Term vs GUL vs IUL vs Whole life

Feb 8, 2019

  1. InviewFinancial
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    Hello.

    I would like to secure some guaranteed funds for my family but want to make sure GUL is the best policy for me for my needs.

    I am at the moment 27 year.
    3 years ago I bought 30 Yr Term (1 mil ) with Prudential which used to cost estimate $700 /year
    so Total cost for 30 year would have been $21000.
    Last year, because i was diagnosed with Rheumatoid Arthritis, we asked my agent for some permanent recommendation.

    He recommended converting to GUL so we did.
    $500K was converted to Prudential GUL which cost $2069 (year) . i did request him that i want to be paid up in 20 year. so total cost of this will be $41380. and return will be $1 mil.. (the policy is up to 120 year or something) . and ofcourse i also didnt care about cash value. because true WHOLE life was same cost for 1/10 of the face value.

    Q1) does this GUL Look real? as long as i make my payments for next 20 years on time, if i die any time from now till the year 120.. my family will get paid 1mil.

    Q2) are there any new policies i can apply even after being diagnosed with Rheumatoid Arthritis ?

    Q3) i am thinking of converting the other $500k term also to GUL. the agent has quotes the $2098 for 20 pay.
    and $1498 if i want to pay for rest of my life. what i am curious is .. the 20 pay is only going to cost me close to $41000 ... (return is $500K) but if i choose to pay for rest of my life it will cost me double or triple.. (ie.. at the age of 95 i would have paid 105K)

    Q4) basically i want to have 1 mil policy for rest of my life, but want to pay the least for it.. what is best policy for me.

    q5) i have also thought about having a whole life policy with cash value, and that policy pay my GUL or other policy after 20 year. so i dont have to worry about making payments.

    Thanks
    Dipan
     
  2. InviewFinancial
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    Q1)i meant get paid 500K. not 1 mil.
     
  3. InviewFinancial
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    Here are the illustrations

    Screen Shot 2019-02-08 at 11.03.29 AM.png
    Screen Shot 2019-02-08 at 11.04.02 AM.png
     
  4. pfg1
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    Q1. GUL will be your least out of pocket cost for whatever amount of perm coverage you choose. Short paying is a good option. Yes, as long as the policy is in force if you die you are covered. Pay attn to the details, some companies have gotcha's on GUL's (missing a pymt, etc)

    Q2. Short answer, yes some carriers insure clients with RA. You would have to apply - obviously your RA and overall health will be evaluated. No way to know what the premium would look like on that (assuming a carrier approved you) until you go through UW. Generally speaking you could possibly get more coverage, but it definitely won't be at the excellent health rating you probably had. Meaning more $$$, maybe alot more.

    Q3. You could also consider converting your term to an IUL and set it up as increasing death benefit, design it as max cash accumulation/min death benefit....and overfund it. It will grow substantially over time since you are young. Obviously I don't know your financial situation...so I'm just laying it out there as an option - not making a recommendation that its right for you.

    You can also just leave your remaining term as is for now....its convertible for some amount of time into the future, so it doesn't have to be done today. Many companies off conversion for the full term, read your policy to see. Obviously the longer you wait to convert...the price goes up some due to age.

    Q4. The cheapest way to accomplish that will be GUL. Again, know the details of the policy.

    Q5 .I don't completely understand what you are trying to do or are asking. ? Pru doesn't even offer WL anymore unless I'm mistaken.

    I'm glad you bought the term when you did! Now you are locked into a good health rating...at least you have options. So many wait until they are less than healthy to try and buy. And yes, having a tax free DB of $1m (or more maybe) is a great thing to do for your family....regardless of when it pays out. I wish more people had that mindset.
     
    pfg1, Feb 8, 2019
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  5. Newby
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    Limited payment years benefits you if you live a long time.

    Lifetime payments benefits you if you die at a younger age.

    If you will tell us when you will die, we can tell you which is best for you.
     
    Newby, Feb 10, 2019
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  6. pfg1
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    Thats true, nobody knows. The other advantage of a short pay is the payment goes away when you are older and hit retirement. Less chance of a lapse in old age - its done.
     
    pfg1, Feb 10, 2019
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  7. InviewFinancial
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    Thank You
    any particular company recommend for 20 or 30 pay GUL ? 500K or 1Mil new policy.
    Current term is with prudential.
     
  8. InviewFinancial
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    Thanks. are things do i need to look inside the policy to see what gotachas are there. and if it is 100% guranteed.
     
  9. InviewFinancial
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    Guaranteed Results Based on Minimum Interest Rate of 1.00% & Maximum Charges

    Prudential 500K conversion 20 Pay illustration states the above statement.
    and after 20th year, i am not paying anything else. the policy goes up to 120 year.

    are there any reasons why one might have to continue to pay even after 20th year?
     
  10. Allen Trent
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    Based on your original post, you should stick with Prudential because you have a guaranteed conversion privilege to get the new GUL/IUL at your original risk/health classification. If you apply at a new carrier, you will get whatever your current health status warrants & you will also have a new 2 year contesitibility period that wouldn't be the case if you converted your current Pru term to a new GUL/IUL with Pru.

    If you can find a new carrier to sell you new term with your current insurability, that might make sense.
     
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