Term Whole of Life

Jan 28, 2019

  1. Benjamin_Redaer
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    Benjamin_Redaer New Member

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    Level term typically has coverage durations of 5, 10, 15, 20, 25, 30 years etc.

    Why are there no versions with coverage to attained age 99 (i.e. term whole of life), either single, limited or pay for life?

    Or in other words, why are there no level term whole of life products that do not pay cash value or maturity benefits? Just pure term.

    Thanks
     
  2. Newby
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    Just look for GUL products that are doing the same thing you are wanting to accomplish. The only difference is they will build minimal cash value in the early years but it will go away in the later years. But straight term to age 99 would have to be priced about the same.

    The whole advantage of term is that it is priced to be temporary. And the death benefit is not paid out on the majority of cases. That way people can protect themselves from temporary risks at a much cheaper price. If you try to turn it into a permenant policy it loses those advantages.
     
    Newby, Jan 28, 2019
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  3. Benjamin_Redaer
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    Benjamin_Redaer New Member

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    Apologies but what is GUL?
     
  4. TampaHound
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  5. Robert Barney
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    No lapse Universal Life. The policy provides a secondary guarantee for a period of time, which can be for the lifetime of the product, or can be for less.

    In Compulife we quote the following no lapse UL benefit and payment periods:

    To Age 80 Level Guaranteed
    To Age 85 Level Guaranteed
    To Age 90 Level Guaranteed
    To Age 95 Level Guaranteed
    To Age 100 Level Guaranteed
    To Age 105 Level Guaranteed
    To Age 110 Level Guaranteed​

    and lifetime:

    To Age 121 Level (No Lapse U/L)
    To Age 121 Level - Pay to 100
    To Age 121 Level - Pay to 65
    To Age 121 Level - 20 Pay
    To Age 121 Level - 10 Pay
    To Age 121 Level - Single Pay​

    WARNING: If you miss a premium, you blow the guarantee
     
  6. WinoBlues
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    WinoBlues Guru

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    Not necessarily.

    * you could blow the guarantee depending on the policy and values.
     
  7. DHK
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    DHK Guru

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    You either fund the box or pay the curve. Yes, there are non-lapse GUL policies, but those are a variation on a theme. Remember that insurance companies are in business and they have to make a profit.

     
    DHK, Jan 28, 2019
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  8. Robert Barney
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    Robert Barney Guru

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    If you have an "exception to the rule" example, feel free to elaborate.

    On the flip side, it's the promise of these guarantees being blown, and the ability to have these policies lapse, that makes them so inexpensive. I really think they are a great deal but consumers who buy them need to UNDERSTAND what they are doing, and set them up to be properly cash flowed to ensure the guarantee is not lost. I am a big fan of making them paid-up by retirement.
     
  9. Robert Barney
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    I think life insurance pricing is so heavily regulated that the likelihood of a company NOT making a profit on a life policy is very low. First Colony (now Genworth) did not go from A++ to B- because they were losing money on life insurance.

    I think that while companies need to make money, agents should be much more concerned that their clients save money. There are enough folks running life insurance companies, and making sure they are profitable, that they don't need help from the agent community. On the flip side, who is looking out for the best interests of the consumer?
     
  10. DHK
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    No doubt and I agree.

    What I'm referring to is the notion of "term for whole life". Essentially, just buy a whole life policy so YOU can benefit from the non-forfeiture rights and access to cash values... OR buy a non-lapse UL policy that is "unbundled" and isn't designed for cash values. There would be cash values in the early years... but they'll be eroded over time. As long as the premiums are paid, the policy would stay in force.

    Sometimes agents think they're thinking of something new. What *I* find is that some agents just don't understand the underlying economics within a life insurance policy and for a life insurance company. That's why I posted Guy Baker's "The Box" video to provide additional clarity for the OP.
     
    DHK, Jan 28, 2019
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