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GUL uses current interest rates in its assumptions and it has a cash value component, even though it's not even remotely used for that purpose.
Trying to understand how VUL policy works
- Thread starter Susan Sullivan
- Start date
- 11,275
Of course, GUL is more of a "permanent term", and I wouldn't use it to store cash as it's just not designed for it.
Permanent means that the given premium will last until age 100 or longer. I know that GUL can have planned premiums for shorter amounts, but that still emphasizes the "permanent term" aspect, just not to age 100.
Permanent means that the given premium will last until age 100 or longer. I know that GUL can have planned premiums for shorter amounts, but that still emphasizes the "permanent term" aspect, just not to age 100.
- 1,405
Surplus cash can get sucked into a black hole in GUL. You decided on the funding period (from single pay to pay to 121), then stick to that payment scheme. Putting in extra money after that, can cause that extra money to disappear.
- 1,405
Planning to live past age 121?
MosesNewmanNAAIP
Super Genius
- 149
Robert Barney giving advice. Lol. Mr. Barney specializes in maliciously slandering thousands of insurance agents in the most brutal manner.
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A full pay GUL is perm, and full age of 121. What I see is alot of marketers or companies will run the guarantee age down to 90 or 95 to lower the cost. Especially in these "our product is best" comparison situations. Makes it look more attractive and it is from a cost point...but if they live past that age, its no different than a term policy that expired. I usually let the client decide what they want, but won't let them go down under 105. Most folks seem to feel like they could live to 85-90, not many ever feel like they'll live past 100...but obviously they could and many are. I would not sell a 90 or 95 expiration, unless they insisted on it and I had it in writing.
not all GUL's are guaranteed til age 121..
even if the client doesn't see that it's til age 121 .. it's not Permanent.
But as DHK pointed out .. it's still built on a permanent chassis where you can make it permanent if you want to .. though not ideal, it's still possible so therefore I can see why they call it permanent
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I think anything less that 121 is risky business and a form of gambling. Bad idea. To me, the cost difference doesn't warrant the saving.
I ran a $250,000 quote for myself on Compulife (my software company). I am a 64 year old non-smoker in regular health. Here are the lowest premiums:
to age 121: $6,292.66
to age 105: $6,074.60
to age 95: $5,598.77
Now I can't imagine living past age 95 or 105, but neither could any of the people who lived to be 96 or 106. Further, medical advancements could cut both ways, let you live longer than you thought and let your GUL expire before you do.
If I wanted additional PERMANENT insurance, there is NO WAY I would buy anything but "to age 121".
By the way, did I mention that $250,000 in return for an annual payment of $6,292.66 is a pretty good deal.
But if it was me buying it, I would go for 10 pay, to age 121. Here's the best price in Compulife:
10 pay, to age 121: $11,584.68
Once a limited pay, GUL is paid up, it's goof proof. You don't have to worry about missing a premium. And did I mention paying a total of $11,584.68 per year for 10 years, in exchange for $250,000 when you die, not if you die, is a VERY good deal?
All of this assumes you will be able to afford the premium commitment and don't lose the policy because you discovered you can't afford to pay for it anymore.
