Universal Life Replacment Tips

[WinoBlues]

I've run across UL horror stories ever since getting into the insurance industry.
I just had a policy come across my desk that another so called "agent" had been handing. Policy was issued in 1987 and now its lapsing. I ran re-proposals and seems the poor sap now has to pay a $7000 lump sum and then $21,450 annually for the next 8yrs to keep it. Its only a $150,000 face amount.......so, I'm looking into other options. Bad thing is the client is now 77yrs old.
Any agent out there needs to really keep an eye on what they write!!

I am working on thre Allstate (LBL) ULs written in 1999 that are the same way. However, the ULs written in 1987, which were most likely Accumulators, are very different from the Accumulator type today, say an ONL UL. Then comparing them to a GUL is night and day different. Of course an "agent" you know that.

>>Any agent out there needs to really keep an eye on what they write!!

Completely agree.

 

[SportsNut]

Policy was issued in 1987 and now its lapsing. I ran re-proposals and seems the poor sap now has to pay a $7000 lump sum and then $21,450 annually for the next 8yrs to keep it. Its only a $150,000 face amount.......so, I'm looking into other options. Bad thing is the client is now 77yrs old.
Any agent out there needs to really keep an eye on what they write!!

These UL's that were created in 79' [EF Hutton] and soon thereafter had the benefit of high interest rates which were all forgiving of expense loads and high cost of ins. They weren't really designed or at least administered for what has happened in the past half dozen years. UL is a product that needs fine tuning or at the very least monitoring to ward off trouble like your 77 yo has encountered. Had this been spotted years ago there could have been minor increases in prem that may have eliminated the problem that he has today.

Tax code back in the early 80's made UL the bomb. One could dump in gobs of cash with very little ins (Pre TEFRA) and begin a tax free stream of cash. They were the maniulation of the tax code for huge deposits and tax free income. That ended or was altered with TEFRA in 82' and DEFRA in 84'.

It probably goes w/o saying that any of the old UL products are obsolete and should have seen better days long before now. The newer contracts can have their merit in the right situation.

 

[VolAgent]

See, the point is you don't KNOW that the c/v would be 0 in the UL policy, you are making an assumption here to bolster your point. Maybe your ASSumption would be correct but my guess is that if you were dumping another 34 monthly into that policy that you would be incorrect. That is the difference here.

I've played around with enough GUL illustrations to feel confident in saying that you wouldn't even get a thank you card from the company for that extra $34 a month.

Putting extra money into a GUL is about the worst thing you can do, IMO. Every time I see some company come out with a IUL or VUL and slap a no-lapse rider on it, I shudder. They toot it as the best of both worlds, but it seems only the company benefits.

 

[gordon112]

With the recent uncertainties in the markets following the crash of 07 it is empirical that most will feel more comfortable with guarantees over fancy marketing gimmicks.

UL has its place, just like any other product, but they are not what the masses want to here (what isn't guaranteed) when they are properly explained.

GUL, WL, and Term all have there place and seem more suitable for today's markets.

I am not sure I would want to ever put my client into a UL.

This conversation obviously could lead into variable annuities over fixed, stocks over fixed income..etc etc

However, none of these life insurance products are investments (besides for a variable annuity). That is the facts and that is something basic you learn getting your license.

It is security and peace of mind, and having a debt to pay now or later..why don't we cover it now.

 

[SportsNut]

the agent that sold that to here 2 years ago didnt explain that if shes one day late on her pmt... boom.. And it's widely known the insurance company will not contact the insured when a missed pmt is not received-

She paying 129 a month for 50k UL NLG with no CV

Got her 50k of WL ...35k and 15k through 2 separate companies.. her cost?

$163 per month

She had no problem paying the extra $30 for piece of mind and obtaining a true WL policy with CV

Big pay day for me-....

I've played around with enough GUL illustrations to feel confident in saying that you wouldn't even get a thank you card from the company for that extra $34 a month.

Putting extra money into a GUL is about the worst thing you can do, IMO. Every time I see some company come out with a IUL or VUL and slap a no-lapse rider on it, I shudder. They toot it as the best of both worlds, but it seems only the company benefits.

Now think about the facts here... the UL policy was 2 yrs old... of course there is no c/v to it. Nore would there be had she owned the BEST FE policy available to mankind in yr 2. Correct!!!

The UL may end up with 0 c/v in it in later years but that doesn't mean that it will never have c/v in it. My point is by funding the policy early in its life with the same prem of that of a WL FE polciy, in fact two WL polcies, the UL has got to uccumulate value. Are you aware that you can overfund a GUL contract and have a paid up GUL...? I have run these illustrations before and you surely have to if you've played around with them.

In this case the UL prem was 129... in fact she was likely 67 at the time of issue, at least the W/S website runs a GUL illustration for a 67yo and the prem is 127 mo for 50K face. Now if you over funded the contract with 34 mo, which is an additional 27% of premium you aren't really serious that this thing wouldn't have c/v...? I am not trying to say that it is going to drip cash but it will perform as good as a heavily loaded FE policy, that is my only point here... which apparently I'm having difficulty in making.

I sell FE policies just like the rest of you but I may have a wider view of what some other existing policies hold. Some agents view is whatever they are selling is better than what the insured owns now. I don't subscribe to that thinking, that is all.

 

[TPAAgent]

The UL may end up with 0 c/v in it in later years but that doesn't mean that it will never have c/v in it. .

Good frekin night sparky, seriously?

You sound like a full blown liberal.. I say pro-choice you say abortion..

Are you seriously trying to convince anybody here that a NLG policy holder will EVER have the same amount of cash value in their policy as a true WL policy holder?

It's a gimmick ART junk product that uses the cash value to offset the annual increase of premiums...

In my example.. my client is paying $30 more per month.. in 10 years alone, her additional cost would be $3,600 dollars but her CV is $9,000... netting her around $5,400

Go ahead and fund that junk with $360 a year and try and convince me you're client will have $9,000 of cash value...

Theres many debates to whether a insurance policy is a "investment".. I consider my $150k WL policy an investment.. Because I know that for a "FACT" that at the time of my death- my return on my investment for my family will be in the range of 50%... For every $1 I spend today, will return a profit to my family of $1.50

This is based of my LE and the history of my family....

 

[Indy007]

TPA, if your client wanted a savings account, she can open one. More than likely your client, being she has 2 "FE" policies now, has the "true whole life" for the death benefit alone. If you're looking at it as an "investment", add up what she will pay in premiums vs what her cash value is at any given point. IRR on CV. Make that make sense as an "investment".

Some whole life policies do perform well on cash values for the long term, (MM, NML, Penn, etc) but I have yet to see a FE policy that did.

What about the TransAce GUL? With it, your client could receive the lessor of 33% death benefit OR 100% premiums paid at the 15th, 20th, or any year after the 25th year. Show me a FE "true whole life" that you can get 100% premiums back at year 15.

Your 150k "true whole life" is also not an investment. A 50% return on your money over your LIFETIME would be a terrible return. Investments: Stock, bonds, variable annuity, variable life, mutual funds, reits, etc.

All types of life insurance have their place, but calling all UL "dangerous, gimmick, ART junk product" just makes you sound, well ignorant.

 

[SportsNut]

Good frekin night sparky, seriously?

You sound like a full blown liberal.. I say pro-choice you say abortion.....

Your intelligence is beginning to wilt my friend. Liberal.... you know not what you write; [again]. Geesh, this is like talking to a bucket of water.

I've wasted enough time here on this thread making points that your narrow mind cannot filter. One needn't look any further than your continued assertion of life ins being an investment that your credibility is lost. Risk management is not a replacement for an investment and an investment is not a replacement for risk mgmt. They are two entirely different things. Got it... Oh wait, I'm sure you don't.

 

[sman]

She had no problem paying the extra $30 for piece of mind and obtaining a true WL policy with CV

Which piece did she get?
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He is MNT 71 in great health. He has a 25K policy for $116 per month and a 35K policy at 196 per month. I am kind of at a loss as how to intrepret what he has so I printed off a couple of articles I googled about UL policies on the elderly and he definitely does not want what he has now. I did notice there are surrender charges of $1500 per policy during the first year of ownership and he bought both policies last fall.

I have a question which you may not be able to answer. Why did he purchase two policies at the same time? Why not just one $60k policy?

 

[TPAAgent]

Your 150k "true whole life" is also not an investment. A 50% return on your money over your LIFETIME would be a terrible return. Investments: Stock, bonds, variable annuity, variable life, mutual funds, reits, etc.

It's just not sinking in with you.. I get it.. you're an old school agent from the 80's .. i get all that... You're that typical liberal.. "you're" assuming I live another 40 years.. what if I die next year? Then whats my ROI ?

And 50% investment is not a terrible return.. I think you fell outta your high chair as an infant and banged your coconut

So what you're telling me is that if I invest 2 million dollars in my lifetime and get a 50% ROI that's a terrible return?

You're either stupid or drunk
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Your intelligence is beginning to wilt my friend. Liberal.... you know not what you write; [again]. Geesh, this is like talking to a bucket of water.

I've wasted enough time here on this thread making points that your narrow mind cannot filter. One needn't look any further than your continued assertion of life ins being an investment that your credibility is lost. Risk management is not a replacement for an investment and an investment is not a replacement for risk mgmt. They are two entirely different things. Got it... Oh wait, I'm sure you don't.

Then beat it old man.. I've given you several facts why a WL has more benefits than a junk GUL and all you do is counter with assumptions.. you haven't given me one concrete fact where a GUL is a better product than a WL.. Not one

Go play bingo, take a cruise, or retire already