Variable Life Insurance

Apr 22, 2008

  1. zwiepak
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    zwiepak New Member

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    IMO, is the worst of both worlds. IMO, I think the only use for a variable product, is if you've maxed out your IRA's and need another tax deferred vehicle.
     
    zwiepak, Apr 22, 2008
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  2. djs
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    djs Super Moderator Moderator

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    Why do you say this?
     
    djs, Apr 22, 2008
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  3. NewHealthStrategies
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    NewHealthStrategies Super Genius

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    Gotta agree with Zwiepak.... I'm really am amused at the number of agents (particularly life agents) that simply will not let go of the "permanent" life argument... even though there isn't a financial planner around that would back-them up.... unless you've ..................... maxed out your retirement plans and have millions in assets.

    Of course, I bow to those that only work in that high-faluting(sp?) market.

    A sale - how quickly can you separate some fool from his money!!!!
     
  4. zwiepak
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    zwiepak New Member

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    If you were to separate the insurance and investment component, you would likely find better products for each component. IMO, there's too much intermingling of insurance cost/charges, and fund expenses, it's hard to tell how each "side" is doing, and heaven forbid you ever have to compare a variable life product against another variable life product. I've always said it's the worst of both worlds.
     
    zwiepak, Apr 22, 2008
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  5. djs
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    djs Super Moderator Moderator

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    I'm getting the sense that this is a buy term, invest the difference type of arguement. I usually agree with that if you actually invest the difference.

    Is your statement really that universal life stinks, or specifically that variable life stinks? Your original comment mentioned variable, the comments here are basically the same with any universal life policy.

    I'm just curious, everyone has an opinion when it comes to life policies, what the right type is for a given situation. To me, it's all about the client, and making sure you meet their needs and, if possible, their goals and desires.

    Dan
     
    djs, Apr 23, 2008
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  6. JRoot
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    JRoot Guru

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    NHS,
    You're assuming life insurance is purchased for investment purposes here. I agree that if you're solely buying LI for investment purposes it's not the best use of your money.

    IMO, the best LI product is the one that pays out. Term is still in force at death... maybe...2-3% of the time? IF you only need it for a certain amount of time, term is great.

    Saying that there isn't a financial planner that would support permanent insurance is bogus. There are so many uses for permanent insurance where term is not even an option....especially in estate planning.
     
    JRoot, Apr 23, 2008
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  7. zwiepak
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    zwiepak New Member

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    Variable universal life contracts. I have no problems with universal life contracts, even though there's an investment component there, it's typcially a general account product with a minimum guaranteed interest crediting rate, and a current interest crediting rate account dependent upon the underlying portfolio of the general account, huge difference.

    Although within the last few years, I've been seeing "hybrid" universal life products that are more "market sensitive". Basically, they're trying to give you a UL product that sort of acts like a VUL... uggggh...
     
    zwiepak, Apr 23, 2008
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  8. pebble head
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    pebble head Expert

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    Well according to Dave Ramsey and Suze Orman TERM is the ONLY way to go. ANYTHING else is GARBAGE! :D
     
  9. zwiepak
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    zwiepak New Member

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    Thing is, calling a VUL "permanent insurance", IMO is stretching it. Your fund tanks, your COI's go up and suddenly you find yourself having to fork over $ or you contract lapses.... I know that's sort of an exaggeration to illustrate the point, but it does its job.

    Now, I've seen VUL's with minimum guaranteed death benefits, which I suppose gives SOME credence to the "permanent insurance" label, but still, if you think about it, what truly is the point of a guaranteed minimum death benefit on a VUL??? :D

    IMO, it's like building a Lamborghini with a slightly bigger space between the driver and passenger seats, and making a point to advertise it as space for a child's seat and stroller...
     
    zwiepak, Apr 23, 2008
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  10. bobson
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    bobson Guru

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    I always find it ironic that prior to the 90's when life insurance agents were the financial planners our country's savings rate was somewhere north of 5%. Nowdays, now that we know how bad permanent life insurance as a product is, we as a country actually defecit spend 1% to 2% of our income.


    The rate OF savings is vastly more important than the rate ON savings. That is an absolute fundamental to long-term wealth creation and yet we never hear that phrase.

    Clearly you are a big fan of mutual funds. I know of a number of (billionaire) families that own the mutual funds that thank you for your setiment.
     
    bobson, Apr 23, 2008
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