Whole Life vs. Index Universal Life

[dgoldenz]

Re: Whole Life VS Index Universal Life

With American Amicable, their UL spikes after 15 years ... it is only garunteed for 15 years ... if you don't pay more than the target premium, then you rate increases to an insane amount.

With AmAm, your UL earns a hell of a lot more cash value than their whole life -- but i guess their whole life is only FE and that doesn't seem to earn much cash value.

RNA's is going to be similar ... from what I was told ...

Who is the best company for UL?

Thanks,

jody

Then don't use American Amicable....tons of companies out there with UL products that are fully guaranteed. There is no "best company"....that depends on the underwriting and the demographics. If you have 10-15 different companies you can use for different situations you should be fine.

 

[insuranceexec]

Re: Whole Life VS Index Universal Life

Then don't use American Amicable....tons of companies out there with UL products that are fully guaranteed. There is no "best company"....that depends on the underwriting and the demographics. If you have 10-15 different companies you can use for different situations you should be fine.

You are absolutely correct. There is NO perfect company; a company that has the cheapest premium for a 50 year old, may not have the cheapest premium for a 51 year old. Great point.

 

[jody108]

AmAm calls it an Easy UL ... simplified UL .. so i guess that is why its not as good as the other companies ... easy to issue though.

 

[dgoldenz]

AmAm calls it an Easy UL ... simplified UL .. so i guess that is why its not as good as the other companies ... easy to issue though.

There's a reason it's easy to issue...

 

[SalemInsuranceGuy]

Re: Whole Life VS Index Universal Life

-UL is less expensive than whole life, especially overpriced FE when looking at people in reasonable health. Whole life is usually 2-3x the price.
-UL will probably not build as much cash value as whole life
-UL policies with a no-lapse guarantee will never increase their premiums unless the owner does not pay the premiums on time or in full
-Many UL products are guaranteed forever now (no-lapse guarantee), I'm not sure where you got 15 years from.

Again this thread was about EQUITY INDEXED UL not just plain old UL vs WHOLE LIFE. Also if you read my prior post, the proper way is to max fund the EIUL product so you never have to worry about it lapsing. At a very minimum you should sell it at full target. The problem is when some shady agent tries to make it look like a lower premium but at the cost of it lapsing early.

To max fund an EIUL, it's the max amount allowed for a client to put in without turning it into a modified endowment contract. The companies software will do this for you. For example. When I was 44 I bought a 250k EIUL on myself and max funded it. Target was around $240 a month and max funding was around $400 a month. Now you only get paid full commission on the target premium of $240 a month. With the over funded premium the other $160 a month you may only get a couple percent commission on that. Which is good for the client because it builds up cash value starting the first year by max funding it. I also make sure it has an increasing death benefit so the clients gets the death benefit plus the cash value and it allows one to put more into the max funding that way.

I have yet to see a whole life policy beat a max funded EIUL policy for cash accumulation. But again I think it's unfair to compare the 2. Each has it's own purpose. People only seeking final expenses are not really EIUL candidates. A good EIUL candidate is someone who is maxing out their 401k at work and maxing out their IRAs, has an insurance need and is also looking for an extra cash accumulation vehicle.

 

[dgoldenz]

The question was about UL, so that's what I answered.....personally, I don't think max funding anything is a worthwhile proposition, but everyone is entitled to their own opinion.

 

[Franz Kafka]

Hmm..

IUL - less chance of lapsing than VUL

IUL with max fund - less chance of lapsing than IUL withut max fund

NLG IUL - no chance of lapsing as long as premium is paid

WL - no chance of lapsing as long as premium is paid AND possibility of reduced paid up

That's all. Pick your flavor.

 

[scotty]

whole life! it has guarantees!

 

[bp019j]

Which IUL product has the lowest drag for wealth accumulation?
- - - - - - - - - - - - - - - - - -

Again this thread was about EQUITY INDEXED UL not just plain old UL vs WHOLE LIFE. Also if you read my prior post, the proper way is to max fund the EIUL product so you never have to worry about it lapsing. At a very minimum you should sell it at full target. The problem is when some shady agent tries to make it look like a lower premium but at the cost of it lapsing early.

To max fund an EIUL, it's the max amount allowed for a client to put in without turning it into a modified endowment contract. The companies software will do this for you. For example. When I was 44 I bought a 250k EIUL on myself and max funded it. Target was around $240 a month and max funding was around $400 a month. Now you only get paid full commission on the target premium of $240 a month. With the over funded premium the other $160 a month you may only get a couple percent commission on that. Which is good for the client because it builds up cash value starting the first year by max funding it. I also make sure it has an increasing death benefit so the clients gets the death benefit plus the cash value and it allows one to put more into the max funding that way.

I have yet to see a whole life policy beat a max funded EIUL policy for cash accumulation. But again I think it's unfair to compare the 2. Each has it's own purpose. People only seeking final expenses are not really EIUL candidates. A good EIUL candidate is someone who is maxing out their 401k at work and maxing out their IRAs, has an insurance need and is also looking for an extra cash accumulation vehicle.

You are spot on with this! Great post. Are you relying on FMO/GA for illustrations? Or are you using your own models?

 

[Norwayguy]

Death benefit option also effects the amount of premium in relation to the death benefit. Option B increasing Death benefit will allow for a larger premium payment per death benefit.