Correct that is how mostly all WL policies are structured and really you can through UL in there. It is in the contract...I sell a little WL but mostly VUL and UL with guarantees.SHHHHH Don't let Sy Sternberg hear you say that you don't sell Whole Life. It is amazing how much Whole Life NY Life still sells. Having those "dedicated" agents selling Whole Life as a savings plan doesn't hurt although it's always been a compliance nightmare. However not enough of a nightmare that they don't push, rather SHOVE, the "new org" agents to sell whole life to people who don't know what it is.
But rest assured says Sy, NY Life will pay all of their death benefits when the next "avian flu" comes along. Of course they will, they overcharge for their term and the old whole life contracts have the insured carrying the majority of the risk - DUH!
Whole Life Factoid
I was just shown an old Mass Mutual whole life contract. It was around 70K face value. Do you know that when the woman wanted to cash it in, the 1099 on the dividends that went to pay the premiums exceeded the Cash Value! The 1099 was created because with the lapse of the contract, or proposed lapse the gains became taxable.
Whole life vs Universal life vs VUL
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Comparing cost from one Policy to the next or one company to the next one has to compare how those policies actually performs. I have yet been shown or even found anyone that would suggest that a Genworth, West Coast Life or any other companies boasting "Price" that pays better then NYL, Mass Mutual and others. In other words, you get what you pay for, sure go for the cheap product but cost is not the main feature that produces value. Plus if my memory serves me most carriers that started "Secondary Guarantees" had to add yet another guarantee to assure the added guarantee, makes my head spin!
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I am very familiar with NYL, and on a guaranteed basis they can't with their WL guaranteed premium compete with other ULNL on a guaranteed cost per thousand.
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Obviously NYL have no desire to compete on price, I think that is a given. Yet though I would still say the NYL or Mass Mutual WL is cheaper then most if not "All" ULNL if the desire is cash value at a future date, something your ULNL simply can't compete with. Yet again, depending upon the language of the contract those guarantees may or may not hold up. Many being sold still use the original language that states you have to have more then $1 of cash value in a given year for that guarantee to hold up, most of them under the premium they are being sold with will not have any cash value, kind of the point, IMHO. Some of the better UL's are now under the new generation of guarantee that states "As long as Premium is Paid" the secondary guarantee will kick in, okay as long as the premium is paid but the premium is not as cheap as others yet those UL's generally have no cash value as most are sold with the smallest premium possible.
I could be less skeptical and agree that this "Third" rewriting of the UL guarantee will stand up on its on, unlike previous guarantees. As in the old saying, "The third time is the Charm" or lets hope so, great selling point!
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But you don't get the DB and the CV. Most people I see are buying permanent insurance for the DB. Strictly comparing guaranteed DB and guaranteed premium, the UL is MUCH less expensive.
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DB and CV, yes you have a choice with all UL's and most WL policies as in payout options. Yet the CV guarantees the DB, basically why UL's have such a rocky history. I'm just wondering what the picadilly is hidden in these newer guarantees as in previous versions? Maybe none, but as the old adage goes, "It is easier to believe what has happen then to believe in what never has happen". Once again, the lower premium UL has such a bad history and one that the companies themselves have not help with their projections of high interest rate payouts. In other words no guarantee is worth the paper it is written on that isn't back up with value or yes, "Cash" in this case. Maybe I'm wrong, yet I doubt that.
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I assume you're talking about "vanishing premium" UL; vanishing premiums were never guaranteed, despite what some people might have thought, so there were no reserve requirements. UL with secondary guarantees now have significantly greater reserve requirements than in older versions. (Many think the reserve requirements are overly conservative, but that's another issue.) The guarantees now must be based upon calculations that enable those higher reserves.
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Methinks the old adage reads, in part, "....believe what has happened than to believe in what never has happened."
Where is my worthy assistant, New Guy, asleep at the switch? I think we need a tutorial on the difference between than vs. then, inasmuch as this error pops up quite often in many posts by many posters on this forum.
Where is my worthy assistant, New Guy, asleep at the switch? I think we need a tutorial on the difference between than vs. then, inasmuch as this error pops up quite often in many posts by many posters on this forum.
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Methinks the old adage reads, in part, "....believe what has happened than to believe in what never has happened."
Where is my worthy assistant, New Guy, asleep at the switch? I think we need a tutorial on the difference between than vs. then, inasmuch as this error pops up quite often in many posts by many posters on this forum.
Now why do you want to start in on me???
Okay, you caught me, where do I send the fine? Yet I'm still trying to figure out what the Vanishing Premium or Company Reserves has to do with the old UL or the not so new SGUL or the new improved ULNL??? Perplexing! I'm just wondering what is next? The Super Duper Great UL or the SDGUL.
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If vanishing premium had been guaranteed, the insurer would have set up reserves, so that when interest rates dropped, the reserves would have been enough to still let the premiums vanish (instead of the policies lapsing
). Unlike vanishing premiums, UL secondary guarantees are in the contract, so the insurers have all set up reserves. If interest rates drop, or avian flu hits, or the inside buildup gets taxed, the reserves will still back the guarantees. Of course, it's always wise to consider the co rating as well.
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