Whole Life vs. Universal Life

[myinsurebiz]

Please explain your thoughts in 2 or 3 sentences.

I only focus on FE - but i have a lead that is determined to get UL. He is 60 and in perfect health - excellent actually.

He doesn't want Whole Life.

I know squat about UL.

He only wants $30k too . . .

Thanks,

Tom
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The way I understand it - both are permanent insurance. But - my illustration software only goes 20 years on the UL?

 

[Dave020]

Re: Whole Life -versus- Universal Life

Whole life is a fixed-premium permanent contract with premium set to age and health of insured at the time the contract is issued. Univeral Life is more flexible than Whole Life in terms of premium and CSV targets. WL you get what you get with no flex, UL you can flex it to reduce premium or target things like CSV of $1 at age 102, stuff like that.

 

[myinsurebiz]

Re: Whole Life -versus- Universal Life

So - UL is good for life as well? Wonder why my software cut it off at 20 years?

CSV?

It gave me the option of 3.65% or 3.0% Guaranteed. With UL - is it best to guarantee the rate or let it fluctuate?

Thanks for your help Dave.

Tom

 

[STIBROKER]

Re: Whole Life -versus- Universal Life

Dude really.....you have much more studying to do....how can you advise someone without knowledge of all 4......

I know squat about UL.

 

[Jeff]

Re: Whole Life -versus- Universal Life

I like the guaranteed Death benefit Ul's. As long as the client makes the reqd payment they have permanent coverage. Premiums are level. You can even set them up to be paid up at whatever age you choose. About 1/2 the cost of WL. No cash accumulation but I find that most of my clients are mainly concerned with the death benefit and choose to forego the cash accumulation for the lower monthly premium. Genworth will go as low as $25,000. May be a fit for your client. I believe the Genworth product name is LifetimeFlexplus II.

 

[GreenSky]

Re: Whole Life -versus- Universal Life

Dude really.....you have much more studying to do....how can you advise someone without knowledge of all 4......

Rather than taking the time to learn insurance, it's easier to ask questions here.

I seem to recall that there are books and classes to learn insurance. Maybe it cuts into the time to earn commissions and recruit new agents.

I really do feel bad for his "clients."

But god bless Tom for not dealing with Medicare Advantage or health insurance. His mistakes can be corrected easily.

Rick

 

[Dave020]

Re: Whole Life -versus- Universal Life

So - UL is good for life as well? Wonder why my software cut it off at 20 years?

CSV?

It gave me the option of 3.65% or 3.0% Guaranteed. With UL - is it best to guarantee the rate or let it fluctuate?

Thanks for your help Dave.

Tom

It's going to depend on the guaranteed rate of the contract. Usually 3% is normal with perm. With WL, you will usually see two columns on an illustration, guaranteed rate cash surrender value and projected rate. It can also be done for UL.

The real difference is with WL, its fixed premium with correspondent CSV (cash surrender value) increasing. With UL products, you can build a much more flexible model, especially if the client is not into having CSV as the basis of the contract. With UL you can target CSV, Death Benefit, Premium Amount and so on...very flexible.

The other way to look at it is that WL (with a good par company paying decent dividends) could create a faster paid-up situation than UL. But, at age 70 that is probably not a primary concern. But you might want to present both options:

1 - UL flexed for lowest premium, correct death benefit and target low to no CSV (you can set it up to have say $1 CSV keeping the policy alive at age 100, stuff like that)

2 - UL as above and WL product paid 20-years to age 90 then paid up (it used to be popular in the 80s to fund that with dividends but that is never a good idea).

Premiums on the WL would be higher than UL in option 2 but that way you give full disclosure and let the client decide. Probably he is going to want highest DB at lowest premium and little or no CSV/

 

[myinsurebiz]

Re: Whole Life -versus- Universal Life

1) Rather than taking the time to learn insurance, it's easier to ask questions here.

Rick

Well - actually - yes . . .

I never studied it because I didn't see myself selling it. But - the man wants it - so he gets it.

I'll have it figured out by Monday. This forum is what makes learning easy. Any smart guy can get it . . .

It's going to depend on the guaranteed rate of the contract. Usually 3% is normal with perm. With WL, you will usually see two columns on an illustration, guaranteed rate cash surrender value and projected rate. It can also be done for UL.

The real difference is with WL, its fixed premium with correspondent CSV (cash surrender value) increasing. With UL products, you can build a much more flexible model, especially if the client is not into having CSV as the basis of the contract. With UL you can target CSV, Death Benefit, Premium Amount and so on...very flexible.

The other way to look at it is that WL (with a good par company paying decent dividends) could create a faster paid-up situation than UL. But, at age 70 that is probably not a primary concern. But you might want to present both options:

1 - UL flexed for lowest premium, correct death benefit and target low to no CSV (you can set it up to have say $1 CSV keeping the policy alive at age 100, stuff like that)

2 - UL as above and WL product paid 20-years to age 90 then paid up (it used to be popular in the 80s to fund that with dividends but that is never a good idea).

Premiums on the WL would be higher than UL in option 2 but that way you give full disclosure and let the client decide. Probably he is going to want highest DB at lowest premium and little or no CSV/

Death Benefit is his primary concern - burial.

He also wants a $100k - 20 year Term to go along with it. He also wants ADB and WOP.

Got to go UW. He loved the rate of WL - seems UL may be less expense for same face.

Lot's of moving parts in UL.

Thanks Dave,

Tom

 

[Franz Kafka]

Re: Whole Life -versus- Universal Life

If he likes UL because it's cheaper make sure he knows why it's cheaper so he will never call you in future and say "WTF's going on with my policy?" No Lapse Guaranteed ULs guarantee the policy will never lapse as long as premium's paid. Typical ULs do NOT guarantee that. If he still insists on regular UL have him sign a paper that says he understands what he's getting. JMO

 

[GreenSky]

Re: Whole Life -versus- Universal Life

This forum is what makes learning easy. Any smart guy can get it . . .

You make it so easy to point out your faults.

Rick