20 pay options

[scagnt83]

I just thought if you put this in a IUL for cash accumulation you'll have more cash value.

Depending on the design they could have less money.

Depending on the product they could have less money.

Most IUL Caps can be lowered to 3% range. Internal expenses can be increased by 200%-500% on most policies.

And if you dont overfund it properly, it will likely lapse in later years.

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Even just comparing dividends to the index performance, no telling what will happen over the next decade. WL dividends were over 10% at one point in history.

 

[Allen Trent]

I just thought if you put this in a IUL for cash accumulation you'll have more cash value.

and also a chance at having none. Cant only look at the right hand projected columns, have to also look at the left worst case & middle columns.

Will the IUL contractually be guaranteed to be paid up at age 31 like the 20pay?

Both the IUL & the 20 pay WL could be good. Is the client more concerned with the guaranteed outcomes or the possible outcomes. dont force your own product beliefs on consumers, especially if you have commission fever from seeing their current policy premium commitment

Or, maybe a client puts $200 a month in 20 pay WL & $200 per month in a minimum face max funded IUL to have a bit of both types

 

[scagnt83]

Or, maybe a client puts $200 a month in 20 pay WL & $200 per month in a minimum face max funded IUL to have a bit of both types

In my experience, clients are much more content with their WL than their IUL when they own both.

There is a constant fear of Cap reductions, expense increases, & lower than expected index returns with IUL. Even when the policy is ahead of the illustration, they either have anxiety about the policy, or fomo for not choosing a more aggressive IUL.

I think its just the mentality behind the purchase in a lot of ways. But there is a clear difference. And Ive had a few who own both, express regret for not buying more WL than they did.

 

[scagnt83]

Will the IUL contractually be guaranteed to be paid up at age 31 like the 20pay?

For the OPs reference, no, it will not be.
IUL is never contractually paid up, until endowment.

 

[bnice1]

What about companies that have the best whole life rates for a 37yr old male smoker

 

[Allen Trent]

they either have anxiety about the policy, or fomo for not choosing a more aggressive IUL.

I think its just the mentality behind the purchase in a lot of ways

1000% agree. Those that own VUL, IUL, especially in their senior years tend to get anxious about what the markets are doing or what they believe they are going to do. Even IUL, which isnt in the stock market, has some more senior clients concerned about losing alot in a big market drop. Even though that cant happen, how many agents are still around to talk the client out of getting out of the policy when their anxiety gets the best of them. you will also then have WL agents coming in at same time & pointing to the worst case columns to make a case as to why the person should exit the IUL now. Consumers are definitely in a difficult spot between their own anxiety to not do something bad to their own policies & sitting as prey to agents that want to maximize compensation on the person they got in front of

 

[DHK]

1000% agree. Those that own VUL, IUL, especially in their senior years tend to get anxious about what the markets are doing or what they believe they are going to do. Even IUL, which isnt in the stock market, has some more senior clients concerned about losing alot in a big market drop. Even though that cant happen, how many agents are still around to talk the client out of getting out of the policy when their anxiety gets the best of them. you will also then have WL agents coming in at same time & pointing to the worst case columns to make a case as to why the person should exit the IUL now. Consumers are definitely in a difficult spot between their own anxiety to not do something bad to their own policies & sitting as prey to agents that want to maximize compensation on the person they got in front of

On that point, while I never read the book, Don Blanton's Circle of Wealth book discussed moving the cash values from the life policy to an annuity. While you certainly can do that, it won't (necessarily) have the same tax treatment on cash flow distributions throughout retirement.

 

[Allen Trent]

On that point, while I never read the book, Don Blanton's Circle of Wealth book discussed moving the cash values from the life policy to an annuity. While you certainly can do that, it won't (necessarily) have the same tax treatment on cash flow distributions throughout retirement.

Fo sure, but if income is needed life policies can be put into lifetime income payout with the exclusion ratio applying to each payment. Or if life carrier doesnt have good payout table, can also 1035 exchange to another carriers SPIA if guaranteed lifetime income in most tax efficient manner is desired. Keeping the life as life is best if it wont crash, clients can afford premiums, etc

 

[DHK]

Fo sure

Had to do it. @goillini52 would be proud.

 

[Lloyds of Lubbock]

"You will also then have WL agents coming in at same time & pointing to the worst case columns to make a case"
It was not all that long ago that agents selling VUL were ripping out any whole life they came across.
If an agent is not working in the best interest of the client, he or she will flip the narrative to whatever is needed to accomplish their goal.
Sometimes products are unsuitable and a replacement is justified.
IMO chasing an ROR is not a great reason to replace a policy.