Whole Life carriers and maxing PUA's
- Thread starter Death
- Start date
- 11,297
PUAs get different dividend treatment than the base policy premiums do. That's why long-term, it would appear that the same premiums over a similar time period, there isn't much difference in their cash values.
So, with that in mind... just pick one: Penn Mutual, OneAmerica, MassMutual, Lafayette Life... almost all of them will do what you're talking about - often at higher multiples than 50/50 blends.
I just wouldn't write Ohio National until they decide who they're going to grow up to become in the next 2-5 years.
So, with that in mind... just pick one: Penn Mutual, OneAmerica, MassMutual, Lafayette Life... almost all of them will do what you're talking about - often at higher multiples than 50/50 blends.
I just wouldn't write Ohio National until they decide who they're going to grow up to become in the next 2-5 years.
- 4,607
Couple items, if looking at max accumulation, 50/50 isn't maxing the PUAR. Some WL can be as much as 25% base & 75% PUAR. Term riders can help allow more premium under the MEC limits
Also, with recent changes in 7702 Premium room laws, you may want to consider also looking at a UL/IUL/VUL product as they received much more favorable treatment under the new 7702 premium room rules resulting in a much smaller insurance policy needed to fit the same total funding.
My personal preference for my own polices is WL with modal PUAR & lump sum PUAR, but I think you may want to consider IUL etc as I think you will be seeing a shift in the industry with more premium going into UL based products with the 7702 changes...... unless WL carriers can find a work around for max funded cases.
Also, with recent changes in 7702 Premium room laws, you may want to consider also looking at a UL/IUL/VUL product as they received much more favorable treatment under the new 7702 premium room rules resulting in a much smaller insurance policy needed to fit the same total funding.
My personal preference for my own polices is WL with modal PUAR & lump sum PUAR, but I think you may want to consider IUL etc as I think you will be seeing a shift in the industry with more premium going into UL based products with the 7702 changes...... unless WL carriers can find a work around for max funded cases.
- Thread starter
- #4
- 11,297
Here's the short version:
Minimum funded policies to secure a death benefit... will require a larger premium than before due to the lower guaranteed interest rate.
Maximum-funded policies to build cash values... will have less 'net amount at risk' in the policy so they can be more efficient in cash value accumulation.
Regarding UL chassis policies... I'll still "begin with the end in mind" and for the premium cases we do, I'd prefer not to put that at risk of increasing mortality/costs of insurance costs.
But study it out and run some illustrations and see what you like.
Minimum funded policies to secure a death benefit... will require a larger premium than before due to the lower guaranteed interest rate.
Maximum-funded policies to build cash values... will have less 'net amount at risk' in the policy so they can be more efficient in cash value accumulation.
Regarding UL chassis policies... I'll still "begin with the end in mind" and for the premium cases we do, I'd prefer not to put that at risk of increasing mortality/costs of insurance costs.
But study it out and run some illustrations and see what you like.
- 2,211
Great Comment.
- 4,607
While I agree with the sentiment for my own personal policies, dont most WL policies have a large amount of the lifetime costs front loaded into the policies, meaning they have less growth early on? Also, just because I cant see the charges pages of a WL like we can in a UL, the costs & fees are built into the contract & illustration of a WL.
I just wish we could find a way to make a WL super flexible for the high income fluctuating income person like a sales exec, mortgage broker, etc business owner in a cyclical industry. Most PUAR plans dont permit enough flexibility to stop/restart maximum funding if you had to take a year or 2 off or more years off from maxing out the PUAR, etc. I get why carriers cant allow full on flexibility with PUAR as it would allow for uninsurable people to dial up buying paid up death benefit possibly after years of putting nothing in
is the below "common" in PUAR from carriers as this is what I am most familiar with below in terms of the "bumpers & rails" limiting complete flexibility.:
Example: $3,000 base, $9000 modal PUAR(max 3x) at issue maxing PUAR. If I only put in 8,000 into PUAR the following year, I can never go back to the $9000 as my max has now reset to the lower amount I put in. If I dont put in any PUAR in a given year, I can always go back to the 1x base amount of $3,000 into the PUAR, but have lost the ability to go over that 1x base amount unless I go back through Underwriting. If nothing is put into PUAR for 5 consecutive years, the PUAR falls off for any additional funding & cannot be funded again without Underwriting. Max age of PUAR deposit of 85
UL chassis product for people with wildly fluctuating incomes can allow for super large deposits or making up missed years of funding (albeit, that same expanded flexibility can also be the death nail for many, many UL type products). This is a reason I predict we will see some gravitation to IUL/VUL with the 7702 favorable premium room expansion
- 11,297
YES! They are known and quantitated within the bundled contract! (Try doing that with any UL product for the lifetime of the contract.)
- 11,297
Sure you can. If you're doing a limited pay and can max-fund for the first 2-3 years, just do APL (automatic premium loans) then backfill the loan when able to.
- 4,607
sure, that.
But what about those cases where they want to fund for a much longer time. Say, 30 year old wanting to buy lowest face to max fund to age 60. are you aware of any policies out there that allow for more liberal PUAR deposits than what I had mentioned above having some "bumpers/rails/parameters" as to future PUAR purchases after lowering in some years or not putting anything in.
Are you saying having the APL would also make the PUAR planned payments or just the base policy?
Honestly asking as the thread triggered some questions in my head on the topic
