Why Do Gul Illustrations Only Show the Guaranteed Values?

[scagnt83]

No I would never say that. I'm trying to calculate how missing some payments would effect the length of time it's in force . It's important to try to understand how these work

With some illustration software you can schedule premiums and have it miss a few years and see what it does.

Bottom line is that if you are looking at an illustration and it says "Guaranteed Values", then that is the maximum charges and minimum interest rate.

It is important to know that missing a premium does not mean it will automatically lapse before age 100. They will receive a notice in the mail telling them that to continue the policy to age 100 they will need to pay more per month or a lump sum to make up for the missed premiums plus interest. So they will be able and reminded to make it whole again if they wish.

Long story short, if they miss a premium the Guarantee to age 100/121 can be restored by catching up on the premiums. And the client is informed of this when it happens.

 

[rousemark]

Can anyone explain to me why anyone would buy a level to age 90 no lapse UL product? What insurance need does that actually fit?

If you are projecting out 30 years or so, it could fit many needs.. One could be that the estate law has been changed and the person might have been tremendously successful ...Or perhaps they started a business and then need the coverage for business continuation or some other business need. Until our crystal balls get a little more accurate, it is impossible to anticipate what a person's need might be.

 

[WinoBlues]

If you are projecting out 30 years or so, it could fit many needs.. One could be that the estate law has been changed and the person might have been tremendously successful ...Or perhaps they started a business and then need the coverage for business continuation or some other business need. Until our crystal balls get a little more accurate, it is impossible to anticipate what a person's need might be.

Got a story about one. ...... Duh! Old guys always have a story.

Couple years ago Norwayguy gave me a California lead. Turns out it was an 80 something 40 year quadriplegic. I could not help him but we found a need for his younger (70s) wife/caregiver. The solution was a dialed down UL to her age 90.

 

[sirherbie]

Ok now this is getting really confusing . So if it's truely the guaranteed insurance and lowest interest rate they're showing to age 121 the current assumptions and interest rates should easily allow many missed payments . So what's being said if the premiums at any time aren't sufficient to carry it till age 100 then the client will be notified .

 

[rousemark]

Got a story about one. ...... Duh! Old guys always have a story.

Couple years ago Norwayguy gave me a California lead. Turns out it was an 80 something 40 year quadriplegic. I could not help him but we found a need for his younger (70s) wife/caregiver. The solution was a dialed down UL to her age 90.

Would have been nice if the 80 year old had bought a permanent plan large enough to cover his need at 80 when he was 35..... Oh, I forgot. No one is going to need insurance after they are in their 60s.

 

[mcouper]

Ok now this is getting really confusing . So if it's truely the guaranteed insurance and lowest interest rate they're showing to age 121 the current assumptions and interest rates should easily allow many missed payments . So what's being said if the premiums at any time aren't sufficient to carry it till age 100 then the client will be notified .

Once again, on a true GUL product, there are no current assumption coi or interest rates. Carrier has calculated a premium that the client must pay (on time) to support the shadow account and maintain guaranteed death benefit for life. If client is late or misses a payment, the guarantee will blow up.

You are confusing current assumption products that have some form of death benefit guarantee -- see John Hancock's Protection UL. You could solve to endow their product on a current assumption basis, and they may have a downside guarantee (based on both interest rate floor and coi ceiling) which usually lasts until about age 85.

 

[sirherbie]

Since there's no disclosure of what the coi or rates are. If a client missed a payment a yr which theoretically takes most Guls from age 121 to age 90 then the company can do what the want and have it run out much quicker as they can adjust the coi.

 

[HoosierLife]

Since there's no disclosure of what the coi or rates are. If a client missed a payment a yr which theoretically takes most Guls from age 121 to age 90 then the company can do what the want and have it run out much quicker as they can adjust the coi.

I know I ran an illustration for a Foresters Smart UL a few weeks back. Had the guy mess with the numbers to base it off of the guaranteed interest rate. The projections had him paying up (for all intents and purposes) after 18 years.

Their Smart UL has a feature that if they live to 100 it's also essentially paid up until 121.

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But Foresters still said they couldn't guarantee it 100% because of COI.

What determines the COI?

 

[Robert Barney]

Got a story about one. ...... Duh! Old guys always have a story.

Couple years ago Norwayguy gave me a California lead. Turns out it was an 80 something 40 year quadriplegic. I could not help him but we found a need for his younger (70s) wife/caregiver. The solution was a dialed down UL to her age 90.

Here's what I was trying to get at.

I just ran a $100,000 quote for a 73 year old, female non-smoker (preferred, not plus) and got these results (lowest premiums).

to age 90 - 2,863.25 - Protective
to age 121 - 3,069.00 - North American or Midland (paid up at 100).

So on a $3,000 premium, an extra $200 per year ensures that her estate gets $100,000, where with the "to age 90" means if she lives beyond 90, here estate gets nothing.

Or look at the extra cost as a simple investment.

She invests $200 per year for 17 years, followed by 10 more payments of $3,000 per year, and her estate gets $100,000 from about $35,000 in payments over the next 27 years.

Meanwhile, if she happens to die somewhere after age 90, and before age 100, her estate gets the $100,000 before age 100.

So given that, who buys the "to age 90"?

 

[WinoBlues]

Here's what I was trying to get at.

I just ran a $100,000 quote for a 73 year old, female non-smoker (preferred, not plus) and got these results (lowest premiums).

to age 90 - 2,863.25 - Protective
to age 121 - 3,069.00 - North American or Midland (paid up at 100).

So on a $3,000 premium, an extra $200 per year ensures that her estate gets $100,000, where with the "to age 90" means if she lives beyond 90, here estate gets nothing.

Or look at the extra cost as a simple investment.

She invests $200 per year for 17 years, followed by 10 more payments of $3,000 per year, and her estate gets $100,000 from about $35,000 in payments over the next 27 years.

Meanwhile, if she happens to die somewhere after age 90, and before age 100, her estate gets the $100,000 before age 100.

So given that, who buys the "to age 90"?

They both owned and operated one of the oldest bookkeeping and tax offices in the city. While he was a quadriplegic Xs 40 years he worked every day. Smart guy. As their agent I showed them their opinions. They made their decision. I did show full pay. Their need ends/ended upon his death. They did not expect him to live anywhere near her 90th birthday. They were correct. She called me the day he died and cancelled the policy.

I was just answering your question on why someone would buy a to age 90 policy. At the end of the day I sell to adults. Most are capable of making their own decisions. Whether or not if I agree with them.