IUL w/non-lapse rider or WL seem to be the best choices based on the scenario presented. While you have pitched IUL, adding the non-lapse rider not only protects the client, it gives you professional creditability. Use this event as a learning experience. Plenty of solid knowledge on the forum, but you can empower yourself if you research the possible solutions. Lots of your solutions can be solved when you know what the product can or cannot do.
Easiest Way to Explain IUL to Client
- Thread starter AOKING
- Start date
- 680
My understanding is that the IUL product was specifically designed to take advantage of the tax benefits of life insurance cash accumulation, without becoming an MEC ie thus loosing those tax benefits.
If the client has extra cash to save or invest, and has exhausted other tax advantaged methods, and has a need for life insurance, then a max fund IUL may be appropriate.
But for death benefit, a true GUL is what will fill out that guarantee column.
I checked into north American recently, they have a guarantee rider which is free but only lasts so long.
A client of mine was recently replaced by one of these, the agent told him to "pay the minimum $130mo, don't worry about the increased price after the guarantee it'll just be a little."
I showed him in the contact where his premium would go up to $600mo in a few years, and get bigger every year...client said "naww, that's not what the agent told ME"
So he basically bought an overpriced term product. Maybe I'll go fix it after his wife's policy pays out fyc
If the client has extra cash to save or invest, and has exhausted other tax advantaged methods, and has a need for life insurance, then a max fund IUL may be appropriate.
But for death benefit, a true GUL is what will fill out that guarantee column.
I checked into north American recently, they have a guarantee rider which is free but only lasts so long.
A client of mine was recently replaced by one of these, the agent told him to "pay the minimum $130mo, don't worry about the increased price after the guarantee it'll just be a little."
I showed him in the contact where his premium would go up to $600mo in a few years, and get bigger every year...client said "naww, that's not what the agent told ME"
So he basically bought an overpriced term product. Maybe I'll go fix it after his wife's policy pays out fyc
- 16,876
I've got a question that one of you might know the answer to. Obviously state guarantee funds are pretty useless on UL and IUL policies because they only cover the guaranteed elements of the policy and most of those policies have guarantees that go in the crapper pretty early.
But with GUL policies, the even though the guaranteed column runs out early just like a regular UL it has the secondary guarantee that the death benefit will stay in force. What I wonder is whether the state guarantee program in in most states would cover that secondary guarantee or just go by the base policy guarantee and toss them under the bus like regular ULs? Has anyone ever questioned this in their own state? Do they limit the coverage to base policy guarantees? Or do they extend it to secondary guarantees?
But with GUL policies, the even though the guaranteed column runs out early just like a regular UL it has the secondary guarantee that the death benefit will stay in force. What I wonder is whether the state guarantee program in in most states would cover that secondary guarantee or just go by the base policy guarantee and toss them under the bus like regular ULs? Has anyone ever questioned this in their own state? Do they limit the coverage to base policy guarantees? Or do they extend it to secondary guarantees?
- 10,313
NA/MNL have a separate GIUL product. Not a Rider.
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