IUL Vs WL
- Thread starter WWYLB1113
- Start date
- 11,275
I'm going to ask questions that I know you didn't ask in your post:
How much death benefit does the insured need today and for the future?
Even if he's single, wouldn't it make sense to lock in a higher amount of term insurance for that same $75/month? Assuming standard underwriting, that should lock-in about a $1 million DB for 10-20 years with most carriers.
$75 won't do a whole lot to "overfund" an IUL properly. You can do a basic WL policy with a very small DB (maybe around $50k).
I suppose what I'm saying is that you need to solve the need for the death benefit first... then determine the best way to finance the death benefit - Term, IUL, WL... whatever.
Without the need for death benefit... why are you trying to sell a permanent life insurance plan?
How much death benefit does the insured need today and for the future?
Even if he's single, wouldn't it make sense to lock in a higher amount of term insurance for that same $75/month? Assuming standard underwriting, that should lock-in about a $1 million DB for 10-20 years with most carriers.
$75 won't do a whole lot to "overfund" an IUL properly. You can do a basic WL policy with a very small DB (maybe around $50k).
I suppose what I'm saying is that you need to solve the need for the death benefit first... then determine the best way to finance the death benefit - Term, IUL, WL... whatever.
Without the need for death benefit... why are you trying to sell a permanent life insurance plan?
- Thread starter
- #3
Easy answer its is actually for myself I have a while life policy right with a 100k death benefit and just trying to see from a cash value accumulation value right now if I'm getting the biggest bang for my buck. I know I will definitely be buying more insurance down the road just way options for right now
- 213
I like my IUL plan. I think the opportunity for cash value accumulation is greater. Obviously, agents of the mutuals will disagree.
But start with the end in mind. You got 75 dollars per month to spend? The minimum DB for most of the major players in IUL is 100k. Even if you could find a company that would issue down to 25k, ever without looking at an illustration I would bet you are nowhere close to overfunding. If you're standard or worse, that probably wouldn't even minimally fund it.
In my mind, IUL just doesn't make sense unless you're going to pour in right up to the MEC limit. Seventy five American dollars won't get you there.
Again, start with the end in mind. Pick your company that has the best par WL or IUL. Now look at how they handle term conversion. Find one that has good partial conversion, and purchase the biggest 10 or 5 or ART that $75 monthly premium will buy.
When you have about 5000 AP you can commit to it, convert an amount of term that equals 5000 in guideline level premium.
But start with the end in mind. You got 75 dollars per month to spend? The minimum DB for most of the major players in IUL is 100k. Even if you could find a company that would issue down to 25k, ever without looking at an illustration I would bet you are nowhere close to overfunding. If you're standard or worse, that probably wouldn't even minimally fund it.
In my mind, IUL just doesn't make sense unless you're going to pour in right up to the MEC limit. Seventy five American dollars won't get you there.
Again, start with the end in mind. Pick your company that has the best par WL or IUL. Now look at how they handle term conversion. Find one that has good partial conversion, and purchase the biggest 10 or 5 or ART that $75 monthly premium will buy.
When you have about 5000 AP you can commit to it, convert an amount of term that equals 5000 in guideline level premium.
- 8,707
American National Index UL 28 Male Nonsmoker Standard 75/Month Contribution till age 65 and then ceasing contributions Option B death Benefit to age 65 then changing to Option a
Initial Death Benefit 90,787 Projected CV ate age 65 $895,569 that is at the current index of 8.5% quick calc If I was showing this to a customer I would also show backing off the index as well at 7% assumed index the CV at 65 drops to $480,157 at 6% it drops to $319,269.
So $75 per month can max fund an IUL.
And to be clear I would recommend a seperate convertable term policy for your death benefits needs preferably with a company that allows for partial conversions so that if your health changes and you want to max fund additional monies you can convert from the term policy.
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$900/yr for 37 years (age 28 to 65) growing to $895,569 is 13.9% compounded ROR. Using your 6% cap, growing to $319,269 equals 9.9% compounded ROR.
No wonder people say these IULs are magic.
- 8,707
$900/yr for 37 years (age 28 to 65) growing to $895,569 is 13.9% compounded ROR. Using your 6% cap, growing to $319,269 equals 9.9% compounded ROR.
No wonder people say these IULs are magic.
I am on my phone but will go back and run it again and I will pull the illustration as I only hit the quick calc button which gave me the info I posted. I clearly entered a 28 year old male nonsmoker min face death benefit option B guideline premium of 900 annually with premium ending at age 65 and switching to option A at that point it gave me initial death benefit and cv at age 65.
MINewBeginning
Expert
- 81
So an IUL is really that powerful for cash accumulation. What's the early withdraw penalty? Loan interest?
- 213
Everything looks amazing on an illustration. Remember though, it only takes a single year to make your illustration worthless.
The real beauty of the IUL isn't the hypothetical good years of growth, it's the downside protection. You don't need to illustrate it damn near double digit growth to make it powerful. Hell, just show them how an indexed product would've performed during the the 2000s.
Instead of losing 30% in 2008 and 2009, you would have lost nothing.
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