UL vs Whole Life vs VUL

Submitted by r.edwards06 on Fri, 09/07/2007 - 03:41

ul vs whole life Saw this topic on another site. Which do you prefer to sell? Which do you or would you want to own?

Posted: 07 Sep 2007 06:30 Post Subject: ul vs whole life

Hi r.edwards06,

VUL works towards the cash value accumulation through investment in different investment funds, like- mutual funds. The word Variable in Variable Universal Life captures the volatile nature of the stock market. VUL allows the policy holder to invest his/her premium payment into the wide variety of investment funds available in the market and reap the benefits of the stock market. The VUL also offers flexibility in terms of premium payment which is unlike the whole life plans. In case of ‘Whole Life Plan' the policy holder is obliged to pay a fixed amount of premium on a regular basis till the term of the policy, failing which will cease the death benefit payable under the policy.

Hope this will clear off your confusion. If you have further queries, Pls, don't hesitate to ask me.

Moreover, it is nice to see your active participation in the forums.Keep participating, I bet, you will enjoy your association with ampminsure, as this community is growing and will definitely get benefited from the active participation of all its members.

Take care,

Juanita

Posted: 07 Sep 2007 07:34 Post Subject: ul vs vul

Which policy to own? Well, it is very difficult to give a general verdict when it comes to ul vs whole life. ‘Cut your coat according to your cloth'- the old English saying applies in case of buying the life insurance policy also. You should purchase the one which will suite your needs the best and also your budget.

Whole life, VUL and EIUL, all of them have their own share of advantages and disadvantages. VUL is more expensive than the Whole life plans. Additionally, it also bears the risk of open market investments. On the other hand, whole life plan is the most common form of permanent life insurance. It stays into effect till the lifetime of the insured. It is also pocket-friendly (at least cheaper than the other two forms of life policies). It promises to pay a certain amount as death benefit but deprives you from deriving the advantages of stock market investment.

Regards, Fatman

Posted: 07 Sep 2007 07:47 Post Subject:

When Life insurance policies are linked to the stock market, they become volatile as Juanita mentioned that. This is because of the nature of the stock market volatility. Sometimes called unit linked life insurance policies.

When it's ul vs whole life my preference is to go with the unit linked ones. As the rate of returns are much higher than the interest rates what the banks provide. And in addition this funds are managed by the professional fund managers (mutual funds, hedge funds etc.). So one can easily expect good return.

Here the caution is that, to which stocks your money is being with, must check with the portfolios the fund managers maintains.. that is the stock. Whether they are growth stock or not.

While selling this type of life insurance policies, it will be a challenge. Because you need to make people understand that why one should invest in those life insurance policies. Better one must learn the advantages and disadvantages of the stock market.

Posted: 07 Sep 2007 08:46 Post Subject: ul vs vul

My friend, agent's compensation varies with the companies. Different companies have different commission structure. But in general, an agent may make more money by selling universal policies. However, across the nation, on an average, an agent may earn 30-50% as a commission on the term-life-insurance and 90-95% commission by selling the whole life plans. But again this is only hypothetic representation. The actual commission of an agent may or may not obey it. ArindamSenIdies

Posted: 07 Sep 2007 03:28 Post Subject: ul vs whole life

When it comes to ul vs vul I understand how the policies work. I was hoping for a discussion on which product you prefer as an agent and consumer. As an agent I like UL because of the flexibility. I think that the cash value projections are misleading though and many agents don't think about or discuss with their clients who plan on using the cash value to supplement their retirements the possibility that the policy won't perform as projected. Or what their cash value could look like if the market is on a down turn when they start taking loans.

As a consumer I prefer whole life. Id rather be charged for actual mortality than a manufactured COI that has profits already built in.

Posted: 07 Sep 2007 03:30 Post Subject:

that was me above. Forgot to log in

Posted: 10 Oct 2007 05:51 Post Subject: The Company Largely Defines What Is Most Advantageous...

I have seen many policy types from various insurers and it seems to me that the whole life product tends to be more friendly for the typical consumer (dependent of course on the crediting rate in conjuction with the insurers fees, loads, and producer comission schedule). Many of the companies I have worked for in the past, have what I considered to be outrageous surrender charges and fees, with a relatively low crediting rate which was often misrepresented to an uninformed consumer in UL illustrations (such is going to be the case in a profit oriented organization). That being said, each vehicle could have advantages for consumers in varying economic situations. Whenever its ul vs vul I must say that for the wealthy sect, a VUL may be the most appropriate if other tax advantaged investment alternatives are unavailable based on IRS means limitations. I tend to think the UL is most appropriate in estate planning instances; but again, this is subject to individual consideration of opportunity cost and the feds decisions upcoming in 2011.

This is an interesting chat room. Keep the comments flowing!

Dan

Posted: 28 Oct 2008 04:14 Post Subject:

I own WL enough said.


Scott

Im Scott and I approve this message!

Posted: 29 Oct 2008 01:19 Post Subject: ul vs whole life

I don't think that life insurance should be an investment vehicle. When I tell my clients that they are covered with life insurance to a certain age, I want to know that it will not change. Fixed UL or Term for me is the only way to go. Just my opinion...

Michael
FindYourPolicy.com

Posted: 29 Oct 2008 03:14 Post Subject: universal life

Who can suggest to me what 'good' insurance companies in PA? I'm trying to find Life Insurance for my son. I've looked at several Insurance companies. However.....whenever I tell me what I can afford ( not gonna say the name of the companies..) they basically tell me, "sorry, I can't help you." I'm low-income...and just want something I can afford AND a 'good' policy.

Posted: 29 Oct 2008 03:25 Post Subject:

Hello Chargesfan
If you go to FindYourPolicy.com and at the bottom of the website on the front page are google ads. They are specific to life insurance companies on the internet and also to your area. You can call them and see what prices they come up with.

I hope this helps.
Michael

Posted: 29 Oct 2008 04:10 Post Subject:

PM me with the following info of your son:

Birthdate, height, weight, smoker?, overall health (any diagnosed situations/medications), how much insurance, how much you want to spend.

Posted: 30 Oct 2008 05:15 Post Subject:

I like so sell 30 year level term. That is what I personally have myself. You get much more death benefit for your premium, I look at it as risk protection for my family rather that an investment, which is how UL and WL are sold.

Posted: 30 Oct 2008 11:28 Post Subject: insurance

Hey, BEATUP.......30 year level term? Please forgive my 'ignorance', however, that ALMOST sounds like that IS Life Insurance. What's the difference between the 30 Year and Life( term and whole.) I'm not too familiar with all of the 'Life Insurances' out there.

Posted: 30 Oct 2008 02:26 Post Subject:

30 year term (also sold in 5, 10, 15, 20 year increments) is pretty much how it sounds. It's good for 30 years. If you die during that 30 years, your beneficiary gets the death benefit. If you live past the 30 years, you and your beneficiary get zippo.

The advantage, as mentioned above is that the premiums are less. However, there are two disadvantages.

1. If you want insurance (again) after the policy runs out, you have to buy a new policy - based on your new age and health. The rates will be higher because you are older and if there is something medically that popped up during the 30 years, you may be uninsurable and can't get anything.

2. The face value of the policy is all your beneficiary will get. There is nothing inside a term policy that will allow you to build cash value.

With a UL, VUL those two disadvantages go away.

1. The yearly premium, where more than with a term policy, will be what you pay - forever. The premium will never adjust because you are older. What you start paying, is what you will pay until you die. If something medically happens 20 years into the policy that now makes you uninsurable, your current policy will stay in place. It simply can't be terminated (unless you stop payments).

2. There is an ability to have "cash value" in the policy based on your investment choices. If your 200K VUL has done well in the market, you could have an extra, for example 50K in your policy. When you pass, your beneficiary will get the 200K and the 50K. However, a nice think about the cash value is that it is available to you before you pass. You can "borrow" against your policy - buy a boat, vacation house, pay for schooling, etc. You will have to pay it back but if you pass before it is paid back, the balance owed is simply taken off the death benefit.
Even using today's market crisis as an example, suppose your cash value drops to nada...no worries. Your death benefit is still 200K. It will alway be 200K (unless you borrowed and didn't pay enough back).

Posted: 30 Oct 2008 06:53 Post Subject: inasurance

There sure is a difference between the two- Life and Term. I would like one that builds Cash Value. I sure can't predict what's gonna happen 20 years from now.

Posted: 30 Oct 2008 07:11 Post Subject:

Smart woman...Term has an advantage if the policy is taken out on a child - then once he/she turns 18 (or so), it can easily be converted to a VUL/UL - with low premiums because the insured is still wayyyyyy young.

Posted: 30 Oct 2008 07:56 Post Subject:

The thirty year term will give me risk protection while I am paying off my mortage and saving for retirement. When you look at the differences in premiums the WL and UL look like a poor investment to me. I would rather put the difference in premiums towards something that would build interes much more quickly.

Posted: 30 Oct 2008 08:09 Post Subject:

How does a 30 year term build interest?

Posted: 30 Oct 2008 10:48 Post Subject:

Actually, beatuplunchbox is absolutely correct. A 30 year term policy is often the way to go. Especially if you don't plan to live very long or be wealthy enough to have estate tax exposure.

Posted: 30 Oct 2008 11:17 Post Subject:

Especially if you don't plan to live very long or be wealthy enough to have estate tax exposure.



Now there is a goal!!!!

Posted: 02 Nov 2008 04:50 Post Subject:

Hey Wendy,
If you ever want to know more about the different types of policies, you can always go to the life insurance guide section. I know the guy who put that together and he covers some pretty good points.

Mark

Posted: 26 Nov 2008 09:51 Post Subject:

beatuplunchbox,

I agree that sometime is it better to buy a term and invest the difference (sometimes its better sometimes its not....depends on the number). The problem is WILL your client actually do this. For this plan to work you actually HAVE to invest the difference. Most people that say that will never invest the difference.

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