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.
Which policy to own? Well, it is very difficult to give a general verdict in this regard. ‘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.
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.
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.
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
I understand how the policies work. I was hoping for a disscusion 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. _________________ Register Now to have your Insurance queries solved.
Posted: Wed Oct 10, 2007 5:51 pm 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. 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 _________________ Register Now to have your Insurance queries solved.
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...
Posted: Wed Oct 29, 2008 3:14 pm 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.
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.
Birthdate, height, weight, smoker?, overall health (any diagnosed situations/medications), how much insurance, how much you want to spend. _________________ Life moves pretty fast. If you don't stop and look around once in a while, you could miss it. - Ferris Bueller
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. _________________ Thinking about becoming a health insurance agent or just getting started out as one?
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