Posted: Tue Apr 22, 2008 6:00 am Post subject: is variable universal life permanent?
Before opting I'd like to know....if variable universal life a form of permanent life policy! _________________ Register Now to have your Insurance queries solved.
Yes my friend, it is certainly a form of permanent life insurance wherein the death benefit would be reimbursed when the insured dies any point of time till the date of maturity. It has the word 'variable' in its description to signify its nature of investing the amount across multiple accounts. Generally it covers for some 100 years or so. Berrman_jones _________________ Register Now to have your Insurance queries solved.
Posted: Tue Apr 22, 2008 6:50 am Post subject: Why it ?
Hi yeah,
You may certainly take it as permanent & also note that it is meant to get special tax benefits under the US IRC. Investment returns get added to the cash value benefit through the life of your policy. Such returns I guess are not meant to be taxed upon.
Another benefit of choosing such policies would be that the VUL have flexi-premium schemes to pick from. In order to ensure the dealth benefit you'd need to pay up the premium on a regular month basis.
Thanx,
PackardBell _________________ Register Now to have your Insurance queries solved.
But remember that you need to have sufficient cash through all those years to be able to feed the policy costs. _________________ Register Now to have your Insurance queries solved.
Posted: Tue May 06, 2008 2:15 am Post subject: insurance
SOO........Permanent you can have until your life ends ( lack of a better way to say it)? Isn't Whole the same thing? I know people who actually have Whole Life until the age of 99 years old. What's the diffrerence there? They BOTH build cash value?
SOO........Permanent you can have until your life ends ( lack of a better way to say it)? Isn't Whole the same thing?
Quote:
Universal Life is one of two catagories of "permanent" life insurance the other being Whole Life.
Universal and Whole life are similar products. The biggest and easiest to explain difference is that in most Whole Life policies the premium, interest rate, cash value and death benefit are all guaranteed and never change as long as the premium is paid. Whereas with UL, the interest rate fluctuates and the death benefit and premium can be adjusted by the policyowner subject to certain provisions.
As for the Whole life to age 99 thing, contracts that I've seen have the policy maturing on that date, meaning if the insured is still living and the policy is still in force they pay the death benefit to the policyowner at age 99.
Posted: Wed May 07, 2008 3:09 am Post subject: insurance
OH!! OK...I catchca!! Good explaination. Would the premiums be the same? I mean..the monthly payments..would the be GREATER than a 'regualar' Whole Life policy?
Well, generally Whole Life has a higher premium than the "target" premium on a Universal Life with the same amount of coverage.
But the flexible premium nature of the Universal Life policy allows the ability to pay more or less than the "target" premium which is the companies suggested premium for best policy performance.
You two are having a real interesting discussion on life insurance, but I just wanted to butt in for a minute.
It sounds like you are leaning toward buying a "Universal Life" insurance policy and I would just like to caution you for a minute.
Universal Life insurance has probably caused more confusion and lawsuits than any other type of permanent life insurance, here's why:
When it was first introduced, it was presented as an "investment", a way to establish a significant retirement income. Then it was paying 13% or 14% interest on the cash accumulation value and if those interest rates had remained stable, it would have accumulated a lot of money, in most cases.
The interest rate now is 3.5%, maybe as high as 5%. Life insurance should NEVER be purchased for "cash value" alone, under any circumstances.
Universal life can be designed to be an excelled life insurance program, but just make sure that you tell your agent that you want a premium that will carry the policy to age 99 or 100 or later. If you pay a "minimum" premim on a UL, it will more than likely not provide insurance protection for over 10-15-20 years, unless you increase your premiums, significantly.
If you are seeking life insurance in an amount below $100,000 and you want permanent insurance, I would strongly suggest the old traditional "Whole Life" insurance policy.
(I won't even get into the "variable" part right now.)
Maze, you make a great point. I was biting my tounge when I read a recent thread that asked if equity indexed UL was a good investment and tons of people responed to the original poster that it is a good "investment".
I really wanted to remind them that it's highly unethical if not illegal (if you're an agent) to represent any life product as an investment.
That said, I really think UL is a great product with a bad rep. If SDchargersfan were my client I don't think it's what I'd be recommending it based on age and amount of coverage desired. But for people ages 21-35 who don't smoke it's still a great deal despite lower interest rates. I don't stress the cash accumulation but rather the flexibility it gives you as a lifelong insurance product. It's also most effective as one part of your total life insurance program, not as your only coverage.
Chargersfan,
If you lived in Ohio I'd offer to take you to lunch and tell you all about it, since I'm not licensed in MO though, I encourage you to find a local agent you feel comfortable with who can help you decide if UL, WL, or some combination of either with Term is best. If I remember correctly and you're a smoker you may even be best off getting a term policy for life coverage and contributing to an annuity product for cash accumulation. But again, a good agent will go over all of this with you and help you make the best, most informed choice.
