Real % return on VUL policy?

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Aug 15, 2005 7:32 pm

Wondering what is the real % return on VUL policy....an insurance agent recommend me to buy one. I know I need insurance coverge,and I would keep for at least 20 yrs. However, not sure about after deduct all the fee in VUL, what is real % return? I shopped around someone run the illustration has 8%, 10%, someone even show me 12%.
Second, it that matters of which company I buy from?

Hopefully, I could get some opinions here!

Aug 15, 2005 8:09 pm

Lily,


1.  Let's start with the fact that life insurance is NOT an investment.  It is life insurance.


2.  If you plan to only keep the insurance for 20 years, you are being sold the wrong policy.  You should consider 20 year term insurance.


3.  The only way to know the "real return" is after the fact.  VUL has investment features that can be illustrated at any number of rates of return, but never above 12%.  Personally, I use 8% maximum.  To do otherwise is asking to be sued or at least demonstrating your total lack of professionalism in insurance.


4.  Lastly, YES, it matters what company you buy from.  There are any number of quality life insurance companies in the marketplace and many of them have superiuor ratings from a wide range of ratings agencies/companies.  There is no reason to do business with other than an A+ AM Best Rated company.


Meaning no disrespect but based on your questions, may I correctly assume you are not in the business?  You are a living, breathing example of WHY people should be buying their life insurance from life insurance professionals...and not asking questions on the internet of people they do not know and do not have any idea of the credentials of the person answering them.


Find a life agent with lots of initials (CLU, ChFC, CFP, LUTCF, REBC, etc.) after his/her name and make them earn their commission by educating you delivering you service.

Aug 15, 2005 8:33 pm

Here's a better idea...consider this concept:


http://www.insmark.com/ConceptLibrary/pdfs/ConceptCenter_Ar ticle%20_MA171_.pdf

Aug 15, 2005 8:36 pm

Please be aware that the topic discussed in the article IS NOT a variable universal life policy.  It is an equity indexed universal life policy.

Aug 15, 2005 11:51 pm
FinclPlngPro:

Lily,


1.  Let's start with the fact that life insurance is NOT an investment.  It is life insurance.


2.  If you plan to only keep the insurance for 20 years, you are being sold the wrong policy.  You should consider 20 year term insurance.


3.  The only way to know the "real return" is after the fact.  VUL has investment features that can be illustrated at any number of rates of return, but never above 12%.  Personally, I use 8% maximum.  To do otherwise is asking to be sued or at least demonstrating your total lack of professionalism in insurance.


4.  Lastly, YES, it matters what company you buy from.  There are any number of quality life insurance companies in the marketplace and many of them have superiuor ratings from a wide range of ratings agencies/companies.  There is no reason to do business with other than an A+ AM Best Rated company.


Meaning no disrespect but based on your questions, may I correctly assume you are not in the business?  You are a living, breathing example of WHY people should be buying their life insurance from life insurance professionals...and not asking questions on the internet of people they do not know and do not have any idea of the credentials of the person answering them.


Find a life agent with lots of initials (CLU, ChFC, CFP, LUTCF, REBC, etc.) after his/her name and make them earn their commission by educating you delivering you service.



How exactly do you know this person should consider 20 year level term when you know nothing about them, including their age or insurability?  Or the amount of coverage they need and as well their ability to pay?


For many folks the net cost of whole life over 20 years can be competitive, depending upon the age at issue.


Not to mention-what happens if in year 14, say, Lily is out of work for 4 month, misses a premium payment, and the policy lapses(since it is term, and there will be no option).  Then-say in year 15 she is working again, but not able to afford a new policy, and sadly she dies, leaving her children to fend for themselves.



Far fetched?  Well that's why people buy life insurance in the first place.


And oh, by the way, initials after one's name are ok, but common sense is helpful too.

Aug 17, 2005 12:59 am

Joe...


Go back and read Lily's post.  She was asking investment questions about life insurance.


Unlike you...trying to be a smart as_ and argue with me...I was offering her answers to her questions...and a positive suggestion. Notice...I told her to go see an insurance professional.  That way she would have the answer to your hypothetical...


"How exactly do you know this person should consider 20 year level term when you know nothing about them, including their age or insurability?  Or the amount of coverage they need and as well their ability to pay?"


I don't...and neither do you.  But the life pro would!

Aug 17, 2005 10:04 am
FinclPlngPro:

Joe...


Go back and read Lily's post.  She was asking investment questions about life insurance.


Unlike you...trying to be a smart as_ and argue with me...I was offering her answers to her questions...and a positive suggestion. Notice...I told her to go see an insurance professional.  That way she would have the answer to your hypothetical...


"How exactly do you know this person should consider 20 year level term when you know nothing about them, including their age or insurability?  Or the amount of coverage they need and as well their ability to pay?"


I don't...and neither do you.  But the life pro would!



I was not trying to be a smart arse....this board is, I thought, a place where ideas and opinions are freely exchanged.


You are correct in that Lily was focussing on VUL as an 'investment', and you and I both know that almost never works well merely as an investment-despite what some insurance salesmen might try to tell you....


And yes-true-you did suggest she see a 'professional', and I hope she finds a good one instead of the clown who tried to plow her into this policy as an 'investment'.


I was merely trying to offer a different point of view-and as well open your eyes to the possibilities.  No offense intended.....