Helping Clients Understand Universal Life Policies

[Bitnis]

scagent83,

Again, thanks for responding. I have some follow-up questions I'll put up later. The one thing that caught my attention is not paying for a GUL and being able to make up the payments. WOW, that is a nice feature.

Who is LFG. I'm appointed with Penn. If you are familiar with Ohio National, would you prefer Penn or Ohio for GUL?

If you are in SC I'm not far from you. Do you do joint work? lol.

 

[dgoldenz]

scagent83,

Again, thanks for responding. I have some follow-up questions I'll put up later. The one thing that caught my attention is not paying for a GUL and being able to make up the payments. WOW, that is a nice feature.

Who is LFG. I'm appointed with Penn. If you are familiar with Ohio National, would you prefer Penn or Ohio for GUL?

If you are in SC I'm not far from you. Do you do joint work? lol.

Be careful with that...and LFG is Lincoln Financial Group.

 

[VolAgent]

Be careful with that...and LFG is Lincoln Financial Group.

Ditto.

If premium payments are missed on a GUL and the CV is zero, the policy will enter grace period and then lapse. Also, the premium required to restore the guarantee may be substantially more than the amount of premium missed.

The best bet is just to tell the client that they cannot miss a premium with a GUL, otherwise all bets are off.

 

[Bitnis]

Be careful with that

I hesitated to even say it.

 

[dgoldenz]

Just think of it as term insurance guaranteed for life. Your clients will always forget what you told them even if you're right. When you tell them "you can even miss a premium payment or two and pay it later" they just hear "I don't have to pay for this when I don't feel like it" and then they will blame you when the policy lapses.

 

[scagnt83]

Be careful with that...

Yes. Do be careful with that. This is policy specific, some GULs if you miss a payment the guarantee goes away period.

Also, be careful explaining this to a client (no matter what type of UL it may be). I am always very careful about how I phrase the flexibility of premiums in a UL. I usually emphasize that its not good at all to miss scheduled premiums and that it should only be done in extreme circumstances... (of course it depends on the purpose of the policy and the type of client)

But its not a feature that I really emphasize to clients, especially the less sophisticated client.

 

[Bitnis]

Does the premium increase like ART? No guaranteed cash value, no guaranteed premium. What makes this product a better fit than convertible term or whole life?

 

[scagnt83]

Does the premium increase like ART? No guaranteed cash value, no guaranteed premium. What makes this product a better fit than convertible term or whole life?

No. GUL is a level premium.

Are you asking about GUL or UL in general??

 

[Bitnis]

Are you asking about GUL or UL in general??

Okay so GUL has a guaranteed premium and UL is like ART?
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Let me see if I can explain these in a nutshell.

There is UL, IUL, GUL, and VUL.

UL

• Cash value is not guaranteed and the rate of return is based on current interest rates
• The death benefit is guaranteed provided a certain premium is maintained

IUL

• Cash value is not guaranteed and the return is based on a certain index
• The death benefit is guaranteed provided a certain premium is maintained

GUL

• Cash value is not guaranteed but the rate of return is guaranteed
• The death benefit is guaranteed provided a certain premium is maintained

VUL

• Cash value is not guaranteed and the return is based on the companies portfolio of investments
• The death benefit is guaranteed provided a certain premium is maintained

I’m not sure how the death benefit portion of the premium is calculated unless it is simply term to age 120.

 

[craigmac1977]

In my opinion Genworth has always come up with some of the best rates for GUL's. Not all of the times but most of the time.