How IUL's use options

[DHK]

I dont care who said it. It's inaccurate.

All fees from all products help to fund the GA... INCLUDING WL FEES.

A little fun here: For a limited pay WL policy that is paid up... what fees?

 

[scagnt83]

A little fun here: For a limited pay WL policy that is paid up... what fees?

Just because a policy is paid-up, doesnt mean internal charges cease. It just means they are guaranteed not to cause a policy lapse.

UL breaks out the fees and makes them transparent. WL does not, but they are still there.

 

[DHK]

A paid up WL policy becomes a liability for the insurance company because it is guaranteed to be paid out per the contract. The only question is when.

I don't mean an RPU either. I mean a 10-pay, 20-pay, 65-pay limited pay policy that was paid to the end of the premium paying period. Everything is guaranteed (except dividend performance, of course).

If there are any fees, they are paid by the insurance company, not the insured... which is the difference between a paid-up WL policy and a similarly funded UL policy.

 

[DHK]

"I'm not crazy. [The College] had me tested."
I guess I know a few things about individual life insurance.

One down, two more to go!

 

[Tahoe Ray]

"I'm not crazy. [The College] had me tested."
I guess I know a few things about individual life insurance.

One down, two more to go!

View attachment 6643

That's "not official" so fake news.

You probably know nothing about life insurance.

 

[DHK]

That's "not official" so fake news.

You probably know nothing about life insurance.

ROFLMFAO!!!

 

[DHK]

I think I'll keep this (or rather the OFFICIAL grade report) as ammunition... for anybody who says I don't know what I'm talking about!

Since you seem to be one of the people that doesn't understand how IUL's earn their return perhaps you should read more and snark less.

Yeah, I know... that'll get old real quick. But it could be fun!

 

[Allen Trent]

A little fun here: For a limited pay WL policy that is paid up... what fees?

The fees, while not as transparent as a UL based product, are built into the WL illustration & contract.

if I pay 12k into a 10 pay WL as an annual payment & decide after 7 months I don’t want the new policy, do I receive all 12k back? I should because it doesn’t have a surrender charge. Anything less than 12k is a fee as a premium load or a policy fee, etc. those costs built in are to cover UW, commissions, etc in exchange for all the guarantees offered in the contract.

WL, while not seen in illustration, do have much more up front charges in essence than UL products & thus, the reason most WL have little to no net CV in the initial years. It is just that UL have most of the disclosed ingredients of the sausage making

perfectly ok with it as most of the permanent life I own is WL.

 

[DHK]

Everything you said is true.

Please notice the time frame and contract I'm talking about:

A 10-pay (or any other limited pay policy) that is paid up.

What are the fees after it is contractually paid up?

None.

Whatever fees there are... are the responsibility of the insurance company because it's their job to ensure they stay in business to meet the obligations in the contract.

 

[scagnt83]

A paid up WL policy becomes a liability for the insurance company because it is guaranteed to be paid out per the contract. The only question is when.

I don't mean an RPU either. I mean a 10-pay, 20-pay, 65-pay limited pay policy that was paid to the end of the premium paying period. Everything is guaranteed (except dividend performance, of course).

If there are any fees, they are paid by the insurance company, not the insured... which is the difference between a paid-up WL policy and a similarly funded UL policy.

Everything you said is true.

Please notice the time frame and contract I'm talking about:

A 10-pay (or any other limited pay policy) that is paid up.

What are the fees after it is contractually paid up?

None.

Whatever fees there are... are the responsibility of the insurance company because it's their job to ensure they stay in business to meet the obligations in the contract.

David, thats the kind of stuff captive agents say. But its not technically correct, and imo misleading. I mean, you are quoting the CEO of a carrier.... who's main goal is to get agents to sell his companies main product... which is WL.


Fees are not paid by the insurance carrier once a policy is Guaranteed Paid Up.

Enough Premiums have been paid (by the client), the Guaranteed Interest Rate creates enough guaranteed returns each year to cover all future expenses.


Why is the premium on a 10pay 2x - 3x higher than a full pay policy??
Because it requires a substantial amount more to start in order to generate the amount of returns needed each year to cover future expenses.


Perhaps you consider the guaranteed interest rate as "the carrier paying the fees"... but that doesnt happen without the client paying double the premium in the beginning years.

Also, the carrier staying in business and covering contractual guarantees is an assumed part of every insurance policy. It in no way means the carrier is "paying the fees" charged in a policy. The carrier might guarantee the interest earned to cover the expenses.... but that doesnt happen without the client paying a substantial amount more in order to generate that interest which covers those expenses.

Just because a Fee or Charge is covered by interest earned in a policy, does not mean the Fee or Charge does not exist anymore.