"Ideal" VUL

[chithi]

A few years back when I first started researching LI contracts, there were some VUL's that provided 4% in the fixed-rate account. I am unable to find those - most likely due to the low rate environment. Is there still someone that (still) provides a rate higher that the 3% that appears to be the norm everywhere.

I read with some interest the VUL spreadsheets posted on this forum and am even more confused about this. The premium range from about 6k for prudential to almost double for MassMutual&Northwestern - does that reflect the risk on the viability of the insurer itself? Or is there something else they offer that I am unable to perceive?

I am guessing that from a purchase standpoint the criteria to be considered for purchasing one are (in decreasing order of priority)

- premiums - the lower the better
- fixed rate - the higher the better
- No lapse rider
- LTC rider
- Loads on the mutual funds (this is all over the place, but in another thread the jackson advisor vul was mentioned that has no load)
- other fees/expenses

There are some other criteria as well - forinstance prudential says that for a certain year one can only take out from the fixed-acct the lower of 2k or 20% (which somewhat defeats the purpose of this as a means of managing the market ups and downs). Northwestern has something to the effect that selecting the fixed rate sets the policy to option A and cannot be reversed!

There are just too many variations to put my arms around and quantitatively evaluate which would be better. Any recommendations/suggestions/ideas or other things to consider to get the most benefits at death, highest fixed rate and all riders while paying the lowest premium, fees and load.

 

[Norwayguy]

A few years back when I first started researching LI contracts, there were some VUL's that provided 4% in the fixed-rate account. I am unable to find those - most likely due to the low rate environment. Is there still someone that (still) provides a rate higher that the 3% that appears to be the norm everywhere.

I read with some interest the VUL spreadsheets posted on this forum and am even more confused about this. The premium range from about 6k for prudential to almost double for MassMutual&Northwestern - does that reflect the risk on the viability of the insurer itself? Or is there something else they offer that I am unable to perceive?

I am guessing that from a purchase standpoint the criteria to be considered for purchasing one are (in decreasing order of priority)

- premiums - the lower the better
- fixed rate - the higher the better
- No lapse rider
- LTC rider
- Loads on the mutual funds (this is all over the place, but in another thread the jackson advisor vul was mentioned that has no load)
- other fees/expenses

There are some other criteria as well - forinstance prudential says that for a certain year one can only take out from the fixed-acct the lower of 2k or 20% (which somewhat defeats the purpose of this as a means of managing the market ups and downs). Northwestern has something to the effect that selecting the fixed rate sets the policy to option A and cannot be reversed!

There are just too many variations to put my arms around and quantitatively evaluate which would be better. Any recommendations/suggestions/ideas or other things to consider to get the most benefits at death, highest fixed rate and all riders while paying the lowest premium, fees and load.

Variable contracts VAL, VUL and Variable annuities are not designed for market timing. Beyond what you already mentioned about fixed accounts there is typically a charge on transfers from fund to fund that exceed a stated amount per year. If you want freedom to move 100% of the money you want a money market fund not the fixed account, the carrier takes on the risk of the fixed account and is not going to let you time the market on it.

 

[chithi]

Variable contracts VAL, VUL and Variable annuities are not designed for market timing.

I understand : the attraction of the fixed account is to use it at somewhat of a hedge against market moves. A 3% return looks very attractive considering the environment we are in but I guess I can plan on placing a part of my contributions in the fixed-account and a part in the funds and just treat them as 2 separate accounts.

As was posted earlier in this forum, jackson is exiting the life-insurance business, so I will need to take it off my list :(.
So any suggestions on which provider has a product closest to the ideal criteria?

 

[BNTRS]

Yup, and I'm not sure that the JNL product was free of premium loads.

I would look at Lincoln.

Also, why not look to Penn for either their VUL or IUL? The guarantees are strong, and they can rider out the surrender charge. The premium load is still there, but it's not large. And expense wise it'll be much better long term.

Penn is only going to work on a premium finance or business owner situation, as their riders are for surrender free are only available in those two circumstances.

Lincoln I'm not sure. Find scagent on the forum. He should know.

 

[chithi]

Penn is only going to work on a premium finance or business owner situation, as their riders are for surrender free are only available in those two circumstances.

I went through their prospectus and

the Policies must be in support of a corporate sponsored non-qualified deferred compensation plan with a minimum of three insureds under the plan

I guess just creating a llc with my wife and daughter (and me) as the 3 insured may do? Other than being out the $800 fee for a california llc and to a cpa for wording up a plan for the deferred compensation this may work.

The one -ve for the Penn plan is they only give 2% for the fixed account though they also offer a equity-indexed-fixed option.

Thanks for your suggestions.

 

[mcouper]

Lincoln VULone - fully guaranteed db available, fixed account that you can dca from..

 

[INS42]

I went through their prospectus and

I guess just creating a llc with my wife and daughter (and me) as the 3 insured may do? Other than being out the $800 fee for a california llc and to a cpa for wording up a plan for the deferred compensation this may work.

The one -ve for the Penn plan is they only give 2% for the fixed account though they also offer a equity-indexed-fixed option.

Thanks for your suggestions.

Penn's VUL is currently crediting 3.85% in their fixed account. 2% is actually the minimum guarantee.

What part of CA do you live?

 

[chithi]

Penn's VUL is currently crediting 3.85% in their fixed account. 2% is actually the minimum guarantee.

YEah - I was just considering the worst case scenario (As compared to say a WL where the dividends are going to be higher in almost all scenarios). I am not a real fan of mutual funds and donot really like the hassle of managing allocation in a 401k, so I was really looking at the fixed rate as the one of the primary factors in deciding which way to go.

What part of CA do you live?

sf bayarea

 

[INS42]

YEah - I was just considering the worst case scenario (As compared to say a WL where the dividends are going to be higher in almost all scenarios). I am not a real fan of mutual funds and donot really like the hassle of managing allocation in a 401k, so I was really looking at the fixed rate as the one of the primary factors in deciding which way to go.

sf bayarea

Check out Penn's WL which has a 4% guarantee. They've managed to keep their dividend scale unchanged for the last 5 years at 6.34%!!

I'm in the bay area too. Let me know if you'd like any info on any of their products.

 

[BNTRS]

Yes, blend Penn's whole life and solve for minimum non MEC db. Penn is really good at this.

This will pretty much turn their WL contract into a HECV product.