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IUL Insurance...

harrycalahan

harrycalahan

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Ive got a term life policy that will take me to age 60. Well my mutual of omaha guy called and said I should REALLY look at getting an IUL. After my term expires, and if life goes accordingly, I shouldnt need another policy. So Im fine with what I have but of course, he needs to make a living too so... What can the Odt finance experts tell me about this?
 
GeauxLSU said:
What's the attraction from your perspective? If you already have a term life policy you're happy with, I'd pass but everyone's comfort level for covering "what ifs" is different. I have a Return of Premium 20 year I'm happy with. https://www.mdmag.com/physicians-mo...ance/dahle-5-reasons-not-to-buy-iul-insurance
Click to expand...
I told him Im 100% fine with what I currently have and would need to run this by my financial advisor (dad) and that I would call him back if I was interested. By the looks of it, Im not interested. It sounds like a grossly complicated fine print policy that has no benefit to me. Right now I pay $45/mo. After it expires, I should be debt free. Thats simple.
 
ANY universal life is a rip-off, plain and simple.

What it plays on is that most people are convinced that life insurance is a gamble, and they want to make sure they don't "lose" all that money they are paying for premiums.

Term life is pretty much as pure an insurance product as you will find. It is sold in a competitive market, and the product everyone is selling is the same. It represents one of the few items where the consumer benefits from a vigorous free market economy.

It sounds as if you are taking the correct approach to life insurance.

Anyone considering universal life would be much better off buying a term life policy that will meet their family's financial needs if he dies, and invest the difference in premium in a indexed money market fund.

As you have noted, UL takes a pretty simple concept, and gussies it up so that it's the insurance company making most of the money.

But the problem is, that it's just not human nature to accept that monthly premium "going down the drain", which is what the UL salesman will tell you is what you are doing.
 
Late to this party, but.....I have 40+ years in life and health insurance, NEVER an agent, most of my career I was an examiner....either employee or contractor...for state insurance departments investigating/auditing insurers. I conducted over 300 exams in my career. Buy Term, invest the difference. My wife and I have term policies, enough to pay final expenses and the mortgage. When the first one of us dies, we will lapse the remaining policy. Term Life insurance is a very simple and cheap concept. All the other types are primarily designed to separate the insured from more of his/her money in the form of profit for the company and commission for the agent.

This is not a new concept, Art Williams didn't invent it, it was around decades before he got in the business, BUT it is the right approach. And you can "ladder" policies of various term periods to provide insurance when you have kids, kids in college, paying off mortgage, final expenses. Shop around as coverage is the same but premiums are not. I would avoid return of premium contracts as all you are doing is loaning your money to the insurance company for them to "play" with.

Again OP sorry I didn't see this sooner.
 
The Old Jaybird said:
Late to this party, but.....I have 40+ years in life and health insurance, NEVER an agent, most of my career I was an examiner....either employee or contractor...to state insurance departments investigating/auditing insurers. I conducted over 300 exams in my career. Buy Term, invest the difference. My wife and I have term policies, enough to pay final expenses and the mortgage. When the first one of us dies, we will lapse the remaining policy. Term Life insurance is a very simple and cheap concept. All the other types are primarily designed to separate the insured from more of his/her money in the form of profit for the company and commission for the agent.

This is not a new concept, Art Williams didn't invent it, it was around decades before he got in the business, BUT it is the right approach. And you can "ladder" policies of various term periods to provide insurance when you have kids, kids in college, paying off mortgage, final expenses. Shop around as coverage is the same but premiums are not. I would avoid return of premium contracts as all you are doing is loaning your money to the insurance company for them to "play" with.

Again OP sorry I didn't see this sooner.
Click to expand...

Good advice!

I would add to check out the rating of the company. I think A++ by AM Best.

Want to make sure that company will be solvent long term.
 
Ratings are good, sort of....I can show you several companies that had excellent A. M. Best ratings a couple years before they went "tits up". There are no guarantees that the company will be around longer than you will, but buying from a "mutual" company, owned by the policyowners, rather than a stock company is a good start. The only problem is that there aren't many mutual companies anymore. Prudential and Metropolitan Life both started as mutual, but then "de-mutualized" 30-40 years ago.

Probably the best mutual around today is Northwestern Mutual in Milwaukee. I examined them twice for the IL Dept. of Insurance and once for the AZ Department.
 
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