by sumitseoleaderindia » Thu Jul 26, 2012 10:26 am
1) Access to Cash
A policy’s cash value can be surrendered, in total or in part, for cash that can be put toward important uses like a child’s education, a business opportunity or supplemental retirement income. Also, you can borrow from your insurer at relatively low interest rates and use the cash value as collateral. The loan is not dependent on credit checks or other restrictions like loans from most financial institutions. Keep in mind that borrowing or withdrawing funds from your policy will reduce its cash value and death benefit if not repaid.
2) Flexibility
If you need to stop paying premiums, the cash value can keep your insurance protection in force for a period of time.
3) Tax Advantages
Cash value accumulates on a tax- deferred basis, similar to assets in most retirement and college savings plans. Death benefits paid to the beneficiary generally are not subject to federal income tax.
4) Guaranteed Coverage
As long as you don’t allow your policy to lapse, you’ll have the coverage for life and won’t need to worry about being unable to afford coverage if your health deteriorates.
5) Stable Premiums
With many types of permanent insurance, premiums will remain constant or stable over your lifetime. With term insurance, premiums often increase as you age.
A policy’s cash value can be surrendered, in total or in part, for cash that can be put toward important uses like a child’s education, a business opportunity or supplemental retirement income. Also, you can borrow from your insurer at relatively low interest rates and use the cash value as collateral. The loan is not dependent on credit checks or other restrictions like loans from most financial institutions. Keep in mind that borrowing or withdrawing funds from your policy will reduce its cash value and death benefit if not repaid.
2) Flexibility
If you need to stop paying premiums, the cash value can keep your insurance protection in force for a period of time.
3) Tax Advantages
Cash value accumulates on a tax- deferred basis, similar to assets in most retirement and college savings plans. Death benefits paid to the beneficiary generally are not subject to federal income tax.
4) Guaranteed Coverage
As long as you don’t allow your policy to lapse, you’ll have the coverage for life and won’t need to worry about being unable to afford coverage if your health deteriorates.
5) Stable Premiums
With many types of permanent insurance, premiums will remain constant or stable over your lifetime. With term insurance, premiums often increase as you age.
Posted: Wed Aug 01, 2012 11:51 am Post Subject:
"Pay the premium and have coverage for life. Don't pay the premium and the coverage will lapse."
Clients understand the concept that they will have coverage only as long as they pay their premiums.
To your credit, YOUR clients may understand this, but most of the people I come across or who are referred to me do not.
And the insurance companies are not promoting the concept as "term insurance" in their marketing materials which is why agents are NOT describing it as term insurance. Some of the marketing materials are more cautiously worded to say things like "your policy can build potential cash value" (grammatically incorrect, by the way) but the average insurance consumer does not understand the subtlety of those words, and believes other words they see, like "permanent universal life insurance" -- the "permanent" part of which is sometimes a misnomer.
Take a look at how Prudential is trying to get producers to promote their new UL product. It does not match your statement.
http://www.prudential.com/media/managed/iaul/iaul.htm?chn=Eblast&src=InsuranceNewsNet&ad=IAUL&dim=NA
Posted: Wed Aug 01, 2012 02:11 pm Post Subject:
Max, that is not a product that is designed to be minimally funded. The products that I'm referring to are designed to always be minimally funded. In fact, it is stupid to do otherwise. If one funds more than the minimum, the cash surrender value will still end up being zero.
Posted: Sat Aug 04, 2012 05:25 am Post Subject:
The products that I'm referring to are designed to always be minimally funded.
OK, fine. Understood. Those products have a specific purpose (such as estate planning uses). The average person being sold UL is being sold a product intended to accumulate cash value (like the Pru product above "build potential cash value"), and we know that the purchase of such a policy often has a very different outcome.
Posted: Sat Aug 04, 2012 03:08 pm Post Subject:
Max, you are correct. I was talking specifically about UL products that are not designed to build cash value.
Add your comment