by Guest » Fri Sep 07, 2007 09:20 am
Hi friends, I've heard that Equity indexed universal life insurance can be a very good investment option. I want to purchase a policy that will give me some investment benefits along with life coverage. Shall I consider buying EIUL or something else? Pls. suggest.
Jeremiah
Jeremiah
Posted: Mon Dec 14, 2009 06:01 am Post Subject:
When assertions and/or recommendations like the one above are posted in this site, readers should protect their best interest by researching the company and learning what the industry and/or any regulatory agencies have to say.
An Informed Decision Is Always The Best Decision
Posted: Tue Dec 15, 2009 04:56 am Post Subject:
Notice that Jobs 4 grads conveniently doesn't mention the cost of insurance.
Posted: Fri Jan 08, 2010 06:09 pm Post Subject: Can anyone explain how they do this?
I have talked to agents from World Financial Group and searched around the internet but nobody seems to be able to explain how the insurance companies guarantee no losses and also give you the return when the market goes up. Simple logic would make this look impossible. I understand that the premiums are not invested directly in the stock market but if not then what is the insurance company doing with the money? And if it's not tied directly to equities, does the insurance company decide how much your return should be when the market is good?
Posted: Fri Jan 08, 2010 08:29 pm Post Subject:
The insurance company is able to guarantee no losses. They aren't guaranteeing that one won't lose money on their insurance contract. They are saying that the side fund won't lose money.
It's a waste of time to understand how the side fund works without understanding the cost of insurance.
Posted: Sat Jan 09, 2010 03:46 am Post Subject:
This is a good point. Talk to you're blue in the face about the indexing part of an equity indexed life product, but if you don't understand how universal life insurance works, you're in for a big surprise when you get older.
Posted: Sun Jan 24, 2010 10:02 pm Post Subject: life insurance
want to have large numbrs f customers to achieve my target
Posted: Wed Feb 03, 2010 01:05 am Post Subject: EIUL
I have thought about buying EIUL, so could you please give me some suggestions about this produce.
Thank you,
Theresa
Posted: Wed Feb 03, 2010 03:09 am Post Subject:
Suggestion number one: don't buy it.
It's all about the illustration magic.
Posted: Tue May 04, 2010 03:07 pm Post Subject:
Sorry I didn't see this sooner. The Dec 13, 2009 post from "Jobs4Grads" is a perfect example of an agent's inability to understand the product he wants others to purchase. While he talks about "a Global index with a 13% cap" and "Return should be 11% a year," (sounds a lot like an unlawful statement of "guarantee" to me) and "Will always outperform the S&P 500", (again another unlawful guarantee) he shows his utter ignorance of EIUL and UL in general (and demonstrates his lack of a FINRA securities registration).
Notice that nowhere in his post does he mention anything about the "participation rate", yet he does state, "So when the S&P is rebounding in an up year back to $100,000, your I.U.L. is actually coming up off the line of $100,000 to maybe $113,000," which is unadulterated hogwash! The participation rate in every WRL EIUL policy I've had the pleasure of tearing apart is 75%, and none of them have shown a 13% rate cap. If the associated index rises at a 12% rate (notice I did not use 13% like Jobs4Grads did -- because 12% is most any of us with a securities license can talk about) -- the 75% participation rate limits the increase to 75% of 12%. If the index were to have a phenomenal year, the rate cap limits the upside to just 12% even if 75% of whatever would be higher.
WFG reps are trained to say to prospects, "You get ALL of the upside of the market, with NONE of the downside." Ain't so. As Guest1 and BNTRS tried to point out, just because a negative return rate in the index is bolstered by a 1% minimum guarantee in the contract, it does not mean that one's cash value in the contract will not decline. The cost of insurance, waiver of premium rider, child rider, and other fees and expenses are all charged each month whether the index is up or down. And as age goes up, erosion of cash value can accelerate beyond even a contract's 5% or 6% rate of return in a year.
And speaking of the "index", it is the year-over-year change that affects the interest rate applied to the cash value, not the day-to-day performance that one may be able to exploit in a Variable Universal Life policy that Jobs4Grads cannot market because he does not have a securities license. The index could rise, rise, rise most of the year, and give back everything it gained on December 30, if the change between Jan 1 and Dec 31 is 1%, that's what the EIUL policy earns for the next 12 months.
If my S&P500 index mutual fund is rising daily, his EIUL putters along at 1% for 12 months. It does not rocket from $100,000 to $113,000. Lord have mercy.
WFG reps are also taught to use a hand drawn illustration (that most of them have never really figured out, they just memorize the script and the drawings) that attempts to show that UL is in the same category but more advantageous than a retirement account such as a 401(k) or IRA, and they are even taught to say, "Mr. Jones, you can only put $5,000 in an IRA or $14,000 in your 401(k), but you can put an unlimited amount of money in our EUIL policy. And it grows tax free and you can have the money tax free as long as you leave 10% in. But you have to pay tax on your 401(k) or your IRA. So we recommend that you invest your money in our EIUL instead." INVEST! from the mouths of persons without securities licenses!
Unfortunately, the majority of a WFG rep's clients don't have the ability to fully fund either their 401(k) or an IRA, so the whole baloney about putting unlimited amounts of money into a life insurance policy is BS anyway. But they try to get as close to $416.66 per month in premium as they can.
When assertions and/or recommendations like the one above are posted in this site, readers should protect their best interest by researching the company and learning what the industry and/or any regulatory agencies have to say.
Great advice from Mark, above. But it doesn't go quite far enough. Not only do you need to know something about the company, you must also know how their product works.
Agents speak with great confidence and often intimidate prospects with their "profound knowledge." Insurance is one of those things, like saving money, that no one learns in school. Our parents probably did not learn it well, if at all, and we learn from their example, if we don't learn about it in school or in church.
So most of us learn the hard way, by making mistakes. But learning the hard way when it comes to insurance is costly. For some, it means never being able to recover. That's why I educate my students and my clients about the various types of life insurance contracts that exist, I show them when one may be better suited to a person's needs than another.
And I show them that there is no perfect policy, that each one does exactly what it says it will do, but also that some policies require more hands-on maintenance on the part of the client than many clients are willing to give to their policy. If that's the case, even if the policy is in the client's best interest, it's the wrong policy.
So to all who read these assorted posts, you also need to do some outside reading. Not the least of which is the Buyer's Guide to Life Insurance that must be given to you when you purchase a life insurance policy. Another good book to read, although it may be hard to find, is What's Wrong With Your Life Insurance by Norman Dacey. It's a little dated, but generally explains each of the different types of life insurance properly.
And if you aren't sure that an agent is telling you the truth . . . bring your questions here. We'll all help to set things straight!
Posted: Sun Jul 11, 2010 04:18 pm Post Subject:
eiul is really good especially for kids and protection
EIUL is a long term investment plan and as person invest on the name of their kids majorly for long term view so it becomes 'kids pro' plan.
Even though EIUL is lucrative I will advice to go for plain term insurance and remaining amount for mutual funds/stocks route,as it is also one of the best choice.
Shelk
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