by Guest » Fri May 25, 2012 12:56 pm
I brought 50,000 VUL for my child age one when she was 28 year ago and each yr paid $294. Now it worth cash vale 8,500, dead benefit 66,000. I understand the cost of insurance will rise high each year base on her age. I am worry this polcy will stop when she is 80 or 90 or sooner, What should I do now, cash out this policy and invist the new one?
We would like to buy a SUL policy for me & my husband for estate planning, the agent said if I pay more money like 10 big payment will save me more money to pay for each year. Is it good idea if you can effort to pay, or her commission will be good if I pay more. What is better product for second to die polcy?
Thank you so much
We would like to buy a SUL policy for me & my husband for estate planning, the agent said if I pay more money like 10 big payment will save me more money to pay for each year. Is it good idea if you can effort to pay, or her commission will be good if I pay more. What is better product for second to die polcy?
Thank you so much
Posted: Sun May 27, 2012 04:29 am Post Subject:
Second to die is for very special estate planning purposes. And if your estate is large enough to have estate tax consequences, the $8,500 you're going to get if you cash the VUL isn't going to matter much to the premium you're looking at for estate planning.
There is some merit in the comment that paying more upfront "could" save you money long term. This will depend on a lot of details.
Unfortunately based on the limited amount of information provided, there's little anyone can reasonably give you in the form of guidance.
Posted: Thu May 31, 2012 01:25 am Post Subject:
We would like to buy a SUL policy for me & my husband for estate planning, the agent said if I pay more money like 10 big payment will save me more money to pay for each year. Is it good idea if you can effort to pay, or her commission will be good if I pay more.
As BNTRS has said, there is not enough information to give you an appropriate answer.
But the agent gets a nice commission when you dump a lot of money into the contract in the first year. Paying "large payments" for only ten years on a UL policy is not likely to properly fund the policy unless the payments are the MAXIMUM permitted by law that will not cause the policy to become a Modified Endowment Contract instead of life insurance.
I am worry this polcy will stop when she is 80 or 90 or sooner, What should I do now, cash out this policy and invist the new one?
You can avoid that today by requesting a "in-force illustration" with specific instructions to show the amount of premium needed to keep the policy in force to age 100. The illustration will show two scenarios: (1) guaranteed costs (worst case scenario) and (2) current assumptions (not guaranteed, probably won't hold true for another 70 years). The answer will lie somewhere in between. In-force illustrations should be run (and understood) every two or three years throughout the life of a UL policy.
If the policy is off-track, you will see the need to pay more premiums now. If you don't pay more premiums now, you will still be able to pay more later, but paying later always means paying more than you would pay today. In the absence of steady and significant returns, $8500 in current cash value + $294 per year will only support the policy a few more years before it will lapse due to insufficient cash value.
I can tell you this: If you've paid $294/year for 28 years, you are not paying enough today if the policy only has $8500 in cash value. There may also be something wrong with your math, too. With a cash value of $8500, I'm not convinced the death benefit is as high as $66,000, unless there was a rider in the contract that separately increased the amount of insurance somewhere along the way. A $16,000 increase is just a little strange.
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