10 Responses to “Universal Life Insurance”

1. banterking11 Says:
   February 19th, 2009 at 3:47 am

   ul sucks !!!!

2. shaninphxaz Says:
   February 19th, 2009 at 4:01 am

   Chances are the dosage you're getting is probably pretty low and may not raise a red flag. If it does you'll just tell them that you are taking a prescription medicine and it won't be a problem.

3. tracey Says:
   February 19th, 2009 at 4:24 am

   Stick with a term policy to cover you incase of death. Universal is just a poor investment. Put that money into a mutual fund instead.

4. Bob A Says:
   February 19th, 2009 at 4:27 am

   All universal life policies are self-destruct plans. What do I mean? While premiums remain flexible, the cost of your insurance increases internally every year. So less and less of your premiums goes toward cash value. For example, lets say you pay $100/year into the policy. In the first year, $20 is used to pay for the insurance and $80 goes toward the cash value (hypothetically speaking since its actually lower than $80 because insurance plans have annual fees). Next year, the cost insurance increases to $22 and $78 goes toward the cash value. Eventually, all your $100 is being used to pay for the insurance and $0 goes toward the cash value. Year after that, your premiums will increase to $110. If you just pay the $100, then the $10 will come out of your cash value. Now the cash value is decreasing and when it runs out, your policy will lapse.

   If you don't believe me, check the tables in your policy. Actually, you don't have to believe me, the insurance company already told you the truth. Agents don't particularly like telling the truth because if they did, you won't buy it from them. For me, I love telling the truth because it pisses these agents off. All life agents (most of them anyway) think about is commissions and making the sale. Its great you have life insurance, but you could of found a better life insurance product.

   I personally sell term insurance (usually 30 year term) and help clients invest their money 100% of the time. Why? Most people don't have lots of money saved right now, so loss of life can be very devastating to the family. So they need the right amount of protection for the lowest possible cost. As they get older, they would have lower financial obligations and their investments will grow, so the need for life insurance declines.

   Did you know if you invested $100/month for next 30 years and your retirement account performs at an average rate of 10%, you can potentially have $228,000? If this was in a Roth IRA, all this money can be withdrawn tax-free after age 59 1/2. Its not guaranteed you will get 10%, but its possible since the mutual funds I offer has a long track record of success and have the best ratings from Morningstar. You had the Universal Life policy for almost 25 years, how much cash value has been built?

5. Travel Geek Says:
   February 19th, 2009 at 9:04 am

   A universal life insurance policy works a little bit differently. The premiums that are paid are chosen by the policyholder and do not have to remain constant.

   Go here for more details…

   http://typesoflifeinsurancereviews.com

6. MyDreamHome Says:
   February 19th, 2009 at 9:15 am

   Insurance is never a wise investment tool. Just because you are a small business owner does not disqualify you for a Roth IRA. Combined AGI over $150k would.

   You may want to look into other retirement type accounts. Non Qualified accounts for example can grow tax deferred and don't always have the same age restrictions.

   Since your agent told you that, get a new agent. He either doesn't understand retirement planning or is running short on cash right now and needs a commission check.

7. mozerchick Says:
   February 20th, 2009 at 2:26 am

   Contrary to what the previous poster answered, Type II Diabetes isn't as big of a concern as she would lead you to beleive. My mother is Type II and has high blood preasure to boot and she's been approved by 2 different companies for life insurance. Stopped reading it after that.

   To answer our question:

   Term insurance is like renting a house. It's good for a temporary need, cheaper than buying a house (whole life), but in the end you have no equity, so when you move out you get nothing back. Also with term your landlord will eventually jack up the rent (premiums will go up ever so often), and will eventually kick you out (cancel your policy at a certain age) and there's nothing you can do about it.

   Whole Life is like buying a house. It's a more stable choice for the long term and a more perminant need. It's more expensive than renting, but your premiums will never go up and the land lord can't kick you out (unless you stop paying your premiums, which is the same as term anyway). The longer you have it the more equity you build in it was well, so if you cancel the policy you at least get something back. Some companies also offer what's known as a "Limited Pay" option. This is like a mortgage,you make payments for 20 years (or what ever length of time you choose) and after that you don't pay anymore, but you keep the house (the policy).

   Universal Life is simply a hybrid of whole life. It has an investment portion to it where you can either increase the benefit amount or have it build in a seperate policy fund that grows tax sheltered. Given that it sounds like you're looking for something for just insurance purposes, don't even worry about this one…you won't need it. (sorry…haven't figured out a clever way to explain it with the housing analogy yet…haha)

   As far as which you should go with it depends on the need. Are you looking at covering things for a few years of something longer term. Term ussually works out to be roughly 1/5 the price of whole life, but if you're looking coverage for longer than 20 years you might be better off going with whole life.

   Your best bet is to contact a lisensed insurance broker that has access to whole life and term. they will have access to multiple companies and can take the details of your mom's health and such and go to each company and say "This is what I have for an application…hypothetically if I submitted this, do you think it would be approved, rated or declined?" and beable to make a recommendation for the company that will most suit your situation.

   If no one will approve it there is the option of gauranteed issue insurance, which does no medical underwriting, but it is VERY expensive in comparison to the products above. At least you will be covered though.

   Sorry…had to add this. Just reread the previous poster and I have to say that person is an AWEFUL source for information! Credit insurance is an aweful suggestion! They do underwriting at the time of claim, and given that there are health issues there would be a good chance that your claim would be denied as a result of a preexisting condition if you're even approved in the first place. Secondly, credit insurance will do nothing but cover the debts. It won't cover anything further like funeral expenses or anything that you would likely also be concerned with.

   I have searched and searched and have NEVER found a single article or source that has EVER recommended credit insurance over personal insurance like term. HEre are a couple resources that support this:

   Comparison of term vs. creditor (you can google search term insurance vs. creditor or mortgage isurance and find thousands of links that will tell you this same thing):
   http://www.asset-aid.com/bank_vs.shtml

   TV exposee on credit insurance not paying out (specifically car insurance from dealerships)
   http://www.cbc.ca/marketplace/2007/02/credit_insurance.html

   TV exposee on creditor insurance not paying out (specifically mortgage life insurance from banks)
   http://www.cbc.ca/marketplace/in_denial/

8. James R Says:
   February 21st, 2009 at 4:56 am

   This person just asked about how long……and almost all of you jumped to say ….about INVESTMENT…..Are you agents really??? or not??? Is there a question :" What to choose …UL or TL?". May be i can't see it.

9. brn_xtc Says:
   February 21st, 2009 at 10:42 am

   The agent should of attempted to see if he was qualified for life insurance. He should of wrote the life application and took a check. Then the underwriter of that company has to make a decision on whether or not this person is qualified for life insurance. If he's not, then the check would be refunded.

   On side note, buying universal life insurance is a really bad idea. Here's how this life insurance works:
   1) This is permanent life insurance.
   2) The premiums remain level.
   3) Premiums are paid for two things: Annual renewable term insurance and cash value.
   4) While premiums remain level, the internal cost of the insurance goes up every year. That means less and less of the premiums goes into the cash value and more into the insurance.
   5) Eventually, if the person continues to pay the same premium, the policy will lapse unless the person pays more premium.
   6) If the person wanted to use the cash value, he has to borrow it and pay loan interest of 6-8%.
   7) God forbids if the person dies, all the cash value in the life policy will be kept by the insurance company.

   As you can see, any life insurance policy that builds cash value is a bad product. If people knew the truth, they wouldn't buy it. But agents sell it as a great way to save money for long term goals. I, however, sell term insurance and keep savings separate from insurance. I tell clients to open an IRA and invest in mutual funds.

10. Jeannie Says:
    February 22nd, 2009 at 8:54 am

    Only if you get back more than you've paid in, in premiums. It's possible, but not likely. You only pay on the net GAIN.

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