Life insurance sales

Anyone else consistently recommend whole life instead of a variable or universal life for those who want permanent policies? Why do you choose one over the other?

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Cash value life insurance should be one of two things for the client, a permanent policy, or an accumulation vehicle (or a combo). That said, think of the product like the engine in your car. If you know that you need the engine, the question is, do you want a four cylinder, six cylinder, or a V8. Each has its benefits and issues. One product is not right for every person. And IUL, in spite of its sizzle about not losing money, can be extremely complex with hidden charges and multipliers. But if you want guarantees at the lowest cost, IUL is awesome because it has less capital costs to the carrier.

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Whole life

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Because it’s probably all the new agent can sell

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IUL

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Each permanent product has its benefits. I’ve been doing this 30 years. Anyone else here have that many years? In 1980 UL was considered the best product because it had great returns (12%) and flexible premiums without having a loan. In 1990, Equitable (now AXA) touted VUL because you had market returns and flexible premiums. In he mid 2000s, GUL was touted because it had lifetime guarantees and flexible premiums. And today, IUL is touted because it has the guaranteed floor (ie improper sales practice of saying you can’t lose money), with the upside of the market. Problem with IUL is the carriers have dropped their top line performance number because the cost of allowing the client to “share” in the upside is too expensive (ie the hedging or put options). And the carriers can change that rate anytime, and HAVE, from 13.5% to 8.5% or 9%. Lastly, Whole Life at each of the carriers has dropped in performance from 8.5% to 5.5 to 6.4% (depending on the carrier). So ask yourself, why are you buying the product? What rating can you get? And are you using it for accumulation or death benefit protection? Based upon that answer, your health and rating, and expected cash flow both today and in the future, that is the product you need to buy. The only thing about all these product that is guaranteed across all of them is change. At some point in the future, something will change and you need to be able to pay the additional premium if needed, or know that if you don’t, the coverage will still be there. No one can tell you.... what the best product is, just what the features are. As I said in the beginning, I’ve been doing this 30 years, and life insurance is a key component of my planning for both individuals and businesses, and we decide on product based upon the goal you wish to achieve. Feel free to reach out if you want more guidance. Good luck. Ps. If you have health issues, DO NOT apply with a formal application. You are better off sending in a “preliminary” informal app with your medical records and a cover letter to each carrier, where they can give you an idea of the rating that you might be. Then you can run the illustrations and decide what is best for you. All of my clients who are not in perfect health go through this process. Best of Luck.

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