Variable Universal Life Insurance?
**Experienced Life Pros only, please** Working with a couple now, and they need Life Insurance. They need a last sourvivor policy for estate planning, so Term is out. Young couple, in their 30's. With a VUL, is there any time that a single pay contract would make sense? I can't figure it out, but since it's an option, I need to go over it for compliance reasons. Please help A.S.A.P.!!!
Public Comments
- The only time would be if you were to elect "Return of Account Value" as the benefit option. That way, over time, the higher the market return, the higher the benefit. Also, when you select that option, the initial face amount is lower, so in case you have a couple bad years in the market, the policy will be fine because of the lower costs of insurance inside the policy. My opinion is to do a 5 or 7 year pay to avaoid any MEC issues. You get a lower face amount off the bat, but you dollar cost average the account value and you don't have to ask the clients to sign a MEC letter.
- ...so you want us to give you specific advice on a security without being compensated for it? You might want to call your b/d or agency manager. I also doubt that your compliance dept says you need to go over every funding option available to your clients (that would be crazy.) But some compliance depts are crazy. Speaking from experience, may I generally suggest you consider something with fixed mortality costs? They exist on both the variable and fixed side. Also, not being in a rush will also you consider their choices.
