is variable universal life insurance a good deal?

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1. In variable universal life insurance, a portion of your premiums is paid toward term insurance, a portion is invested in the stock market, and a portion of your investment is paid toward fees that you don't know about (such as administrative fees, policy fees, payment processing fee, operating fees, surrender fees, management fees, and few others). Your premiums remain flexible after the initial payment. You can either pay the minimum premium, which will result in little or no growth of the cash value or you can pay the target premium, which will result in a faster growth of cash value (but its not guaranteed to grow since its variable). In all universal life policies, the cost of the term insurance increases internally every year. You will only find this out by reading the universal life policy. That means less and less of your premiums is being invested and more is being paid toward term insurance every year. Eventually, all your premiums will be paid toward term insurance. Sooner or later, the cost to have this life policy will be too expensive to have for the average consumer. There are two death benefit options you can choose. Option A is where your death benefit remains level. When you die, all the cash value in the policy is kept by the insurance company. This is the cheaper option of the two. Option B is where your death benefit grows as your cash value grows. This is the most expensive option of the two since you will have to pay more premiums to include the cash value in the death benefit. Most people switch from Option B to Option A as the cost of the insurance is too great because the term insurance keeps going up. Anyway, I wouldn't advise anyone getting a universal life insurance. It starts out inexpensive and then it eventually get more and more expensive. How would you feel about paying more money every year when the death benefit doesn't change? People should purchase a level term insurance (20-35 year term) because its inexpensive and premiums remain level during that period. That means people can afford the right amount of coverage needed versus what they can only afford in universal life insurance. Term insurance doesn't build cash value, so it gives people the choice of where they want to save their money. They can save their money at the bank, in CDs, money markets, mutual funds, stocks, and/or bonds. I have always sold term insurance and help clients invest their money 100% of the time. In the beginning, you may have kids to take care of, have a mortgage to pay, and have some other debts to pay as well. You don't have lots of money saved, so if you die tomorrow, how would your family survive without your income? Most people who have life insurance don't have enough coverage, so the family won't be able to maintain the same life style for that long. In the later years, your kids grow up, your mortgage gets paid off (hopefully), and you probably still have some other debts to pay (such as credit cards). So the need for life insurance is low. You are nearing retirement or in retirement, so you better have lots of money saved. Buying term and investing the difference makes more sense than bundling them together in a universal life policy. You pay less for more coverage and you avoid all the unnecessary fees that life insurance companies charge on your investments.
2. VUL is ok, but best the younger you apply, due to the mutual funds. I would recommend Whole Life, then UL, then VUL. All three are supposed to be permanent life insurance. But when your death benefit can be affected by the swings of the mutual funds, it makes me a little nervous. That is why I would list VUL last. However, a VUL may be more suitable for a younger person, who will have alot of time to let the funds do their job. But with any VUL, I would recommend overfunding the policy. <a href=http://www.choicearizona.com/>Insurance</a>
3. Depends on your age, needs, and carrier. If you are 35 or under, usually a pretty good deal (if you need the insurance) or think you might ever. If you are young you can investigate minimum premiums if you are strained at all.
4. Sometimes yes and sometimes no. No one on this forum really knows enough about YOUR situation to be able to tell for sure. Just to give an example to the contrary, I recently covered a child with a VUL policy where the parents make a small monthly payment and then pull out their cost-basis at the child's age 18. As long as they can maintain a moderate rate of return, this child will have millions of dollars of coverage in his 80's. For getting their money back, that's one heck of a legacy they get to leave that "buy term invest the difference" just couldn't do. Don't get me wrong, I'm usually not a fan, but you shouldn't rely on generalized advice from people who don't know you. Go seek the help of a local independent agent or a fee-only adviser if you don't trust the person you are working with now.