Category: No-lapse guarantee

American General’s new Guaranteed UL has very good rates

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October 18, 2013

4:53 PM

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2013, 55 year old, 55 years old, 56 year old, Age 55, Age 56, American General Life Insurance Company, lapse protection guarantee, lapse protection rider, lifetime guaranteed death benefit, lifetime no-lapse guarantee, No-lapse guarantee, universal life policies with secondary guarantees

Guaranteed Universal Life, GUL, for life insurance coverage is a great low cost alternative to Whole Life with fixed rates and coverage available to age 120 and beyond.

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Looking over quotes for a client in his early 50’s, I found American General’s new Guaranteed UL, called “AG Secure Lifetime GUL II” has very competitive low rates.   Doing my latest revisions this week on permanent life sample quotes for 54 years old, 55 years old and 56 years old, American General has the lowest rates for female preferred best for $500k, $1m and $2m, and for male at preferred best $500k.  That is not a complete survey, it does not include for example the preferred rate classification, or age rates for those in their 60’s and 70’s, but it is an indicator that American General is now very competitive for certain face amounts and rate classifications and should be part of any comparison for permanent life insurance, no-lapse guaranteed Universal Life.  This product also builds guaranteed cash value and has a option surrender the policy after 20 years and with a guarantee to receive back 50% of the premiums paid.

Cash Value Life Insurance Choices

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September 25, 2013

10:40 AM

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Age 120 guarantee, Cash Value, cash value life insurance, cost of insurance, Increasing death benefit, IUL, lapse guarantee, No Lapse Guaranteed Universal Life, No-lapse guarantee, par whole life, Whole Life, whole live vs indexed universal life

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Whole Life: life insurance participating, or par

  • Dividends
  • Builds Cash Value
  • Guaranteed Cash Value Accumulation
  • Endow, worth face amount in cash, at age 100 or age 121
  • Increasing face amount
  • Cash dividends option, after a period of years
  • Paid Up Insurance
  • Cash value protects policy if payments are missed
  • Coverage guaranteed to age 100 or age 121

Pros: Since it builds on top of guaranteed cash value, par whole life has highest potential for cash value accumulation, flexible to changing circumstances; good to start for children, in 20’s, 30’s or upper income
Cons: much more expensive than Universal Life (UL) or Indexed Universal Life (IUL)

Indexed Universal Life:  IUL

  • Builds Cash value, higher upside potential with index crediting then current assumption UL
  • some guaranteed cash value accumulation, not all years
  • Flexible on payments
  • Option for increasing face amount, option B
  • Cash value protects policy if payments are missed
  • Policy lapses with zero cash value

Pros: less expensive than Whole Life, flexible to changing circumstances
Cons: if underfunded and or performs poorly can lapse without additional premium; higher cost of insurance charges than UL, periodic review is advisable, more complex, more choices to make than current assumption UL

Universal Life: UL, current assumption UL

  • Builds Cash value
  • Flexible on payments
  • Option for increasing face amount, option B
  • Cash value protects policy if payments are missed
  • Policy lapses with zero cash value

Pros: less expensive than Indexed UL, flexible to changing circumstances, lower cost of insurance charges than Indexed UL
Cons: if underfunded and or poor interest credited can lapse without additional premium

Whole Life: non-participating, non-par

  • guaranteed cash value accumulation

Pros:  fixed premium, guaranteed cash value accumulation, endow at age 100 or age 120; good for final expense
Cons: level death benefit; cash surrender value matter little compared to death benefit

Guaranteed Indexed Universal Life: GIUL

  • cash value accumulation, generally not in 80’s and older

Pros:  lifetime guarantee, or set guarantee year
Cons: lower casher value accumulation than Indexed UL

Guaranteed Universal Life:  Guaranteed UL, GUL,  no lapse guarantee UL

  • Little to no cash value accumulation

Pros: least expensive lifetime guarantee age 120+, also least expensive setting guarantee to age 90, 95, 100, 105, 110 or whatever length desired;  ability to structure longer guarantees, and at older ages than term life, for example 30 year guarantee at age 59
Cons: missed premium payments lapse policy, little to no cash value accumulation
Return of Premium Term:   ROP term

  • guaranteed cash value accumulation
  • reduced paid up insurance with some carriers

Pros:  At the end of the term you get all your premiums back; builds cash value, mostly in the last years of the term period
Cons:  death benefit same as term if you pass away, cash value not included; more expensive than term, especially after mid 40’s

James Gandolfini’s estate tax and the role of life insurance

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August 7, 2013

10:46 AM

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current assumption UL or CAUL, Estate Maximization, Estate Planning, guaranteed universal life, GUL, ILIT trust, irrevocable life insurance, irrevocable life insurance trust (ILIT), life insurance in a trust, New York, No Lapse Guaranteed Universal Life, no lapse universal life, No-lapse guarantee, term insurance, term life, Term Life Insurance, universal life insurance, Whole Life

James_Gandolfini

James Gandolfini, actor extraordinaire of The Sopranos, who died recently of a heart attack at age 51 apparently has left his heirs subject to a sizable estate tax.  Tax experts noted that they will likely end up owing a significant amount partly due to his residing in New York.  State estate taxes vary considerably depending on which state you reside in.

I was struck by this comment in one analysis as to the very practical role of life insurance in estate planning.

At a minimum, an irrevocable trust should have been set up for Mr. Gandolfini to use to pay insurance premiums toward a life insurance policy that would have covered expected estate taxes, Mr. Wolfe said.

Gandolfini did set up a $7 million life policy for his son in a irrevocable life insurance trust (ILIT).  To give the benefit of doubt, he may of set up others. Life insurance is not required to be in the public domain of probate. One lesson to come out of this is to add life insurance regularly especially when remarrying and having children.  Insurability, the ability to obtain coverage, can be an issue when adding life insurance later in life. Fully underwritten life insurance involves a blood test, and depending on age and coverage amount, an EKG and medical records. In Gandolfini’s case at his age in the absence of identifiable heart disease his rate classification probably would have depended almost entirely on his weight according to the carrier’s build chart.

Estate planning with minor children makes term life insurance an option.  There’s 10, 15, 20, 25 or 30 year term depending on the age of the child and how far it is prudent to carry the coverage out.  Term is inexpensive and conversion allows on to exchange the term into a permanent policy without proof of insurabilty during the term period.

For permanent life insurance the first and foremost estate planning tool is Guaranteed No-Lapse Universal Life locking in coverage to age 120 or beyond.   For other situations and goals the options include current assumption Universal Life, Indexed UL or on the upper cash value and benefit end a Whole Life plan.

AIG pays back TARP funds and its effect on American General Life Insurance Company

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January 7, 2013

1:42 PM

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Conversion, guaranteed universal life, indexed life insurance, Indexed Universal Life, IUL, No Lapse Guaranteed Universal Life, no lapse universal life, No-lapse guarantee, Universal Life, universal life insurance

I saw one of AIG’s “Thank You America” commercials this weekend, and that’s how I found out that AIG had paid back in full their TARP bail out money.  That’s good news for American General Life Insurance Company.  I’ve been an agent for American General for over a decade, well before they were acquired by AIG back in 2001.

American General’s independent ratings have declined since AIG’s liquidity crisis 2008 and now have stabilized.  2008 exposed the ratings system to be very flawed, and since the rating system has not been reformed, it is a tenuous means to judge a carrier.  From a life insurance agent’s point of view, to recommend a carrier is in part observing a life insurance company’s price and product changes, underwriting practices and rules for term conversion. It’s also telling how much interest they are crediting on current policy holder’s permanent plans.

There is also a distinction between recommending a life product that’s guaranteed, and those that are non guaranteed, that depend on crediting interest to the policy for cash value.  A guaranteed no-lapse universal life, G-UL, is very straight forward, as opposed to a performance based product like indexed universal life, IUL, or a traditional UL.  Term or return of premium term has a guaranteed level rate for a fixed period of time, but conversion options to a permanent plan without evidence of insurability is another key consideration, especially since so many people run into health problems in the 10, 20 or 30 years after their policy is taken out.

I will take a wait and see approach to American General.   They can prove their worth by proportionately crediting of their UL policy holders and expanding conversion options.

Guaranteed acceptance life insurance: your last choice

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May 23, 2011

4:59 PM

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65 year old, 65 years old, Age 65, burial insurance, burial insurance with guaranteed life policy, final expense, Graded Benefit whole life, guaranteed acceptance Whole Life, guaranteed universal life, lifetime no-lapse guarantee, No Lapse Guaranteed Universal Life, senior final expense, Simplified issue whole life, universal life insurance, universal life policies with secondary guarantees, whole life vs universal life

Don’t fall for mail order offers for guaranteed issue life insurance or guaranteed issue life insurance. Better options are out there. You can potentially save thousands on premium or get twice as much coverage with another carrier.

I received the other day a mail solicitation from United of Omaha Life Insurance Company for guaranteed acceptance life insurance.  This is also called guaranteed issue life insurance or graded benefit life insurance.  They say “You Cannot Be Turned Down.”  They offered coverage choices from $10,000 to $3,000.

Wait. This is last resort life insurance.  Don’t even consider this until you’re sure you can’t get something better. Just to give you an idea, a 65 year old woman, preferred non smoker rate, can get $25,000 of guaranteed universal life, fixed rate to age 110, with Genworth for less than $10,000 whole life with a 2 year waiting period with United of Omaha for graded benefit whole life insurance.

Take these steps when shopping for a small final expense life insurance policy.

#1 Choice     For excellent, good, average, or even poor health

Fully underwritten life insurance.   Full and immediate benefit.  Applications require a blood test and short paramedical exam.   Carriers generally request your medical records, all at no charge to you.  This way life underwriters can gage your risk classification and make you an offer for coverage.   This will save you lots money over a no physical exam policy.  Genworth and North American offer lifetime guaranteed permanent coverage, called no lapse universal life, starting at a $25,000 benefit, and multiple carriers, including Lincoln National and Aviva, offer coverage of $100,000 and more for seniors.   Unless you’re in really, really poor health, try this first.  There is no cost to you to apply, and the worst they can do is offer you a higher rate or turn you down.

 

Plan B:     2 years after any major health problem, or with multiple serious health problems

If your health is marginal, or you want a smaller less expensive policy than $25,000 with Genworth or North American, the next step is simplified issue whole life.   It has a full and immediate benefit.  There is no physical exam.  There are many, many carriers that want your business. Comparison quote with an independent broker.   AARP offers this type of product but ask yourself, since both AARP and New York Life draw a profit from the policy, won’t going to directly to one carrier be less expensive?   Here are some final expense simplified issue whole life carriers:

  • Liberty Bankers Life
  • Settlers Life
  • Transamerica
  • Foresters
  • Royal Neighbors
  • Columbian Life
  • Philadelphia American
  • American Continental

 

 

Plan C:    Major health problems but not terminal

Graded Benefit Life Insurance If your health is very poor, coverage is offered with a 2 or 3 year waiting period for full benefit.  More expensive

 

Plan D:     Terminal health, or nearly terminal health

Guaranteed Issue Life Insurance No medical questions.   Guaranteed approval.   2 or 3 year waiting period.  Most Expensive.

 

Please contact me for a free and confidential quote.

sean's profile picLicensed Agent:  Sean Drummey
phone:  (910) 328-0447
email:    spdrummey@gmail.com