Cash Value Life Insurance - Variable Universal Life

[@CashValueLifeInsuranceReviews]

Have you ever seen a VUL enter a death spiral?

[@CashValueLifeInsuranceReviews]

That seems like a relatively self evident comment. No I don't sell them.

[@fmtajes1]

That first chart showing the risk is really good!

[@ghostoferlock]

good video, IF someone is averaging into the market through a VUL, to me, it makes sense to hold the units. The way it was suggested of an account value going down and more units being sold to cover cost of insurance is something I considered some time ago. IF the policy is looked at like a policy and investments, and the insurance costs are deducted from a daily interest, or money market account where there is no volatility, it seems to work better. Sending in a one time deposit for the whole year of insurance, and then averaging in during the year seems to go well. As long as deductions are made from an account or fund that isn't volatile. It's a bit odd that people look at illustrations and think a policy can return 10 % or 12 % each year. IF someone looks at a return of 6 % or 7 % each year, and averages into volatile funds it seems like a reachable idea. IF markets are up, maybe move some of the investments to the daily interest or money market account. Could easily keep from selling units when markets loose some value and redeeming more to pay insurance costs. I think personally markets will do worse in the next ten years than the last ten. Keeping in mind that buying and holding over the last decade and years has really increased accounts.

[@ezekielmaki7849]

Thanks for putting this together. Very good explanation.

[@CashValueLifeInsuranceReviews]

Ezekiel Maki thanks for the comment!

[@Aijemcire99]

Great explanation. My wife and I have these policies through farmers, both started them a while ago and caught this bull market that took place in the last decade. I just talked to my wife about what I've been learning about these policies and the death spiral. The answer to your question on the video as to whether I expect the line to continue performing the way it has is , not likely. That leaves me wondering, what you think we should do now? If we drop the policy and we replace them with term, do we loose everything it has earned?

[@CashValueLifeInsuranceReviews]

I would have to see your policies. matt at leveragedwm dot com Variable policies have caught a helluva run. What do they say? "buy low and sell high" Depending on your age and goals, it could be time to move into a principle protected strategy.

[@paulroehlgnoida5299]

Lower your life insurance coverage to least you can get. You have a high cash value anyway.

[@rich88goldman]

Matt, first I want to say thank you for putting together all of your videos, which provide great value in helping us understand cash value life insurance. I enjoyed watching them. In this video (at 3:35) you used a fixed death benefit $1 mln to explain net amount@risk and fees, which is great; however, how would that fee chart look for an IUL with DB option 2 (increasing)? Wouldn't the fee continue to increase as people get older, and the amount of insurance also increases?

[@CashValueLifeInsuranceReviews]

Yes. Which is why at some point you will need to switch it to a level policy if the goal is to maximize cash.

[@rayray52577]

Why are you using only the last 10 years as a reference point to your case against VUL? Shouldn’t you look at a 20-30 year time horizon when evaluating ANY long term vehicle? I feel like the 10 year argument is disingenuous, especially since you can systematically allocate some of your cash value to the fixed account over time. There are many mechanisms in place to hedge against the so called “VUL death spiral” such as switching to a level DB & moving a greater proportion of your allocation to the fixed account over time. But in the end, you should never look at a 10 year holding period when evaluating any long-term investment decision, especially when it comes to life insurance.

[@emanueliglesias7684]

Hi, so I just got a VUL it seems like it was a bad idea?

[@emanueliglesias7684]

What would be your recommendation? Get out of it and get a IUL? I'm 37 by the way.

[@CashValueLifeInsuranceReviews]

Hard to say without knowing more, feel free to book a call with us and we certainly can help!

[@firecraig]

What company was it with? Are you funding to at least target?

[@twokind7801]

Very helpful Thank you Matt

[@TGPtrev]

Excellent. This is the greatest augmentation to my pre-licensing education. Thank a lot!

[@CashValueLifeInsuranceReviews]

Glad you enjoyed my videos!

[@Raison_d-etre]

Are you sure you're learning from the right people, if something this simple is new to you?

[@Lylelanley99]

Ooooof. You are illustrating 8%? I hope that is purely for the video and not what you are showing potential clients. I have never shown more than 5, keeps from having complaints filed against me when the policy blows up after year 25.

[@tragictrust5269]

Sounds like you are doing numerous things wrong in your practice

[@Lylelanley99]

@@tragictrust5269 15 years in the business and top of the table over 10 years with no complaints would prove that to be false.

[@Raison_d-etre]

I agree. 6.5% is what I use for my models.

[@audreyl704]

I have VUL and im looking to change it to an IUL

[@CashValueLifeInsuranceReviews]

I am happy to help! check out my website for further instruction on how to get a full policy review and get your money into a properly structured policy: leveragedwm.com/iul-review

[@sheraldhill2728]

If you knew when the market would go down or go up you wouldn’t even need insurance on your small island you purchased with the interest from your billion dollar portfolio. Your question about whether the investment will do better or worse isn’t answerable. Terrible premise.

[@Raison_d-etre]

The only thing worse than having an opinion on the market is expecting Wall $t. to do your homework for you.

[@twokind7801]

Very helpful Thanks Matt