"Ed Zollars, CPA" <ezollar[at]mindspring.com> wrote in message
news:bovuar01ajo[at]enews3.newsguy.com...
- quote -

This is exactly what I was thinking, too. I kind of noticed that many of my
peers, most of whom have a lot more years in their experience in this
industry obviously, have a tendency to stay away from VUL. I have heard
them saying, "I don't want to get a phone call from my client a couple years
later (asking me where all of his money has gone)" quite a few times. I
guess they became very cautious because of what happened to the market past
few years.

However, just like what you pointed out, what if I sell a WL policy to
someone and get a phone call from him a couple years later saying "What the
heck? My neighbour bought a VUL policy from someone else about the same
time I bought my VUL, and now he's cash value is three times of mine?"


- quote -

I guess the most important thing would be letting the future buyers know
what all these types of products are exactly and how they are different from
one another. Boy, doing so might be even a bigger challenge than predicting
the future market. In my short career, I already ran into quite a few
clients and client prospects who couldn't really grasp the concept. I don't
blame them. It took me months to better understand what they are myself,
and I still have a lot to learn. I know I can't expect them to understand
everything after an one hour appointment. Of course, I need to work on my
presentation skills, too.... However, sometime it's really hard just to
have them listen to me because they often think "Oh here's an insurance
sales guy talking. Even if he says something that makes perfect sense to
me, I'd better not listen to him since that probably is nothing more than
his sweet talk with lots of sugar coating."


- quote -

Brent D. Gardner, ChFC wrote:

- quote -

One thing you learn over time is that people tend to have
very short term memories--so back in the 1990s when we had a
run of great performance in the stock market, people totally
forgot about the potential downside. And, today, after the
prices have fallen, people now have forgotten about the
potential upside.

The key thing to remember, though, is that twenty years from
now, many of those who are buying the guarantees will be
moaning loudly if the market outperforms their policy. It
won't be fair or right <grin> and they are the same crowd
that today is complaining about not being told to take the
guarantees in the 1990s, but what the heck.

That said, my own take is that such people are virtually, by
definition, *not* the type of people who should own a VUL.
Buying high and selling low simply is never a good financial
planning move, no matter whether in a VUL or outside one.
And that's exactly what that group always does (they buy the
"hot" item, be it a VUL or, now, guarantees).

- quote -

I would say that's currently more of a factor of the swing
in perceptions--safety is in, as shown by the premium that
is still being paid for U.S. Treasury obligations. That
same feeling should translate into people wanting to buy
guarantees in insurance products as well as other financial
products that offer insulation from obvious market factors.

Of course that crowd does end up more exposed to some other
risks that right now are being ignored--inflation being one
of them (guarantees tend to be in terms of nominal dollars).
But, of course, since we haven't seen significant
inflation in years that crowd would be just as blind to the
risks from there as they were to the risks from the market
moving.

While participation offsets some of that issue (policy
outperforming the guarantees), reality is that it's not the
same as being fully "exposed" since the insurer generally is
only going to offer (or, frankly, economically be able to
offer) a guarantee that's at a level low enough that they
have virtually no doubt they can outearn it with a pretty
good cushion.

--
Ed Zollars, CPA
Phoenix, Arizona

"_JP" <YamYam[at]nospamsplease.megapathdsl.net> wrote in message
news:vr3jjef01o7bda[at]corp.supernews.com...
- quote -

Welcome to the craft of advice! =)

- quote -

I'm a relatively young guy in my market, which is working primarily with
business owners. I'm 34. I work with a lot of guys who have been in the
business as long as I've been alive. Some are near 80. A lot of them, myself
included, fell in love with VUL in the 90s. Since life insurance is the
longest term investment you can make, surely VUL funded with stock funds is
better than UL or Whole Life, right?

Right?

Hmmmmmmmmmm?

Today, I'm not 100% sure. I find it worthy of note that most of my peers
have stopped selling it completely. They aren't waiting on the market to
recover, they tell me they have no intention of selling it again (the
exceptions are mostly those that work the nonqualified benefit market). I'm
not selling any, and I do nonqualified benefits every day. One of my mentors
used to say "Why take risks with a risk management tool? Who would want to
risk their life insurance?" His clients always agree with him, and I feel I
may have strayed some over the years. Now, I sell guarantees and my
production is up four-fold. I still deal with mutual funds and stocks, but
they are in places where they probably should be -- a brokerage account or
IRA. And, of course, my old friend variable annuities.

The best life agent in my home town has never sold any VUL. He learned his
lesson with UL in the 80s and never succumbed to the lure of faster growing
cash values. Now, he sells convertible term to everybody, and then works on
conversions to...GASP...Whole Life. That's it. No more UL, never a VUL, and
he doesn't use policy illustrations. He'll write 200 cases this year, and
probably earn around $1,500,000 in first year commissions. As he says at our
meetings, "I sell death benefits...for whatever reason someone needs cash at
death."

I've seen his presentations. I can only describe them as 'elegant
simplicity.' VUL, on the other hand, is anything BUT simple.

I sure hope you get a copy of Ben Baldwin's book. Along with that, get the
last few written by Barry Kaye. Barry's book, The Investment Alternative, is
to Whole Life or UL, what Ben Baldwin's book is to VUL.

Good luck!

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

Oh my goodness. What great replies that I got. I even came to think, "with
a news group like this, who would need to pay for a financial / insurance
advice?"

Thank all of you who kindly answered my question. It really helped me a
lot, and it also made me feel so much better...

Why do I feel so much better now? It's not because I was one of those
"idiots" who recently bought a VUL policy from an "evil idiot" who gave me a
half way complete and decent illustration and a smooth sales talk. The
reason is, although it feels a little embarrasing to say to be honest, I
recently started a new career in the insurance industry. Yes, I thought I
had become one of those evil idiots.


Maybe I have to act like, well, actually would actually have to be an expert
of the subject as someone who's going to be responsible to make a right
advice, explain everything, and answer all the questions to his clients.
And, that's probably why I feel a little embarrased to reveal who I am. But
then again, since I'm a starter, nothing is wrong with not knowing
everything, and there wouldn't be anything more wrong than not trying to
learn more, right? On top of that, after reading all the replies from you
guys, who I am pretty sure would have thought I was a client or client
prospect, it really was ackward because I felt like taking advantage of your
kindness.

Don't get me wrong. My company has been training me a lot and I have been
spending great deal of time studying all the products that we sell.
However, when I came to this newsgroup and saw all those negative comments
about VUL, I really had to ask myself rather serious questions - Have I
become someone who will sell a shitty product like VUL and take advantage of
his ignorant clients? Should I only sell whole life and term policies and
absolutely stay away from VUL? Obviously I couldn't answer those questions,
so I had to ask here.

Maybe I could've asked the same questions to my manager. However, I think I
would've had a really hard time believing his answer is 100% unbiased. Who
knows? My manager may try to convince me whichever product generates the
most profit is the best product the mankind ever invented. Beside, I
already know what he is going to say; "Don't worry JP, and spend your time
making more phone calls and get more appointments instead!" *sigh*


I guess I learned a lot from this newsgroup already. Of course I still have
a long way to go, but I can confidently say two things about VUL now, at
least.

1) It "can be" a great choice for some people, depending on their
objectives, financial situation, and needs.

2) I'd better be careful with it.

I have made a promise to myself that I wouldn't sell VUL just because I
would make more commission than selling a term. Well, if I was so evil, I
wouldn't even have bothered to learn more about it first place...


Once again, thank you for your replies.


_JP

Ed Zollars, CPA wrote:
- quote -


So true, so true..........


- quote -


So few people understand that concept
(including many agents)


Cal Lester CLU
--
I don't suffer from insanity, I enjoy every minute of it

This signature file is generated by Pick-a-Tag !
Written by jeroen[at]vanbaarsel.net

_JP wrote:
- quote -

The negative bias in the replies you've read may be because so many of
the initial posts come from investors who are pitched VUL as a one-stop
kind of savings plan. Especially beginning investors who sound like they
have little understanding of the policy or its alternatives.

On the flip side the product exists for a reason, it's not just some
Ponzi scheme. It's safe to say that the majority of investors don't need
VUL but it's wrong to say that nobody needs it.

Does it mean anybody who even
- quote -

Get an explanation of what specifically points to VUL. Not the generic
tax comparisons, but what specific aspects of your finances, insurance
needs, etc point to VUL. You need to get a good explanation, good enough
that you really see how it could work out best for you despite the
costs. Leave his mother out of it.

-Tad

_JP wrote:

- quote -

My take: for very items in financial planning is there an
"absolute" answer, but a lot of people have them <grin> . So
quite often I find that individuals' reaction to VUL is
either it's the greatest thing ever to be invented and
anyone that doesn't have it is a certifiable idiot *OR* that
it's the devil's creation that makes no sense for anyone and
anyone who does have it is a certifiable idiot.

Those who toe the "middle ground" do so not out of
"political correctness" but most often do so out of the fact
that they believe it's a case of matching the tool to the
job--and part of that matching process will involve not just
a cold view of the client's financial situation, but will
also consider the client's own preferences.

Life insurance policies with a cash value all have an
"investment" component and an insurance component. In a
traditional whole life policy, the investment component is
completely managed by the insurance company in a pooled
fashion and the premiums are set by the policy. The
investment component over time grows to take care of a
larger portion of the eventual death benefit, so that if you
die the insurer gives your heirs the investment component of
your policy and then has to draw on its own resources for
the remaining amount of the death benefit. That means that,
over time, the cost of providing the insurance goes down
since the insurer will have less to pay each year.

In that traditional policy, the insurer guarantees a certain
(generally low) return and then sets your premium based on
that return and funding for the policy to eventually pay for
itself. If the policy is participating (and the
overwhelming majority of such policies are), to the extent
more than the guaranteed minimum is earned on the account,
that amount can be used in a number of fashions, including
reducing or eliminating the premium.

At its simplest, a VUL policy simply grants the policy
holder additional control over both the investment component
of the policy and the amount of premium paid. Now, in both
cases that additional control is not absolute--your
investment choices are defined by the entity writing the
contract and both the contract and the IRC impose actual or
effective limits on the variation in the amount paid into
the policy.

I do think such policies are highly unlikely to prove
satisfactory if the client doesn't *understand* the product
and how it differs from the other options available. As
well, because of higher costs that generally come with such
policies, you do have to not only be able to "beat" the
investment performance of the insurance company general fund
(which you could pick up with a universal policy), you have
to beat it by enough to overcome the higher expenses. I
would note that my experience is that the number of people
who *believe* they can beat that is a lot higher than the
number that actually do <grin> .

As well, you have to understand that, by its very nature the
policy is not going to perform like *any* projection you
might be given--that is, it can't really be represented by
single point estimates at a date in a future, despite the
fact that the illustrations you'll be given will tend to
show the policy that way (and, in fact, regulatory
requirements basically force you to be shown it that way).
The policy will require supervision over the long term, and
a very close working relationship with your agent after the
sale. If that isn't going to happen, either because you
can't be bothered or your agent ignores clients after the
sale, then it's not likely to work well either.

I say not likely--it still might. But, then again, someone
throwing darts at the stock page of the Wall Street Journal
and then investing all of his money for the rest of his life
in the one security that his dart hits *might* become rich
beyond his wildest dreams. But, in both cases, it will be
more like hitting the jackpot on a slot machine than doing a
rational financial plan.

But if you understand the policy, decide both that you can
accept the way it works and have a good agent that will work
with you for the long term, I'm not going to jump up and
down and say you must be an idiot. Rather, you've made a
fully informed choice given the options that only you can
truly consider. I will feel the same way if you decide
against it after being fully informed.

--
Ed Zollars, CPA
Phoenix, Arizona

If you are going to invest $1000 per month, I suggest you compare VUL
with the alternative of buying term insurance (Find one of those
competitive quote sites.) and putting the remainder in annuities or
individual stocks. These investments can defer taxes on the growth
but still be available for your needs.

Frank


captainX0r[at]yahoo.com (X0r) wrote in message news:<eedcf209.0311090926.4c901438[at]posting.google.com> ...
- quote -

"_JP" <YamYam[at]nospamsplease.megapathdsl.net> wrote in message
news:vr0llmsmdtb73d[at]corp.supernews.com...
- quote -

The negative slant has two easily discernible reasons:
1. Recent stock market history, and
2. Most people who post on the subject don't know much about it, except what
others tell them.

- quote -

Variable Life has been around since 1969, the same year that most insurance
company broker/dealers were founded (some deregulation during the 68-69 time
frame made it possible for insurance companies to own broker/dealers). VUL
came around later, sometime after UL was invented (circa late 1970s). You
may want to know what the difference is: Variable Life is actually Variable
Whole Life, which has a fixed premium. VUL is flexible premium, adjustable
death benefit insurance, with variable and fixed sub-accounts for your cash
values to be invested in.

- quote -

I actually replaced a variable whole life policy last year (with VUL) that
had been originally written in 1982. That is the oldest one I've found in
practice. The interesting thing was that the client was so proud of it. He
said that all these agents had come by and looked at it and said there was
no way they could beat it. Why? They were selling general account products
like whole life and universal life. He purchased it at the right time and
enjoyed some fantastic growth. We moved to a new contract because the latest
generation of products allow for more efficient income distribution (there
were several other reasons, but that's not why I'm posting). This guy was
quite happy with his equity performance inside a life insurance contract
(and that was despite the recent erosion from record highs). I've run some
historical analysis, which I don't have handy, but I remember that he had a
substantially more cash values and death benefits that if he had purchased a
really good participating whole life policy at the same time (and the 80s
were a good time to own interest sensitive traditional life insurance).

- quote -

Actually, the more wealthy they are, the more likely they are to be older,
more conservative, and favor general account products, like whole life and u
niversal life.

VUL favors younger, upwardly mobile, higher income, more sophisticated
people, in my opinion. The PAW, or Prodigious Accumulator of Wealth, is the
prospect for using life insurance as a wealth accumulation vehicle.

I own some of everything: Term, whole life, UL and VUL. And I'm single with
no dependents - I have no apparent need for death benefits, except to pay
off what little debt I carry. One day, I will need much more than I need
now, but I'm not worried about any changes in my health, or if I finally
decide to get my pilot's license, because I'm already covered by several
million of life insurance (this stuff is cheap when you're young, and I
believe strongly that one must own what they sell).

- quote -

Don't worry, people who think that life insurance is evil are a most vocal
group. I doubt they would couch their words. People who are cautious are the
professional advisors, because they tend to avoid hype and focus on problem
solving. That lack of enthusiasm doesn't effectively counter the overtly
negative outcries of the under- and uneducated, or those who have an axe to
grind. Such is the nature of online forums.

- quote -

While I'm on record as saying some people in my craft are pretty bad, they
tend to be the minority. Most of the pros I work with on a regular basis are
pretty upstanding folks. They know that the best investment in their future
is to do the right thing, right now, and not necessarily what profits them
the most in the short term. This comes with experience, OR proper
supervision for the new members of the profession.

A suggestion: Get the latest copy of Ben Baldwin's book: The New Life
Insurance Investment Advisor. You can buy a copy for $20, which is cheap
considering how good this book is, or check one out from your local library.
This is one of those rare advisor oriented books that a savvy consumer can
benefit from reading. One way to find out if your VUL salesperson is worth
their salt is if they have this on their shelf. I have several copies,
myself, including several that are now out of print. I would be concerned if
your advisor hasn't read it and doesn't have a copy handy. Another test is
to ask them which account your monthly deductions should come from (answer:
fixed account). With the volatility of stock and bond accounts, you should
not have your monthly deductions for insurance coming from them. Use the
fixed account so that your policy does not suffer from reverse dollar cost
averaging inside the contract. This requires a little more effort on the
part of the agent, but its one heck of a good idea that works great. Another
question to ask, if tax-free income via loans are planned for: Does the
company have the administrative system in place RIGHT NOW to effect these
loans for an income stream? Only a small few have actually invested in these
back office systems, which places those companies HEADS ABOVE the rest. Not
having it is like buying a car that cannot be serviced locally - future
headaches down the road, guaranteed.

If you have plenty of liquidity, and are fully funding available IRAs and
Qualified Plans, and are looking for a place to put some long-term money, a
life insurance policy isn't the worst place, and it may one day be the best
place - nobody knows what the future has in store. VUL is NOT a great place
for short term savings. For that, you might want to check out the premium
deposit funds with the better insurance companies. If you own a policy with
them, you can pre-pay premiums into a liquid fund that pays good current
interest. Right now, the ones I use are paying 3.00% to as much as 5.50%,
for general account products (VUL premium deposit funds are lower, around
1.50% right now). It doesn't pay any commissions, or have any fees, which is
why most agents forget this stuff exists, but it remains one of those hidden
benefits of owning life insurance with a good company. 3.00% on liquid
savings is better than the banks are paying, and because you don't have free
check writing and an ATM card, your savings is more likely to accumulate
rather than get spent.

A quick pointer about commissions - Most of what you read that is written by
lay people is wrong when it comes to commissions and life insurance. There
is a lot of petty jealousy exhibited by people who would not last one day
dealing with the rejection an agent must endure. None of those who lambast
the industry or product are going to come to your house and help you, so
remember that when you read their negative opinions. Life insurance is sold,
not bought, and the companies have tried for over a century to cut
commissions, with results that backfire in their face, leaving visible scars
(some companies never recover). There is one company that probably has the
best VUL on the marketplace from the consumers point of view, and they also
pay the highest commissions to brokers that sell it. It is counterintuitive,
but life insurance companies do better if they have a larger pool of
insureds. This drives down long term mortality costs and expenses, which
boosts profits. The best way to distribute a large amount of life insurance
is to pay agents more than your competition. This is why the best polices
are NOT the no load / no help kind, but the fully commissioned products sold
the good old fashioned way. Fully loaded products don't just beat the no
load versions, the stomp them into a mud hole and then walk it dry. A lot of
well-educated advisors don't get this, and probably never will, because they
don't understand insurance. That's good, because if they did, they'd be
selling it to, and I like not having much competition. =)

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The VUL like a lot of financial instruments has its place. The problem many
planners have with it is that it should not be the first investment. I think
when you look at the reasons people are buying them is because the insurance
agent is pushing it as a one stop fix that can do a lot. For that purpose a
VUL is more expensive and in many cases not the best answer.


"_JP" <YamYam[at]nospamsplease.megapathdsl.net> wrote in message
news:vr0llmsmdtb73d[at]corp.supernews.com...
- quote -

I have found this newsgroup a couple weeks ago, and I have been doing a lot
of reading including old postings on Google.

It seems like the general consensus about VUL is quite negative. I've found
a lot of people and their postings disapproving VUL. Of course I found
some, although quite fewer, people saying VUL "can be" a good and right type
of insurance, but when those people say so, 90% time they sure don't forget
to mention all the negative side of it.

I can't help wondering. How long has this monster called VUL existed? I
searched the web on the history of insurance a few times, but I always ended
up with thousands of search results for various "insurance" companies
stating their company "history," not exactly the answer I was looking for.
However, if VUL has existed 10 or 20 years by now, and therefore there
are people out there who had VUL for long time, there should be some
historical and statistical data of real life cases; if those of who bought
VUL decades ago are still happy with it or not, or if their VUL insurance
policies indeed have managed to deliever all the sweet promises. Does
anyone know any place I can find this kind of information?

Based on what I have read so far, if a person does need a life insurance, is
willing to take more risk for higher return, would only spend "extra" money
to pay for the policy after maxing out all other types of tax sheltered
stuffs and saving a lot of money for emergency liquid fund, and knows for
sure that this is an investment meaning you can certainly lose all your
money as well as make it grow bigger, then VUL *might be* a right choice for
him/her. Wow, this sounds like a millionaire guy who can care less about
losing a few thousand dollars every year, but at the same time wouldn't mind
being lucky and getting high percentage of return on this "small"
inverstment. Well...

For those of who say VUL "can be" a right choice, are you saying so just
because you want to be politically correct, while deep inside you believe
it's nothing more than a troublesome monster? Does it mean anybody who even
mentions about VUL is a bastard who doesn't care about my financial well
being and future, but just wants my money?

If you aren't getting and they are not explaining the downsides, take a
walk. They are not helping you. AMEX should be willing to show what could
happen if the environment changes, inflation, interest rates, up market,
down market.

If after they explain it and you tell them you don't really understand it,
what do they say? Don't worry about.

Go somewhere else and see if you get the same recommendation.

"X0r" <captainX0r[at]yahoo.com> wrote in message
news:eedcf209.0311100448.21b96738[at]posting.google.com...
- quote -

captainX0r[at]yahoo.com (X0r), you continued:

<< <I> The purpose of the plan is to save money for a house and a boat, for
education of our children and for retirement. </I> >
Well, this is actually the wrong "purpose" for buying a variable life insurance
product like a VUL. Oh yes, to some extent it can be used towards that end if
need be. But your decision on whether to have a VUL or now really should hinge
on other issues IF those other issues are a high priority to you.

First, how long do you really want the life insurance coverage . . . and, how
much for which periods. If you really don't want the coverage or some coverage
for the rest of your life, then a VUL or any other permanent life insurance
product is not the place to look - even if it has some useful tax sheltering
qualities.

Secondly, if you do want some life insurance coverage to last your entire
lifetime, then such policies are bust used as a supplementary source of money
for the types of things you're interested in. You have to keep in mind that
the cash build up in these policies is really designed to keep the policy in
force your entire lifetime and are NOT meant to be some sort of personal bank
account with a tax shelter.

With a variable contract like a VUL, the purpose of such a contract is for your
to be able to control the investments for the reserves of the policy in order
to get a better return that other types of permanent policies in order to make
the cost of insurance less costly, or at least having less come out or your
pocket. But, to do so is risky because investing to get higher returns is
risky. And unless you are experienced at investing and have a high-risk
tolerance, a variable life contract can wind up being a very expensive mistake.

Because such life insurance contacts do have high expenses involved, one needs
to invest in such a way to get high returns to offset them. This is one of the
reasons for one having a high risk tolerance as a prerequisite in deciding to
get such a contract. Also, to make such a policy more efficient at offsetting
these costs, one really needs to highly over fund it in the early years. If
you can not commit to such "over funding," then this particular type of
permanent policy would not be a good choice.

If one is not somewhat financially knowledgeable or sophisticated and really
doesn't like or really doesn't want to understand investing and managing money,
then a variable life insurance contract of any kind is really something to
avoid. They are indeed very complex life insurance contracts and one really
shouldn't buy something they just don't understand and/or really don't want to
understand.

Now, don't get me wrong about these types of life insurance contracts. I
really like them . . . . . AND, I actually own more than one of them along with
some other types of life insurance, including term coverage. I've even been
licensed to sell them too. But just because a particular type of policy might
be good for me doesn't necessarily mean it's good for you or any other
individual. It's my feelings that one should have a clear idea as to the
application of any particular life insurance policy and that one should ready
and able to follow through with whatever decision one is making for the long
term. So, approach this with care and don't worry about rushing in. You can
always get temporary life insurance covering right away to give yourself time
to decide on just who to work with and what portfolio of life insurance
coverage you want and for what purposes.

<< <I> I've got some life insurance (minimal) through work, retirement through
work and a Roth. They're converting the Roth to AMEX, setting up a "savings"
account through AMEX, and the VUL through AMEX. I've essentially maxed out my
contributions to the Roth and the work funded retirement plan, so the VUL is
everything else. </I> >
Just keep in mind that you DON'T have to have everything in some sort of tax
shelter. Having everything in a tax-sheltered position can create as many
other problems as it might solve.

<< <I> Of course they can demonstrate why it's good - they're selling their
product. It "makes sense to me" <b> because I don't really get this stuff
</b> and they just show me charts of how much money I'll make. </I> >
If you really don't "get this stuff," then stay away from variable life
contracts like VUL's. These are simply not suitable life insurance contract
for people who "don't get this stuff." You might be better off with your life
insurance planning by getting a UL type contract instead and dumping your
Emergency Fund funds into it???

<< <I> They're not going to tell me why it's bad or why I don't need it, I
don't have the skills/knowledge to question it and that's why I came here.</I>
Well, you may not have the skills/knowledge but you do have intelligence and
the ability to discern just what you feel is in your best interest or not. And
you can only do that if you're given BOTH the pro's and con's. If these things
are not being presented to you in such a way that you're not getting the
"con's" of it, then you need to find someone else who can present the
information to you so you can make well informed decisions. Don't let someone
just sell you an a bunch of hype. The "hype" may be true for certain
situation, but whether it's really for YOU, just depends.

<< <I> > Is the planner a CFP?

Good question - I had assumed so, but I have no idea, and will find out next
time.</I> >
Well, the CFP designation MIGHT be of some help to know. But it's no guarantee
that you're going to get good financial advice that's appropriate for you. To
find good professional service, you've got to seek it out just as you want any
other type of good professional services. It takes some time and it DOES take
some effort, as it's not necessarily an easy task. I find that people who
don't want to make such an effort usually wind up listening to all sorts of
philosophical opinions and views and disappointed with the results in their
lack of effort.

So, trust your own ability to discern what's good for you and insist on getting
good balanced information so you can make well informed decisions. I hope you
find some of these thoughts helpful. Good luck.

captainX0r[at]yahoo.com (X0r) wrote in message news:<eedcf209.0311090926.4c901438[at]posting.google.com> ...
- quote -

You are definitely not being too cautious.

First of all don't be swayed by the brand name. The individual
advisor matters a lot more than the company they work for. There are
good advisors and bad advisors at every company, but AEFA is not known
for its strict oversight of its advisors. There were some law suits
in the news about a year ago against AEFA for selling unsuitable VULs.
The best way to find an advisor is from a referral from someone you
trust.

VUL can work as described. Part of your premium goes to paying for
insurance and part goes into an investment account. The investments
grow tax free because it's inside an insurance policy. Normally you'd
have to pay taxes on the growth when you withdraw from the account, so
instead you borrow from the policy. One downside is that you have to
keep the policy in force for the rest of your life or all those loans
become taxable. Another is that you pay higher expenses for investing
than you would investing outside the policy. For VUL to be a better
investing vehicle than other options, you need a long time frame so
that the tax-free compounding overcomes the higher expenses. It's
hard to say exactly how long, because policies and external options
differ, but break even is probably somewhere around 10-20 years (so
don't put money in that you plan to spend before then). If saving for
college and/or retirement it usually makes sense to max out the tax
advantaged options for that first (IRAs, 529s, etc.).

If you've got people (especially children) depending on your income,
do get life insurance ASAP.

Thanks for responding.

- quote -

The purpose of the plan is to save money for a house and a boat, for
education of our children and for retirement. I've got some life
insurance (minimal) through work, retirement through work and a Roth.
They're converting the Roth to AMEX, setting up a "savings" account
through AMEX, and the VUL through AMEX. I've essentially maxed out my
contributions to the Roth and the work funded retirement plan, so the
VUL is everything else. Of course they can demonstrate why it's good
- they're selling their product. It "makes sense to me" because I
don't really get this stuff and they just show me charts of how much
money I'll make. They're not going to tell me why it's bad or why I
don't need it, I don't have the skills/knowledge to question it and
that's why I came here.

- quote -

Good question - I had assumed so, but I have no idea, and will find
out next time.

-X

Typically VULs make sense for the advisor and the firm. While it's
good to have life insurance since you'll want to provide for your
family in the event something hapens to you, a VUL can be expensive
over the life of the policy.

You can read more about this at http://www.amexsux.com and if you're
unhappy with the plan you can find out how you can get your money back
at the above URL.

"BMS" <mcfared[at]comcast.net> wrote in message news:<ZNwrb.114618$9E1.557045[at]attbi_s52> ...
- quote -

What is the purpose of the plan, that is what are you planning for.? IF this
doesn't make sense to you, either get them to demonstrate why it is or take
a walk if they can't.

Is the planner a CFP?

What else are they putting into the plan. If the VUL is the beginning, then
that should be the end of AMEX.

"X0r" <captainX0r[at]yahoo.com> wrote in message
news:eedcf209.0311090926.4c901438[at]posting.google.com...
- quote -

I'm having American Express Financial Advisors prepare a plan for me,
which I really think I need. I'm not very financially minded at all,
and I like spending money. We've met a few times, and the last time
they mentioned that they wanted me dropping $1000/mo. into their VUL.
I'm *really* skeptical about this since I've never heard of anything
good coming from dealing with life insurance; it's synonymous with
"scam" in my mind (can't help it). This is also over half the money
I'd be investing on a monthly basis. They likened it to a Roth IRA
(from a tax/growth perspective), which I think I mostly understand,
but they said I could use it for buying a house, a car, a boat, paying
for education, living off of in retirement, etc. That doesn't sound
like life insurance to me. I have a wife and a young son, so as I
understand some of what I've been reading here, I'm a good candidate
for life insurance. I'm just wary of this whole thing, especially
since it's being touted as a tax free money maker type vehicle. The
only thing keeping me going at this point is that it's American
Express (TM), and not Bob's Discount Life Insurance or whatever.

Am I being too cautious? Is this a fine, upstanding plan? I still
think I should diversify my money a bit more. I'll likely open up
another account elsehwhere just to cover myself, but I'm worried about
this VUL. Any comments or advice?

Thanks,

-X