"mark" <Ih8SpamminScum[at]especiallyyours.net> wrote in message
news:YkSqc.208$N8.185[at]nwrdny02.gnilink.net...
- quote -

Your assertions are without completrely merit, because they cannot be
supported with verifiable evidence. Why? No such evidence exists, anywhere,
except in your imagination.

VUL grew in popularity because of the prolonged bear market, and the demand
has fallen directly with the domestic equity markets. UL has ramped up
recently, despite the modest interest rate environment, because of new No
Lapse Guarantee riders that essentially create a "term to 100" contract,
often with inconsequential surrender values.

A few myths you promulgate I will correct here:

1. ALL life insurance is sold. That is the nature of the product. Without
agents, demand would be all but nonexistent, and prices would be
astronomical in comparison to the ultra low premiums of today. This fact
cannot be refuted, and has been been continually supported by real life
statistics going on over two centuries now (source: LIMRA, ASA)

2. VUL and VAs are two distinctly different animals. The only two things
they have in common is the world variable in the name (required by law) and
the fact that they are manufactured by insurance companies. VAs are the
single most UNDERSOLD product on the shelf today. Millions of investors
would be better off today had they considered the contractual benefits of
the VA contract for part of their long term retirement portfolio during the
booming 1990s. Those that did are so far ahead that the domestic equity
market has to return 18-22% per year, every year, for the next half dozen
years just to catch up with the guaranteed minimums in existing contracts.
Nobody can refute these facts with verifiable evidence, because if there
were any, I'd know about already -- none exists.

3. You have virtually zero understanding of the history of VAs, which is not
the subject of this thread, but I'll refute your myth nontheless. VAs are
growing in popularity SOLELY because insurance companies sought alternative
distribution channels. Prior to that change, the only distribution channel
was the life insurance agent (discounting the direct markets, which would
have zero demand if not for the lack of competiton in the 403(b)/TSA
marketplace). Alternative channels include wirehouses, regional
broker/dealers, and banks.

4. Commissions on all variable products are limited by law, and always have
been. Therefore, NO company has offered any outrageous compensation -- it is
what it is, and always has been, subject to the same caps in the 1940 Act,
as amended. This fact cannot be refuted. Round figures, the appropriate
compensation to effectively distribute an annuity is 100 basis points per
year of CDSC, plus or minus 1%. For accounts up to $2,500,000, this is right
in line with the average fees for investment advice tacked on by RIAs
(source: NAVA). For contracts with more money, there are negotiable options
available, just like any other investment program.

5. The need for the contractual benefits of the annuity contract are the
single most unmet need in the marketplace today, and many contractual
benefits are underpriced, making them the deal of a lifetime for those that
already own them. Literally billions of wealth has eroded because of the
myopia and willfull ignorance of the ethically challenged, closed minded,
anti-salesman, anti-insurance zealots. There's a reason why the financial
porn industry quit attacking VAs 4 years ago -- they found out the hard way
they were wrong (source: AM Best).

6. Premium credits exist for a justifiable purpose -- to aid existing
contracts to be exchanged for newer contracts with benefits unavailable at
the point of sale previously. TANSTAAFL, and I've yet to meet a client that
didn't understand this. I've read more prospectuses than the average bear,
and I have yet to find one that didn't spell out how a premium credit was
accounted for. Plus, a CDSC may recoup a credit, but it never has and never
will pay for it -- so your assertion there is completely without any merit
whatsoever. Premium credits are paid for out of the general account of the
insurance company, and then recouped via M&E. These facts cannot be refuted.

- quote -

You cannot provide any support for your bogus assertion that 99.9% of
anybody purchased the wrong product, much less something that is so
difficult to sell as life insurance. Why? None exists, anywhere.

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 Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

Matt <ng.20.apharmdb[at]spamgourmet.com> wrote in message news:<zKUqc.402$N8.209[at]nwrdny02.gnilink.net> ...
- quote -

This is a very dangerous attitude to take towards insurance. People
who are struck with a terminal illness are not given advance notice!

I bought some universal life (not variable universal life) policies a
while ago, after discussing the issues extensively on this newsgroup.
To me, VUL was too complicated, and the current favorable tax
treatment of capital gains and dividends lessens the appeal of
stock-based subaccounts in a VUL. If Kerry is elected and capital
gains and dividend taxes go up, VUL would look relatively better. You
can at least guarantee insurability by buying a term policy
convertible to permanent NOW, and wait until the election to make a
decision.

- quote -


Where in the world do you get YOUR statistics. I do not believe
that there is actually 99.9% of ANYTHING, except possibly
Ivory Soap, which was only 99.4% pure.

I doubt very much that you could find ANY publication to
support that statement.



- quote -

How are you determing "the need"??????????

- quote -


This is the first time that you have made a reasonable statement.
I am certain that VUL has been sold to many people who do not
fully understand it's functioanlity. On the other hand I understand
and I may be wrong, that many women underwent complete
hysterectomy's when they might not have really needed them".


And 99.9% of the people who are
- quote -


again, the use of that 99.9% figure. btw, did any of that 99.9 %
need ANY insurance? If so what should ALL of those 99.9% have
bought????????? Should they ALL have bought 5 yr. Term,
10 yr. Term, or possibly 20 yr.Term???????????????

Cal Lester CLU

mark wrote:
- quote -

Ok, sorry, but this is exactly NOT the kind of advice I'm looking for.
I have read the prospectus, I understand the fees and their nature. I
know that for me, because of my situation - already exhausted all tax
advantaged options, likely to be unable to contribute to a Roth soon,
and high tax bracket in retirement - a VUL is an interesting
POSSIBILITY. Comments like this and all the blind rage on amexsux just
don't convince me. It would make one wary, but I don't need any help
being suspicious. Besides, the people ranting always talk about how
they got into the VUL policy when they weren't maxing Roth & 401k, or
had credit card or other bad debt, didn't have the money to properly
fund the policy, etc. Well, that's not me.

The question is which costs me more over the years?
A) Premium charge, COI, & fund charges

OR

B) Term, Income tax, capital gains tax, & fund charges

(Did I leave anything out of either line?)

With regards to future insurability, I'm not going to have a problem - I
don't smoke, drink, am in good health. Barring accidents, I'll be good.

Actually, Micheal Sullivan's:
- quote -

makes the most sense to me.

Thanks,
Matt

"cal-lester" <cal-lester[at]comcast.net> wrote in message
news:nfPqc.80639$xw3.4489049[at]attbi_s04...
- quote -

I agree with you 100% Cal, but I stand by my original statement that 99.9%
of the people who are sold VUL were truly "sold" VUL, and did not need VUL.
It's the same sad story with Variable Annuities, unfortunately. Amazing how
variable annuities were not exactly very big business until the heavy
hitters in the industry started offering high commissions to agents. Then
amazingly enough they sold like hot-cakes. Did the need for VA's increase
all of a sudden? Of course not. And then to top it all off, due to the
premium credit charade that many of the "insurer's" were offering, a lot of
agents did a lot of churning/bouncing of accounts. Ofcourse not mentioning
that their 5% premium credit was offset by the x% surrender charges.

My point is simply this - VUL and other niche products are just that - niche
products. But unfortunately I've seen too many people who would never be
right for these products being sold them. And 99.9% of the people who are
"sold" them don't need em and would be better off putting their money
somewhere else. End of rant.

"mark" <Ih8SpamminScum[at]especiallyyours.net> wrote in message news:v5yqc.38498$vz5.14079[at]nwrdny01.gnilink.net...
- quote -


Pete, I can find NO FAULT with your decision to
discontinue the VUL, due to the HIGH costs that
were involved with that particular company. Further,
Term insurance might be right for you, but might
NOT be best for someone else. There is the question
of continued insurability, and length of contract........

Mark, I do find fault with your comment though. It is
true that I have never owned, nor sold a VUL contract,
as I was always a firm believer in traditional U/L. Most
of my clientele were insufficiently knowledgeable to really
understand the vagaries of the market's influence on the
value of their contract.
Being a "practicing devout coward" I did not care to
subject myself to the potential phone call somewhat like
this:

Hey Cal, how come even though I paid in $1,000 in
premiums this year, my policy is worth LESS than it
was LAST YEAR. Yeah, how come????????????

However, I do take umbrage at your use of word Scam
as it pertains to Agents & Brokers. It is terminology like
that, that causes people to make improper decisions about
their true needs.Professional Life Insurance Agents are honorable,
and try to provide the best product for their clients.
I will grant you that there are unscrupulous agents, as there
are unscrupulous doctors, teachers,lawyers,government employees
Catholic priests, etc.
Cal Lester CLU

"mark" <Ih8SpamminScum[at]especiallyyours.net> wrote in message
news:v5yqc.38498$vz5.14079[at]nwrdny01.gnilink.net...
- quote -

You'll notice that people who spew unsubstantiated allegations like the one
in the paragraph above never have ANY verifiable evidence to support their
bogus assertions.

That makes them just as bad as the boy who cried wolf. In a perfect world,
the wolf would be standing behind them when they hit SEND.

CHOMP. Gobble, gobble, gulp. Ahhhhhhh!

Gene pool improved!

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 Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

On Wed, 19 May 2004 04:02:12 CST, "mark"
<Ih8SpamminScum[at]especiallyyours.net> wrote:

- quote -

While it is not credible to assert that "most consumers" would benefit
from a particular product or strategy, it is equally non-credible to
assert that few do.

Over the years I've come to conclude is that all we can say is that,
in general, the appropriateness of a particular product/strategy
varies from case to case.


-HW "Skip" Weldon
Columbia, SC

You notice that the only people who defend VUL's, Variable Annuities, and
other niche products that for 99.9% of people constitute nothing more than a
scam, are the agents and brokers.

"Pete Lipowitz" <petelipowitz[at]aemail4u.com> wrote in message
news:9fd676b5.0405181426.47a309a6[at]posting.google.com...
- quote -

Matt, you'll want to fully understand how much this product will cost
you so read the prospectus carefully. I use to own one from American
Express and after looking at what the policy was doing for me and
after doing some research (Amexsux.com) I decided to go with term.
These products are very complicated and costly since I was paying 5
percent on the money I was paying into the VUL and 5 dollars a month
for the policy and I was paying management fees of around 2%. I ended
up paying a surrender charge since the policy had a 10 year surrender
period.

Good luck,
Pete

Matt <ng.20.apharmdb[at]spamgourmet.com> wrote in message news:<gOopc.62466$wY.49596[at]nwrdny03.gnilink.net> ...
- quote -

"John A. Weeks III" <john[at]johnweeks.com> wrote in message news:150520041004506586%john[at]johnweeks.com...
- quote -


Commission have absolutely nothing to do with the VALUE of
a Life Insurance Product. Commissions are paid from the
General Account of the Carrier, and are NOT taken from YOUR policy.
Obviously the commissions that will be paid figure in the overall cost
of the policy, but so does the paper it is printed on........

btw, did you know that the Dentist makes 100% of the fee that
you pay to his office manager ????????
The Lawyer makes 100% of the fee he/she charges...........

AND although I think that it is rather "crass" to liken the purchase
of Life Insurance to provide money for your family at YOUR Death
to the purchase of a car that will decrease in value as you drive it out,
why would I even be concerned about the amount of the sales person's
commission or salary, IF that was the car that I wanted to buy, and it was
about the same price all over..........

Cal Lester CLU

Matt <ng.20.apharmdb[at]spamgourmet.com> wrote:

- quote -

Just a note here, often as not, it's worth maxing out everything that
you can deduct (not just the part your employer matches) before
considering VUL as a savings instrument.

- quote -

It might be. It's going to depend on a huge number of factors, some of
which you can predict and some of which you can't. How long would you
hold the term insurance and how healthy will you be at the times you
need to renew it? What kind of investment mix are you looking for?
(High turnover or high dividend/interest investments will favor a VUL
over non-tax-deferred more than low turnover no/low-dividend stocks,
where you get some deferral through unrealized capital gains). How much
insurance do you expect to want at an old-age death? (There can be
estate-tax reasons to hold insurance).

The answers to these questions, as well as one thing you cannot predict
or control at all (how well do your investments perform) will make a
huge difference in whether VUL is going to maximize your after tax money
out. It's not a simple analysis. Also remember that every VUL contains
a potential tax bomb. Once you've started one and taken money out (with
the wash-loans), you must either hold the policy in force until death
(no matter how old you are when that happens) or be liable for back
taxes on all your gains. This is why a desire to hold at least some
life insurance until an old-age death is a big yes indicator, and a lack
of such desire would be a big no-indicator. VULs can allow you a lot of
leeway in how much death benefit you keep around compared to how much
you have at the start or in the middle, but there are restrictions on
how low it can go before the IRS considers it "not insurance" and you
get the tax bomb I was talking about. That's when your VUL agent calls
you up and says "You need to deposit $X by blah, blah date if you want
to hold off the tax dogs."

To the extent that you really are buying term insurance anyway that you
would hold for a fairly long time, and maybe have some estate-tax
considerations for which permanent life-insurance would be useful, it
could be well worth using some kind of insurance vehicle (such as a VUL)
to tax advantage your savings.

If a fair amount of your VUL would be invested in bonds, BTW, you should
give serious consideration to UL or whole life. It's not as flexible
(you can't stuff as much money into it for a given DB as you can with a
VUL), but the returns on whole life can end up being very competitive
with income based investments.

The key thing to realize about VUL is that unlike sticking a bunch of
money into a mutual fund or buying term insurance -- it's a life-long
product designed to serve a life-long need, and it will almost always be
a big mistake to let the policy lapse. Make sure before you buy one
that you are comfortable with that. Make sure that to the best of your
current knowledge about your financial future, the product will still
look like a good fit for you in 10, 20 or 50 years. This is not
something you have to worry about with other kinds of investment
decisions.

- quote -

That depends on a lot of factors, as mentioned above. You need to talk
to a good agent who understands the potential problems and will not
pussyfoot around letting you know about the risks. They should be
asking you all the questions I mentioned above, and probably a number
more that I've forgotten. They should be running a few mock projections
to show your cash/value/db/money taken out over time given some fairly
different and realistic investment expectations.

If they use numbers that don't make sense (they try to emphasize the
10-12% expected average returns or something even bigger, or they fail
to show what happens with 5-6% average returns, they use different
assumptions about your risk and return in the VUL vs. non-VUL
scenarios), if they don't ask a lot of the right questions, if they fail
to warn you about potential tax consequences and the permanent nature of
the product, or if they fail to clearly answer any questions you have, I
would run, not walk, to a different agent. No matter what, I would
seriously consider having an accountant or financial planner not
associated with the agent look over the plan with you before you invest.


Michael

In article <gOopc.62466$wY.49596[at]nwrdny03.gnilink.net> , Matt
<ng.20.apharmdb[at]spamgourmet.com> wrote:

- quote -

Would you buy a $20,000 car if you knew that the salesperson was
going to make an $11,000 commission on that car sale? Well, that
is how VUL works. The salesperson often gets a commission that
is more than 100% of the first year premium. How could a deal
like that be good for you?

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

"Matt" <ng.20.apharmdb[at]spamgourmet.com> wrote in message
news:gOopc.62466$wY.49596[at]nwrdny03.gnilink.net...
- quote -


Get "The New Life Insurance Investment Advisor" by Ben Baldwin. The book is
written for the consumer AND the agent. Here's a link to it:

http://www.amazon.com/exec/obidos/AS...&link_code=as1

If the agent presenting this product doesn't have the latest copy of this
book on their shelf, look for another agent.

VUL works best when funded with an equity portfolio. If you use all bonds,
you're often better off with a general account product, like UL or Whole
Life.

A balanced portfolio often appears to illustrate better, but the systems the
NASD allows are deterministic ONLY, and they actually prohibit the use of
the more realistic stochastic modeling. In reality, a balanced portfolio
doesn't make up for the additional costs, so the general account products
often come out ahead.

VUL can be an effective wealth accumulation vehicle, but there are a lot of
caveats. Ben Baldwin's book helps better than any other hard source you can
find at this time.

Questions? Comments?

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 Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

"BMS" <mcfarland[at]yahoo.com> wrote in message
news:dfppc.52575$536.9027453[at]attbi_s03...
- quote -

And like opinions, everyone's mileage will vary. Despite the pleas of the
ignorant and uninitiated, plenty of people mix them, with good results and
positive outcomes.

- quote -


Less than HALF of working Americans have access to a qualified plan, and
among those that do, only the minority offer any form of matching
contributions. Among those that do match, they are matching less and less
these days.

It is VERY common for an advisor to work with people who never will have
access, making alternative funding vehicles more attractive.

- quote -

Agreed. A good participating whole life policy purchased at a young age,
with some addtional premium, in the form of a paid-up addtions rider, can
create a long term bond alternative that will generally outperform bonds
theirself, net of any and all fee arguments created by those who don't
understand general account insurance products and how they work.

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 Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

There is an opinion of not mixing insurance with investing.

You mentioned that you haven't maxed out your 401k deduction, gotten the
full employer match but not the max you can defer. I'd being doing that
first. Same tax deferral advantages without mixing in the cost of insurance.

Look at other forms permanent insurance as well, I wouldn't bother with
term, unless you were going to take advantage of the ability to convert it
later and the premium is so tiny now.

Also, I would be looking to save in other non-retirement accounts for the
home you want and other things that will happen well before you are entering
retirement.


"Matt" <ng.20.apharmdb[at]spamgourmet.com> wrote in message
news:gOopc.62466$wY.49596[at]nwrdny03.gnilink.net...
- quote -

Ok, so I'm probably starting another flame war, I've read threads in the
history of the group, but the people asking the VUL question then were
not in the same situation as I. (They weren't exhausting other tax
advantaged investment options first.)

I'm 28, single, no kids. I plan to have a family, but no idea when that
will happen. I'm looking for ways to invest my money. I'm already
maxing out my employer's retirement plan (the part they match anyway).
I'm maxing out my Roth, but I will likely hit the income limit on a Roth
in 5 years unless I marry someone who makes no money. I'm a frugal guy
and still have a decent amount of money left to invest. With all my
savings, I'm still going to be in a high tax bracket when I retire
unless it all goes wrong somehow.

Is a VUL a good method for saving for longer term needs such as
education expenses and early retirement? I will save separately for a
house.

What I'm wondering is, over the long-term do the premiums you pay for
the VUL cost you more than if you were just paying taxes on the money
and had term life insurance until kids were self-supportive?

I've read the entire prospectus for the policy and gotten my questions
about it answered(wee fun), been thinking about this for over a month,
read everything I can find on the web and I still can't see a clear answer.

If there is more information that would help, just ask.

And if you know of other tax advantaged methods of investing, please let
me know.

Thanks,
Matt