- quote -


Yes John, and YOUR last line reverts back to Pete's 3 lessons.
He was simply trying to caution ANY buyer to beware of buying
ANY product until he has made himself cognizant of it's REAL
values and pitfalls.
Cal Lester CLU

- quote -

I agree with you wholeheartedly about withdrawal of funds from the
policy, which is a good option. Both ways are tax free. I thought
Pete's response was rude to Dan, who was asking a good question. VUL
is insurance first and foremost, as you said, but the investment
accounts can and do perform well, especially for an individual who can
fund it to the max.
John Kaighn - http://www.jerseybenefits.com/ to moderator - i trimmed
it!

"John Kaighn" <kaighn[at]jerseybenefits.com> wrote in message news:44e176c5.0409080710.fae4d81[at]posting.google.com...
- quote -

funds, rather than BORROW. When you borrow, there IS an interest charge,
(even if it is a wash loan), which DOES mount as time goes by. Whereas,
when you Withdraw, (the Death Benefit diminishes the same amount), there
is NO INTEREST charged to you or the C/V account.

b) although the information that you provided is succinct, it does NOT
diminish the THREE LESSONS that Pete offered.
Cal Lester CLU.


======================================= MODERATOR'S COMMENT:
Please trim the post to which you respond.

"Cal Lester" <cal-lester[at]comcast.net> wrote in message news:<irj_c.289836$eM2.3065[at]attbi_s51> ...
- quote -

If you are maxing out your 401k, and still can afford to save, the VUL
or an annuity are the only tax free ways to invest. Since you can't
touch the annuity before 59.5, the VUL works in your case, because you
can "borrow" from the tax deferred cash value, and you don't have to
pay it back, it is just deducted from the death benefit. While a VUL
does have a commission, and there are other expenses for insurance,
fees are not the only thing you need to concern yourself with as an
investor. Many people are blinded by this and they will settle for
lower performance, to save a few dollars in fees. This is the no load
mentality. It takes a great deal of work and many dollars spent in
research to find funds which out perform their benchmark. However,
many funds are well worth their fees. A VUL may also be worth its
cost to you, because you have exhausted all other tax deferred savings
vehicles. My site is http://www.jerseybenefits.com/ Also you can
feel free to email me for more information.
John Kaighn

Could NOT have been expressed any better.
Especially "lesson # 1".
Cal Lester CLU

"Nashville Pete" <poremskinospam[at]comcast.net> wrote in message news:va-dnTm296kC5KrcRVn-jA[at]comcast.com...
- quote -

Indeed you have a lot to learn.

Lesson #1 Life Insurance is not an investment, it is life insurance.
Lesson #2 Go to your nearest Jr College and take a night course in Personal
Finance and Investment.
Lesson #3 Don't buy something if you don't know what in hell you are buying.

Good luck


"Daniel" <dan.gosser[at]comcast.net> wrote in message
news:7380cca1.0409011025.44b01625[at]posting.google.com...
- quote -

Did the advisor do a risk profile questionaire with you?

Show you a complete asset allocation wiht an investment statement.

How is he compensated? Ever show you a form ADV part 2?

You seem to have an insurance salesman trying to be an advisor.

- quote -

"Ed Zollars, CPA" <ezollar[at]mindspring.com> wrote in message news:ch5bqb02i67[at]news3.newsguy.com...
- quote -

I would add that Ed might have also included the fact that the Fee's inherent
in a VS./U/L are much higher than those in other forms of Life Insurance. Since
you state that there is no apparent NEED for L/I currently, then it would appear
to me, as it has to others, that there are MANY other forms of investments that
you might look into at MUCH LOWER NET COST TO YOU. You may or may not
have been advised that the "so called investment" portion of the VS./U/L contract
is INVESTED in one or more mutual funds (usually at a COST to you over and
above the cost of the Insurance itself).............
Cal Lester CLU

Daniel wrote:
- quote -

Daniel,
VUL would be a bizarre choice for a place to put your extra cash, for a
23 year old (single?) individual. Do you have other, substantial assets
outside the 401k? Are you in a top tax bracket? Is it true that you have
no need whatsoever for life insurance & if so why would you buy a
permanent insurance policy, i.e., one that you keep in force till death
(and are required to do so, to get those "tax benefits"). And are you
fully aware of the costs of VUL and the possibility they will more than
outweigh the putative tax benefits?

Someone pointed me to this VUL analysis recently, it's a good one:
http://www.consumerfed.org/VULReport0203.pdf
Note that it's 22 pages and not easy reading. Note also all of the
"here's another VUL mess we needed to fix" examples at the end of it.

If VUL sounds complicated and special-purpose, that's because it is.
Caveat emptor (which is latin for "get a new advisor").

-Tad

"Daniel" <dan.gosser[at]comcast.net> wrote in message
news:7380cca1.0409011025.44b01625[at]posting.google.com...
- quote -

Like most investment decisions it is virtually impossible to tell if a
particular one is right for a particular individual without going over all
of the facts and circumstances relative to the individuals specific
situation, including need. VULs like almost every other investment or
insurance product can be a good part of an overall plan, but they aren't
necessarily for everyone. With that said . . .

If you aren't comfortable with your "advisor" then I strongly suggest you
find another one. SERIOUSLY, if you feel like you are being taken for a
ride so that they can pad their pockets, this is NOT the advisor for you.
And it doesn't matter how good the advisor is or how well he performs. If
you don't trust him, you don't belong with him PERIOD.

VULs do pay very good commissions so the sales person will get paid for
selling it to you. However, your concern should be that you are getting the
product that is right for you, not that the advisor/sales person is making a
commissions (large or small) for making it available to you. Of course, you
should be able to shop around for competitive pricing, but the point here is
that you need to make sure you get what you need. Don't buy it or not buy it
based on the commission paid to the rep.

Good luck,
Gene E. Utterback, EA

In article <7380cca1.0409011025.44b01625[at]posting.google.com> , Daniel
<dan.gosser[at]comcast.net> wrote:

- quote -

In any game of poker, if you don't know who the patsy is, then you
are the patsy. Time to call the bluff, take your money off of the
table, and find a game that isn't rigged against you.

-john-

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

Daniel wrote:

- quote -

First, if you truly feel that uneasy about the ethics of the
individual you are dealing with, then perhaps it's best for *both*
of you if you find someone else to deal with. If you are right
(this person has only his own interest at heart), then clearly you
are better off leaving. If you have a valid reason to doubt the
ethics of the individual, then it's likely not a good idea to put a
lot of trust in the advice and better to look elsewhere.

Or it's possible you will never be comfortable with the possibility
that the other party's financial interests might have influenced his
advice--if that's true, then you are likely never to be able to get
advice since all of us always face some conflict (I do not sell
insurance, nor do I take commissions of any sort--but that doesn't
totally eliminate issues that certain advice will result in higher
fees to me then other advice would).

What's a rational basis for questioning the advice? Well, if no
alternative was ever presented and compared or if the presentation
is such that it would appear to *never* make sense to do anything
else buy purchase this particular product. VUL is a product that
certainly is not a "one size fits all" deal and if your adviser
seems to be suggesting such then you likely have a problem adviser.

When you were presented with the illustrations, did the adviser make
it clear that what you were seeing was virtually certainly *NOT*
what was going to actually happen? That is, results may be better
or worse, but it would take a miracle for the policy to perform as
illustrated. Did the agent give you some information about what
happens to the illustration as variables are changed--that is, what
is the sensitivity of this policy to changes in various assumptions,
so you can understand which assumptions are the key ones--if they
come up off by a large amount, it's going to have a big impact.

- quote -

Well, you can *borrow* against it at any age once you have a
sufficient balance built up and, so long as the policy remains in
force, you won't pay tax on those amounts. However, the agent
should have explained to you what happens if the policy "collapses"
and you are faced with either putting money into the policy or
having it lapse (hint, if it lapses with large amounts borrowed out,
the tax result can be *VERY* nasty).

As well, how much of a "cushion" is the agent showing when
illustrating what you would take out? And how close does the policy
come to "cratering" under his assumptions (that is, needing an
influx of cash before you die)? And, again, how much could the
various assumptions be changed before the cushion seems a bit too
narrow for comfort?

It's called a "variable" policy for a reason--did the agent
illustrate the variation and the impact of the same?

Finally, if you truly have no need for insurance then a VUL would be
less likely to "make sense" than if did have insurance needs to
cover. You are paying for mortality charges, and what you are
getting from those fees is *only* the tax shelter (or perhaps only
deferral) wrapper. The fact the policy is being max funded is a
good thing that way (since it is a method to minimize the insurance
charge), but you may still find the tax cost of a fully taxable
investment account might be lower than the mortality charges
incurred--especially if you don't trade often and let the
investments appreciate in value over time.

--
Ed Zollars, CPA
Phoenix, Arizona

After meeting with my financial advisor quite a few times, they are
now recommending that I invest in a VUL. It would be fully funded at
the allowable limit. I max out my 401k, and plan on opening an IRA,
but I'd like access to the funds earlier then 59.5.

My concern is I don't konw if this is the best route, I am afraid they
are trying to sell me on this for their own personal gain/commission.

Their sales pitch is that I can draw a large amount of income from
this at 45 (im 23 now) and of course the tax free benefits. I have no
need whatsover for any type of insurance (term that is.) I feel like
I am being sold on something that may not be in my best interest.

Any suggestions?
I appreciate any help, I certainly have a lot to learn!

Dan