Peter Wernstern wrote:
- quote -


Peter, I hate to blow your bubble, but what you have here is a
STANDARD provision in EVERY Life Insurance product. It is
put in there to prevent "a run on the bank" situation. Standard
practice is to issue a check A.S.A.P., to clear the books, and
not be required to pay additional interest.

This phrase is NOT a reason to buy or not buy. That should be
done on the question of NEED and best possible product to
SOLVE ALL OF TH RAMIFICATIONS OF THAT NEED.
Cal Lester CLU

"Peter Wernstern" <ptwrn[at]yahoo.com> wrote in message
news:41EDF1B9.6040509[at]yahoo.com...
- quote -

That's required by state law. Have you ever read the fine print for your
bank accounts? They same six month delay for withdrawals is available to the
bank, too. Both banks and insurance companies are protected from a "run on
the money" during a financial crisis for up to six months, ever since the
1930s. This is VERY OLD news.

- quote -

They didn't hide it. It just took you a while to find it. If you have a bank
accout in the United States, you've obviously put money there without
reading the fine print.

- quote -

Except this isn't too good to be true. No more so than any other bank or
insurance product.

- quote -

Premiums taxes are common, and unavoidable. They've been around as long as
they've had insurance commissioners (who do you think pays for those
departments in each state?). They change from time to time, and nobody pays
attention, because they don't see a bill for it. Virtually every insurance
premium you pay gets a haircut by your state insurance department.
TANSTAAFL

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://www.brentdgardner.com/
http://www.gardnerfinancialgroup.com/
http://www.topgunproducers.com/
http://www.creditfixinc.com/

Si vis pacem para bellum!

"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.

OK. I think I found the catch.

I went back to the piles of papers in the file (yes, I save every piece
of paper I receive from Marsh [at]WorkSolutions) and in there I found a
document entitled "Group Universal Life Insurance Certificate".

Section 8 (Deferment) reads there: "We may delay paying a Cash
Withdrawal for up to 6 months from the date the Administrator receives
your request for payment. If we delay for 30 days or more, interest will
be paid from the date the Administrator receives the request at a rate
not less than the Guaranteed Interest Rate (see page 5)."

Get it? If I want to retrieve my money back, I might wait up to 6 months
before I receive it!!!

Amazingly, despite asking the representatives explicitly about such
limitations/gotchas, they managed to hide this information from me (did
they really think I was going to send them a fat check without reading a
detailed and legally binding document?)

Naaaaah - this is not what I had in mind when I was thinking of an
interest based account that is better than my current money market
account at my local bank.

The moral of the story is... IF IT LOOKS TOO GOOD TO BE TRUE, IT
CERTAINLY IS.

Thank you everybody for helping me decipher this issue.

Peter

P.S. In an older flyer I received 9 years ago, it seemed that the trend
of hiding information from clients was not widely spread yet and so in
the Q&A section I found this:

Q. How interest credited to cash?
A. a 2 percent state-required life insurance premium tax is deducted
from each new cash contribution and the balance of the new contribution
is credited with current interest from date of receipt by MetLife.

Hmmm... there is no mention of that 2% penalty in the current
certificate. Anyone knows if this is still the law?




Peter Wernstern wrote:

- quote -


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

Go to bankrate.com and find yourself some realistic CD rates.
Steve
"Peter Wernstern" <ptwrn[at]yahoo.com> wrote in message
newsu6dnasjs63QF3zcRVn-jA[at]adelphia.com...
- quote -


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

"Peter Wernstern" <ptwrn[at]yahoo.com> wrote in message
news:41E4B8D5.3060701[at]yahoo.com...
- quote -

Most GUL policies are sold in lieu of pure group term, and the premiums are
virtually identical.

- quote -

The insurance company wants your money. That's not a bad thing, because they
can do pretty good with it, compared to other short term investments. GUL is
a truly bizarre contract that most agents don't know much about, because it
generaly doesn't have any surrender charges (as a participant, the plan may
have them, but only if your company cancels the entire group...which is a
small, but real risk). I'm not totally familiar with Met's GUL, but the ones
I've sold were pretty liquid, depending on the size of the group. With
thousands of employees, the company can afford to be partially liquid to the
group, with the appearance of total liquidity to the individual participant.
The company goes on the risk that the entire group may cash out, but this is
highly unlikely. Most people use the cash account as a place to accumulate
some very secure savings at what is often a very competitive rate of
interest.

What you can do is request a sample contract, or sample participant
certificate. This should detail all the liquidity provisions. You may be
surprised to find out (as are many agents) that this stuff is pretty neat
from the consumers point of view.

I say that this stuff doesn't pay very well (to the agent), because at the
small plan level, it doesn't. I know some brokers that have very large
national accounts that gross seven figures peddling this stuff, but those
are political sales and one needs to be politically connected to land one.
This is why few agents know about it and one rarely finds these plans
outside of larger employers.

FYI - There's at least on company marketing GVUL. Paragon, I believe, and
they are owned by General American, which is a Met Life company. I've looked
at it before, and it was 100% liquid on day one, too. It's just not
profitable to sell for the overwhelming majority of agents.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://www.brentdgardner.com/
http://www.gardnerfinancialgroup.com/
http://www.topgunproducers.com/

Si vis pacem para bellum!

"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.

Brent D. Gardner, ChFC wrote:
- quote -

You are correct, Brent. It is a group term life insurance (and it is
called GUL by everyone in my company). I am employed in a "Fortune 500
company" and my understanding (although I haven't done an extensive
research) is that the rates we get for this insurance are very
competitive (i.e. I wouldn't be able to find anything better on my own).

The cash accumulation offer was something of a recent development: One
day I receive a letter from SEABURY & SMITH that "MetLife voted to
change from a mutual insurance company to a stock insurance company, a
process called demutualization". I have no clue what that means, but as
a result I was "entitled to a share of the proceeds from the
demutualization". So from a balance of $0 I went to nice amount of
several hundred dollars by doing *nothing*. That amount continues to
carry an interest rate of 4.2%.

Free money out of the blue... Doesn't this sound "too good to be true"?
I called the company up to inquire about this, but the representatives
wouldn't provide more information than what I had in the letter.

Anyway, I was thinking of withdrawing that amount, but then I realized
that nowhere can I get nowadays 4.2% interest rate... So I went further
and asked myself "why not transfer money from my bank account to this
GUL cash accumulation program, if this is so much better?"

The letter(s) received from MARSH state: "If you participate in the cash
accumulation fund, you will earn 4.2 percent interest for this year. If
you do not participate in the cash accumulation fund, you may want to
consider making contributions. Money you contribute to the fund can be
withdrawn at any time for any reason such as a new home, a child's
education or a supplement to your retirement income. You can also use
your cash accumulation fund to purchase a paid-up life insurance policy
and pay no future premimums. You can begin, terminate, or change cash
accumulation contributions at any time by calling Marsh [at]WorkSolutions."


Hmmm... only now, after typing this relevant part of the letter, I
realize that there is a strong hint here that you *cannot* really
withdraw the money "at any time for any reason". Otherwise, why would
they list only circumstances like "a new home, a child's education or a
supplement to your retirement income"?

I think that this is the catch. What do you think?

Thanks,
Peter

"Cal Lester" <cal-lester[at]comcast.net> wrote in message
news:KsKdnTHHs6k8YH7cRVn-rw[at]comcast.com...
- quote -

OT author mentioned group term, so I'm assuming that he's being offered a
GUL addendum to that benefit. It's actually fairly common among Fortune 500
companies, but like I said, commish is negligible, so few actually solicit
it, except by mail.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://www.brentdgardner.com/
http://www.gardnerfinancialgroup.com/
http://www.topgunproducers.com/

Si vis pacem para bellum!

"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.

Brent D. Gardner, ChFC wrote:

- quote -

wouldn't one have to be a MEMBER of THAT group in order to purchase
Group UL???
Cal Lester CLU

"Cal Lester" <cal-lester[at]comcast.net> wrote in message
news:ONudnelbx98lMX_cRVn-gg[at]comcast.com...
- quote -

It is worth mentioning that there are Group UL contracts with ZERO surrender
charges (that means 100% liquidity on day one), that also pay competitive,
or guaranteed, interest rates that compare favorably with current bank
rates. These aren't new -- they've been around for over a decade. They
aren't heavily marketed because the commissions are almost equal to group
term without the cash value accumulation, and few agents will work for free.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://www.brentdgardner.com/
http://www.gardnerfinancialgroup.com/
http://www.topgunproducers.com/

Si vis pacem para bellum!

"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.

- quote -

Excellent thinking Peter ! ! ! ! !


- quote -

But that would have amounted to a"free lunch" wouldn't it ! ! ! !


- quote -


What you describe is BOTh Good & Bad. Good if you manage to
DIE while THAT particular Term Policy is IN-FORCE. Bad if (depending)
on the type of Term, IT EXPIRES before YOU do.
Term Insurance is an EXCELLENT tool to be used for protection,
provided that the client UNDERSTANDS the nature of the BEAST.
The very name tells you that it can only be in-force for a specific
period of time (term). It is BEST used when there is a KNOWN
obligation, which will be an obligation for a SPECIFIC period of
time: mortgage, loan,college etc..

However, if one is interested in having a Life Insurance policy that
can be GUARANTEED to be In-Force at Death (provided that all
premiums have been paid), then some form of PERMANENT LIFE
Insurance would be required: Whole Life, Universal Life or one of
the hybrids.....................

- quote -

more likely, that the EXPLANATION was wrong. You have not provided
sufficient information for me to hazard a gues as to what type of contract
would be most suitable for you, however it does appear that they did
not even bother to determine that......
Cal Lester CLU

- quote -

Cal Lester wrote:
- quote -

Thank you so much, Cal. I did suspect that the program was not properly
explained to me, but as hard as I tried to get the insurance company's
reps "to talk", they would reply with very evasive and ambiguous
answers. Perhaps that's the best sign that I should stay away from this
(and maybe find a better company to have my life insurance with).

The way they explained it to me was that EVERYTHING that I contribute in
a lump sum will carry the 4.2% interest and will be available to me in
its entirety at any time I want to retrieve it. I would of course have
to pay taxes on the interest when I retrieve it (but that was obvious to
me. I never expect "free lunch" from the government).

Currently I only pay about $30 a month for Term insurance. Term
insurance *only*. I never selected a cash accumulation program.

So, when the insurance company (Marsh[at]Worksolutions) came up with this
offer, my understanding from my conversations with those reps is that
whatever I deposit is mine - just like in a bank account, except that it
is not FDIC insured but it is tax deferred. Is it possible that my
understanding was completely wrong?

Thanks,
Peter

- quote -

annuity.

In the latter case, any withdrawals will be at least partly taxable income.



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

Peter Wernstern wrote:
- quote -


- quote -

NO, it is simply an advertising brochure...

- quote -

The "catch" that you refer to, is that the program was NOT properly explained to you.
You have been offered either a Life Insurance Policy (Interest earning probably U/L)
or an ANNUITY.
In both cases, there are costs & expenses involved. The "balance" of your contribution,
(after removal of those costs) would then earn the Guaranteed Interest, plus any CURRENT
additions. That earning would be "INCOME TAX DEFERRED", not tax free. There are
conditions attached by IRS.

You just might want to remember that "there is no free lunch".......................
Cal Lester CLU

Greetings,
I recently received an offer from the insurance company (a division of
Seabury & Smith) in which I have term life insurance (group rate through
my employer - fortune 500) for a VERY attractive "savings" program: I
can either contribute monthly or send a check for a one time lump sum -
and in return I will receive a minimum GUARANTEED 4.0% interest rate
(currently the rate is 4.2%) - tax deferred!!!

Feeling that this is "too good to be true" (I can get from my bank today
only 1.5% and only if I have a deposit of over $25K...) I asked the
representative: "Can I withdraw the money any time I want?". His answer:
"You can withdraw any amount any time you want".

I asked: "Are there any limits on the number of transactions I can
preform per year?" His answer: "No limits at all".

I then asked: "Is my deposit FDIC insured?"
His answer: "What do you mean?" (an insurance professional that doesn't
know that FDIC is???)
I said: "If your company goes bankrupt one day, will my deposit be
guaranteed by the government?"
His answer: "Oh. This is never going to happen. Many people deposit
large sums of money and retrieve it any time they want without any
problem. Your money is safer with us."

I then asked if I can receive the details of this "cash accumulation
program" in writing. He said: "Sure I will mail it to you".

I waited about two weeks (nowadays it seems that everything is done from
India - just as all the representatives of this company I have spoken to
have a heavy Indian accent). Then I received the promised "document": it
was a half letter size page, folded into a pocket brochure, where only
highlights of the plan are mentioned (bullet style).

Hmmm... is this type of "document" legally binding?

Where is the catch here? 4.2% interest rate, tax deferred, withdrawable
any time, "safe and secure" (even ING offers today only 2.75% in a CD
for a year...) - I am sorry, but to me it still sounds as "too good to
be true".

What do you think? Am I just being paranoid or is there a catch here? If
the latter, what is it?

Your learned opinion is welcome and appreciated.

Thanks,
Peter