Is Variable Universal Life Insurance a Good Option?

Is Variable Universal Life Insurance a Good Option?

Let’s make sure you’re on the path to financial success - then help you stay there!
The Money Guy Show takes the edge off of personal finance. We’re financial advisors that believe anyone can be wealthy! First, LEARN smart financial principles. Next, APPLY those principles! Then watch your finances GROW!

We can’t wait to see you accomplish your goals and reach financial freedom! New shows every week on YouTube and your favorite podcast app. Thanks for coming along on the journey with us.

[Yyrdfhjlplnvxsserujbg]

Would be nice if you went into the technicals as to why. You don’t explain why in detail, just your high level thoughts.

[Gas_man]

I’m in a similar situation and have a VUL and term life. My financial advisor (a fiduciary) likes VUL for its tax benefits when fully funded.

[chengbosong]

Good recommendations! As a life insurance actuary, I think most people only need a term insurance (before reaching FI). Permanent life insurance products are usually only appropriate for folks who cannot save money on their own, or for wealthy people’s Estate planning.

[fivefive]

With the changes to 7702 account (cash value life insurance) VULs have now become very attractive.

VULs are great as a way to get around the Roth IRA limitations and still utilize the market. BUT you definitely need to sit with someone who knows how to set these up properly.

Whenever I do them, I lower the insurance costs to the minimum and fund them to just under the MEC limit. This put a larger portion of the premiums in the market.

[casrogue]

But i belive the VUL keeps the difference at the end and only pays the insured part. For example if the insurance is for 500k ...it only pays that and keeps the rest of the accumulated wealth. Also fees varies from company to company ..

[tlowensjr]

If you have callused hands, the IUL is not for you. The service provider basically kept increasing their fees until I was forced out of the product. This was a very bad financial lost.

[TheKingSlacker]

Lol.. you need to update your subscriber counter. Thank you for all of the great information.

[alanyoung]

Love the advice. Insurance should be insurance, and investment should be investments. When you have these products that blend them, it's so inefficient and costly. Not very lean and you end up with so much added cost.

[timothythompson]

These guys don't know what they are talking about. Term insurance gets very expensive as you get older. When the term insurance expires you are left with nothing. When you take money out of a 401k out have to pay high taxes. A variable life product prep vents these problems.

[wysbbsc]

Most permanent life is not an investment. IULs are good retirement vehicles to subsidize your investments, to hedge against taxes. It is, nor shouldn't, be your sole investment. Also needs to be absolute minimum of $60k or more in yearly income to even consider an IUL.

[devonevans]

Is it a good option for children for the purposes of a education savings fund? We have kids ages 2-16.

[IamAubreyAnderson]

Half baked truth is on this episode! But they said to buy term and invest the rest. They said to just hold out for the market to correct.

I ask who wants to pay out all those taxes and what about the people who can’t wait for the market to correct?

[mateocabrera]

Why not surrender the cash value and not take out a loan

[djpuplex]

Glad they addressed the marriage issue. Yes stay single.

[travisny]

buy term invest the difference. When cancel a whole life your cash value is taxed. At age "100" you can receive the cash value and its taxed. When pass away company keeps your savings!!!!

[j.mney]

Universal life is such a rip off. Go with term life. Better coverage and cheaper.

[danielschachle]

Young people should not be maxing out anything but the match in employer retirement loans.

[firecraig]

Hahaha. My VUL will get 9-10% returns and lifetime fee LESS than 1% fee. Thats WITH life insurance!!! Clearly you two don’t know what’s out there.

[DDFinanceGuy]

Hi Guys! LOVE your show, have sent it off to a bunch of people.

I do have a couple things I want to comment on... hopefully if willing, have an back and forth. UNDERSTANDING this is a 2 year old video and 7702 has caused a change in some things not sure if that was taken into consideration when talking about the VUL or not...

1. As I am active in the finance industry (12+ years, securities licensed 10+ years), I have actually taught financial advisors (for 5 years) about permanent life insurance. * During that timeframe I was teaching not whole life, but rather MOST CASES whole life is not my 1st, 2nd, or 3rd option.

2. I would love to have dialog about some of the things you said here, some true, some (IMO) slightly off, some which was too generic and more information needed.

3. Additionally, I still have quoting privileges for a number of companies life insurance products across the industry. Including VUL/Whole Life/Term policies. Why do I bring this up? Because we can dive into some of the costs (VUL's are transparent on costs/expenses, Whole Life not as much so). Dive in to a properly structured VUL given certain criteria are met before making this recommendation... Roth IRA/401k max outs, other investments/ other life insurance that cover liabilities.

Side note, I AM NOT A FAN of IUL's. Mainly because the insurance agents who are selling them 99% of the time don't understand how they truly work and are shoving a round peg in a triangle hole to make a quick$. Additionally, anyone DAY 1 that passed their life insurance license can sell an IUL. Whereas to sell a VUL they need at least a series SIE & Series 6 (depending on the state they also need their Series 63) in order to sell a VUL or Variable "Product".