What is your experience / advise regarding Universal Life Insurance Plans?

2014-08-01T20:43:55-04:00

I recently attended a meeting with a company that's a part of Transamerica. I'm interested to see if there are any folks out there who know about these life insurance policies that also have a savings account linked to them known as 7702 plans.

Response by MSG Wade Huffman made Aug 1 at 2014 10:38 PM

2014-08-01T22:38:28-04:00

Not going to tell you what to do with your money, but I'll pass on an article from Forbes (it's a couple years old, but not outdated).

http://www.forbes.com/sites/investor/2012/09/13/retirement-disaster-looms-for-universal-life-policyholders/

Keep in mind, a 7702 is not a “retirement plan” as most people understand retirement plans. Rather, it’s another name for a life insurance policy, often variable universal life, and often sold with very high commissions attached for the salesman.

These plans may very well be appropriate for some individuals, but most definitely not for the majority.

Do your due diligence and you may want to consult with a certified financial adviser (who has YOUR best interest in mind).

Just my opinion, It's your money.

Retirement Disaster Looms For Universal Life Policyholders

Not all insurance policies are the same. Buyer beware.

Response by PO1 Private RallyPoint Member made Aug 2 at 2014 11:25 AM

2014-08-02T11:25:05-04:00

SFC Private RallyPoint Member I can speak to it. What do you want to know?

Response by CAPT Steven DesJardins made Aug 2 at 2014 11:56 AM

2014-08-02T11:56:15-04:00

Go with Navy Mutual Aid, a military insurance association. They can provide info. I have been a member for decades and can attest to their reliability. I started with them after my father turned over to me a "vanishing premium" universal life policy from John Hancock which had lost over half it's value due to premiums never vanishing. I converted it to Navy Mutual Aid universal life which has performed exactly as promised and met or exceeded target interest rates for the last 20 years. I also have term life with them.

Response by SGT David Taylor made Aug 3 at 2014 11:54 AM

2014-08-03T11:54:43-04:00

The first job I had after leaving service was selling Life Insurance/Annuities. Remember, this was over 20 years ago. I only had this job for about 6 months before I started with my current employer.

For most people, the best deal with life insurance (no savings attached) was term life. 10 year term life was always the best bang for the buck.

It was the general rule back then, Universal Life Plans had the best commission rate due to the company making the most money off of them. Term life had the least commission, and the company made the least amount of money from them.

Again, that was 20+ years ago. I would talk to a financial adviser or accountant (they are either cheap or free for the initial) to see what works best for your situation and family.

I hope this helps.

Response by 1LT Private RallyPoint Member made Jan 4 at 2016 3:07 PM

2016-01-04T15:07:14-05:00

SSG Ortega,

As a licensed life insurance agent, I can tell you that Universal Life Insurance policies have pro's and con's like everything else. That said...I own an Indexed Universal Life insurance policy on myself and my wife with the intention of using the cash value for supplemental retirement income and this is also how I sell these policies. Different life insurance companies have different types of universal life policies so you need to be aware of how the cash account grows.

My policy has a 1% floor and a 13% cap on the internal rate of return. The current 20 year snapshot on my policies rate of return is 8.4% tax free which is pretty damn good.

You also need to be aware that some permanent life insurance policies may have Chronic Illness rider's that can be added at no up front cost which serve as a substitute for Long Term Care insurance.

Hope this helps.