Re: an advantage of par whole life -- Insurance Forum

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Date Posted: Tue, August 06 2002, 19:09:16
Author: Rich Franzen
Subject: Re: an advantage of par whole life
In reply to: Brent D. Gardner, ChFC 's message, "Re: an advantage of par whole life" on Tue, August 06 2002, 14:27:52

>For example, the policy I illustrated yesterday had a
>base premium of $1,197 for $100,000 of coverage at age
>35. Using the PAR rider, I could max that out at
>$3,591 per year, but it would be a MEC with that
>company. On the other hand, a VUL with another company
>would allow $3,915 per year in premium and NOT be a
>MEC. The differences is in the design, pricing and
>mortality assumptions that give some leeway to
>creative actuaries and policy design people. I know
>you understand the differences between a MEC and a
>non-MEC, and the value of cramming as much cash in the
>policy as possible, so I'm sure you can see the value
>of designing a policy with the highest non-MEC premium
>possible. =)

About a year ago, someone sniped at me on a board (probably MIFP) because I somehow mentioned that whole life policies were subject to MEC provisions. A reply stated emphatically that MEC's only apply to Variable type policies. Geez, for a year now I've been wondering why my WL policy illustrations say that the proposed policy has been tested and is not an MEC...

>I ask my clients why they buy what they own when I
>show up, and the most common answer is "This guy
>showed it to me and said it was a good deal" or
>something to that effect. I met with the founder of my
>broker/dealer last fall and he was one of the first
>people to actively use the buy term and invest the
>difference replacement strategy -- way back in the
>early 1950s. He had been very successful selling Life
>Paid-Up at 65 as a pension plan to miners. Then he
>went around and replaced other companies whole life
>with term and a contractual plan mutual fund (no IRAs
>back then). They manually calculated the savings and
>used graph paper and a pencil to make a presentation.

Not to insult your friend, but in what way were his actions different than the Al Williams & Primerica crowd? Is there a "good" kind of twisting?

-- Rich
--- http://rocq.home.att.net

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Replies:

Re: an advantage of par whole life -- Brent D. Gardner, ChFC, Wed, August 07 2002, 0:21:43