Genworth UL Lifetime FlexPLus?
I am shopping for a life insurance plan for a 18 child. Agent came by and gave me a great quote on a Genworth UL Lifetime FlexPlus. He states that I will pay flat rate of $15 month for 20 yrs and after words it will have a DB for life up to age 101. Is this possible at such a good rate? I’m not to worried about building CV just a death benefit. Is this true with this plan? I can pay $180 a yr for 20yrs and have a truly paid up policy for life.
The Genworth policy you mention is a good policy, and if it is being illustrated based on the guarantees, it is possible to get a lifetime guarantee.
Look at the illustration – about 9-12 pages. The numbers pages in the back will tell you. On the left side are the guaranteed premiums. Check to see that premiums stop when you indicate, and look at the death benefit column to make sure it continues for life.
Look at the guaranteed column of the illustration for your answer. I commonly use that plan for children because of what you see there.
Two things:
1. Timing of the premiums is critical because of the time value of money. If you miss a payment or pay one late, work with your agent or customer service to get this back on track while it’s cheap.
2. Paying $15/m and $180/y are not the same thing because of the time value of money. In this design scenario on this product, there isn’t usually much savings, but you might want to consider paying annually.
Good luck
References :
Independent agent
Former insurance brokerage manager
What is the face amount of the DB? For a $10,000 policy it may be possible. For a $100,000 it is not. This may also be a Variable or Indexed policy and the illustrations may be using an unrealistic rate of return.
Insurance companies are in it to make money, which isn’t wrong, but they will not do a transaction that they probably will lose money on.
Do a compound interest calculation on what the future total of the money would be if there were no insurance expenses taken out for 64 years at a 5% return ($53,477.65 by my caluculation). If the total amount is less that 140% ($32,086 current face amount) of the face amount then it probably is unlikely that this policy works out.
In simple terms, if the policy is over 32k then the rate of return assumptions are too high to guarantee that you will not have to contribute past 20 years.
With that said, if you do get a better rate of return then it might work out. Check the rate of return used, anything higher than 10% is highly suspect. I would look at a 5% return on the illustration to be on the safe side.
References :
The Genworth policy you mention is a good policy, and if it is being illustrated based on the guarantees, it is possible to get a lifetime guarantee.
Look at the illustration – about 9-12 pages. The numbers pages in the back will tell you. On the left side are the guaranteed premiums. Check to see that premiums stop when you indicate, and look at the death benefit column to make sure it continues for life.
References :
Experience: http://www.lifeinsuranceadvisors.com