Last week we revealed results of our 10 pay whole life comparison for cash surrender value and this week we have the results comparing the death benefits of various 10 pay whole life products.
The comparison uses data collected from the same policy proposals used in the cash value comparison. Male and female ages 45 and 55 with preferred risk class. Internal rate of return is calculated on the premium derived using a $1,000,000 initial death benefit.
We’ve gathered information on the best performing 10 pay whole life products for 2015 looking at cash value rate of return.
As a quick review
The debate over regulating indexed universal life insurance interest rate assumptions looks to be nearing an end and as the dust settles it appears as though the whole life insurance coalition won.
Normally we are fine with leaving minor mistakes people make regarding various financial products alone—long time readers of this blog know we’ve sure made our fair share of editing booboos among the nearly 500 articles we’ve written in the past three years.
Recently, we were called in to review advice (a second opinion) given by a financial planner that was so wrong I have to highlight it here. And I also realized something in correcting the misinformation that made me think this is a mistake some others might be making. So I did a little digging around ye olde interwebs (looking at forum posts & financial blogs) and discovered it is indeed a common mistake.
Choosing a whole life insurance company’s product as a place to store cash requires a deeper understanding and trust in the company’s ability to care for your money. There are a multitude of metrics that we look at when we select a company for a client and these various metrics help us measure risk faced by a policyholder; this risk touches on multiple considerations mostly concerned with continued operational success.
Some of the metrics we use worry about continued success through mitigating the risk of negative economic considerations or operational losses be they business losses or investment losses. Today we’ll discuss one metric that focuses exclusively on investment risk loss.
Whole life insurance dividend changes often happen once per year and we generally get excited near the end of the year when most companies announce these changes. We’ve been tracking and announcing changes when they become available for the past several years and will continue to do so in the future.
The anticipation for the announcement of the following year’s dividend focuses mostly around evaluating how well an insurance company is doing—especially with its block of participating life insurance—and how these results affect the dividend interest rate. We don’t get a lot of under-the-hood information about whole life insurance, so any metric we can use to look at how things are going is always appreciated, and dividend interest rates are one of those metrics.
The life insurance underwriting process is an evaluation of an applicant that insurers use to categorize policyholders. The regular categories looking something like: standard, preferred, and preferred plus or some equivalent idea.
But what does it means to be standard or preferred? And why do insurance agents and brokers sometimes talk about waiting until the end of the year to apply for insurance for those who are on the bubble between various risk classes?
For years, media types and fee-for-service consultants have shouted commissioned salespeople into a dark ugly corner. This bullying reinforces the stereotype that commissioned sales professionals twist the arms of unsuspecting persons in an effort to enrich themselves.
While this sort of stories certainly makes for good entertainment (and tasty marketing morsels for the slick brochures of aforementioned consultants), it does little else. Since our primary reason for existing is to be a resource of useful life insurance info, we will focus this discussion (evil commissioned salespeople) through the insurance lens.
Indexed universal life insurance investment return on assets is an indicator we use to measure how well an insurer can maintain returns on its cash value products. Just like the whole life insurance investment return trend we published earlier this month, the same general principal applies (i.e. a higher return on assets held at the insurance company gives us indication that the insurer should be able to deliver a higher return on cash value products like cash accumulation focused life insurance products and annuities).
This time we’re looking at life insurance companies that are well known for their indexed universal life insurance offerings, and this time the results are a good bit different.
We all know indexed universal life insurance has taken its place at the top of the leader-board as the dominate form of universal life insurance when cash accumulation is a primary consideration. It’s also the #1 growing type of life insurance in the United States and has held this title for several years. There’s a lot to like about it, but there are a lot of different forms of this product offered by several insurance companies. Just as we’ve noted about whole life insurance not all insurance contracts are created equally. So, we’ve put together a guide for best bets among the indexed universal life insurance crowd when cash accumulation is the primary objective.
