2020 0818 - Garrett Gunderson - Universal Life Insurance Policy: Everything you need to know
- Todd Langford
- 00:00 - Todd - Zero-sum Game. Accountants got a hold of it sometime in the 80s and made decisions based on fear. - [Bonk: What does this mean?]
- 00:00 - Todd - Accountants made a decision to come up with a product that was good for the company, but not necessarily good for the consumer. And that's where they lost their purpose.
- 02:00 - Garrett - Concepts vs Math, Math supports the concepts.
- 02:00 - Garrett - IUL is sold as a no risk product.
- 02:00 - Todd - IUL Upside, Downside, UL built on the Term Chassis.
- 02:45 - 04:15 - [Bonk: Q: How Can Universal Life Insurance Be Classified? Permanent / Whole / Term / Other]
- 02:45 - Todd - People Say that Universal Life is Whole Life for half the price. It can't be half the price and be the same thing.
- 03:00 - re: Norman Baker (?) - There are no deals in the insurance industry. Everything is a trade-off between cost and risk for the insurance company.
- 03:15 - Todd - Why are the premiums different for Term and Whole?
- 03:30 - Todd - Universal Life is somewhere between the two. What does that mean? What that means is that there's less risk for the insurance company and that is why they can charge a lower price for it.
- But yet it's sold as the same thing as Whole Life.
- In fact, part of it is in the Name. It is classified as Permanent Insurance. What does that mean? What does Permanent mean to you?
- Garrett - That it will be around one day longer than me. For sure.
- Todd - Right. Permanent has to be there, right.? It has to be there. That's what Permanent is. And, yet, Universal Life doesn't fit that. All it is is extended term insurance really.
- 04:00-- Garrett - It's built upon this Term Insurance Chassis. Which is Annually Renewable. And it could go up every year as you get older.
- 04:00 - Todd - In the old days the only thing available was YRT. Insurance companies then started Level Premium Term. Mortality Curve.
- 05:33 - Todd - UL undercharge - people - sad - people pay and then get a surprise. This thing is going
- [Bonk: 1) UL - bigger and later surprise, 2) a) Blumenthal vs New York - Did it say $X was enough for permanent, b) GMP - Guaranteed Maturity Premium, Expert Witness]
- 0 - Garrett - Selling into a future that they don't understand how it's going to impact.
- 07:00 - Todd - Seen what happens to families. Paid premiums, skipped Vacations.
- Now that that spouse has died I find out that the Life Insurance doesn't exist.
- People say that insurance companies don't pay claims. No, that's not what happened. - What happened was that they bought a faulty product, because it was sold to them as something that is permanent, but it turns out not to be when they actually look at it.
- 09:00 - Universal life is a zero-sum game, original purpose was...
- 9:40 - Accountants made UL....-?
- Insurance companies have a terrible reputation
- 10:00 - Garrett / Todd - 2008 recession, Double Dip, Variable Life - Complexity of IUL - People don't know how it works - Does taking money out of Policy affect your COI, NAV - Crediting has a lot of affects, Sequence of Returns,
- 12:50 - WL getting replaced by IUL. Guarantees vs NGE's.
- not to protect the consumer, it's to protect the company
- 6.81% max-? - Caps, Floors -
- 14:45 -
- Garrett - alot of moving pieces, alot of things you are not being told, level of uncertainty, Tax Shelter
- later people will think they have a different product
- if somebody sold it, they may not know
- 16:00 - Garrett / Todd - People think it's simple, I can't think of a more complicated product,
- ⇒ They think they are buying a different version of an Indexed Annuity.
- Maybe it's easier to sell if you don't explain it
- Todd - Arbitrage - LIRP - Illustration - Marketing - Guarantees vs NGE's
- Think and ask better questions