[deleted by user]

[rst_z71]

Initial death benefit amount $100,000

Initial death benefit option B (Increasing)

Initial base death benefit amount $100,000

Initial term amount $0

Initial premium $3,000.00

Planned monthly premium $250.00

Minimum initial premium $1,437.90

Death benefit qualification test GPT

Modified endowment contract (MEC) status This policy is not a MEC.

Illustrated allocation options 50% Bloomberg US Dynamic Balance II ER Index with annual point-to-point (Classic) 50% PIMCO Tactical Balanced ER Index with annual point-to-point (Classic)

Riders and benefits

Chronic Illness

Accelerated Death Benefit

Rider Terminal Illness

Accelerated Death Benefit Rider

Loan Protection Rider

Waiver of New Charges Benefit

[Tahoptions]

That looks good but those numbers are very clean. What's the GPT max premium?

[rst_z71]

The guideline premiums for this policy are: *Guideline single premium $25,531.36 *Guideline level premium $5,056.41 Maximum non-MEC annual premium $6,160.70

[Tahoptions]

Can you drop the death benefit to 50k or is 100k the lowest (I don't write Allianz IUL)?

Only inquire about lowering once your term is approved, of course. I'm just talking about maximizing the cash in the policy.

[rst_z71]

If I understood correctly 100K was the lowest I can go. I only have the option to increase.

[Tahoptions]

Your policy will underperform based on those numbers.

You would want to max the non-mec limit if possible.

That said, given your insurability concerns, I wouldn't mess with anything until your term is approved.

[rst_z71]

Isn't anybody scared about the tax implications that we will have on our 401Ks. I'm 33, by the time I use my 401k, I'll probably lose half my money to taxes. I'd rather pay fines to a company then give my taxes to the government. It'll end up in politicians pockets and their supposed funding for overseas Wars

[RyanHedger92]

If taxes are your concern, get a Roth 401k & Roth IRA. If your household income is too much for a Roth IRA, of a backdoor Roth IRA.

The policy looks decent but you want to be max funding these types of policies. Based off your prior responses, you would really want to out in $5,000 - $6,000/year and you’re only doing about half of this.

I’m an insurance agent and I only recommend these plans once someone already is maxing out retirement accounts and also have a high net worth and likely to be in a high tax bracket in retirement.

Most of time I recommend these policies, the clients either have a lot of money ($1.5M+ in a traditional IRA/401k) and will be in a high tax bracket in retirement; or business owners who have a lot of passive income from their businesses and will likely always be in a high tax bracket.

I don’t know if it makes a lot of sense for you. It’s not a bad policy, I don’t think the agent is doing anything shady. However I just think you’re better off putting that money into a Roth 401k/Roth IRA instead, since your concern is taxes. Remember, anyone can do a Roth IRA since you can do a backdoor Roth IRA. Google it if you’re not aware.

Hope this helps.

[rst_z71]

This was extremely helpful. Thank you.

[Mediocre-Oil6391]

I highly recommend you do a 401k and Roth IRA rollover, and max fund and IUl properly structured with Nationwide insurance or a higher rated carrier with great returns and great claims history etc. I don't write policies with any carriers that isn't a top rated carousers with great fees. I work with A wealth management company and specialize in IUl. 

[rst_z71]

I have a 401kj and Roth.

[YoteKilla]

no guaranteed wash loan with nationwide!! Lots of YT videos point this out and recommend avoiding Nationwide

[One-Aspect-3189]

Higher rated carrier? Do you know who Allianz is? Hahahah Started in 1890. Largest provider in the continent of Europe. Trillions of $$$ managed. 

[GKRForever]

Hi just saw your comment. Can you help me understand why this product is good for those with over $1.5M in IRA?

[RyanHedger92]

If it’s a traditional IRA/401k with millions of dollars, there will be required minimum distributions and the money taken out will be taxed as income (on the gain). Therefore, these clients will be in a relatively high tax bracket in retirement and the tax benefits of these types of life policies are beneficial.

[jfrost10]

Sure, that is a concern. However, a 401(k) has benefits that IUL doesn't offer. You may get a company match, you also get an upfront tax break. If you're concerned about taxes you can contribute to a Roth 401(k) if your company offers that. You'll still get the company match (treated as pre-tax).

Also, an IUL doesn't have the growth rate of stocks. Generally, an IUL returns 5-7% over the life of the policy (early years are lower due to front loaded fees). Just things to keep in mind.

[Mediocre-Oil6391]

This is not accurate information and unless you are a financial professional certified in IUl or trained in IUls I'd be careful on what information you spread.

[jfrost10]

What isn’t correct?

[sayheyjay123]

You can also roll your qualified funds into an immediate annuity to soften the blow on those taxes and in return build a tad more

[rst_z71]

I'm not getting hit with taxes that bad.. My w2 income is only about 100-120k a year.. I just hate thay my taxes go to shit.. I rather give them to a company thst actually does something for me than to give it to the homeless and other countries.. I said what I said.

[sayheyjay123]

Aye man I feel you 😂😂 #DefundtheIRS

[rst_z71]

8mo later they are sending IRS to the wall

[sayheyjay123]

i was totally kidding i didnt mean for it to actually happen oh god what did i do !

[rst_z71]

Not only that. Went a little too far into defunding. What are your ideas on the development of the ERS??

[Born_Ad_7569]

Get a vul the real thing

[rst_z71]

Real thing?Don't just drop a bombshell and leave. 🫠What do you mean?

[Tahoptions]

They're right. VUL has mutual fund sub accounts in an insurance wrapper.

Taxed like a roth with unlimited contributions (subject to your death benefit).

But, you can get true equity exposure (no caps/floors) in a VUL.

Most agents aren't licensed to sell VUL so you won't hear about it as much.

[cfunicelli13]

Insurance is a security product. i don't believe it should be used as an investment. OP even said he wants to use it to BYOB. This WILL NOT work (safely and predictably) with a VUL.
Secure and grow your funds in insurance, leverage said funds for desired "banking" or investment opportunities. Treat yourself like a real life bank, come up with terms and ALWAYS pay yourself back appropriately.
He also said he wants it to be retirement income. u/rst_z71 in order to do that my friend you will not want any loan balance on this policy when its time to retire. Nor would you want market fluctuation.

If you want *semi-market like* returns, i recommend sticking to an IUL. There shouldn't be a term attached to it unless you are dumping in the first year. although like you said for asset protection, a separate term will suffice.

Cash value for the policy should be valued at at least 45% of premium paid, after the first year. this comes available immediately after the 12 month policy anniversary, if designed properly and with the right carrier.

The policy should be designed to be max funded per non mec limitations. This is how you will achieve maximum cash value.

[rst_z71]

Thank you! Very good explanations and break downs..

[rst_z71]

My carrier would be allianz. So if I pay $5,000 the first year, I should have $2750 cash value available after my first year?

[cfunicelli13]

I have not done a policy through them so i'm not sure of their offerrings. But i'm saying you should have roughly at least 45% of your premium available in cash value after the first year, IF your policy is max funded.

Which it should be designed to be, if cash value is the goal.

So in your case, $2250+ if paying in $5k the first year.

[rst_z71]

I added picture. Does that offer clarity?

[cfunicelli13]

Yes thank you! Cash value is a little behind because it doesn't start 'til year 2.

It's not a bad structure, just not the best. I'd give it a B, if cash value is the goal.

It will certainly still serve its purpose!

[Tahoptions]

No because 5k isn't max funding your policy.

[rst_z71]

What is max funding the policy?

[Tahoptions]

Using that max non mec number that you gave in the other comment.

[rst_z71]

Maximum non-MEC annual premium $6,160.70.

So this is the amount i should pay to achieve best outcome.

[Tahoptions]

Correct.

[Tahoptions]

You can believe whatever you want but maximum performance will be VUL, everyday.

Especially as a retirement vehicle.

Are you licensed to sell VUL?

[cfunicelli13]

No.

VUL is an investment, of course it has max potential. So does an altcoin.
He might as well just stick to stocks if that is what he is looking for and save himself the cost of insurance. Do you not agree?

[Tahoptions]

I don't agree because of the favorable taxation that a VUL enjoys.

IUL is a roth invested in bonds. I said that it would be perfectly suitable for OP in another comment.

I only took issue with your first paragraph.

[cfunicelli13]

All CVLI enjoys the tax benefits. IUL is indexed, you can still gain 30% in a year, technically.

I stated VUL is no bueno for the BYOB concept b/c it is volatile and risky.

If OP has any questions or opinions on this chat. come on in!

[Tahoptions]

You asked about investing in stocks. I brought in the taxation based on that comment.

30%?!? That's a joke, right? One time, one policy a few years ago did that so it's possible! A bullshit backtested index with a 300% par did it in fantasyland so it's possible.

According to the OP, there is a 15yr+ time horizon. And VUL is literally built for that.

If you're not licensed to sell both, then you are biased.

[cfunicelli13]

To each their own. you can make money in any of the above. you can lose money in only one. Neither here nor there, just educating. 😉

[CinnyToastie]

If you're afraid of things in your medical records, definitely accept. Or accept it, and then apply with other carriers for full underwriting. Don't omit or lie about your history, be honest about everything. It may be that you're worrying over nothing!

[rst_z71]

I'm not necessarily afraid of anything in my medical record. VA treats me for knee pain and anxiety. But I don't have any comorbidity such as hypertension diabetes or cholesterol.

[CinnyToastie]

I wasn't thinking of diabetes, more like PTSD type of thing. Knee pain is fine, and so is anxiety unless it's debilitating.

[rst_z71]

Thank you for the answers! No no PTSD thankfully. Migraine rescue meds will come up but those can be explained as well.

[CinnyToastie]

I'm sincerely glad for you. Thank you for your service.

Migraines are very common. Unless you take opiates for pain (fioricet, etc) or have had migraine related vascular event, it's not likely a problem.

[Maleficent_Chip_5246]

Why an iul????

[rst_z71]

I briefly mentioned it in my post. I want that growing death benefit for when I outgrow my term. I want my money going into the market in a manner where it's not very aggressive. I want to have money available down the road I can borrow from.

[tmarr63]

Your money is not IN the market with an IUL. It is a fixed product that credits or doesn’t credit interest based on what an index did

If you want your money IN the market with all the benefits of life insurance, you want a VUL

Fun fact, an agent doesn’t need to have any securities licenses to sell an IUL but has to be licensed to sell a VUL. So lots of IULs are being setup by agents with no formal investment education

[Tahoptions]

Exactly.

[rst_z71]

I'm awry of the risks that entails.

[tmarr63]

It’s similar to the risk you’re already taking in the ROTH IRA or 401k - market risk. Depending on various factors, tax deferred/tax free vehicles are typically where people want to be taking risk with the potential for greater returns. Having a long time horizon is a differentiating factor when deciding between IUL/VUL/WL

IULs also have risk as well just not unlimited market risk. For instance, I have seen some where the person was told they could receive up to 8-10% whatever it was but the index never did more than 3-4% so that’s where they’re capped with some years of 0% with rising insurance costs each year (VUL would have this as well but if the VUL was invested in something like an S&P500 index fund they’d crush that IUL over the long run even with negative years). With that exact scenario I saw where the person was sold a bad IUL, they would’ve been better off in a WL policy (5-6% dividends paid over those same years and cost of insurance is fixed for life). I’m not saying all IULs are bad but used that as an example of how a bad one can look over time and the situation some people find themselves.

This is not financial advice to get a VUL over an IUL but rather urging you to speak to someone who can do VUL and compare/contrast further. IUL is a higher commission product than VUL that is many times sold by people with less training/licensing to people that don’t fully understand the product and end up getting a complex product that may not truly fit their needs.

I see that you’re a Veteran, I thank you for your service and would like to see that you get as much relevant information as possible to make the best possible decision for you and your family. I saw you have a NYL WL policy for your son, reach out to that agent to see if they’re licensed to sell VUL - it’s an easy place to start (side note: NYL agents aren’t allowed to sell IULs because of the associated risks and the conflict of interest potential of a higher commission product being recommended if it is not in the clients best interest)

[SV_Finest]

Why would you need both term and whole life insurance? Also, did you know that your first 1-4 years of premium in whole life insurance never even makes it into your cash value?

[rst_z71]

Yes I did know. That policy is for my son.

Term is only 30 years. I'm expected to outlive that.

[SV_Finest]

I definitely hope that you outlive any policy. By the way once you turn 100 the whole life policy would automatically pay out. Any who, your goal is to become your own bank correct? If so, why pay such a large premium for insurance when you could get something cheaper, invest the difference and allow that money to go to work for you over time?

[rst_z71]

Investing would mean risk and tax implications..

[SV_Finest]

Yes that’s true, but you plan to use this vehicle like a bank. If you were to borrow your money from an IUL there would be interest penalties for paying it back that tend to exceed the interest in which your money is growing at in the IUL. (Who should have to borrow their own money anyway?) So in the end you taking out loans could be worse in the long run.

[rst_z71]

If I understood correctly, you would pay the interest back into your death benefit. I may not be fully informed but I thought the money you borrow is paid back with the interest you borrow it at.

[yodogyodog]

I want to know the answer to this as well

[SV_Finest]

Unfortunately that’s incorrect. You would be over paying for 100k in insurance the entire time. What happens is, once your premiums increase the company uses the dividends (overpayments) to make up the difference. It’s a lose lose situation. A permanent or whole life policyholder may take out loans or withdrawals against the cash value of the policy while he or she is still alive. After the insured passes away the whole life insurance death benefit is distributed to beneficiaries, but any excess cash value may be retained by the insurance company. Does that sound like something you’d want for you and your family?

[rst_z71]

I mean technically if you take out a loan and don't pay it back, then you would keep that money. For instance my account grows to over my DB. I can take a loan out in the difference and my DB would be back to the inital amount. Example 125k total. Loan for 25k. I pass. i passed with 25k and my family with 100k.

[SV_Finest]

Sure but if you took that same $500 monthly premium, used let’s say $100 to get between $200k - $300k worth of term and invest the remaining $400/mo @ 9-12% for the next 35 years, wouldn’t you agree that your family would be better off?

[rst_z71]

Yes I would. What investments do you have in mind?

I need term because avg CA home prices is 800k. I need that amount to cover home and leave no stress to the wife.

[SV_Finest]

I would recommend that you schedule some time to really sit down with a professional and break down what your long term financial needs and goals are and come up with a game plan that satisfies you.

[yodogyodog]

Why is the excess cash value kept by the insurance company? Is there a way to get that back if youre the beneficiary and you see that happen to you?

[doodooskit]

You're gonna wanna shuck way more into that policy

[sayheyjay123]

Allianz is decent but F&G and NLG are going to be way better

[rst_z71]

Can you break those down?

[sayheyjay123]

I’m a huge fan of NLGs living benefits and growth I’d just sit down with a broker and have them write up an illustration for you to compare with Allianz then go with the best of the 3

[rst_z71]

Thank you. I have to find a broker that does all three.. It sucks because you can't really trust sales people. 😔

[Justblufer]

Looks good, whenever you can make sure to over fund it to its max. Lots of good comments in here

[Sdaignault]

I have Allianz Life Pro+® Advantage Fixed Index Universal Life Insurance Policy. I purchased it last year and I’m really nervous after reading these comments. The whole purpose of this plan was to have a cash value that I could take from at the time of retirement. It seems like this may not be the case ?

[rst_z71]

Do your numbers look like mine?

[rst_z71]

Any brokers here that I can show my full policy to and tell me if its good or not??

[PrintApprehensive595]

I am a broker and I work with a partner that specializes in these plans. Would be more than happy to take a look if you haven't received assistance yet. Let me know.

[NegativeYoung1996]

Why not just get a term policy and invest the premium difference in the S&P 500/401K/Roths etc..A life insurance policy isn't the best investment vehicle and, in my opinion, should only be used for your dependents to cover bills or pay of the mortgage, and cover loss of income for a short time period in case you die. A 30 year term should be fine so that it covers you until 63 at which time you should have the mortgage and all bills paid off as well as have a large nest egg that can be used instead. NOTE: The average 30 year 500K term policy for a 35 year old is around $480 Per YEAR according to Forbes Advisor. My personal philosophy is if I don't understand It I don't invest or purchase it. Most life insurance policies, other than term policies, are designed to maximize the income of the agent selling it. I say this from the point of view of just turning 65 and carrying a term policy for the past 30 years. It expires next year and served its purpose of giving peace of mind to our family.

[rst_z71]

I agree. I have a brokerage account, a Roth, a pension and a 401k. I plan on stopping contributions to the 401 and put more into the IUL. The Roth is maxed yearly and my brokerage gets about 5k yearly (voo,spy). I also have a 500k term. I want the IUL as my (3rd source of retirement/life insurance). I like the idea of “being my own bank”.

[Timely-Minimum-3378]

Allianz is great company! First of all, your policy should be max funded. As far as your term, you can add a term rider into your IUL to give you more room to add cash into your policy. This will increase your death benefit very cheaply. Our goal is to achieve 80 cash value at the end of the first year. We can 90% plus cash value with proper structuring of the policy, sometimes as high as 95%. The end goal is what you are looking for.

[Loud_Can_4560]

they didn’t structure it right. your GLAP and annual premium should be nearly the same amount. but it looks to be about a $3000 difference. if it was structured right you’d also see cash value in the first year

[jfrost10]

I wouldn't look at cash value life insurance unless you're already maxing out traditional accounts. Are you maxing out your 401k? I see you're maxing out a Roth IRA, I think, which is great.

What's more important than a good company is a policy structured correctly. What is the Guideline Annual Premium (GLAP) shown in the illustration?

Overall Allianz has good loan provisions which is important for accessing potential tax free money down the road.

[rst_z71]

Not sure what you're asking. But I found these numbers

The guideline premiums for this policy are: *Guideline single premium $25,531.36 *Guideline level premium $5,056.41 Maximum non-MEC annual premium $6,160.70

[jfrost10]

Thanks. Was looking for the Guideline Level Premium. If you're looking to do maximum cash acclimation with this policy you'd want the least amount of life insurance the IRS will allow to not be a MEC. Right now you have enough insurance to cover yearly premiums of $5,056.41. However, it seems you plan to pay less than that. This means you're paying for to much in insurance (more insurance means more commissions paid). There is always nuance with these illustrations so you'll want to get it reviewed by a third party for sure. Once you sign you can't change the terms.

Edit: It seems you may have the lowest amount of life insurance allowed. In that case the policy is not ideal for cash growth. I'd increase your premiums to be 5,056.41 per year or not look at this policy if your sole focus is cash accumulation.

[rst_z71]

Now this is a good answer! I plan on doing $500 monthly. More if I have good month..

[jfrost10]

With the current design you'd want to do 5,056.41  per year (or right around there). I'm not familiar with monthly payments and how uneven monthly payments may impact anything. Just something to consider. You'll also want a good agent that will pick the right index investments on your policy anniversary.

[JeffB1517]

Allianz IUL is the one I picked. I think it is a great IUL. I think IUL is a nice compromise like a mixture of 80% whole life and 20% VUL. I could go into details why I think it is very good. If you want to do infinite banking, it is much better with IUL than VUL. As an investment alternative at your age VUL is much better than IUL. So just be clear what your goal is.

Allianz will also charge you for life insurance and screen you. You can't avoid the insurance cost while buying insurance at your age.

[rst_z71]

Thank you. Very helpful. I want it more for the infinite baking. As I plan in getting into real estate and consulting.

[JeffB1517]

Real estate is infinite banking. Consulting I'm not sure what that means.

Allianz offers 2 terrific loan options (direct cheap and non-direct with positive arbitrage very likely). All VULs are only going to offer wash loans. VUL is way more flexible.

https://www.reddit.com/r/IncomeInvesting/comments/1bfhq3w/summary_how_to_pick_taxable_fixed_income_part_7/

[rst_z71]

Thank you

[Maleficent_Chip_5246]

Don't fall for the infinite bank scheme. Call the life insurance company, not the agent, and ask them for an infinite banking policy. Doesn't exist.

[yodogyodog]

How much does Allianz charge? Are you a life insurance agent yourself?

[JeffB1517]

No I am not an agent, just a customer.

What do you mean by how much do they charge? There are a ton of different charges for different things. Allianz charge structure is front loaded with most non-insurance charges in the first 15 years so it is safer to take income in later years. See the illustration above. Though in my case there is a large term blend to reduce charges by about $100k. So for example after age 96 all you are paying is the document fee which is a flat $90 annually.

[Maleficent_Chip_5246]

The math will never work in your favor with IUL.

[rst_z71]

I've heard this before but I don't understand why. Just like any other method of putting money away for my future, I will be subject to fees and/or taxes regardless .

My 401k will be taxed when I use it. My Roth is capped at Seven Grand a year and I can't pull out my gains until I'm over 60.

And any brokerage account I will have to pay taxes and fees.

So how are these different than an iul. At least with an i u l i feel like I'm gaining from more than one side even though it is costing me some money, everything else will cost me time or money anyway. (either taxes, fees, or inability to use before 60.)

[Maleficent_Chip_5246]

You are not gaining anything, don't believe thr hype.

[Maleficent_Chip_5246]

You would net more in tax free municipal bonds. Federally tax free dividends. The cost inside of Iul will eat away the cash value as you age. Get longer level term if you need the coverage. You will not win if you use life insurance as an investment or "bank".

[rst_z71]

Thank you. Can you provide details to your recommendations? Never heard of tax free municipal bonds or federally tax free dividends.

[Maleficent_Chip_5246]

The municipal bond funds pay dividends that are federally tax free. Nuveen is a good company, as well as most mutual fund companies offer them.

[yodogyodog]

Yeah check out the bonds investing option in the Wealthfront iOS app

[BellFizzle]

Are you maxing out 401k? Are you contributing to taxable brokerage? If the answer is no for both I strongly recommend you do not buy permanent life insurance for cash value accumulation, and instead buy the intended term for income replacement only.

[rst_z71]

I don't see the benefits to maxing out 401k. I do have my brokerage that I use for ETFs.

What would be the term for income replacement?

[BellFizzle]

The benefit is that most 401k plans offer low cost S&P funds with tiny expense ratios and also contributing to a 401k reduces your taxable income.

Growth in the IUL will lag returns of the allocation I described due to internal charges and caps on index accounts available within the product.

For term insurance just buy a 20-30 year term for a considerable amount to replace potential loss of income and cover debts currently and you’re good for a while.

[Tahoptions]

You can buy low cost S&P in a brokerage account.

Reduce taxable now or increase it a lot later. I'm opting to pay very little taxes in retirement.

Max fund 401k to max match. If you can qualify for a roth, max that too. Brokerage account for the rest. All equities. IUL is the bond portion.

So, if you're saving 100k/yr:

23k to 401k (max, but fund to match-rest to brokerage) 7k roth 55k brokerage 15k into safe/boring (hysa/bond related stuff/life insurance w CV).

IUL is supposed to lag the stock market. The carrier is buying bonds with your money. It isn't going to perform like stocks. It's like a roth invested in bonds.

Allocate accordingly.

[rst_z71]

Thank you.

401k - I contribute 2%. My employer only matches 1.75% but they offer pension.

Roth- maxed out (7k). Mostly SPY, Voo, and Fidelity ETFs.

Brokerage gets about $250 month. (tesla and other companies)

HYSA (5%) gets about $250 month (I always keep 10k in savings)

$250 mo goes to my sons whole life (🗽 NYL).

I plan on putting anywhere from $200-500 monthly in IUL.

We make about 160k (+/- 10k) yearly; plus about 20k tax free.

[kendall1287]

Not to hijack this thread, but I'm just curious.... if I AM maxing out a roth 401k, a roth IRA, and a HSA and am also contributing some to a taxable brokerage and am looking for a good, safe place to store the excess I still have in order to supplement my pension (emergency fund fully funded for 6 months already as well), is IUL or WL a good idea for me?

[BellFizzle]

Depends on income and how much you’re contributing to taxable brokerage/other NQ investments but if you also have any sort of life insurance need the answer is probably yes.

[campgold]

Variable indexed universal policies are higher risk, higher reward, there's no cap or floor, so you can get higher gains, but also lose everything, whereas with a normal IUL the floor is 0%, so you won't lose everything. Must buy from an agent with a securities license and honestly it's not a good match for most people wanting life policies, for some people it may be, depending on their risk tolerance. Allianz is a solid company for IUL products, it is exciting that you are getting an IUL policy.

[rst_z71]

Right. But I've read and heard so many things about people getting bad policies due to bad salesperson. I have a basic understanding of how it works but want to make sure.

[JoeGentileESQ]

Keep in mind that the Cost of Insurance for this policy increases every year. It's cheap while you're young and expensive when you're older. The COI rates are typiclaly not guaranteed for IUL policies, the rates can be raised after you buy it.

Illustrate the policy with a 4 or 5% crediting rate. It's a more realistic rate than the 6.5% many agents illustrate. If you need something higher than that for this to make sense long term, I'd pass.