[net.invest] Universal Life

rbc@houxu.UUCP (R.CONNAGHAN) (04/06/85)

I have wondered about the merits of Whole Life vs 
Term.

After very little thought I have gone for Whole Life.

The reaspn is not the cost or the cash value.

The reason is that in 7 years the policy will be paid up
and I won't have to pay anymore.

From then on in I will be insured.

In fact I (depending on my health) can take out additional
insurance using the money I no longer have to pay into
the first policy.

The whole idea of insurance is to provied for your loved ones, or
at least to pay for your funeral.

It is not an investment.

I am very eager to here any comments on this.

Robert Connaghan
houxu!rbc
microsys!rbc	(maybe)

-- 


Robert Connaghan
Microprocessor Group
AT&T Bell Labs - Holmdel, N.J.
houxu!rbc

afb3@hou2d.UUCP (04/08/85)

I have an interesting mix of all the mentioned insurance types
including the following:

	1)	Whole life (20% of insurance plan)
	2)	Universal Life (about an equal amount to whole, 20%)
	3)	Term (40% on plan)
	4)	Accidental (not part of basic plan.  I figure that if
		I get bumped off traveling for my company or in the
		insanity of the New Jersey/New York highway system, my
		family deserves a wind fall.
	5)	"Savings" (20% of program.  Real savings should be part 
		of any good "insurance" program!!!)

As I suspect with most people, I bought Whole Life when I was young
and foolish.  Thats not to say that I consider it that terrible a move,
but it is expensive.  My "Universal life" was purchased for an 
interesting set of reasons (about two years ago), which include:

	1)	For roughly 50% more preimium I get 2 1/2 times the
		insurance I got with the same company as whole life.
	2)	In 6 years the premiums vanish (and unless the interest
		rates reaaly tumble, they stay vanished).
	3)	My existing policies with that company have sufficient
		cash value to allow me to "borrow" the premiums to keep
		the policy in force while I'm paying the Universal
		life premiums (only diminishing the death benifit by
		the small amount of the cash value loan outstanding).
		After the 6th year I can resume my whole life payments
		with all my policies in place.
	4)	Like "whole life", this insurance remains in force until
		I choose to stop it (no renewal BS).

All in all, I thought the "Universal" option pretty reasonable.  At the
time I purchased it, it seems to have nearly the cost advantage of the
term option (given a reasonable and probable rate of return) but 
retained some of the important "features" of Whole Life (IE. 
permanance).

I would be VERY interested in how the Government views Universal life.
As it appears, others seem to have knowledge of this.  Comments??


Al Baldwin
AT&T-Bell Labs
...!ihnp4!hou2d!afb3


[These opinions are my own....Who else would want them!!!]

djvh@drutx.UUCP (VanHandelDJ) (04/09/85)

> 
> I would be VERY interested in how the Government views Universal life.
> As it appears, others seem to have knowledge of this.  Comments??
>

The government recently changed the laws governing Universal Life.  The
tax advantages were so good that U-Life was being used as an investment.

- Changes were made on the minimum insurance corridors
- Taxes on withdrawals were changed to tax first money withdrawn.

These changes, I believe, were enforced at the New Year, 1985.


	Why do people believe that Whole Life is more permanent than
Term.  You can get 30-Year level Term, Decreasing Term to Age 100, and
on and on.  You do not need Life Insurance after retirement (in most cases)
anyway.  What would you be protecting against?


Dave Van Handel