As a final expense life insurance agent you will run across a few seniors that would like to strangle the agent that sold them a UL (Universal Life Insurance) policy back a couple decades ago. They always thought they bought whole-life but after paying LOTS of premiums the policy crashed and they lost all their money.
Those policies were usually underfunded because the interest rates were so high in the late 1980’s and early 1990’s that insurance companies WAY over predicted performance. The people who bought whole-life policies were fine because whole-life is always guaranteed. But the ones that bought UL aren’t happy campers at all.
UL CAN be a good product if the agent KNOWS what he is doing and the client
GUL is NOT right for MOST FE buyers. But in the certain situations it can be an excellent choice.
understands any area that are NOT guaranteed.
But I recommend that FE focused agents stay away from regular UL. At least until you have lots of experience and knowledge.
But what FE agents CAN find good use for is GUL (no-lapse guaranteed Universal Life Insurance.) It’s a much simpler animal than standard UL.
GUL can simply be thought of as level premium term insurance all the way to age 121 (or what ever age you illustrate it for.) It’s death benefit forever with a fixed premium that won’t change.
So why not just sell them whole-life? Lower cost. Since it doesn’t build usable cash value and it doesn’t have all the guarantees of whole life, it CAN be substancially cheaper to buy, especially in large amounts.
When should the FE agent consider GUL? When they have a reasonably healthy applicant that wants $25,000 or more of coverage at the lowest cost and they are ONLY worried about death benefit. They need to be healthy enough and willing to pass a physical and they have to be sophisticated enough to know they can NEVER miss a payment (or the no lapse guarantee goes out the window.) Unlike Whole-life if they pay it for years and want to stop paying, they won’t get any money back.
But for the RIGHT applicant, GUL can be the right solution.
