SD_S2K

One of my very good girl friends works at Farmers Insurance, and she has been pushing me on this for quite a while also. Now I say she is a good friend, has been for a long time, so I take what she says pretty seriously and without a grain of salt. I would never expect or believe she is trying to make a buck off me in any way.

Would she make money off me if I bought one? Yes of course someone is making money anytime you buy anything in this world, so that is expected.

She said her brother, a district manager, and her bro's boss, a real big wig at Farmers, are huge supporters of the VUL and pour lots of money into them. So obviously there are advantages and disadvantages, but there are people that love these things.

I personally will probably not put any or much money into it, but that is because my personal situation warrants it. I am a 1099 insurance broker so I need every ounce of write off I can by putting my money into a SEP IRA every year. Plus I am 28 and single, so the life insurance part really is of no importance to me, so it is kind of a waste of money to buy it. But I think I might start putting some money into it so that I can withdraw that money early to buy a house or pay kids tuition in the future...

my $.02, but try calling Farmers or other insurance/financial institutions and ask their opinions...

Money2536

I think of a VUL this way. It's an okay way to stash some extra money that you already paid taxes on and are looking for some additional tax-deferred money to borrow against during retirement if you satisfy a couple of different factors.

1. You're in a high marginal tax bracket. 33-35% bracket.

2. You are making your maximum contributions to both your's and your wife's qualified plans.

For example, you're 45 years old, insurable, have married filing jointly taxable income of $375,000, contributing $15,500 to your company's 401(k), spouse is contributing $15,500 to her company's 403(b), and you are looking for a way to participate in more tax-deferred growth with your after-tax money.

Brokers make their money off of the first year's premium amount. For instance, if I sold you a policy that had a death benefit of $250,000 and an annual premium of $2000, depending on the company I work for, I may make 40-80% of the $2000.

You make big money when you exchange cash value from an existing policy into a new policy. I just did an exchange into a new Universal Life policy where I took an 87 year-old widow that had $285,000 in cash value from three old policies and exchanged them for a new one. The payed a comission of $28,000. My company pays 50% of that $28,000. That's why insurance agents always recommend insurance for everyone.

Take your money that you would be wasting on a VUL and add to your company plan.

kevinS2OOO

Attending one of their presentations tomorrow night, a friend of mine asked me to go and I would feel sorry to turn him down...

What they say about their financial plan sounds too good, I did do research (thus digging out this old thread) and watch reviews on YouTube about the company, but still I was born a very skeptical person. My question therefore is, is World Financial Group a scam or not? If it is not, how difficult is it to get at least an extra $2000 in my bank every month?

It would be great if anyone can give me some ideas/affirmations. Perhaps I should just go in with an open mind...but it's better to play safe!

ExOdy

have fun at the "presentation"

it's for some, and not for many.

magician

They're insurance salesmen, most of whom (in my experience) no little to nothing about insurance and less about finance. Their products are designed to make a lot of money . . . for WFG and its salesmen.

I wouldn't waste my time.

magician

I was talking to a "financial advisor" about equity indexed life, and I asked him how it could give you the gains on the S&P 500 but not the losses. He gave me a book that describes (i.e., markets) it, and I finally discovered what they do: they buy call options on the index. What I can't figure out is how you don't lose money when the index goes down: you had to pay for the call options and they expire worthless.

Color me skeptical.

jeffbrig

Personally, I'd run away. Life insurance isn't, and shouldn't be, a savings account. This setup is constructed to be more easily marketable by having a cash account component.

Want some level of security for those you might leave behind? Buy cheap term life insurance. 10yrs, 20yrs, whatever you think you might need. I took out a term life policy in my 20s - $250k for a couple hundred per year. Double that if it's an accidental death. By the time it expires, I'm effectively self-insured by the value in my retirement accounts.

s.hasan546

guys these "friends" you trust, might be honest, but their brainwashed by the companies they work for. I can't count how many idiot insurance broker/financial planner friends who have tried to sell me various investments that they believe is amazing . If you are semi-financially savvy, you do not need a VUL. Do what Quikag has mentioned. IMO it is the best way.

rwheelz

I am with s.hasan546 and quikag. Sure there are some benefits to whole life, and many people use these policies effectively, but In the end, you can do better. Look at the negative returns for the first ten years... that says it all IMO. Nobody cares more about your money than you do.

FWIW, a financial advisor that I sort-of-trust told me if I was ever interested in whole life to be VERY careful about the company I chose. Northwestern Mutual is probably the first place you should look.

llckll

You can take that money you're putting into the V.U.L and invest it yourself. Keep it in your own hands.

Does your current job offer life insurance? My job offers 10 x's pay and i'm only paying $12/paycheck.