Question on Universal Life Insurance

[clark_kent]

About 5 years ago my financial advisor talk me into opening a FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY by Pacific life. It’s about $48.50 a month for $100,000 policy. My question is when I opened the account he told me I would only have to pay the $48.50 premium for a certain amount of years and after that I wouldn’t have to pay anymore premiums and I would still have the policy. Is this correct and what are the pros and cons for this specific policy? Thanks.

 

[resjudicata]

@clark_kent Be careful of that. This policy will canabalize itself. That isn’t near enough to stay ahead of the fees and rising cost of insurance inside the policy.

Your “adviser” sold you the product that pays him the number 1 absolute most of all products out there in the financial industry.

 

[jukes]

@resjudicata This.

 

[aatif]

@clark_kent That can be correct if you fund the policy properly.

It doesn't sound to me like it is being funded properly but I'm just guessing. Maybe you are in your 20s and it is?

Call PacLife and ask for an in force illustration. Ask them to specifically illustrate the payment needed to have the policy guarantee to stay in force until it endows. If you can get them to run a second illustration ask the to illustrate the maximum amount you can put in before it becomes a modified endowment contract.

See what is what.

 

[clark_kent]

@aatif I’m 35 now…I started the policy when I was 30

 

[aatif]

@clark_kent Eh, maybe. It's possible

Get the illustrations. It's hard to know anything for sure without them

 

[aatif]

I will ask a secondary question of, what is the purpose of this policy?

Is the plan to use it as a defacto expansion of retirement planning? Legacy? What is the why for this policy?

If it was set up correctly, your advisor probably didn't actually make much money on it. At that premium... He probably made like $300. Heck, if he set it up so it was FULLY screwing you over he made about $800. This is not the type of money someone typically breaches ethics over. So I would not jump to the conclusion that he did this for the comission. But, that doesn't change the fact that you should do a little due diligence and check his work. He may not be malicious but that doesn't mean he was competent.

 

[andela]

@clark_kent That is almost certainly underfunded depending on your age/health. Very very unlikely that what your advisor is saying will happen.

 

[clewis]

@clark_kent This “advisor” should never give advice again

 

[justadog]

@clark_kent How many years?

 

[resjudicata]

@clark_kent Variable is mutual funds! You should be able to see the current value by logging in! You can change your investments to. And with the flexible premium it allows you to fund it the way you want.

 

[adoptedwatcher]

@clark_kent "I was told" is the most dangerous phrase in the English language.

Read your policy. It will say whether it's paid up after a certain number of years.

 

[caitlynlovesjesus]

@clark_kent You need to get level term insurance and get rid of this policy. If you call the actual insurance company, ask them to send you a guarantee in writing that you can stop paying in whatever year your age told you. You will see that they can't do it.