| How is does variable life insurance work?

How is does variable life insurance work?

Poorboy asked:


I went to an AXA financial advisor to plan for my retirement and he insists i get an flexible variable life insurance policy from AXA? Anyone have this insurance from AXA and how does it work? I personally want to put money on IRA’s, but he is saying this is a better option for me. I am 29 and single. What do you think?

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2 Responses to “How is does variable life insurance work?”

  1. Termite on June 18th, 2009 7:46 pm

    VUL’s are laden with fees. If you need life insurance, buy term insurance to cover your needs. If you need to invest for retirement, invest in good solid mutual funds inside of an IRA. NEVER MIX LIFE INSURANCE WITH INVESTMENTS!!!! In some states it’s actually illegal to even associate VUL’s with retirement plans.

    With cash value life insurance, in most cases, if you die the insurance company keeps the savings and pays out the death benefit. If you borrow a loan against the cash value, you have to pay interest on YOUR money. Plus it is deducted from the death benefit at death. So you pay for both savings and protection, but only get one.

    I know they can make it sound good, but make sure you do the research.

    The FTC even did a study on cash value life insurance scams. They concluded that the average rate of return for a whole life policy was 1.1% after fees and commissions. Yeah they may tell you it averaged 9.2%, but that’s before fees and commissions. Don’t listen to the idiots that sell this crap.

  2. runnin_rebel07 on June 22nd, 2009 3:46 pm

    HAHAHAHA…..All of the folks that just answered above, particularly the one right above me is lost! They argue for you to do your research yet they have failed to do theirs. There are over 2000 different life insurance companies out there, and there are ONLY three that you should be working with: Northwestern Mutual, MassMutual or NY Life.

    The reader above said that he has never seen a dividend above 6%? (I recommend you do your homework). Try reaching for a Northwestern Mutual policy that is currently yielding 7.5%, and their 20 year average is just over 9.2%. Whole life contracts with one of these three companies are fantastic, yet you should not be putting all of your eggs here: roughly 3-7% of your gross income into these policies.

    Now, your AXA buddy is pushing a VUL policy because his company return STINKS!! (Thats the homework that you need to do). Ask him, why not a whole life contract, and ask what that number is! VUL’s are not bad, but traditional whole lifes with one of the three companies mentioned above are much better. Please consider, and do not listen to these jabronies down here that are being ill-advised due to the 1,997 other bad companies out there corrupting their view.