Universal Life Insurance. Yay or Nay?
Page 1 of 5 123 ... LastLast
Results 1 to 10 of 48

Thread: Universal Life Insurance. Yay or Nay?

  1. #1
    Member
    Join Date
    Mar 2017
    Location
    Alberta
    Posts
    56

    Question Universal Life Insurance. Yay or Nay?

    Hi everyone, I am about to talk to the financial broker who sold me this Universal Life Insurance I had for almost 4 years now ( Admittedly, I was one of those ignorant people who signs this kind of stuff without full knowledge of what was written in the contract) Here's what is in the insurance policy:

    PLAN : Univeral Life
    TOTAL ANNUAL PREMIUM : $508.16
    TOTAL MONTHLY MINIMUM PREMIUM : $ 42.35
    PLANNED PREMIUM : $125.00 Monthly
    DEATH BENEFIT OPTION : Sum Insured
    MONTHLY ADMINISTRATION FEE : $12 payable to Insurance Age 100
    PROVINCIAL PREMIUM TAX : 2.00% from each deposit made to your Accounts. This percentage will not change unless required by gov't legislation

    PLAN TYPE : Single Life
    COVERAGE EFFECTIVE DATE : April 1, 2013
    LIFE INSURED : JMB Age 25, Male, Non Smoker
    SUM INSURED : $300,000
    MINIMUM MONTHLY PREMIUM : $42.35
    COST OF INSURANCE OPTION : Yearly Renewable Term


    I believe the investment part is invested in Market Indexed Accounts under American Equity Index and Canadian Equity Index both at 50%.

    The reason I was shaken from my laziness into looking stuff like this was there was another broker who looked into my portfolio and said that BMO insurance has high Management Fees and made me looked into this line in my insurance policy to which I believe my broker never mentioned to me as far as my memory is concerned. Here is what it says "THE MAXIMUM DAILY BMO MANAGEMENT FEE ON EACH MARKET INDEXED ACCOUNT IS 0.0089 AND IS GUARANTEED AS LONG AS THIS POLICY REMAINS IN FORCE

    My gut feels right now is I am into something not really for me as of right now. I am 29 y/o with 50k annual salary with wife who doesn't have stable income right now and with a 2 year old child. Living with parents right now so saving a lot from there till we buy our own house. I also have a current car loan with still 22k to be paid.

    Any thoughts or suggestions what I should ask the broker when I talk to her regarding my policy?

    My wife and son has same UL insurance with BMO under the same broker with 125 and 50 monthly payment respectively.


  2. #2
    Senior Member
    Join Date
    Aug 2013
    Posts
    1,863
    Just to clarify (so I can compare with my own term life), between you ($125/mo), your wife ($125/mo) and your child ($50/mo) - you are paying $300/mo or $3600/yr premiums - is that correct? This is for $300k coverage for you, and maybe $300k for wife? perhaps $50k for child?

  3. #3
    Senior Member kcowan's Avatar
    Join Date
    Jul 2010
    Location
    Pacific latitude 20/49
    Posts
    4,789
    Sounds like you have coverage of $720,000 for the 3 of you. Why?
    It seemsyou are also making savings deposits of $198.36 every month. Why?

  4. Remove Advertisements
    CanadianMoneyForum.com
    Advertisements
     

  5. #4
    Senior Member
    Join Date
    Nov 2010
    Location
    Ottawa
    Posts
    7,423
    Quote Originally Posted by jmbagsy View Post
    Hi everyone, I am about to talk to the financial broker who sold me this Universal Life Insurance I had for almost 4 years now ( Admittedly, I was one of those ignorant people who signs this kind of stuff without full knowledge of what was written in the contract) Here's what is in the insurance policy:

    PLAN : Univeral Life
    TOTAL ANNUAL PREMIUM : $508.16
    TOTAL MONTHLY MINIMUM PREMIUM : $ 42.35
    PLANNED PREMIUM : $125.00 Monthly
    DEATH BENEFIT OPTION : Sum Insured
    MONTHLY ADMINISTRATION FEE : $12 payable to Insurance Age 100
    PROVINCIAL PREMIUM TAX : 2.00% from each deposit made to your Accounts. This percentage will not change unless required by gov't legislation

    PLAN TYPE : Single Life
    COVERAGE EFFECTIVE DATE : April 1, 2013
    LIFE INSURED : JMB Age 25, Male, Non Smoker
    SUM INSURED : $300,000
    MINIMUM MONTHLY PREMIUM : $42.35
    COST OF INSURANCE OPTION : Yearly Renewable Term


    I believe the investment part is invested in Market Indexed Accounts under American Equity Index and Canadian Equity Index both at 50%.

    The reason I was shaken from my laziness into looking stuff like this was there was another broker who looked into my portfolio and said that BMO insurance has high Management Fees and made me looked into this line in my insurance policy to which I believe my broker never mentioned to me as far as my memory is concerned. Here is what it says "THE MAXIMUM DAILY BMO MANAGEMENT FEE ON EACH MARKET INDEXED ACCOUNT IS 0.0089 AND IS GUARANTEED AS LONG AS THIS POLICY REMAINS IN FORCE

    My gut feels right now is I am into something not really for me as of right now. I am 29 y/o with 50k annual salary with wife who doesn't have stable income right now and with a 2 year old child. Living with parents right now so saving a lot from there till we buy our own house. I also have a current car loan with still 22k to be paid.

    Any thoughts or suggestions what I should ask the broker when I talk to her regarding my policy?

    My wife and son has same UL insurance with BMO under the same broker with 125 and 50 monthly payment respectively.
    WOW!!! Did you ever get conned into this one! Paying those kind of monthly premiums and a kickback to the agent in management fees $144 a year to age 100 (if you live that long) as well as 2% to the provincial gov't on the premiums?
    That to me is a RIPOFF! I guess you were overwhelmed by the agent when all those numbers were spewed out at you?

    Here's the reality my friend...At AGE 29 and unless you are in poor health with a life threatening disease..
    my suggestion is to buy TERM INSURANCE for $200k (4 times your current annual salary) and walk away from this highway robbery!
    Why do you need life insurance on your child?
    Last edited by carverman; 2017-03-18 at 02:02 PM.

  6. #5
    Member
    Join Date
    Mar 2017
    Location
    Alberta
    Posts
    56
    Quote Originally Posted by OnlyMyOpinion View Post
    Just to clarify (so I can compare with my own term life), between you ($125/mo), your wife ($125/mo) and your child ($50/mo) - you are paying $300/mo or $3600/yr premiums - is that correct? This is for $300k coverage for you, and maybe $300k for wife? perhaps $50k for child?
    I suppose this is correct. Part of it goes to insurance premium and part of it goes to investment.

  7. #6
    Member
    Join Date
    Mar 2017
    Location
    Alberta
    Posts
    56
    Quote Originally Posted by kcowan View Post
    Sounds like you have coverage of $720,000 for the 3 of you. Why?
    They way she sell it to me was part of it goes to to investments. She said that I will only pay for 20 years my portfolio will build a fund value which can pay for the monthly premiums for the next years to come after paying for 20 years.

    Quote Originally Posted by kcowan View Post
    It seemsyou are also making savings deposits of $198.36 every month. Why?
    How did you come up with 198.36/month? sorry i wasnt able to follow you there

  8. #7
    Member
    Join Date
    Mar 2017
    Location
    Alberta
    Posts
    56
    Quote Originally Posted by carverman View Post
    WOW!!! Did you ever get conned into this one! Paying those kind of monthly premiums and a kickback to the agent in management fees $144 a year to age 100 (if you live that long) as well as 2% to the provincial gov't on the premiums?
    That to me is a RIPOFF! I guess you were overwhelmed by the agent when all those numbers were spewed out at you?
    I believe so, I blame myself for getting myself into this. I signed without giving the effort of understanding what I was getting into in the first place. The agent told me I will only pay for 20 years and that will build a fund value for my portfolio that can cover the monthly premiums thereafter. She showed me a table with a projected net return rate of 8% where the fund value grows bigger as I age.

    Quote Originally Posted by carverman View Post
    Here's the reality my friend...At AGE 29 and unless you are in poor health with a life threatening disease..
    my suggestion is to buy TERM INSURANCE for $200k (4 times your current annual salary) and walk away from this highway robbery!
    Why do you need life insurance on your child?
    That's what I am planning. To buy term and invest the rest (though I still need to work on investing part). Again, the reason I got my child same insurance was the premise of paying only for 20 years and my son will be insurance carefree after as the fund value can pay for the monthly premiums in the subsequent years.

  9. #8
    Member
    Join Date
    Mar 2017
    Location
    Alberta
    Posts
    56
    Again, thank you all for you honest feedback and suggestions. Should I talk to my agent now and cancel everything and just get a term life insurance for myself and my wife now? I've read that life insurance and investments are not good in the same portfolio unless I've maximized my RRSP and TFSA with all the management fees that comes with it.

    At this age, I am still learning about how everything about finances work. I know it may be late but it's not too late for me. This is why I am here in this forum to learn from all of you guys here. Thank you. This means a lot to me.

  10. #9
    Senior Member Beaver101's Avatar
    Join Date
    Nov 2011
    Posts
    2,947
    Quote Originally Posted by jmbagsy View Post
    Again, thank you all for you honest feedback and suggestions. Should I talk to my agent now and cancel everything and just get a term life insurance for myself and my wife now? I've read that life insurance and investments are not good in the same portfolio unless I've maximized my RRSP and TFSA with all the management fees that comes with it.
    ... no, don't mention this to your "financial" " broker" (sounds more like an insurance salesperson than anything else) yet about cancelling your UL policy. Find out first what term life you're replacing it with - ie. get some quotes for how much insurance you're getting for the (monthly) premiums you have to pay. You should be able to get some quotes online ... eg. term4life.com or something like that. But before you do that too - do not have some life insurance from your work place eg. group insurance which is primarily term. This should give you some basic coverage that should complements your own and that of your spouse/child. Then next step is find out what penalty you would have to pay to cancel your UL policy (ie pull it out and read the fine print) -this info should be in there. And THEN after you made a decision (final) to purchase the term policy, you call your broker and say ciao (bye) to her and the UL. Otherwise she's going to talk you out of buying the term and stay with the UL.

    Btw, how many brokers were you dealing with on your finances that muddled-up with life insurance? quoting from your first post above:
    ... The reason I was shaken from my laziness into looking stuff like this was there was another broker who looked into my portfolio and said that BMO insurance has high Management Fees and made me looked into this line in my insurance policy to which I believe my broker never mentioned to me as far as my memory is concerned .. .
    [/QUOTE] At this age, I am still learning about how everything about finances work. I know it may be late but it's not too late for me. [/QUOTE] ... you're correct that it's never too late to learn. Welcome to the forum ... there're a lot of smart guys (sans me) around here who would be happy to help you. Just hang around and ask the questions.
    Everyone should be respected as an individual, but no one idolized.-A. Einstein

  11. #10
    Senior Member
    Join Date
    Nov 2009
    Posts
    1,747
    Should I talk to my agent now and cancel everything and just get a term life insurance for myself and my wife now?
    Yes and No. Yes, get rid of that junk and buy term insurance to protect your family. No, definitely do not call that same agent to buy your term insurance. That agent works for herself. You want one that works for you. Not always easy to know in advance but I think you already know where your last agent stands on that measure.

    I can't help you with the agent recommendation but if you tell us where you live, maybe someone else can.

    One last note. DO NOT CANCEL your current policy until the new term insurance is in place. You will have a new 2 year contestability clause against non disclosure of pre-existing conditions on the new coverage, so since you currently are insured without anymore contestability you want to disclose just about anything and everything that might be an issue. If you went to the doctor because of a sore toe, let them know and let them decide if it is serious or not. Contestability is a clause where if you had a pre-existing condition THAT YOU KNEW ABOUT, even if you did not think it was serious, you have to tell the insurance company or they will void the policy if you die in the 1st two years. All life insurance policies have this clause.


Page 1 of 5 123 ... LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •