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- - TA: GVUL (https://www.airlinepilotforums.com/delta/141326-ta-gvul.html)

Quote:

Originally Posted by jurbik (Post 3719463)

Here's an insurance guy's take... I am a pilot and have been a licensed life agent for many years...
The fee loads, and myriad of charges on this are a non-starter for me... However, if all you're interested in addressing better tax treatment, you can elect the GVUL with the 50K group term and save a few bucks in imputed income. You are not required to fund this. With this agreement, the airline funds this. For me this saves roughly $3500 in taxes. YMMV... The "tax free growth" (and available loan feature I see as substandard. Why? Because it's not permanent life insurance in the real sense of the term. In my book, permanent life insurance remains in force for life as long as the premiums are paid. With WHOLE LIFE, the insurance company carries ALL the risk. Derivative products like this, transfer it to YOU. Why? WL insurance comes with 3 guarantees: Premium, cash value, and death benefit. A GVUL is a blended solution. On one side, you have a built in annual renewable term where mortality costs go up EVERY year. So... it continues to cost more every year. The offset is an side account(s) that is funded and (hopefully) performs better than the cost of the increasing term insurance it is paying for (or at a minimum moves at parity). In a boom market, the illustration looks awesome. In a down market ... not so much. I can't tell you how many 1035 exchanges I've done out of UL/IUL/VUL contracts to permanent insurance. When the investment side underperforms (while your still loaded up with fees to boot!), something has to give. Mr/Ms policy holder what would you like to do? Reduce your cash value? Reduce your death benefit? Or... increase your premium? There is no free lunch. All this said...To use the correct, permanent life insurance contract, properly built for many of the stated tax advantages is a phenomenal approach. If you're interested, look into Infinite Banking. There are certified IBC practitioners out there. I'd recommend finding one. Infinitebanking.org (Yes, I'm one, but am in no way soliciting. Call another practitioner). This works...

This is great info. Thanks for posting.

Front loading 2.25% on a 4% guaranteed return with withdrawal fees too should be criminal IMHO.

Quote:

Originally Posted by notEnuf (Post 3719526)

Front loading 2.25% on a 4% guaranteed return with withdrawal fees too should be criminal IMHO.

There is no option with 4% guaranteed return. Of the many optional investments, the lowest risk plan floats, currently paying 4% (lagging 3/6/12 mo tbills), but is only guaranteed for 1.5%.

Quote:

Originally Posted by Planetrain (Post 3719528)

There is no option with 4% guaranteed return. Of the many optional investments, the lowest risk plan floats, currently paying 4%, but is only guaranteed for 1.5%.

Even worse, so the option isn't realistically an option. This put the MBCBP "poor choice" argument to shame.

I’m opting in because I see no downside to lowering my imputed income and adding some degree of portability. The investment doesn’t appeal to me, but isn’t necessary to use, anyway.

i consider just the imputed income change a huge win

Quote:

Originally Posted by notEnuf (Post 3719529)

Even worse, so the option isn't realistically an option. This put the MBCBP "poor choice" argument to shame.

The lowest risk option, “fixed account” is one of 21 optional plans*. It pays a minimum of 1.5%.

The highest I saw was “MetLife Stock Index Portfolio” with a 10yr annualized return of 10.88% and “BlackRock Capital Appreciation Portfolio” with a 10yr annualized return of 11.84%.

*I might also point out in that a separate document, there are only 7 investment options. I’m not sure which options we really have.

Quote:

Originally Posted by Planetrain (Post 3715585)

Podcast was very well done.
If anyone has access to a Monte Carlo probability simulator, you might get some better results with some confidence intervals.

These are relatively easy to construct in Excel. Here is a simple model. There are also several online already built.

Quote:

Originally Posted by jurbik (Post 3719463)

GVUL with no additional investment in the policy is my plan. I'll take the tax savings from lower imputed income and move on.

WRT Infinite Banking, I've modeled a few whole life policies from IBC mutual life companies against a 20yr term with the difference invested in an S&P ETF taxable brokerage margin account. Even with LTCG paid on qualified dividends from the ETF, the brokerage/margin option comes out ahead for total value. The one area where WL comes out ahead is higher available loan proceeds in the early years. This is because I put a cap on the margin loan to allow for a safety margin in a down market. There are pros and cons to each approach depending on the individual and I may revisit the IBC concept next year.

Quote:

Originally Posted by Planetrain (Post 3719562)

I still wouldn't pay 2.25% up front on those numbers. Knowing the withdrawal fee structure will likely change before I take money out. Paying for potential tax savings is too much of a gamble for me and the portability means the responsibility for premiums becomes mine. I'm not saying I won't participate in the insurance but defenately not the "investment."

Quote:

Originally Posted by Planetrain (Post 3719562)

Where did you find the investment options? All I've seen is the basic overview so far.