TA: GVUL
10-19-2023 | 05:16 PM
#51
Line Holder
Joined: Sep 2007
Posts: 1,257
Likes: 5
Notes from the Webinar tonight:
1) The GVUL is applicable to the Delta paid insurance (2,500 times the 12-year captain rate) not the supplemental term available from Delta.
2) If you choose GVUL the first $50,000 remains term and the rest transitions to GVUL
3) Enrollment period 1 Nov - 17 Nov
3a) Complete enrollment 27 Nov - 20 Dec
4) GVUL is permanent and portable
5) Variable range of investment options (low to high risk tolerance)
Or
6) Interest bearing account (guaranteed fund account) current minimum rate of return 4%. Will never go below 1.5%. Can only move 25% of funds out of this account into the variable funds.
7) Tax free transfers between accounts
8) Expense charges: 2.25% expense charge for additional funds added above what Delta pays
9) Tax advantages: All earnings are tax deferred. Access to cash value when needed without penalty. Tax free withdrawals up to basis.
10) All investment dollars are on an after tax basis (either lump sum or partial deposits)
11) Tax free withdrawals up to basis: Delta paid premiums + own invested inputs (additional GVUL premiums paid as investment)
Example:
Age at issue: 40
Ends at age 65
Premiums Delta pays: $39,282
Extra premiums paid for savings/investment: $125,568 (optional)
GVUL earnings: $93,235
Paid in total (basis): $164,850
Cash value subject to tax $53,953
Available cash value $218,803
12) There is a maximum amount that can be invested per year (changes year to year)
13) This is not a whole life policy
14) Taxes are more favorable on the GVUL policy
15) No rider options
16) No further underwriting required at retirement if the policy values are not increased
17) Basic imputed income is lower than with group term
18) If you don't use the investment option, nothing is returned to you if you surrender the policy upon leaving Delta. (Cash value would be returned and the amount over the Cost basis is taxed at your current income tax rate)
19) You could revert to Group Term during subsequent open enrollment seasons.
www.metlife.com/gvul/DeltaAirLines
The presenter handled a lot of Q&A. You can register for future webinars on the website.
I'm just a guy, but it seems to me that there are no drawbacks to the GVUL vis a vis the Group Term if you don't leverage the investment option--i.e., you get the same death benefit. If you're looking for another vehicle to diversify your portfolio you'll have access to investment accounts with GVUL. You could also just keep using your own money to pay into your usual investments (bitcoin, gold bars, whatever).
1) The GVUL is applicable to the Delta paid insurance (2,500 times the 12-year captain rate) not the supplemental term available from Delta.
2) If you choose GVUL the first $50,000 remains term and the rest transitions to GVUL
3) Enrollment period 1 Nov - 17 Nov
3a) Complete enrollment 27 Nov - 20 Dec
4) GVUL is permanent and portable
5) Variable range of investment options (low to high risk tolerance)
Or
6) Interest bearing account (guaranteed fund account) current minimum rate of return 4%. Will never go below 1.5%. Can only move 25% of funds out of this account into the variable funds.
7) Tax free transfers between accounts
8) Expense charges: 2.25% expense charge for additional funds added above what Delta pays
9) Tax advantages: All earnings are tax deferred. Access to cash value when needed without penalty. Tax free withdrawals up to basis.
10) All investment dollars are on an after tax basis (either lump sum or partial deposits)
11) Tax free withdrawals up to basis: Delta paid premiums + own invested inputs (additional GVUL premiums paid as investment)
Example:
Age at issue: 40
Ends at age 65
Premiums Delta pays: $39,282
Extra premiums paid for savings/investment: $125,568 (optional)
GVUL earnings: $93,235
Paid in total (basis): $164,850
Cash value subject to tax $53,953
Available cash value $218,803
12) There is a maximum amount that can be invested per year (changes year to year)
13) This is not a whole life policy
14) Taxes are more favorable on the GVUL policy
15) No rider options
16) No further underwriting required at retirement if the policy values are not increased
17) Basic imputed income is lower than with group term
18) If you don't use the investment option, nothing is returned to you if you surrender the policy upon leaving Delta. (Cash value would be returned and the amount over the Cost basis is taxed at your current income tax rate)
19) You could revert to Group Term during subsequent open enrollment seasons.
www.metlife.com/gvul/DeltaAirLines
The presenter handled a lot of Q&A. You can register for future webinars on the website.
I'm just a guy, but it seems to me that there are no drawbacks to the GVUL vis a vis the Group Term if you don't leverage the investment option--i.e., you get the same death benefit. If you're looking for another vehicle to diversify your portfolio you'll have access to investment accounts with GVUL. You could also just keep using your own money to pay into your usual investments (bitcoin, gold bars, whatever).
The bolded in and in Red is what caught me by surprise in the presentation. Seems quite a hit.
10-19-2023 | 05:25 PM
#52
Line Holder
Joined: Oct 2017
Posts: 1,105
Likes: 6
From: 737 A
I just spent an hour listening to the GVUL webinar. Sorry if this post rambles. If something needs clarification I can try to answer, but best bet is to ask during an upcoming webinar.
Long story short is I’m leaning towards signing up for it, but probably not utilizing the invest portion of the GVUL.
Highlights:
Death benefit never changes
Lower taxable income
Optional to continue the plan after retirement or separation
2.5% fee on transactions when using the investment side
Investment side has a few options
Variable fund investments are in market options can go negative.
all investment cash is after taxAt retirement pilot can:
1) keep policy until age 100 by paying premiums out of pocket
2) take cash as a withdrawal
The GVUL has the optionally we all wish existed in the MBCBP. Can opt in/out each open enrollment period. Cash basis (tax free withdrawal amount) resets to 0 each time opt in from term.
Hope that helps someone.
Presenter said there’s a podcast coming 10/25
Long story short is I’m leaning towards signing up for it, but probably not utilizing the invest portion of the GVUL.
Highlights:
Death benefit never changes
Lower taxable income
Optional to continue the plan after retirement or separation
2.5% fee on transactions when using the investment side
Investment side has a few options
Guaranteed fund account has return set each year. Currently at 4%. 2024 will most likely be set at 4% again. Its minimum is 1.5%. Not tied to any fund
Variable fund investments are in market options can go negative.
all investment cash is after tax
1) keep policy until age 100 by paying premiums out of pocket
2) take cash as a withdrawal
withdrawals are tax free up to cost basis (premiums + investment cash) Delta pays premiums.
3) Roll into annuity. Any account at MetLife or elsewhere The GVUL has the optionally we all wish existed in the MBCBP. Can opt in/out each open enrollment period. Cash basis (tax free withdrawal amount) resets to 0 each time opt in from term.
Hope that helps someone.
Presenter said there’s a podcast coming 10/25
10-19-2023 | 05:34 PM
#54
Line Holder
Joined: Jul 2023
Posts: 702
Likes: 236
I'll switch to GVUL based on the lower rates of imputed income. I may or may not throw some money in there to keep up with the cost basis. That part is completely voluntary.
10-19-2023 | 05:39 PM
#55
Line Holder
Joined: Oct 2017
Posts: 1,105
Likes: 6
From: 737 A
If that type of fee roughly translates to expense ratio of other investment funds, I agree, you can get a better rate at Vanguard.
I'll switch to GVUL based on the lower rates of imputed income. I may or may not throw some money in there to keep up with the cost basis. That part is completely voluntary.
I'll switch to GVUL based on the lower rates of imputed income. I may or may not throw some money in there to keep up with the cost basis. That part is completely voluntary.
10-19-2023 | 05:40 PM
#56
Line Holder
Joined: Oct 2021
Posts: 1,298
Likes: 372
Option A: Status quo death benefit, high imputed income
Option B: Status quo death benefit, low imputed income, other ancillary benefits that are completely optional and voluntary
APC: “Sounds like a screw job! They obviously aren’t telling us everything! I bet the mean lady in Raleigh was behind this!”
Seriously, based on everything that’s been communicated and a general understanding of the two options, I can’t understand any rationale for continuing to pay excessive imputed income. We have the option to pivot to a much cheaper plan, with exactly the same death benefit. End of story. But please, stick it to the mean lady if that floats your boat.
Option B: Status quo death benefit, low imputed income, other ancillary benefits that are completely optional and voluntary
APC: “Sounds like a screw job! They obviously aren’t telling us everything! I bet the mean lady in Raleigh was behind this!”
Seriously, based on everything that’s been communicated and a general understanding of the two options, I can’t understand any rationale for continuing to pay excessive imputed income. We have the option to pivot to a much cheaper plan, with exactly the same death benefit. End of story. But please, stick it to the mean lady if that floats your boat.
It's seeming to me that the catch is a potentially better apples to apples policy, with the addition of potentially poor, but optional, additional investment products. Insurance is in the money-making business afterall, and it's rare that they would offer 2 very similar options, dangle a carrot in front of the second one (less imputed income), without some angle to it. I think the angle is that they expect to make more money on the additional investment side for those who choose to participate. Might be a small % on a small % of total participants, but insurance plays the % game.
10-19-2023 | 05:45 PM
#57
Line Holder
Joined: May 2022
Posts: 229
Likes: 12
It's not a bad thing to seek the devil's advocate on the new policy. i.e. "What's the catch?"
It's seeming to me that the catch is a potentially better apples to apples policy, with the addition of potentially poor, but optional, additional investment products. Insurance is in the money-making business afterall, and it's rare that they would offer 2 very similar options, dangle a carrot in front of the second one (less imputed income), without some angle to it. I think the angle is that they expect to make more money on the additional investment side for those who choose to participate. Might be a small % on a small % of total participants, but insurance plays the % game.
It's seeming to me that the catch is a potentially better apples to apples policy, with the addition of potentially poor, but optional, additional investment products. Insurance is in the money-making business afterall, and it's rare that they would offer 2 very similar options, dangle a carrot in front of the second one (less imputed income), without some angle to it. I think the angle is that they expect to make more money on the additional investment side for those who choose to participate. Might be a small % on a small % of total participants, but insurance plays the % game.
I could be wrong on this, but I don’t think the imputed income differences have anything to do with discretion by met life in the desperate treatment of both plan offerings. I think it’s a byproduct of the tax code and how group term vs universal life policies are treated for purposes of calculating imputed income.
Everything else being equal, smart money is on the most tax efficient option.
10-19-2023 | 07:16 PM
#59
Gets Weekends Off
Joined: Apr 2007
Posts: 5,613
Likes: 627
Imputed income reduction ranges from several hundred for younger pilots to several thousand for older pilots. Apply your marginal tax rate to get your savings. The exact numbers for imputed income are in the links from the 9/27 FltOps email.
10-19-2023 | 09:00 PM
#60
Thread Starter
Gets Weekends Off
Joined: Jun 2015
Posts: 2,008
Likes: 184
Notes from the Webinar tonight:
1) The GVUL is applicable to the Delta paid insurance (2,500 times the 12-year captain rate) not the supplemental term available from Delta.
2) If you choose GVUL the first $50,000 remains term and the rest transitions to GVUL
3) Enrollment period 1 Nov - 17 Nov
3a) Complete enrollment 27 Nov - 20 Dec
4) GVUL is permanent and portable
5) Variable range of investment options (low to high risk tolerance)
Or
6) Interest bearing account (guaranteed fund account) current minimum rate of return 4%. Will never go below 1.5%. Can only move 25% of funds out of this account into the variable funds.
7) Tax free transfers between accounts
8) Expense charges: 2.25% expense charge for additional funds added above what Delta pays
9) Tax advantages: All earnings are tax deferred. Access to cash value when needed without penalty. Tax free withdrawals up to basis.
10) All investment dollars are on an after tax basis (either lump sum or partial deposits)
11) Tax free withdrawals up to basis: Delta paid premiums + own invested inputs (additional GVUL premiums paid as investment)
Example:
Age at issue: 40
Ends at age 65
Premiums Delta pays: $39,282
Extra premiums paid for savings/investment: $125,568 (optional)
GVUL earnings: $93,235
Paid in total (basis): $164,850
Cash value subject to tax $53,953
Available cash value $218,803
12) There is a maximum amount that can be invested per year (changes year to year)
13) This is not a whole life policy
14) Taxes are more favorable on the GVUL policy
15) No rider options
16) No further underwriting required at retirement if the policy values are not increased
17) Basic imputed income is lower than with group term
18) If you don't use the investment option, nothing is returned to you if you surrender the policy upon leaving Delta. (Cash value would be returned and the amount over the Cost basis is taxed at your current income tax rate)
19) You could revert to Group Term during subsequent open enrollment seasons.
www.metlife.com/gvul/DeltaAirLines
The presenter handled a lot of Q&A. You can register for future webinars on the website.
I'm just a guy, but it seems to me that there are no drawbacks to the GVUL vis a vis the Group Term if you don't leverage the investment option--i.e., you get the same death benefit. If you're looking for another vehicle to diversify your portfolio you'll have access to investment accounts with GVUL. You could also just keep using your own money to pay into your usual investments (bitcoin, gold bars, whatever).
1) The GVUL is applicable to the Delta paid insurance (2,500 times the 12-year captain rate) not the supplemental term available from Delta.
2) If you choose GVUL the first $50,000 remains term and the rest transitions to GVUL
3) Enrollment period 1 Nov - 17 Nov
3a) Complete enrollment 27 Nov - 20 Dec
4) GVUL is permanent and portable
5) Variable range of investment options (low to high risk tolerance)
Or
6) Interest bearing account (guaranteed fund account) current minimum rate of return 4%. Will never go below 1.5%. Can only move 25% of funds out of this account into the variable funds.
7) Tax free transfers between accounts
8) Expense charges: 2.25% expense charge for additional funds added above what Delta pays
9) Tax advantages: All earnings are tax deferred. Access to cash value when needed without penalty. Tax free withdrawals up to basis.
10) All investment dollars are on an after tax basis (either lump sum or partial deposits)
11) Tax free withdrawals up to basis: Delta paid premiums + own invested inputs (additional GVUL premiums paid as investment)
Example:
Age at issue: 40
Ends at age 65
Premiums Delta pays: $39,282
Extra premiums paid for savings/investment: $125,568 (optional)
GVUL earnings: $93,235
Paid in total (basis): $164,850
Cash value subject to tax $53,953
Available cash value $218,803
12) There is a maximum amount that can be invested per year (changes year to year)
13) This is not a whole life policy
14) Taxes are more favorable on the GVUL policy
15) No rider options
16) No further underwriting required at retirement if the policy values are not increased
17) Basic imputed income is lower than with group term
18) If you don't use the investment option, nothing is returned to you if you surrender the policy upon leaving Delta. (Cash value would be returned and the amount over the Cost basis is taxed at your current income tax rate)
19) You could revert to Group Term during subsequent open enrollment seasons.
www.metlife.com/gvul/DeltaAirLines
The presenter handled a lot of Q&A. You can register for future webinars on the website.
I'm just a guy, but it seems to me that there are no drawbacks to the GVUL vis a vis the Group Term if you don't leverage the investment option--i.e., you get the same death benefit. If you're looking for another vehicle to diversify your portfolio you'll have access to investment accounts with GVUL. You could also just keep using your own money to pay into your usual investments (bitcoin, gold bars, whatever).
I think what’s confusing is I’m learning GVUL is less like
“term life insurance”,
and more like
“term life insurance”+”a side investment product cleverly attached to term life insurance that is very tax friendly, but potentially muted returns due to fees”.
How in the world they get to sell this second part as insurance seems like PFM. Somehow it works?
I’d imagine self-paid premiums beyond 65 are super high and not worth continuing in retirement, so this would definitely get liquidated at 65.
Are the “2.25% expense fee” subject to increases?
Is that an annual expense charge or when you withdraw charge or when you deposit funds charge? (Or combinations?)
Seems one could run a simulation of funds in an after tax brokerage account at X%, normal taxes, and one in the GVUL with X-3%?* and factor in some transaction charges and tax on just the basis and have a good comparison.
*opinion-only, whatever rate the GVUL earns is going to be less than a clean brokerage account. MetLife will be somehow less efficient for the “house cut” on similar investment products.
