Anyone has experience with these? Got pinged on LI by a few financial advisors from Northwestern mutual. From an investment standpoint, the tax treatment seems advantageous. Anyone has experience with this? Anything to watch out for?
OP, UL is not the same type of investment vehicle as a stock fund. If you are looking for strictly market returns stick with what you already have - a stock portfolio/funds and term insurance.
Lol. Don’t buy this trash. Buy permanent term and invest the rest. Your NM “advisor”, really an insurance sales man will be collecting egregious commissions on these products. Term will cost you 1/10 and invest rest into stocks, etfs or mutual funds
Keep in mind they are world class salesman and will have a rebuttal to every concern you have. They are professionally trained to peddle stuff you shouldn’t buy
OP: I am considering variable universal life by Northwestern Mutual too. Did you decide?
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Northwest Mutual is a well known carrier - see AM Best for insurance company ratings. I have had two UL policies for over 20 years and both have served me well as vehicles to invest money that grows tax free as well as provide a death benefit - one of the policies also has a long-term care rider. What to watch out for is your guaranteed rate of return, fees and insurance cost. My policies are older, but for example on the MassMutual plan, the guaranteed rate of return is 4%, the annual fees are $75 and the cost of insurance is $700 (the insurance cost increases every year and I am over 60). One catch is there is a maximum amount you can invest or the policy turns into a Modified Endowment Contract (MEC) and the tax treatment changes. If you are simply looking for life insurance to protect your family, a 20- or 30-year term policy is much more economical. A UL policy is an investment tool along with stocks, bonds and treasuries.
You’re so kind, thank you for this fantastic information. I do have term insurance, I am planning to switch mainly as an investment strategy. I want to choose a less-risky portfolio (index fund like returns) and go for the long term. The tax-free loan option is what I see as the advantage here. I will inquire about the fees on this plan. Bottom line, am I right in comparing this against a brokerage account where I just invest on the same portfolio and comparing the results ? I need to contrast this versus the benefits of insurance and loan opportunity.