Recommended Universal Life (Indexed Universal Life) by my Relationship Manager. Wondering if it's suitable for me.

Hi Seedly Community, I am in my 30s, married with 2 young kids. I recently upgraded to Priority Banking status at a local bank and my Relationship Manager recommended me a Universal Life product ( Indexed Universal Life to be exact).

However, unlike other common wealth products where many financial influencers simplified them with interesting examples and infographics, I am unable to find a good explanation of Universal Life in layman terms - the ones I found via Google are somewhat technical.

I am aware of "buy term and invest the rest", and have applied this philosophy partially for the past years. My dependents and myself are sufficiently covered (>10 times annual income) so my family is well protected when it comes to insurance coverage. I also have a decent 6-figures sum in investments via Unit Trusts, Robo Advisors and equity holdings on different platforms.

I am keen to know if Universal Life is a suitable product given I am already sufficiently covered. Also can some sifus explain why you bought Universal Life plans previously and if you think it was a right choice?

Thanks in advance.

Discussion (10)

What are your thoughts?

Learn how to style your text

FindTheLoan.com

05 Feb 2025

The returns on your Benefit illustration table are projections. For whole life plans, they are invested into the insurer's par funds. They try to generate a return for you. UL, in general, has a more sophisticated investment strategy and its dedicated fund is separate from the par fund. Some UHNW ULs' funds operate like hedge funds

Disclaimer. Top UL & MDRT agent previously, but more than a decade ago. This is not financial advice. Just opinion.

Save

Winston Cheong

Edited 17 Oct 2024

Financial Services Director at Prudential Assurance Company Singapore

Indexed Universal Life offers customers lifelong coverage against death and terminal illness, and balances growth potential of their funds for future generations while protecting it from market downturns.

In my personal opinion, it is typically suited for customers that prefers locking in a sum aside of legacy planning - to protect their business liabilities or benefit their beneficiaries, while still having the opportunity to take a premium financing loan on the policy value of the plan to create cash flow should you want it. The product itself participates in an adjusted returns of the index market that it invests towards (differs between insurer and product) to make up the policy value in the plan.

This cash flow (from the premium financing loan) when invested properly, also creates positive cash flow to help pay off your interests on the loan yearly while helping you grow your wealth / net worth.

Hope my humble sharing helps.

Save