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Fourth, policy loans or withdrawals may significantly shorten the guarantees in an SGUL. CAUL products generally have better terms for "preferred loans" or "zero net interest" loans that may permit the policyholder access to cash values on a more favorable basis.
Essentially, clients who are willing to take the greater interest rate and cost of insurance risk in a CAUL may receive significantly greater cash values that they may access on more favorable policy loan terms than would be possible with a SGUL.
The advantages of CAUL versus SGUL should be evaluated only after determining one's need.
CAUL will appeal most to those for whom the purpose of SGUL does not exist.
You want to compare how CAUL and SGUL meet their objectives.
He additionally wants to compare the cash values and face amounts after such withdrawals are made from SGUL and a CAUL respectively.
The graph shows hypothetical CAUL and SGUL cash values.
* The annual $15,000 premiums for the first 20 years produce similar projected cash surrender values in the CAUL and SGUL illustrations.
* The withdrawals of $30,000 from policy years 21 through 30 have a greater impact upon the CSV of the SGUL illustration.
The different performance of the policies is attributable to a number of factors, of which one is the additional charges for the guarantees in the SGUL. However, under these assumptions, the CAUL meets the combined policy withdrawal, cash value and death benefit objectives of the client better than the SGUL.
Most insurers selling competitive SGULs at older issue ages have seen a dramatic increase in percentages of sales at these ages.
This allowed the final choice to be the lowest premium SGUL, for the expected underwriting class, from a very well respected and financially strong company.
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