Variable Universal Life

MR. WATSON: So what we have talked about is

• Whole life,
• Indexed Whole Life
• interest-sensitive whole life.
• Universal life.
• Indexed Universal Life
• Variable Life

Variable universal life

A Note: If it says UNIVERSAL: the premiums are flexible....If it says VARIABLE: the policyholder chooses the investments.

MR. WATSON: So, combine the Universal and the Variable and you have Variable Universal. Same as a universal life, (flexible premiums & an adjustable death benefit), but the policyowner chooses the investments.

MR. WATSON:Out of all these policies we talked about, which one gives you the ability to have a flexible premium?

ALL: Universal life.

MR. WATSON: Universal life. Now, out of all these, which one gives you the choice of investments? Variable. Would you rather the company make the investments at 4 to 5 percent, or do you want to chance it at making a better return than that? Which one gives you that choice? It's the clients choice, no?

ALL: Yes, but I like Variable Universal. I like a lot of risk.

.MR. WATSON: OYE!!!

MR. WATSON: Variable universal life . You combine the universal life, the flexibility of the premium payments, with the choice of choosing investments. Remember, it has the word "universal" in it, so, the premiums are flexible. It also has the word "variable", so, the policy owner chooses the investments. You have stock-market returns tax-free.

MR. WATSON: I didn't say "tax deferred." How do you get that money tax-free?

MAN: Die.

WOMAN: Or borrow.

MR. WATSON: Die or borrow. Do you have to pay it back while you are living?

MAN: No.

MR. WATSON: Will Rogers said he was more concerned with the return of his money than he was the return on his money. Will Rogers was very conservative, but I guess he's still dead, isn't he? Will Rogers was a very conservative investor. He would have not invested into these accounts. Do you agree?

ALL: Um-hmm.

MR. WATSON: He would have purchased Whole life, interest-sensitive, or universal. To protect Will Rogers from guys like you or me, who might be very aggressive investors, the variable products have to be invested in the company's separate account. So if that account goes belly up, people like Will Rogers are protected. So in the past you had John Hancock Mutual Life Insurance Company and John Hancock Variable Life Insurance Company. One is the general account, the other is the separate account. Two separate companies. If the stock market went to hell in a hand basket, the general account people would be protected.

WOMAN: You said variable accounts were guaranteed.

MR. WATSON: No, I did not. I said with the variable life policy, the premiums are fixed, and the death benefit could not go below what you initially purchased. Guys, it's a risk/reward type of thing.

WOMAN: So if the stock market went down, I mean-

MR. WATSON: Crashed.

WOMAN: -- crashed, then what do you have if you have a variable?

MR. WATSON: You have the guaranteed minimum death benefit. You lost. You only get the death benefit. That is the risk.

MR. WATSON: Separate account and general account. Which one are variable life policies invested into?

MAN: Separate.

MR. WATSON: What about variable universal life?

ALL: Separate.

MR. WATSON: What about variable life?

ALL: Separate.

MR. WATSON: What about universal life?

ALL: General.

MR. WATSON: Why?

ALL: It's not a variable product.

MR. WATSON: Because separate accounts protect non-variable people from the risk of the variable people. Does that make sense?

ALL: Yes.

Yep, here they are again.