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Please see attached the chart page from a Transamerica Financial Foundation Indexed Universal Life (FFIUL) policy. A California WFG agent sold this policy to a client earlier this year. Transamerica buries this very important chart deep down in its policy paperwork.

This chart's numbers are Cost of Insurance (COI) charges. Carriers also call them Mortality Charges. For Universal Life (UL) policies--like the FFIUL--COI charges are a constant--and constantly growing--part of your monthly premium.

At first these COIs look small and harmless. But when you add in their multipliers, they swell to enormous charges that threaten to destroy your policy. **If you live to your 80s and older, you can pay much more than your Death Benefit. How can that possibly make any sense for a policyholder to pay?!

Let’s do an example together. You are a healthy non-smoking 35 year old male who buys this policy. You choose a $500,000 death benefit.

Look in the second column on the left, titled “MALE MONTHLY COST OF INSURANCE PER $1,000.” Trace down that column to age 35. You see “0.09333.” This means that, at age 35, you pay $0.09333--a little over 9 pennies--per $1,000 of Death Benefit per month.

“Gee, only 9 cents. Sounds low right?” Not so fast! First you need to multiply $0.09333 by 500. Why? Because you pay 9 cents just for each $1,000 of death benefit. Remember, you bought $500,000 of total Death Benefit. Thus you have to multiply $0.09333 by 500. That gives you a COI charge of $0.09333 by 500 = $46.67 per month. Then you have to multiply that by 12 to get your yearly COI charge. In this case $46.67 x 12 = $559.98 per year.

See how it works? To calculate how much COI you have to pay each year, you have to multiply that year’s monthly COI charge by *6,000.* That’s 500 (for your total Death Benefit) x 12 (months in a year). 500 x 12 equals 6,000.

Now all you have to do is go down the column and multiplying each year’s COI by 6,000. That’s

Age 35: $0.09333 x 6000 = $559.98

Age 36: $0.09750 x 6000 = $585.00

Age 37: $0.10333 x 6000 = $619.98

….

Age 85: $9.98583 x 6000 = **$59,914.98**

WHOA! What just happened there?! At age 85, you pay almost $60,000/year? Almost *$5,000 per month?* Indeed that's -over- $5,000/month when you add in all premium fees.

I’m afraid it’s true! In your twilight years, your FFIUL becomes enormously expensive. So expensive, you are most likely forced to drop it and lose everything you put into it.

Let’s make the math super easy. Let’s say you’ll die at age 85. All you need do is add up the COI charges from ages 35 to 85. Then multiply that by 6,000. It comes to $1.023815 x 6,000 = $614,289. Over $100k more than your Death Benefit.

If you live to 90, it’s worse--MUCH worse. You pay $1,018,374. That’s over a -million dollars-. Twice as much as your Death Benefit.

Wait. You pay over a million dollars for a $500k policy?? Again, how can that possibly make any sense for a policyholder to pay?

Using this simple math I showed you here, please ask your WFG agent how the FFIUL can possibly make sense for anyone who expects to live even a reasonably long life. Please don’t let your WFG agent pass off your question with a vague claim that “your money will grow to cover this.” Please make your agent -prove- to you that your money's growth will cover these enormous late-life charges. Insist he use a hand-held calculator --NOT Transamerica’s Illustration software that can hide numbers and other data from you. Also very important: Ask your agent to do the math at 5% average annual Rate of Return which is close to the long-term stock index rates of Return. That’s very important. You don’t want your WFG agent to use the fantasy 8% and higher Rates of Return that less scrupulous agencies typically use.

It’s almost certain your WFG agent will be at a total loss to defend the FFIUL by the numbers. In his May 25th 2016 review, author William3 lays out a compelling argument for why you'll wish to avoid this policy. It’s titled “World Financial Group - Plan to live a long life? Will your FFIUL--WFG’s “top” product--FAIL and leave you with NOTHING? I show you the MATH." If you bought the FFIUL, I urge you to follow the procedure that William3 spells out for you there. Do this before you meet with your WFG agent so you are fully prepared. Knowledge is power.

WFG agents, if you see any problems with the reasoning and math I present here, please let us hear from you. Thank you.

This person wrote the review because of "concerns about transamerica ffiul" of transamerica ffiul from World Financial Group and attached a photo. Reviewer claimed that he or she wants World Financial Group to read this review and look into the issue (if any).

The most disappointing in user's experience was concerns about transamerica ffiul policy. The author asks this business to immediately contact him/ her to briefly discuss his/ her negative experience with the company.

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Ex-WFGer
#1363984

@Hal , +Hal :

Hal, what is the name of your IUL?Which carrier issued it?

Why don't you take this opportunity to prove it to us?

You can make copies of your policy and upload it as part of a review. Of course you should block out your identifying info. Give us just your non-ID info like your policy's contract language and charts. Especially Hal please back up your claim that your "payments are fixed" with the relevant policy language.

Otherwise Hal, we have to assume you're blowing hot air at us.

What I claim here, nobody has to take my word for it. Just call Transamerica at 800-PYRAMID and ask for Inforce Policy Services. They'll tell you the COI charges regularly reset during the life of the IUL, in this case the FFIUL.

Hal, it's very well known that the original Universal Life policies (ULs), Variable ULs (VULs) and Indexed ULs *ALL* have regularly resetting COI charges when the policy's in force.

The idea is that you are supposed to grow your cash value accordingly, to service those ever-increasing COI charges and reduce your net risk. Trouble is, agents vastly and ridiculously overillustrate IULs at 6%, 7%, and higher annual rates, when the very long-term CAGR--the 40, 50, 60 and more years you expect to hold your IUL--will deliver 2.5--4% at most. The FFIUL does NOT--repeat does NOT--give a guaranteed premium. Your premium can shoot up.

WAY up.

Hal, why do you think we're starting to see...

Just search on "Lieff Cabraser Universal Life" and that takes you right to the page titled: Life Insurance Surrender & Hidden Fees Investigation.

Looking forward to your response Hal.Thanks for reading and engaging.

Show more
Anonymous
#1363959

Ex-wfger: do you or anyone you know even own an indexed ul policy?Or are you just one of those people that believe things without proof?

I have had an IUL in place for 7 years now and the payment has not gone up even a fraction of a cent, but the cash value sure has. Furthermore in my policy papers at signing it guarantees my payments are fixed, which means never increase. On paper, signed by my agent and myself. And Steve below is correct, that sheet is used to determine your premium at the time of signing.

I work for a respectable well known ins agency (starts with an A), not wfg, own an IUL and have sold many.

I have a client who's had his in effect for 10 years and the payment hasn't gone up a cent.Your turn

Ex-WFGer
to Hal #1363985

Hal, please see my answer to you, above. Thanks.

Ex-WFGer
to Hal #1363994

Hal, funny that you don't even give your full name here and yet you *still* can't give even give us the name of your agency.

What are you hiding Hal?

If you're on the up-and-up, why would you hesitate to disclose that to us? Or at least offer proof for what you claim?

I don't give my name either. BUT Hal that doesn't matter, because I give the sources to back up what I say so readers can verify it for themselves.

So far, you haven't done any of that Hal.

Thanks for reading.

Ex-WFGer
#1363821

@Steve , +Steve :

Steve, I'm sorry, you're dead wrong--the COI charges *do* keep increasing in an inforce policy, with the maxima for the insured set for each age year in that COI chart.That's the root problem with xUL policies such as Transamerica's FFIUL.

That's the problem that causes IULs like the FFIUL to implode 20, 30 years down the line, causing the insured to lose everything: his death bennie and the $100,000s he poured into this toxic pig in a poke.

Steve, you sell these things, so you really, truly need to understand this basic and fundamental problem. For Transamerica's FFIUL please call 800-PYRAMID and ask for Inforce Policy Services. They will make it clear to you--COI charges can and *do* keep rising in an inforce policy, i.e.

a policy your client already bought.

Again, your client does *not* "lock in" a COI charge but rather the COI charges keep rising as he ages.Thanks for reading.

Anonymous
#1363808

There's one major thing you're missing here .This chart is a representation of what it will cost to buy units of insurance at a particular age.

It does NOT mean that each year your policy's COI increases. Readers don't be fooled by this math that is applied falsely to smear one particular company and get you to buy a different companies insurance.

It's funny how there is an ad for AIG at the bottom of this.

I sell AIG, as well as TA FFIUL.AIG has the same COI chart.

Ex-WFGer
to Steve #1363822

Steve, please see my response to you above.

Anonymous
#1363786

Meant no surrender charge, not surrender value

Anonymous
#1363783

O.k.how about this: you buy a ffiul at 35 years old, let's say an 800k policy.

You pay 350/month (4200/yr) for 30 years. Total you've put in is 126k. Your mtg is paid off, kids are probably grown, you probably don't need 800k in coverage anymore. Your estimated cash value is 214k as shown on your illustration page.

You cancel your policy which will have no surrender value as it's been in effect for 30 years. You've almost doubled your money. Maybe not as much growth? Maybe some surrender fees?

You at least get your money back, at least. Up until age 65 though, if you die your beneficiary gets 800k. If you keep it past 65 you start running the risk of going in the other direction, where you'd have to cancel policy because cash value can't cover COI anymore without payment increase. Or not, that's 30+years from now, who knows?

Any EDUCATED replies to that? That's the way I'm looking at it.

I'm not for either side, just like to know what I'm talking about before posting.If you give me something compelling and can disprove my illustration, I'll admit I was wrong.

Ex-WFGer
to Joe #1363838

Joe, putting your example into a spreadsheet, you can forget about ever seeing any cash.Your FFIUL will implode 27 years after you buy it.

FFIUL fees, especially accelerating COI charges, will chomp through your FFIUL by your age 62 and you lose EVERYTHING--your death bennie and the $126k you put into it.

In calcing this, I assumed that you are a healthy male non-smoker who put down $800 when he first bought the policy and paid $350/month from then on. I also went with a Premium Expense Charge of 6%, monthly policy fee of $12, Monthly Face Value charge of $0.24 per $1,000, and Index Account Charge of 0.06% per month. I left off the Long-Term Care rider, so you pay no monthly fee for that.

For the annual index account growth rate, I used 3.25%. Joe, this because over the very long term--the 40, 50, 60 years and longer you expect to hold your FFIUL--you will get a long-term CAGR of only 2.5--4%, because the carrier (here, Transamerica) funds your index account 95% or more from investment-grade bonds which yield 2--4% over the long term.

Hope this helps.Any questions, please ask.

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