Pay for Universal Life Insurance for us,

Not opposed to life insurance, mind you, but we already have term life insurance that is paid by the company (up to $250K or N yrs salary), and the average age at our company is 30 to 35.

Yesterday, they sat us on a call with an insurance salesman who tried to convince us this policy was the best thing since sliced bread because “you can add additional funds into an investment account as part of the policy” and the “earnings are tax-deferred until you take money out.” (He kept comparing that to your 401K plan.)

My questions in the call:

Me: So are the funds in the investment account free to take out at any time, or they connected to the policy?

Salesman: let’s schedule some time to talk about that offline. (Sir, we’re in a pandemic. There is no offline.)

Me: what do you mean the earnings are tax deferred until you take the money out? Isn’t that the case with a regular investment account also?

SM: no, for a regular account if you sell stock, that’s taxable even if the money stays in the account.

Me: oh, okay. So can we choose which funds we want to invest in?

SM: Yes, you can choose between these 5 options. (All have ER between 1-2% + maintainable fees on the account.)

Me: what happens to the account if someone leaves the company.

SM: that’s the best part, you can keep the account going and then you just have to pay the premiums yourself.

Me: is the company contributing any funds in the investment portion of the account? And are those funds available to employees if they leave the policy?

HR: Good question, let me check in on that.

Me (internally): did you numpties do any research on this before signing us up to this policy?

The Gods: no, they did not.

Wow, that’s not even close to an efficient use of their money.  The salesman is making out like a bandit and the rest of you are getting shafted.  Good luck, I hope you can make your HR come to their senses.  Hearing stories like these makes me appreciate the folks at my company that run our benefits. 
To the OP:

Either the people running your company are idiots, or they’re getting a kick back off this and do not care about their employees at all. That’s pretty said when an employer would chose a Universal Life plan over a 401k. Sorry you’re getting screwed.

This content was originally published here.

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