wholelife vs Universal life when I have some WL

I need your opinion and help.

My situation is little complicated as I may go back to China after 5-7 yrs. I am 35 yrs old and married and have one kid. I have WL (NYL) $150K and Term for $400K 15 yrs. Now I am working with financial advisor and he is asking me to take UL (750K) and term (250K) and want me to DUMP my WL where I have already paid for 2 yrs. My financial advisor is mainly focused on insurance and when I asked them to help me with investment.

His reasoning is that WL is expensive and UL is cheaper and will be easier to manage when I move to China.

I would like to know if UL make sense for me and DUMP WL. Current our household income is ~180 and we are maxing out 401k. I have no loan and financially pretty strong.

I was thinking to overfund WL and replace term with 30 yr $750 Term.
Any suggestion/guidance will be helpful.
Thanks in advance for any input.

we obviously cant help you too much with this but i will offer a couple of thoughts for you to consider.

1. i think your "financial advisor" is acting somewhat inappropriately. here is why (i am basing it ONLY on your comments):
a. you say you wanted some investment advice and he is primarily offering insurance advice. while looking at your insurance may be appropriate, he should be focusing on what you want FIRST and addressing other issues secondarily.
b. he is asking you to cancel insurance you have only had in place for two years. this is when you lose the MOST for changing your decisions. it would seem to me that he could easily build you a better insurance plan AROUND what you already have in place ... if it needed rebuilding at all.
c. his comment that WL is expensive tells me that he probably doesnt know what he is talking about.
d. his new UL policy will be "easier to manage" when you get to China. well, i dont really know what the heck that means. BUT, i do know that NYL has a very very strong presence in China. in other words, if you kick the bucket (die) and your wife wants to get the proceeds, she can go to a local office. is that true with his nifty UL policy? i doubt that.

would you please tell us what company the person is with? and also, what company he is recommending for this UL policy?

hope this helps.

I was thinking to overfund WL and replace term with 30 yr $750 Term.
On the surface of it, I think your idea is much better than his.

First of all, UL is neither cheaper nor "easier" to have. A UL only appears cheaper because you can choose any premium you wish to illustrate it. However, if you want a UL to perform up to par with a whole, I can virtually guarantee you that the required premium to do so will meet or exceed your whole life premium...and the UL still offers no contract-guaranteed cash values.

I sniff a commish on this one!

Thanks IMO and price for your quick response.

He is recommneding Metlife for UL and Term whose rating is lower than NYL and AIG which I have for term.

One thing worth mentioning that his eaiser to manage was also related to cost because once I go back I won't be making as much. His point was that WL I am bound to pay ($100 per month which I can pay does not matter where I live) whatever I am commited for but with UL I can reduce if I am not able to pay.

On the same line my house hold income is ~ 180K and I have 100k saving. Does it make sence to look into VUL?

Thanks in tons for your input. I am going to DUMP him or only work with him for Investment. otherwise I will start looking for other advisor if things does not work out.

but with UL I can reduce if I am not able to pay.Yes, with a UL you can do this. BUT if you do, you will eventually have to make it up or sacrifice all of your cash values to support the insurance costs...or worse. The UL policy, if underfunded for a long enough period of time could cause "premium suck" and you could get a very large surprise bill in the mail that says we need so many thousands of dollars or your policy is going to collapse. This is one of the primary reasons I believe UL is a poor choice.

On the same line my house hold income is ~ 180K and I have 100k saving. Does it make sence to look into VUL?If you're unsure of your future income, you may want to put this on hold. It is a decent concept for high income individuals, but why not try overfunding the whole life to the max instead and see how that goes? You see, the VUL option is ONLY truly effective if you are DEFINITELY going to overfund it. Otherwise, it could cause the same condition as I mentioned for the straight UL.

Whole life is simple, guaranteed...and good. And you will find that they can perform very closely with most ULs and VULs.

If you say you want to work with this advisor for investments, be leary if he goes straight to a variable annuity without explaining ALL of your options. Mutual funds, even if they are taxable are often a better choice. I'm not saying a VA is a bad thing for high income tax deferral, because they can be very effective if placed effectively. But if there is a push away from all your other options and a VA is presented as your only solution without good, solid reasons then find another advisor.

Thanks price for your valuable input. I really feeling much better now.

Thanks for all your valuable input. You guys Rock.