Bigger policy vs smaller and frontloading?

For those whole-life experts, which do you think is a better option:

1) get a larger policy with a bigger premium and bigger DB. It builds up a decent amount of CV over long time etc but at it's typical rate of growth.

vs

2) get a smaller policy, smaller death benefit and smaller premium, BUT get the PUA rider to allow the purchase of additional insurance. As you've all said this allows the CV of the policy to grow at a much faster rate etc.

So, which is better or do they come out equal. I'm going to try and get a couple of illustrations from my agent but it may take several weeks for that to happen.

For others, one advantage I see of #2 is that you are not obligated to pay a certain amount per year in case jobs are lost or something bad happens in the household. These days being tied down to 18K per year is a huge committment.

It depends on what you are getting the policy for. If it's for the DB to pass on to heirs, then an argument can be made for option #1. If you are just looking to supplement retirement income, i suppose #2 is an option, but there are also taxable investments to consider as well with more growth opportunity but also more risk.

Thanks for the input.

This is definitely more of a fixed income investment option rather than DB. In fact, we have nobody to leave any DB to other than spouses.

There's also other $$ in this wonderful stock market right now, so this is the fixed income side of things. And a nice way to duck taxes as long as possible.

If the purpose of the policy is for nothing more than savings--choose a dollar amount that you want to spend each month and purchase a permanent policy that costs that amount. The reason being is that your cash value growth is not based upon the death benefit (i.e. purchasing the paid up additions does not necessarily boost your cash value) but it is based upon your premium input.

-Joe

This is definitely more of a fixed income investment option rather than DB. In fact, we have nobody to leave any DB to other than spouses.

This equates to using option #2. If cash buildup is the one of primary uses, you want the smallest face amount that will accomodate your desired monthly contribution without causing the MEC. Use term to supplement the death benefit required to keep everyone properly protected.

I agree with pricespector. However, I would not use any type of traditional whole life policy for this. I would use IUL in your case.

Interesting Dan. What would the crediting rate be for those IULs last year and this year? I would think that it would something along the lines of zero with full index participation.

That is an intelligent answer pricespetor, you are acknowledging the fact that it isn't negative which is great now right? haha. The great thing about the indexed products that I specialize in have a floor of 2% and a ceiling of 12%. Currently my clients are making 2% in their IUL's while 401k's are losing thousands of dollars. Last year the S&P's growth was nice, which is what the indexed products are based off of, so my clients made 7-9%.