- Personal Finance»
FFIUL Insurance Plan
FFIUL and the benefits
Last time we discussed the 529 plan and the secrets behind it. Now lets look at the FFIUL plan and what it looks like. First of all lets please understand that this insurance plan is best for covering your children and that also from when they are born or at a young age. This is because the longer you have it the more cash value you collect. Also know that it is a life insurance plan so you can not get coverage if diagnosed with a disability or life threatening illness so if you want to get this plan I would suggest getting it right away.
Now one of my favorite benefits of this plan is that the premiums is locked. This means that your premium does not go up by age. Once you have the plan you pay the same premium for the rest of your life. Now remember this is life insurance so it has your death benefit. So the coverage is not just for college. It is for anything and everything you need it to be for. Last time I did a few scenarios to help you understand what the plans functions looked liked then did Q&A of yes and no questions. I will do the same this time but will also cover some of the basic bullet points on what makes this plan so fantastic. I also promised to tell you how to find an agent near you that could provide you with this plan and so that will also be covered at the end.
Lets start up with the benefits first so that we understand the stories a little better. First off this plan is a non-includible asset. This means that last time when the scholarship was deducted from because of your 529 plan- that won't happen hear because it will not show as a college savings plan. Now of course there are many times where you need to take out loans for different situations right? Well this plan has 0% interest on withdrawal. Of course you have to wait a year before taking out a loan because you need to build up that cash value first. This plan is also tax deferred which may sound like a bad thing but is actually better than tax advantage. If you are in the accounting industry then you know what I am talking about. Now there are many more advantages to this plan but lets look at some scenarios to help us understand this plan better.
For our cases lets say that the plan was bought as soon as the child was born and its been 18 years since then. You got your child a $1,000,000 FFIUL plan. Your monthly payment is $295 and you have been religiously putting in that payment like you should.
Your child has been diagnosed with cancer and you need funds for the treatments. Because your cash value has been building up you are able to withdraw money from your plan with 0% interest and pay for your child's treatment without having to worry about the interest on the loan.
Tanisha is old enough to go to college now but she decides that she rather not. If we remember correctly in the 529 plan this means your money is gone. However, with this plan you still get that money. In fact if you encourage your child to leave that money there and keep paying the monthly payments her death benefit will go up and her family will get both the death benefit plus the cash value at the time of death. Of course she also has the option of taking it out when needed.
Now this plan gives you a profit. This is because the money that you leave in there you get a certain percent of interest added to it.
Sarfarz has an FFIUL plan and has not taken any loans up to this point (or he did take a few loans- your choice in preference) his profit in the account has been going up by 12.5% so far. But recently there has been an economic downfall and a lot of people are having to start all their savings from scratch as it is all being lost. However, when he goes to check his account he sees his is not falling but is simply at a stand still. This is because there is a guarantee of .75% compound interest which protects him from losing money through inflation.
Now that you have seen a few scenarios to see how this plan works how about our favorite Q&A?
Can you get this plan for an older child?
Of course! you can even get it for yourself! The best part about this plan is that it is good for just about anyone.
Do we have to pay extra premium for the cash value to rise?
No. As long as you keep paying your regular premiums your cash value will rise on its on there is no extra fee for this. Once your death benefit is paid off (which takes about a year) your cash value will start being built.
My child got a $200,000 scholarship is there a reduction of what I get because I have this plan?
No. Remember this plan is a non- includible asset therefore it will not show on the system and you get the full scholarship.
My child wants to go to Australia to study do they still get to get that money?
yes. they still get both their death benefit and their cash value. Their college savings in this plan is available no matter what.
What if I only have a specific amount of money I can pay for premium?
The thing is you can tell the agent how much premium you can afford and they will run the numbers for you! I tried running a $50 premium till age 65 and $100,000 death benefit and even with withdrawal for retirement every year after age 70 I still ended up with around $500,000 in death benefit!
Can we get this plan for other reasons?
Of course! We can help you set the plan with specific riders to make it what you need! We have long term care and basic as two of the many rider options. So if you are worried about short term basic is what you need and if you are worried about long term disability then we have that as well.
Do you need a medical check up?
Yes you do. This is a life insurance plan so like all other life insurance plans you do need to do a health check up but we make the process fast and easy so don't worry!
O.k. I get it it's a pretty good plan but where do I find an agent that can get me this plan?
Get out your pens and papers because here it comes- any life and health licensed insurance agent contracted with TransAmerica or WFG can get you a plan. If you find it difficult to find someone like that let me give you a secret. I am also licensed and contracted for Texas. I will put my office information for you and if you are in a different state or in Canada I will have the company connect you with the branch in that location. We will find you an agent that fits your needs and personality. That way you know that we aren't just trying to make money off you but are there as your friends to help you.
My office number is 972-247-8406 you will need to ask for Bazal Morani and I will be there to help. It is a CPA firm so do not get worried when you here A. Morani CPA firm. If you are in Texas particularly in the Dallas, Irving, Arlington, etc. area feel free to stop by at our office at 2775 Villa Creek Dr, Ste. 180 Irving, TX, 75234. Please set up an appointment first so that we have everything ready for you when you come in.
If you have anymore questions about this plan feel free to contact me or even leave a comment on this post and I will get back to you ASAP. Now because it is the Christmas holidays- Merry Christmas, Happy New Year, Happy Hanukkah, and Happy Holidays!