quote:
I don't think it is a smoke and mirrors product. I think it is a product that makes sense for some people who have no appetite for risk and are looking for guaranteed returns.

Well, then I apologize. I took your agreement with the other poster's comments that you quoted as an agreement in his position on the products.

quote:
As the rate of return in the WL policy goes up the rate of return you can achieve outside of the policy does as well so it will always remain a relative relationship.

No kidding, that has never changed. You can always find an investment to outperform another, however you can also do worse than the WL. My whole reasoning in questioning is every person I get into a discussion about WL always claims it is not worth the money, doesn't perform well enough, etc... That would mean there is a point that performance would justify it. They just never have a point that they think it would.

quote:
In a hypothetical scenario where they were unrelated I would be happy with 8% or better as the guaranteed rate.

So, if say a policy got 8% after tax over the past 30 years, it would have been worth buying?

quote:
I don't think WL really has to stand on its own as an investment though as there is a value that is relative to each policy purchaser that can't be quantified in the death protection and guaranteed returns

I agree. This is why I question anyone that says you should never buy WL.

quote:
What are the other 2/3s of the return component?

Company Expense ratio and Mortality.

This post was edited on 8/21/14 at 3:46 pm

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Posted by Maderan

Member since Feb 2005

807 posts

Posted on 8/21/14 at 3:53 pm to GoCrazyAuburn

quote:
So, if say a policy got 8% after tax over the past 30 years, it would have been worth buying?

I think anyone would take a guaranteed 8% after fees and taxes for the next 30 years as a portion of their portfolio. If fact, most insurance companies and pension plans would invest heavily in this right now.