Cash Value Life Insurance Policies - Page 2 - TigerDroppings.com

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CoolHand
USA Fan
Member since Dec 2011
1482 posts

re: Cash Value Life Insurance Policies


quote:

The "buy term and invest the difference" works for some, but in a changing economy like now, this one size fits all approach does not work


Should I go back to this method when the economy stops changing?



This post was edited on 10/10 at 12:11 pm


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BestBanker
New Orleans Saints Fan
stuck in a moment
Member since Nov 2011
3049 posts

re: Cash Value Life Insurance Policies


quote:

I THINK they are going to do really well later in life.


except if the market crashes by 40% the year they are to retire (never happens).

I did this on purpose, but agree with you that they should be ok in savings amounts, but, the big but is that all qualified plans do not consider future higher income tax levels. No matter the law, the withdrawals will have to be taken and the tax paid.

I also use WL as a basis to all of my financial moves. Tax-free, liquid, suit protected, disability protected, cost-recaptured. I also use market.






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BestBanker
New Orleans Saints Fan
stuck in a moment
Member since Nov 2011
3049 posts

re: Cash Value Life Insurance Policies


quote:

quote:The "buy term and invest the difference" works for some, but in a changing economy like now, this one size fits all approach does not work

quote:

Should I go back to this method when the economy stops changing?


think this way: buy permanent and invest it all.






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TheHiddenFlask
Clemson Fan
The Welsh red light district
Member since Jul 2008
16771 posts
 Online 

re: Cash Value Life Insurance Policies


quote:

think this way: buy permanent and invest it all.


Annuities are not investing.






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Janky
LSU Fan
Team Primo
Member since Jun 2011
7257 posts
 Online 

re: Cash Value Life Insurance Policies


quote:

Annuities are not investing.


Where did this come from?






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Lonestar
LSU Fan
Member since Nov 2006
647 posts

re: Cash Value Life Insurance Policies


Im pretty sure variable annuities are investments.
I feel you need to be diversified froma a tax standpoint, both now and in the future. Both term and permanent should be used together. I have both, but the goals for each are different






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BestBanker
New Orleans Saints Fan
stuck in a moment
Member since Nov 2011
3049 posts

re: Cash Value Life Insurance Policies


Where did annuities enter this discussion?





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JWS3
Purdue Fan
Baton Rouge
Member since Jun 2008
2502 posts

re: Cash Value Life Insurance Policies


LINK

Ask your agent what happens to "my" cash value when I die?






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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
13521 posts

re: Cash Value Life Insurance Policies


Alright, I'll try and answer as many of your questions as I can. It looks like a lot of guys have already given some good advice in here.

What type of tax reasons are you talking about first and foremost? Permanent Life Insurance can be set up to help take care of estate tax issues, as well as retirement income tax issues. Knowing that answer drastically changes how you should go about looking at the policy.

As far as an asset goes, it should be used to help improve your overall portfolio. Properly structured policies have guaranteed death benefit for whenever you die, some have appreciating death benefit, as well as a guaranteed minimum growth of cash value. Furthermore, depending on your age, I would make sure you get some type of disability waiver, so that if you become disabled, your premiums are paid by the company.

So, before I go any further into the potential benefits and drawbacks of Permanent Insurance, let me know a little more about the tax concerns you are specifically talking about. (you can be as vague as you want about your actual personal info )






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bigblake
Member since Jun 2011
940 posts

re: Cash Value Life Insurance Policies


(no message)


This post was edited on 4/6 at 1:53 pm


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BestBanker
New Orleans Saints Fan
stuck in a moment
Member since Nov 2011
3049 posts

re: Cash Value Life Insurance Policies


Without looking at your link, I know where your cash value goes when you die...it goes to your beneficiary as a trumped-up-in-tax-free-valued death benefit.

People amaze me as their ignorance when it comes to whole life insurance policies, but only inasmuch as the insurers and their agents promote the ignorance.

Life insurance is a bond. Period. Look up bond in your encyclopedia. It is a very safe and certain instrument of finance, that apparnetly only the wealthy have continued to use for well over 100 years.

So, I will be bold enough to make the following statement: If you don't want to create wealth and then use your assets while protecting your assets, don't buy this type of insurance. Just buy term life insurance and invest heavily in stock market assets, because that is what you are told is the best way to get you to where you want to be.

:inb4oozingsarcasm:






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cbtullis
LSU Fan
Baton Rouge
Member since Apr 2004
2969 posts

re: Cash Value Life Insurance Policies


quote:

Essentially there is money building in my basic bank accounts and need financial vehicles to invest it because the 0.5% return I get is poor. I'm heavily invested in other areas.


This is why a a lot of people use these policies.

Btw, what company is pitching you these policies?



This post was edited on 10/11 at 8:33 am


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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
13521 posts

re: Cash Value Life Insurance Policies


Sounds like you are in a great position then. I would assume your estate planner is looking at your situation and seeing two possible tax problems. First, with your retirement income, you are loading up taxable income. The permanent can help by giving you tax free retirement income during retirement that can be their when you spend down your taxable income.

Secondly, the policy will be there when you die, that also eppreciates over time, which can greatly help with paying for estate taxes. The estate planner will know all about how to set these up.

Now, to answer your general question about permanent insurance in general, it is first and foremost a life insurance policy. However, it is also an extremely strong asset. Think of it like this, it is less risky than gov't bonds, is not exposed to market fluctuations, has guaranteed growth each year (positive continuous compounding). With an asset like that in your overall portfolio, it allows greater flexibility with your invested assets, and can allow you to keep yourself more aggressively invested for longer if you choose because you have a base to insure positive growth each year. Also, with the good policies, once your account is credited the cash value, it cannot go backwards, no matter what happens in the market.

With all that said, there is a ton of junk out in the market with this stuff, and a ton of terrible agents. I would talk to agents at Northwestern Mutual, New York Life, and Mass to look at policies. They each guarantee a floor of 4% on their traditional whole life, and have performed solidly over the years (around 6-9% tax free return over the past 3 years). Also, if you want to see a Northwestern policy, you have to speak with one of their reps, as they are the only ones who can sell their stuff. I cannot stand Universal Life, and I wouldn't suggest it for your situation. Just make sure you take everything the agents tell you with a grain of salt. Make them teach you about the policies, not just sell it to you.

Best of luck.



This post was edited on 10/11 at 9:03 am


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