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Whole Life Insurance??
Posted on 12/16/09 at 10:30 am
Posted on 12/16/09 at 10:30 am
Is it a good long term investment? I have plenty of term life that I'm thinking about converting, but I would like some objective advise first. BTW, my insurance company is one of the more reputable ones. TIA.
Posted on 12/16/09 at 10:54 am to Cantstandya
Whole Life Insurance??
Dont use it as an Investment vehicle. The only worthwile Whole ploicies that seem reasonable are for newborn children. I have one for each of mine and if they are healthy I will use the cash value to pay for college. There are better ways to invest for college but this allows them to have Life Insurance if they have a long term illness, etc. I also shopped around the policy to ensure that I had the best(lowest) commision rate but you still in reality get screwed a little. For me though it was the safe bet for some college savings and Long term Life Ins for my kids.
Dont use it as an Investment vehicle. The only worthwile Whole ploicies that seem reasonable are for newborn children. I have one for each of mine and if they are healthy I will use the cash value to pay for college. There are better ways to invest for college but this allows them to have Life Insurance if they have a long term illness, etc. I also shopped around the policy to ensure that I had the best(lowest) commision rate but you still in reality get screwed a little. For me though it was the safe bet for some college savings and Long term Life Ins for my kids.
This post was edited on 12/16/09 at 11:00 am
Posted on 12/16/09 at 1:26 pm to TROLA
Whole Life is a good way to have death benefit coverage while having a supplemental retirement plan. The key is getting a whole life policy with the right company. Some are excellent. Some are not.
Posted on 12/16/09 at 2:08 pm to Cantstandya
Speaking as an Insurance agent I rarely recommend Whole Life insurance as an investment vehicle. If someone has maxed out thier IRA and thier 401k and are looking for additional ways to invest in a tax deferred manner I might recommend whole life. If you are simply looking for a permanent death benefit and a permanent premium you should look at Guaranteed Universal Life. It must be the Guaranteed variety as there are some shitty Universal Life policies that are floating around that can blow up in your face. I work for Mutual of Omaha and we have this product. Check with your local office and ask for the GUL Complete. Good Luck
Posted on 12/16/09 at 2:50 pm to LSUgolf04
quote:
Whole Life is a good way to have death benefit coverage while having a supplemental retirement plan. The key is getting a whole life policy with the right company. Some are excellent. Some are not.
You would be better off to have a term policy while investing in Mutual Funds.
Posted on 12/16/09 at 3:00 pm to TROLA
quote:
You would be better off to have a term policy while investing in Mutual Funds.
Some would agree with that. However, there are a lot of people that do not want to invest their money into the market.
Edit: Just to clarify, I don't neccessarily disagree with you. I sell life insurance and mutual funds so I am not biased towards either. I just wanted pass on the thoughts of some of my clients.
This post was edited on 12/16/09 at 3:09 pm
Posted on 12/16/09 at 5:19 pm to LSUgolf04
Try to find a single financal planner that is not selling whole life who thinks it is a good investment. Read the fine print, you die, they keep your investment. Buy term, invest your savings, My wife was an insurance agent, the "your children could get ill, and not be able to get insurance" was the scam she hated most.
Posted on 12/16/09 at 10:19 pm to Cantstandya
No to whole life PERIOD
Posted on 12/17/09 at 8:42 am to JWS3
quote:
Read the fine print, you die, they keep your investment.
This might be true with some whole life policies. However, it is certainly not the case industry wide.
Our whole life policies normally end up being worth 4 to 5 times the amount invested after 20-30 yrs and it has an increasing death benefit over time.
Posted on 12/17/09 at 11:39 am to JWS3
quote:
Read the fine print, you die, they keep your investment.
I ain't buying that shite, but what?
Posted on 12/17/09 at 11:51 am to Cantstandya
Buy term...get it so that it ends when you are 55 or 60...after that, you shouldn't need life insurance because your kids will be on their own, and you should have enough money saved for you or your spouse to survive on in case something were to happen to one of you.
Posted on 12/17/09 at 11:55 am to Chicken
quote:
you should have enough money saved for you or your spouse to survive on in case something were to happen to one of you.
TD pension plan!
Posted on 12/17/09 at 1:47 pm to Chicken
quote:
Buy term...get it so that it ends when you are 55 or 60...after that, you shouldn't need life insurance because your kids will be on their own, and you should have enough money saved for you or your spouse to survive on in case something were to happen to one of you.
This.
Posted on 12/17/09 at 2:52 pm to LeonPhelps
I am in the market for a 30yr term right now. Best I have found so far(only shopped two places) is $157/month for $750k in coverage. Is this in the right ball park?
Posted on 12/17/09 at 11:28 pm to bayoudude
[quote]Our whole life policies normally end up being worth 4 to 5 times the amount invested after 20-30 yrs and it has an increasing death benefit over time.[/quot
If I have one of your policys, and say I invested $25K over 30 years, and going by your statement, it is now worth $100K, and the death benefit is $150K, and I die before withdrawing my investment, what will your policy pay the beneficiary?
If I have one of your policys, and say I invested $25K over 30 years, and going by your statement, it is now worth $100K, and the death benefit is $150K, and I die before withdrawing my investment, what will your policy pay the beneficiary?
Posted on 12/18/09 at 8:32 am to JWS3
bayoudude, look around. should be able to find much cheaper with reputable companies. dont want to post names on here if it isnt legal.
Posted on 12/18/09 at 1:23 pm to LSUgolf04
quote:
Whole Life is a good way to have death benefit coverage while having a supplemental retirement plan. The key is getting a whole life policy with the right company. Some are excellent. Some are not.
Absolutely. The company is everything in this discussion. With reasonable returns, this can make a lot of sense and to fully evaluate vs. other options you have to look hard at the tax implications both today and long term.
Posted on 12/18/09 at 3:21 pm to TROLA
quote:
You would be better off to have a term policy while investing in Mutual Funds.
This by a long shot from an investment prespective.
Posted on 12/18/09 at 7:50 pm to bayoudude
quote:
I am in the market for a 30yr term right now. Best I have found so far(only shopped two places) is $157/month for $750k in coverage. Is this in the right ball park?
I would say so.
Thats about what I pay for 500k on myself and wife.
I sold life insurance for 6-7 yrs.
I always sold term over wl just for the fact that more covg can awarded for the monthly premium.
Sure everyone wants million in Life insurance but for 99% of the people it is financially undoeable.
and fwiw agents make much more money off WL policies than term, so keep that in mind if you find one pushing the WL.
This post was edited on 12/18/09 at 7:52 pm
Posted on 12/19/09 at 4:23 pm to TIGRLEE
Just for a basic example take 20 pay whole life for example.
The investment you put in will never equal the amount it pays out. If someone were to die in the first 10-20 years it is actually a far greater investment than any mutual fund, or guaranteed return. Once the policy matures the cash value won't show the same growth a fixed investment vehicle (such as an annuity would produce), but the difference in the two is covered by the death benefit.
There are different types of whole life. One has an accumulated death benefit, so as the earlier poster mentioned, if the policy is for 150k and it has a 100k cash value at death you would get the 250k total (tax free) (Paid up additions is what is referred to as). The cheaper form of whole life only pays a level death benefit and you forfeit the cash value, but it keeps lower premiums.
I usually sell a lot of Universal life policies. I like the variable aspect of them (you can increase or decrease your premiums). Non-guaranteed rate of return is around 4% right now, guaranteed is only 3% currently. I like to overfund universal plans for people with preferred/super preferred ratings that can include educational funds. Basically after about 5 years a UL plan can be used as a savings account that generates over 3% interest. You can put money in or take money out as long as you stay below M.E.C (modified endowment contract) standards.
I'll stop for now cliff notes version is there is a reason over 90% of America's wealthy have whole life policies on themselves. I sell mainly term to young couples that need to focus on maxing out their 401(k)s, but Universal Life can be an excellent tool as a fixed vehicle to support one's retirement plan. We certainly didn't have any clients lose 30-50% of their retirement in our products over the last 5 years.
The investment you put in will never equal the amount it pays out. If someone were to die in the first 10-20 years it is actually a far greater investment than any mutual fund, or guaranteed return. Once the policy matures the cash value won't show the same growth a fixed investment vehicle (such as an annuity would produce), but the difference in the two is covered by the death benefit.
There are different types of whole life. One has an accumulated death benefit, so as the earlier poster mentioned, if the policy is for 150k and it has a 100k cash value at death you would get the 250k total (tax free) (Paid up additions is what is referred to as). The cheaper form of whole life only pays a level death benefit and you forfeit the cash value, but it keeps lower premiums.
I usually sell a lot of Universal life policies. I like the variable aspect of them (you can increase or decrease your premiums). Non-guaranteed rate of return is around 4% right now, guaranteed is only 3% currently. I like to overfund universal plans for people with preferred/super preferred ratings that can include educational funds. Basically after about 5 years a UL plan can be used as a savings account that generates over 3% interest. You can put money in or take money out as long as you stay below M.E.C (modified endowment contract) standards.
I'll stop for now cliff notes version is there is a reason over 90% of America's wealthy have whole life policies on themselves. I sell mainly term to young couples that need to focus on maxing out their 401(k)s, but Universal Life can be an excellent tool as a fixed vehicle to support one's retirement plan. We certainly didn't have any clients lose 30-50% of their retirement in our products over the last 5 years.
This post was edited on 12/19/09 at 4:25 pm
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