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re: Indexed Universal Life policy. Who has done it?
Posted on 7/28/23 at 10:34 am to La Place Mike
Posted on 7/28/23 at 10:34 am to La Place Mike
I am tyring to answer and told you my answer. I will be self-insured by the time my term insurance runs out. The death benefit of a WL policy will not be needed in that situation to provide for my family/inheritance. When I compared my cost of buying term insurance plus investing my excess, I end up with a balance that is approcimately 40% greater than what the whole life benefit would be in the same stage of like.
The biggest risk I take in this is two-fold. ONe is that I have a drastic change in income that makes me not self-insured at my projected age. If that happens, I would likely also not be able to afford my whole life premiums (multiple thousand per month). The second is a stark inheritance law change. This could also go both ways where whole life becomes taxable on death benefit (unlikley but possible). For me, I would rather accept the market proven return of the S&P and pay low cost term policy to get to that point. If that happens, I retire at my desired age without financial concern, and will leave my kids/interests a significant windfall in life. If I die before then, my family gets a substantial portion of money to provide for their needs during their lifetime.
Since you have been the one asking the question, please tell me the flaw in this explanation.
The biggest risk I take in this is two-fold. ONe is that I have a drastic change in income that makes me not self-insured at my projected age. If that happens, I would likely also not be able to afford my whole life premiums (multiple thousand per month). The second is a stark inheritance law change. This could also go both ways where whole life becomes taxable on death benefit (unlikley but possible). For me, I would rather accept the market proven return of the S&P and pay low cost term policy to get to that point. If that happens, I retire at my desired age without financial concern, and will leave my kids/interests a significant windfall in life. If I die before then, my family gets a substantial portion of money to provide for their needs during their lifetime.
Since you have been the one asking the question, please tell me the flaw in this explanation.
This post was edited on 7/28/23 at 10:38 am
Posted on 7/28/23 at 12:00 pm to GeauxTigers777
quote:
GeauxTigers777
Congrats on being on top of your game. The average investor doesn't have the time nor the inclination to mind their investments which are for the most part all tied up in their 401K at work.
quote:Because it's an explanation. I am looking for hard data that proves that buying term and investing the rest works that can't be disputed. To be honest, there isn't hard data that proves it doesn't work that can't be disputed. In the end, it's all speculative and depends on which side of the street you're on. I could come up with illustartions to prove it works and I could just as easlily come up with illustrations that proves it doesn't work. The thing is both illustrations can be "valid" based on the products and the rates of returns I use.
Since you have been the one asking the question, please tell me the flaw in this explanation.
I do appreciate your attempting to answer. You have to do what is right for you and your family and you have evaluated the risk involved. Most people aren't savvy enough to do that.
Something that is lost to most people on this board is they beleive that what is right for them is right for everyone else and that is not the case.
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