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Message
Anyone using a whole life insurance policy for income?
Posted on 6/8/23 at 3:25 pm
Posted on 6/8/23 at 3:25 pm
If so, do you recommend it?
3
Posted on 6/8/23 at 3:36 pm to Cycledude
No one is going to be able to make a good recommendation without more info from you. There are a lot of variables involved regarding your specific situation that are needed. Among them:
-How much is the policy for?
-Are you using it to leave money for a loved one or is this just a final expense policy for you?
-If it is a final expense policy, how much are you anticipating it costing you to be buried/cremated?
-If you are wanting to leave money for a loved one, how much?
-How much is the policy for?
-Are you using it to leave money for a loved one or is this just a final expense policy for you?
-If it is a final expense policy, how much are you anticipating it costing you to be buried/cremated?
-If you are wanting to leave money for a loved one, how much?
Posted on 6/8/23 at 3:56 pm to AUHighPlainsDrifter
I wasn’t so much asking someone to recommend one. I already have 4 whole life policies. I was asking if anyone has experience using them for income, as an investment. Don’t care if most of the death benefit gets used up, I mainly want it to generate yearly income.
Posted on 6/8/23 at 3:58 pm to Cycledude
I hate to sound like Dave Ramsey here, but how much do you pay annually for 4 whole life policies?
You don't think investing in the stock market would be a better strategy?
You don't think investing in the stock market would be a better strategy?
Posted on 6/8/23 at 4:36 pm to Cycledude
Yes. I get suckers to buy a whole life policy my company is pushing then I make income.
Posted on 6/8/23 at 4:58 pm to Cycledude
quote:
I was asking if anyone has experience using them for income, as an investment.
You could cash them out for income. Is that what you're referring to? Or are you asking if the interest that they earn makes it a good idea to use them as an investment?
Posted on 6/8/23 at 5:18 pm to AUHighPlainsDrifter
quote:
You could cash them out for income. Is that what you're referring to? Or are you asking if the interest that they earn makes it a good idea to use them as an investment
It sounds like he's talking about staggering Participating (aka dividends) whole life policies where you overfund the hell out of them and participate in the profits/dividends of the insurance company. Estate planning strategy as well but this is usually synonymous with a high networth individual, not really the average Joe.
This post was edited on 6/8/23 at 5:25 pm
Posted on 6/8/23 at 5:26 pm to Tomatocantender
When you fund the whole life policy, the insurance company invests it and pays dividends to your policy in the form of a guaranteed amount, right now about 5%. An U.I.L. Policy invests in the stock market with a guarantee above zero. You can withdraw money out tax free against the cash value if you wish but it will reduce your death benefit. The value of it all grows over time. Many wealthy people do it.
Posted on 6/8/23 at 5:32 pm to Cycledude
Okay, most people on this board are going to give you a negative opinion because they don't understand WL. Hell, most insurance agents don't understand WL. WL can be a great tool for supplementing your retirment income. The cash value can be used as a buffer asset, help absorb spending shocks, or reduce tax liabilities. The death benefit can be used to create your own pension or a pension for your spouse.
As far as recommending it yes people should compliment their portfolio with permanent life insurance.
As far as recommending it yes people should compliment their portfolio with permanent life insurance.
This post was edited on 6/8/23 at 5:35 pm
Posted on 6/8/23 at 6:33 pm to La Place Mike
quote:
WL can be a great tool for supplementing your retirment income. The cash value can be used as a buffer asset, help absorb spending shocks, or reduce tax liabilities.
For the price of WL, can’t a Roth IRA do the same?
Do you work for Northwestern Mutual?
Posted on 6/8/23 at 6:37 pm to La Place Mike
Wade Pfau. Buffer asset. Agree.
Posted on 6/8/23 at 7:52 pm to REB BEER
quote:
Do you work for Northwestern Mutual?
No.
Posted on 6/8/23 at 7:52 pm to REB BEER
quote:
Do you work for Northwestern Mutual?
No.
quote:
For the price of WL, can’t a Roth IRA do the same
Why not have both?
A roth is qualified and WL is non-qualified so you could start taking cash before 59.5 while the roth is still accumulating. Contributions are also limited with a roth as well as income limits.
This post was edited on 6/8/23 at 8:12 pm
Posted on 6/8/23 at 8:13 pm to BestBanker
quote:
Wade Pfau.
I have thought about inviting Wade and Alex Murguia to Money Talk.
This post was edited on 6/8/23 at 8:17 pm
Posted on 6/8/23 at 8:22 pm to Cycledude
Wealthy people invest in stocks, take the dividend, and never sell.
Wealthy people do not live off the income of a whole life policy my friend.
They may use a WL policy for an estate feature in their strategy but they don’t take the income.
And a Universal Indexed Life policy is not the same thing as a Whole Life policy.
Wealthy people do not live off the income of a whole life policy my friend.
They may use a WL policy for an estate feature in their strategy but they don’t take the income.
And a Universal Indexed Life policy is not the same thing as a Whole Life policy.
Posted on 6/8/23 at 8:40 pm to Shepherd88
Please disregard this post
This post was edited on 6/8/23 at 8:43 pm
Posted on 6/8/23 at 11:52 pm to Cycledude
quote:
When you fund the whole life policy, the insurance company invests it and pays dividends to your policy in the form of a guaranteed amount, right now about 5%. An U.I.L. Policy invests in the stock market with a guarantee above zero. You can withdraw money out tax free against the cash value if you wish but it will reduce your death benefit. The value of it all grows over time. Many wealthy people do it.
Holy fricking shite, the amount of blissful ignorance in this post is painful.
Posted on 6/8/23 at 11:53 pm to La Place Mike
quote:
As far as recommending it yes people should compliment their portfolio with permanent life insurance.
No. People should never mix investments with life insurance unless a guaranteed way of losing money is desired.
Posted on 6/9/23 at 7:14 am to TDsngumbo
quote:
No. People should never mix investments with life insurance unless a guaranteed way of losing money is desired.
How would you lose money? Please show your work on paper as evidence to prove your statement.
This post was edited on 6/9/23 at 7:16 am
Posted on 6/9/23 at 7:20 am to AUHighPlainsDrifter
quote:
You could cash them out for income. Is that what you're referring to?
I assume borrowing against the cash value (depleting the death benefit) is the income method being talked about. A work around for paying taxes on dividend income.
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