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Friend is trying to convince me to buy whole life.
Posted on 4/25/20 at 2:04 pm
Posted on 4/25/20 at 2:04 pm
He is trying to sell me whole life and keeps talking about "infinite banking." I know it's bs but what are some good stats I can throw at him?
21
Posted on 4/25/20 at 2:08 pm to Limitlesstigers
A friend, huh? Well, no need to go out and make any enemies.
Posted on 4/25/20 at 2:10 pm to Limitlesstigers
Do you have hundred of thousands in excess dollars that you are trying to tax shelter? If not, you don’t need it.
Get a term policy.
Get a term policy.
Posted on 4/25/20 at 2:13 pm to Limitlesstigers
He's not your friend.
Posted on 4/25/20 at 2:26 pm to Limitlesstigers
-- The actual insurance policy portion is higher than term life
-- You must build up money in the account at a lower savings rate than you can get anywhere else
-- You borrow money against your own money and then pay interest back to someone else
-- Insurance agent ("friend") selling you the policy gets his cut of your money in large chunks, much faster than you accumulate cash in the policy
However, it's very good if someone absolutely sucks at saving any kind of money, and they are willing to pay ridiculous amounts out of pocket for the privilege of borrowing or cashing out a small portion later.
What's not to love?
-- You must build up money in the account at a lower savings rate than you can get anywhere else
-- You borrow money against your own money and then pay interest back to someone else
-- Insurance agent ("friend") selling you the policy gets his cut of your money in large chunks, much faster than you accumulate cash in the policy
However, it's very good if someone absolutely sucks at saving any kind of money, and they are willing to pay ridiculous amounts out of pocket for the privilege of borrowing or cashing out a small portion later.
What's not to love?
Posted on 4/25/20 at 2:26 pm to Limitlesstigers
What company?
Posted on 4/25/20 at 2:27 pm to Limitlesstigers
quote:
He is trying to sell me whole life and keeps talking about "infinite banking."
go watch the youtube videos on it. see how much info they leave out like what you can do with a solo401k etc. I'd avoid it like the plague.
now if he said velocity banking then i would say that is good and it works. If speed equity is a route you need or want to go. It definitley works. you save tons of amortized interest versus simple interest using a liquid PLOC or liquid HELOC to pay off a illiquid mortgage. If that is a route you want to go.
Posted on 4/25/20 at 2:30 pm to Newgene
quote:
The actual insurance policy portion is higher than term life
-- You must build up money in the account at a lower savings rate than you can get anywhere else
-- You borrow money against your own money and then pay interest back to someone else
yeah at least with a solo401k you pay interest to YOURSELF. Thus giving you an even bigger contribution all legally. nobody getting a cut.
Posted on 4/25/20 at 3:30 pm to Limitlesstigers
Can you give us some of his pointers? What company is it? Did he ask you to read the book “bank on yourself?”
Did he tell you about IUL that has much more potential?
Did he tell you about IUL that has much more potential?
Posted on 4/25/20 at 3:35 pm to Limitlesstigers
quote:
Friend is trying to convince me to buy whole life.
Not the kind of friend you need. Whole life is terrible.
Posted on 4/25/20 at 3:47 pm to kywildcatfanone
Terrible unless it’s the correct solution.
Posted on 4/25/20 at 3:50 pm to kywildcatfanone
quote:
Whole life is terrible.
yeah i mean worst case scenario you can just get term and roll/convert into whole later if you feel you need to.
but yeah i would never buy whole now when you can invest instead. just get term for now.
quote:
Max out contributions to your tax-advantaged accounts and consider other investment vehicles before you buy permanent life insurance as a savings builder. Don’t buy permanent life insurance unless you can stick with it for the long haul. Generally it takes many years for the cash value to build substantially, and you pay fees for cashing out the policy during the “surrender charge period.” That period lasts years and varies depending on the policy.
Posted on 4/25/20 at 5:05 pm to Limitlesstigers
It's not a bad deal if you can afford it.
If you have a family go for it, you never know what will happen and you don't want to leave your kids/wife broke.
An alternative is to buy term insurance and put the extra you would have paid in a 401k etc etc
Life Insurance get's a bad rap but it's actually a solid investment if done right.
If you have a family go for it, you never know what will happen and you don't want to leave your kids/wife broke.
An alternative is to buy term insurance and put the extra you would have paid in a 401k etc etc
Life Insurance get's a bad rap but it's actually a solid investment if done right.
Posted on 4/25/20 at 5:17 pm to The Torch
quote:
It's not a bad deal if you can afford it.
If you have a family go for it, you never know what will happen and you don't want to leave your kids/wife broke.
An alternative is to buy term insurance and put the extra you would have paid in a 401k etc etc
Life Insurance get's a bad rap but it's actually a solid investment if done right.
That's all an argument for life insurance in general, but I wouldn't include whole life in that recommendation. Most would agree on the term life with additional savings recommendation.
Posted on 4/25/20 at 5:34 pm to Limitlesstigers
Dave Ramsey will tell you to buy term and invest the difference that you would pay for whole life. Says whole life is trash.
Posted on 4/25/20 at 5:39 pm to BZ504
Dave Ramsey is a radio host without a single insurance or securities license
Posted on 4/25/20 at 7:02 pm to wasteland
Whole life is the right answer for a small subset of people. I'm going to go off on a limb and say that I bet it is not the best option for the OP.
Posted on 4/25/20 at 7:14 pm to wasteland
quote:
Dave Ramsey is a radio host without a single insurance or securities license
Why is it every single person I encounter with a insurance license always tries to sell me whole life without even knowing the very basics of my financial situation?
This post was edited on 4/25/20 at 7:50 pm
Posted on 4/25/20 at 10:15 pm to EA6B
Higher commissions on whole life than term
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