- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
1
Posted on 4/25/20 at 11:29 pm to wasteland
quote:
What does that have to do with Dave Ramsey?
Not having a insurance license doesn’t disqualify a person from giving sound advice on insurance any more than having a license means that person will give sound unbiased advice.
Posted on 4/26/20 at 7:03 am to EA6B
quote:I find it's very common that people who have insurance licenses give very bad advice. I wonder why that is.
Not having a insurance license doesn’t disqualify a person from giving sound advice on insurance any more than having a license means that person will give sound unbiased advice.
Posted on 4/26/20 at 8:09 am to Limitlesstigers
I have a few family members in the insurance business. In my opinion, you need to make over $250K before whole life should even come up.
Also, its not an investment. Sure, you can have "some" returns", but if you are looking for an investment, it isn't a good one.
Back to the 1st point, it comes onto the radar for tax purposes.
I am sure I am missing other points, but that is the down and dirty.
Also, its not an investment. Sure, you can have "some" returns", but if you are looking for an investment, it isn't a good one.
Back to the 1st point, it comes onto the radar for tax purposes.
I am sure I am missing other points, but that is the down and dirty.
Posted on 4/26/20 at 8:41 am to Limitlesstigers
Go to White Coat Investor forum - Debunking the Myths of Whole Life Insurance
This is a seven part series that will inform you.
P.S. I'll bet your "friend" is a Northwestern Mutual agent (salesman).
This is a seven part series that will inform you.
P.S. I'll bet your "friend" is a Northwestern Mutual agent (salesman).
Posted on 4/26/20 at 8:48 am to BZ504
quote:
Dave Ramsey will tell you to buy term and invest the difference that you would pay for whole life. Says whole life is trash.
Dave also says not to apply for PPP or EIDL loans from the SBA, even though they can be forgiven, really lost respect for him on that one, he is letting his hatred of the government spill into his advice which will really hurt his listeners
Posted on 4/26/20 at 9:17 am to Limitlesstigers
About the only time you won't to better elsewhere is if you are going to put probably hundreds of thousands front-loaded into a policy where your heirs are going to get a benefit above the current estate tax exemption. It is $11,580,000 currently. If your estate plan has you, a single parent, trying to pass a single kid more than that sum, there are some arguments for whole life. Of course, if you're married or have multiple children, multiply the exemptions accordingly. My understanding is that the beneficiary's benefit isn't taxable, so there's a little loophole there. This is the one real argument for whole life that I've not been able to really see a downside in. Because if you're talking about those sorts of numbers, in an estate plan, you can afford for your own ROI to be low and uncorrelated with everything for the boost on return for the following generation. It doesn't really offer much to the investor himself.
I would tell him that, "infinite banking" is just a tax-free but not interest-free loan.
Other examples of tax free loans that charge interest are mortgages, car loans, payday loans, personal unsecured loans, other personal secured loans, credit card debt, student loans...
I don't understand why borrowing money with interest against a low-yield investment is more attractive.
I would tell him that, "infinite banking" is just a tax-free but not interest-free loan.
Other examples of tax free loans that charge interest are mortgages, car loans, payday loans, personal unsecured loans, other personal secured loans, credit card debt, student loans...
I don't understand why borrowing money with interest against a low-yield investment is more attractive.
Posted on 4/26/20 at 8:34 pm to Limitlesstigers
Incorrect, he is not your friend is he is trying to sell you a whole life policy. Maybe he can help you with a timeshare or a reverse mortgage or an annuity too.
Posted on 4/26/20 at 8:46 pm to iknowmorethanyou
quote:
What company?
I got Northwestern Mutual at 2:1
Primercia at 3:5
Rest of the field is 10:1
Posted on 4/26/20 at 9:01 pm to Limitlesstigers
Never buy whole life. If your friend is a new agent, the odds are he will fail in the insurance racket and move on to another company or move onto something else and you will be stuck with the policy.
Posted on 4/26/20 at 9:35 pm to FlyingTiger1955
What about variable life insurance? Is it just as bad as whole or basically the same?
Posted on 4/26/20 at 9:42 pm to Limitlesstigers
I knew before reading that the "friend" trying to convince you to buy was also the individual doing the selling.
Just say no. I would also tell him that the next time he tries to take advantage of your friendship, he will be unfriended.
Just say no. I would also tell him that the next time he tries to take advantage of your friendship, he will be unfriended.
Posted on 4/26/20 at 10:28 pm to Golfer
quote:
I got Northwestern Mutual at 2:1
Primercia at 3:5
Rest of the field is 10:1
Bet the house on Northwestern Mutual
Posted on 4/26/20 at 11:44 pm to TigerDeBaiter
quote:
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.
Or from potential litigation. There are a few reasons for a few people to have them.
Posted on 4/27/20 at 3:48 am to Limitlesstigers
Whole life works in some situations. I have a WL policy that my dad started for me back in the late 70s. The premium is only $1,000 a year so I keep it. Provides for a nice LOC to draw from if needed.
Posted on 4/27/20 at 8:30 am to Limitlesstigers
quote:
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?
I have a whole life paid-up 10 year policy... the internal rate of return is a little more than 3.5% (tax deferred), which means a taxable investment vehicle would need to get over 4.5% for it to make sense for me due to tax brackets.
I also have BND (Vanguard Total Bond Market ETF). The inception-to-date annualized return is 4.37%.
Point here is... a great Whole Life policy with a great company is basically like buying bond funds with slightly less return but with a tax-free death benefit, tax-deferred annual returns, and no volatility.
Should you put all your money into Whole Life? No. Same answer if you asked, "Should I put all my money into XYZ?"
You need exposure to equities. Take advantage of 401k or Roth IRAs (if your income is low enough to qualify). If you have extra cash flow after taking advantage of those retirements accounts and you need more life insurance, then Whole Life can be sweet.
But, all these folks saying Whole Life sucks don't really understand it's value.
With whole life, you can think of it as your bond (or Fixed Income) portion of your asset allocation but with tax benefits and creditor protection (in some states) and hedges against the unlikelihood of you dying early.
To the trolls to follow, no, I am not an insurance agent.
Posted on 4/27/20 at 8:48 am to Limitlesstigers
There is something to be said for everyone to have a small (100K or less) amount of whole life insurance... ESPECIALLY if it was purchased when you are very young (under age 25... as a kid is even better). Essentially enough money to put you in the ground and pay off some debts. The term won't ever expire, so as long as you pay, it will always be there. Many people become uninsurable (or only insurable at high costs, even for term), so having something that is very cheap and will never expire as a bedrock is a good idea... but again... you have to get it as a kid or very young.
Beyond that...
Any case for more than 100K of whole, or any case where whole is argued as an investment, or the idea of infinite banking, is completely inappropriate for at least 95% of the population.
The costs are very high, and the growth of your cash value is a fairly low rate.
If you have high cash flow, already max out 401Ks, and are needing a place to put cash on a tax-deferred basis, it can potentially work.
The infinite banking concept only makes sense, if you have a long time horizon and can put in large sums of money. Put the money in too fast, and you MEC. Don't put enough money in, and it's not work it.
By enough money, I mean to the point where the cash you are borrowing against value is like 20 percent or less of value.
Beyond that...
Any case for more than 100K of whole, or any case where whole is argued as an investment, or the idea of infinite banking, is completely inappropriate for at least 95% of the population.
The costs are very high, and the growth of your cash value is a fairly low rate.
If you have high cash flow, already max out 401Ks, and are needing a place to put cash on a tax-deferred basis, it can potentially work.
The infinite banking concept only makes sense, if you have a long time horizon and can put in large sums of money. Put the money in too fast, and you MEC. Don't put enough money in, and it's not work it.
By enough money, I mean to the point where the cash you are borrowing against value is like 20 percent or less of value.
This post was edited on 4/27/20 at 8:57 am
Posted on 4/27/20 at 1:23 pm to LSUFanHouston
I am now retired from the business. I usually recommended for the average client something along the lines of a small whole life 20 year paid up policy from a dividend paying company with a large term rider(convertible if desired). As a rough example, 25 year old male will pay around $25 or so for the wl portion. 20 year premium will be $6000. At the end of 20 years he has $25000 paid up ins. The dividends it has earned and will continue to earn should be set up to buy paid up additional ins. If he lives until his 80's, it should be much more than his original amount. At no time should this be sold as an alternative to a steady investment in equities, funds, or other things. If he should die after issue(we all will), the last expenses will be covered by this policy with the excess going to his beneficiaries. So $6000 yields a minimum of $25000 if paid for 20 years. He has the option of cashing in at a later date if he so desires. Taxes will be due on the distribution minus premiums paid and accumulated dividend value. Death proceeds are not taxable(subject to estate limits). This works for many people. Sadly, many will buy term and fail to invest the rest as most suggest. This will not apply to most who frequent this site. It does sadly apply to millions of Americans who can't cover a $500 emergency.
Posted on 4/27/20 at 2:03 pm to Limitlesstigers
Makes it easier when you know which of your friends have no clue what they are talking about. I have friends like that.
Page 2 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News