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re: Life Insurance Question
Posted on 12/8/17 at 11:46 pm to lsutgrfan10
Posted on 12/8/17 at 11:46 pm to lsutgrfan10
So this is a 27 year term policy? The agent at Select Quote said they had no terms go past 20 years. In 5 years or so, I could try for another 20.
Early spring I bought a 20 year level-premium term, age 57, $700k for just over $2500 per year. I can continue at the end of the 20 years as follows: first year (year 21) is $10,000 per year, then $12,100, then $14,900 . . .
Wife will probably be taking me hunting rather than pay the $10k.
Early spring I bought a 20 year level-premium term, age 57, $700k for just over $2500 per year. I can continue at the end of the 20 years as follows: first year (year 21) is $10,000 per year, then $12,100, then $14,900 . . .
Wife will probably be taking me hunting rather than pay the $10k.
0
Posted on 12/9/17 at 12:48 am to DCtiger1
quote:
For reference, see this 250k whole life illustration. 30 yr old male by age 65 would have a death benefit of 329,001. notice how if dividends aren't touched, they accumulate at 3.6% interest. the interest on this illustration is extremely conservative btw. Also note that the premium NEVER changes.
It is a non-guaranteed illustration, not typical returns. Unlike mutual funds, or other equity investments you will never find or get the an agent to show you actual past performance data of these policies. For good reason, even with taxation most any other investment will outperform these policy over the long term. My ex-wife was a insurance agent, I heard the same pitch over and over for a decade.
This post was edited on 12/9/17 at 12:51 am
Posted on 12/9/17 at 7:42 am to EA6B
3.6% is conservative returns. What’s the best interest rate you can get guaranteed? Life insurance isn’t an investment. So funny how people will protect their home and their car, but don’t want to protect their biggest asset which is their future income.
You and your Dave Ramsey brethren make a critical mistake in the fact that the average American isn’t going to take the money they could put towards whole life and invest somewhere else. They’re going to go spend it.
You and your Dave Ramsey brethren make a critical mistake in the fact that the average American isn’t going to take the money they could put towards whole life and invest somewhere else. They’re going to go spend it.
Posted on 12/9/17 at 9:29 am to lsutgrfan10
quote:
Apparently my Dad has an Annual Renewable Term Policy.
So the premiums will rise as he ages.
quote:
DEFINITION of 'Annual Renewable Term (ART) Insurance' A form of term life insurance that offers a guarantee of future insurability for a set period of years, although premiums are paid every year on the basis of a one-year contract. As such, the premiums will rise over time as the insured person ages. This type of insurance is designed for short-term insurance needs.
Investopedia
Posted on 12/9/17 at 10:48 am to YaDigg11
quote:
First big question is this Term or Whole life. Also if you pay the premiums you should have him transfer the policy to you so you can be the owner. That would insure that you have all the say in who the beneficiaries are and that you are guranteed the money.
Great Advice
Posted on 12/9/17 at 2:00 pm to DCtiger1
quote:
3.6% is conservative returns. What’s the best interest rate you can get guaranteed? Life insurance isn’t an investment. So funny how people will protect their home and their car, but don’t want to protect their biggest asset which is their future income.
Your insurance return is not guaranteed, it says so at the top of the of illustration you posted. I can post the historical returns for any mutual fund, or stock that has ever existed, if these products are such a great thing why wont the insurance companies show us real past performance data instead of a "illustration" literally created out of thin air?
When I was working I always protected my future income, it was called long term disability insurance.
How will the average American that is not going to invest their money for the future going to somehow develop the discipline to make the premium payments on these policies? Give us the default rate on payments into these polices, how many that are written still exist 40 years later?
Posted on 12/9/17 at 2:31 pm to EA6B
While you're correct that the returns aren't guaranteed, they're being projected at historically low assumptions. If the dividend rate was being projected at 6%, I'd support your argument. 3.6% for a strong mutual company is a silly target. They'll likely exceed the illustrated performance over a 30 year period.
Posted on 12/9/17 at 2:42 pm to EA6B
quote:
When I was working I always protected my future income, it was called long term disability insurance.
And what happens to your future income if you die? With waiver of premium, the whole life will self fund if you become disabled.
Whole life is a great option because it’s permanent and it has living benefits. In a pinch you can withdraw your dividends or borrow from the cash value in a day or two.
Nothing is guaranteed, but my life insurance company has NEVER missed a dividend payment. If you can’t see the value of having that circle of protection for your family that will never increase and can be paid up by age 65, then that’s fine. Don’t shite on permanent insurance because it’s an amazing product that benefits millions of people.
Posted on 12/9/17 at 4:08 pm to DCtiger1
quote:
Nothing is guaranteed, but my life insurance company has NEVER missed a dividend payment. If you can’t see the value of having that circle of protection for your family that will never increase and can be paid up by age 65, then that’s fine. Don’t shite on permanent insurance because it’s an amazing product that benefits millions of people.
You asked the question, "What’s the best interest rate you can get guaranteed?"
quote:
Don’t shite on permanent insurance because it’s an amazing product that benefits millions of people.
Then show me the benefit, back up the benefit with actual data not made up hypotheticals.
Here are a couple of simple questions that not a single insurance salesman will answer for me.
.
What percentage of the policies written by your company actually reach the paid up status?
What was the actual annualized return after fees and expenses for this type of policy over the last 5, 10, 20, 30 years?
These companies have not missed a dividend payment in 113 years, and as you can see they don't hide actual performance numbers. I do see the value in doing that.
This post was edited on 12/9/17 at 4:16 pm
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