Comments on: Give Whole Life Insurance a Fair Comparison – Get Illustrations and Compare!

By: Evan

Evan — Mon, 21 Dec 2009 05:11:50 +0000

I am sure if I ran the same illustration right now, I would get a different result. Taxes are taken into account indirectly, by using a Net return.

I think you’d like my post on using a whole life product to create an income stream:

http://www.myjourneytomillions.com/articles/create-your-own-pension-using-whole-life-insurance/

You are 100% correct this is not for the guy putting $1,000/yr into his Roth IRA! But I hate those standard gems, like whole life is a worthless prodcut.

By: Evolution Of Wealth

Evolution Of Wealth — Sun, 20 Dec 2009 23:58:17 +0000

Just for fun I ran some quick numbers with a AAA rated mutual insurance company. I used the same set up as you: $115k DB, $12k/yr premium, male, 28, second best rating. At the end of year 21 it is projected to have $38,501.76 in cash value and $186,659.90 in death benefit. The key to these policies is the funding. Most insurance people don’t truly understand how to properly fund a policy.

As for the investment account, there’s a couple of huge unknowns. Such as what rate of return you’ll actually get over the 20 years. Also taxes. Why aren’t taxes taken into account? This strategy isn’t for everyone and it isn’t targeted to the guy that is trying to put $1,000 into his Roth IRA. For more advanced people it can really sing.

You forgot one more cost of term insurance, opportunity cost.

By: You�re Retired. Should You Ditch Your Life Insurance Policy? (at Forbes.com) | Even Answers Insurance Quote

Fri, 13 Nov 2009 10:40:52 +0000

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By: mzeiter

mzeiter — Mon, 02 Nov 2009 01:29:06 +0000

Thanks EVan
I place much high dividend whole life ins to dentists and small business owners
Who already have other equity planning in place
Remember it is not meant to replace other accumulation planning but only add to existing planning by oFfering all the benefits I mentioned above that u don’t get with equity investments as a stand alone.
Most of all the term I sell,with the exception of larger business term policies, are to folks who are not educated in retirement planning andwwlll say they will invest the rest but never do it
Hopefully this message comes with only few typos
From my blackberry phone. SOrry

By: Evan

Evan — Mon, 02 Nov 2009 00:56:44 +0000

Wow, that is a mouthful! Thanks for adding

By: MZeiter

MZeiter — Sun, 01 Nov 2009 21:55:06 +0000

Whole Life vs Equity investments
Facts
1.It’s given that Income Taxes will be increasing in all our lifetimes going forward.
2. Retirement planning must include safety of principal and guaranteed growth instruments.
3. Tax free distributions are golden at retirement with all the tax we will be expected to pay.
4. If you become permenantly disabled , “can you still contribute and achieve your retirement goals”? No work no income, Right?
5.What has the equity market’s contributed to American investers bucket’s from 1998 to 2009? about ZERO.

Whole life, “complimenting a sensible equity retirement investment”,will result in the following benefits:

A)as good or faster growth
B)guaranteed retirement vs non guaranteed
C)Death benefit(much higer than values vs no death benefit (only non guaranteed account)
(Remember love for family should be based on guarantees, and not end upon your death!)
D)Distributions are TAX FREE vs Taxable distributions at Marginal Tax rates of North of 40%. Wow what a chunk.
E)Upon permanent disibility(Whole life with waiver of premium) contributions continue for life(full anticipated cash accumulation and death benefit) vs Zero contribution ability(no work no income)results in very vulnerable retirement and death protection for your loved ones.
F) If equity markets fail you especially years before retirement like many have experienced…your hedge or “saving grace” will be the whole life….Not the equity.
If the market does well…woudn’t it be great to have both buckets filled…meeting your retirement goals?
In conclusion…if you love someone,not just yourself, and can understand that the words safety, guarantees, predictability are synonymous with the word Love, have a respectable, honest, and knowledgable Advisor show you how this is done.

By: Evan

Evan — Sat, 03 Oct 2009 15:48:01 +0000

The cash value is generally lower than death benefit, and disappears upon death, but the family has the higher death benefit.

I think that answers your questions.
Evan´s last blog ..Obama Wants your Tax Opinion! Are you Freaking Serious?

By: El Guapo

El Guapo — Fri, 02 Oct 2009 22:21:28 +0000

One Question. What happens to the cash value component when the insured dies ?

By: Twitted by metasparen

Twitted by metasparen — Fri, 21 Aug 2009 16:57:14 +0000

[...] This post was Twitted by metasparen [...]

By: When Applying for a Mortgage don't Forget to Calculate your Debt to Income Ratio | My Journey to Millions

Fri, 07 Aug 2009 00:32:17 +0000

[...] Obtain a loan from your Cash Value Life Insurance Policy to pay off higher minimum payment debt; or [...]