[ARCHIVED THREAD] - Whole Life Insurance (Page 1 of 2)
Posted: 4/12/2013 10:41:29 AM EDT
|
Does anybody here have any experience with whole life insurance policies?
The wife and I have $5k we are ready to dump into our retirement funds. At this point, we have the option of putting it into a Roth IRA, or starting up a whole life insurance policy. Any whole life policy we started would be through a mutual company. At first we were going to just put all the money into the IRA for the 2012 fiscal year, but we were counseled to consider the whole life policy as an alternative. I trust the people giving us advice to not screw us over or anything like that, but on doing some independent research, I've read so many negative things about whole life insurance policies, that I'm a bit wary. What say you hive? Any experience with whole life insurance policies? And yes - I know I am crazy for asking for legitimate financial advice from GD... but here we are. 
|
|
I am a life insurance underwriter, put it into the Roth. 5K wont buy you much if you looking for a paid up policy. If you find a policy with an annuity rider paying a decent interest rate it may be advantageous to take out a minimum face amount life and contribute the rest to the annuity. Your not getting the advantageous tax status on the Annuity Rider as opposed to the Roth, and remember your "Advisor" is an insurance agent, they will make a substantial commission and will push you to the biggest face amount they can, they don't get any kickback for higher contributions to the annuities. |
|
WL is not your best bet.. If you're wanting to invest that money into a life insurance policy, then go with a Universal Life that develops cash value (most do). Stay far far away from Whole Life and Variable Universal, as well as anything that is Indexed or Interest Sensitive. As far as straight life insurance goes.. Get Term, unless you can afford UL. Term is really only good if you die young. If you live 5 years past your Term's level period (and keep paying) you've already paid more than the policy is worth. Also, be advised that if you wish to withdraw cash from any Life Insurance policy you're going to take a huge hit from the Feds. |
|
Quoted:
Whole life is a rip off especially with what interest rates are. You would be far better off buying term insurance and investing the difference. Whole life is a racket, been there, done that. Listen to this man. Whole Life is a rip off for what you put into it. |
|
Quoted:
I am a life insurance underwriter, put it into the Roth. 5K wont buy you much if you looking for a paid up policy. If you find a policy with an annuity rider paying a decent interest rate it may be advantageous to take out a minimum face amount life and contribute the rest to the annuity. Your not getting the advantageous tax status on the Annuity Rider as opposed to the Roth, and remember your "Advisor" is an insurance agent, they will make a substantial commission and will push you to the biggest face amount they can, they don't get any kickback for higher contributions to the annuities. I believe this is something that they were talking about. My understanding is that it is a policy designed for investment and will have a guaranteed rate and pay dividends. Can you briefly explain what an Annuity Rider is? I'm not familiar with the term. |
|
Quoted: Quoted: Whole life is a rip off especially with what interest rates are. You would be far better off buying term insurance and investing the difference. Whole life is a racket, been there, done that. Listen to this man. Whole Life is a rip off for what you put into it. If you live long enough it all is a "rip off", but so is car insurance if you never are in an accident or home owners if you house never burns down. WL has it's place, especially for people that spend every nickle they make and never invest/save anything. Term is a good option while young and gets ridiculously expensive when your older. Some people need a WL policy with a small manageable premium or they just won't have anything left for their family to bury them. |
|
I skimmed the OP. I'm a life ins salesman. if I'm selling whole life, I sell life paid up at 65. Our WL's grow at 5% compounded annually. Shoot me a PM and I'll make sure you're getting a good price. Most WL companies are VERY expensive Posted Via AR15.Com Mobile |
|
I used to sell life insurance.
Whole life and universal life or any other super duper life only benifits the insurance company in the long term. In fact the longer you hold the policy, the less the risk by the insurance company. at some point you become self insured because of the higher premiums you put into the policy. With whole life you build an investment account that pays a poor rate of return. Lets say in 5 or so years you want to "borrow against your policy" for whatever, (braces for the kid, a new car, starty a small business, anything) lets say you borrow or receive funds of $10,000 on a $100,000 policy. then lets say you die 6 months later, your beneficiaries get $90,000. or $100,000 but less the borrowed amount. Borrow 25,000 get $75,000 death benifit. Oh, you can pay it back like a loan, and for the privilage you can pay the insurance co. interest in the "loan" . they win either way. Keep in mind you are paying approximately 20-50% higher premiums for whole life vs term life. Trust me, buy term, get the entire death benifit, plus invest the savings in premium and in true ARFCOM fashion, your beneficiaries "get both" if you die. |
|
Quoted:
Quoted:
Quoted:
Whole life is a rip off especially with what interest rates are. You would be far better off buying term insurance and investing the difference. Whole life is a racket, been there, done that. Listen to this man. Whole Life is a rip off for what you put into it. If you live long enough it all is a "rip off", but so is car insurance if you never are in an accident or home owners if you house never burns down. WL has it's place, especially for people that spend every nickle they make and never invest/save anything. Term is a good option while young and gets ridiculously expensive when your older. Some people need a WL policy with a small manageable premium or they just won't have anything left for their family to bury them. Are you basically saying that WL is better for people who don't have the discipline to save? FWIW - we are both in our mid 20s so we have a ways to go before we finish investing and retire. |
|
Quoted: Quoted: I am a life insurance underwriter, put it into the Roth. 5K wont buy you much if you looking for a paid up policy. If you find a policy with an annuity rider paying a decent interest rate it may be advantageous to take out a minimum face amount life and contribute the rest to the annuity. Your not getting the advantageous tax status on the Annuity Rider as opposed to the Roth, and remember your "Advisor" is an insurance agent, they will make a substantial commission and will push you to the biggest face amount they can, they don't get any kickback for higher contributions to the annuities. I believe this is something that they were talking about. My understanding is that it is a policy designed for investment and will have a guaranteed rate and pay dividends. Can you briefly explain what an Annuity Rider is? I'm not familiar with the term. Policies can have many types or riders such as accidental death, dismemberment, nursing care, you name it. Annuity riders are an annuity that is administered with the policy, a portion of what you pay go to cover the life premium, and a portion is contributed to the annuity. You pay in and build up the value of the annuity for 10-15 years or until age 65 it all depends on the policy and at some point you can receive monthly payments from the insurance company for a period certain, or life certain again depends on the policy. You can also set up Roth IRA's in a similar fashion with annuity payouts. |
|
Suze Orman
Specifically at :45 seconds into the video... I've never liked the idea that my life insurance money is also a retirement investment vehicle. As Suze Orman and many other reputable finanacial planners will tell you, if you want a life insurance policy, get an inexpensive term policy. If you want to save money (for retirement or something else), then invest in an IRA/ROTH IRA or other mutual fund accounts. Just my .02 cents. |
|
Quoted:
I used to sell life insurance. Whole life and universal life or any other super duper life only benifits the insurance company in the long term. In fact the longer you hold the policy, the less the risk by the insurance company. at some point you become self insured because of the higher premiums you put into the policy. With whole life you build an investment account that pays a poor rate of return. Lets say in 5 or so years you want to "borrow against your policy" for whatever, (braces for the kid, a new car, starty a small business, anything) lets say you borrow or receive funds of $10,000 on a $100,000 policy. then lets say you die 6 months later, your beneficiaries get $90,000. or $100,000 but less the borrowed amount. Borrow 25,000 get $75,000 death benifit. Oh, you can pay it back like a loan, and for the privilage you can pay the insurance co. interest in the "loan" . they win either way. Keep in mind you are paying approximately 20-50% higher premiums for whole life vs term life. Trust me, buy term, get the entire death benifit, plus invest the savings in premium and in true ARFCOM fashion, your beneficiaries "get both" if you die. How does this work with regards to whole life policies with annuities attached to them? You pay $X,XXX amount into the policy every year. Y% goes to the death benefit and then the other Z% is put into an annuity and invest on your behalf (minus fees of course). So if I start with this policy when I am 25 and pay into it for 40 years then at some point the Y% has already covered the entire death benefit and I'm just making a poor investment? Is that what you're saying? |
|
Quoted: Whole life can be a great tool. Consult a professional with credentials not GD about financial advice. You sound like someone who sells whole life insurance. Whole life is the bastard stepchild of a poorly performing investment and a sub-par life insurance policy. |
|
If you need Ins go with Term. If you have no kids then ask yourself if you really need any life Ins.
If your worried about caring for your wife should you kick it do not fret as if she is even remotely attractive she will find another. Oh and the term rates quoted on TV are BS in my experience. If your weigh an ounce over what their height/weight chart says you have to pay a higher rate. Their charts are BS! |
|
Quoted:
Whole life is about the worst investment possible. Feed your IRA/Roth either in no load mutual funds or individual stocks. You'll thank me when you get older. You have no clue what you are talking about. I sell plenty of whole life as a State Farm agent, and there are PLENTY of times where whole life policies are far better than traditional investments. For one, people with high net income who would normally mech out a roth IRA can set up a whole life to essentially be a super charged RothIRA. They can dump as much money into them as they want without worrying about it mech-ing. |
|
Quoted:
Quoted:
Whole life is about the worst investment possible. Feed your IRA/Roth either in no load mutual funds or individual stocks. You'll thank me when you get older. You have no clue what you are talking about. I sell plenty of whole life as a State Farm agent, and there are PLENTY of times where whole life policies are far better than traditional investments. For one, people with high net income who would normally mech out a roth IRA can set up a whole life to essentially be a super charged RothIRA. They can dump as much money into them as they want without worrying about it mech-ing. That is interesting to hear you say. We are hardly high earners. I max my 401k at work, but we only have this one Roth IRA, and are deciding if we should max it out for the year or do the whole life. Are you saying that a whole life policy is really only useful once you have maxed out your Roth(s)? |
|
Quoted:
Whole life can be a great tool. Consult a professional with credentials not GD about financial advice. Bullshit. Tell me one good use for it. The fees are high, the returns are low, when you die they keep your built up cash value. It sucks all the way around. The only people that recommend it are the ones who sell it. Term is all you need and here is why. Buy 20-30 yr depending on you needs. Buy the term long enough to cover you until your kids are grown. Get about paying off all your debts including your house. If you can't accomplish this in 20-30 years you are a moron and no financial plan is going to matter anyway because you don't have the discipline to follow it. Also invest the difference in what you would pay on whole life and what term life costs you as we'll as any extra. Lets say 30 yrs from now your term expires and you croak. Your kids are grown and gone, your house is paid for, you have no debts, you have a sizeable investment portfolio I think your wife can get by. You don't need life insurance at this point. Many people buy life insurance for the wrong reasons I think. The only reason I would buy life insurance on a kid is if I could not afford the five k or so to bury them. A kid does not have income that a family needs to get by so you don't need life insurance on them. On the other other hand a father with three little kids and a stay at home mom needs life insurance because if he dies his wife and three kids are fucked. |
|
Quoted:
Quoted:
Whole life is about the worst investment possible. Feed your IRA/Roth either in no load mutual funds or individual stocks. You'll thank me when you get older. You have no clue what you are talking about. I sell plenty of whole life as a State Farm agent, and there are PLENTY of times where whole life policies are far better than traditional investments. For one, people with high net income who would normally mech out a roth IRA can set up a whole life to essentially be a super charged RothIRA. They can dump as much money into them as they want without worrying about it mech-ing. Again says the guy who sells it. I have high net income , can't do a Roth and I would not think of buying that shit. Just because you can "dump as much as you want" in something does not make it a good idea. The policies have high fees which is why the people that sell them push them so hard. |
|
Quoted:
Quoted:
Quoted:
Whole life is about the worst investment possible. Feed your IRA/Roth either in no load mutual funds or individual stocks. You'll thank me when you get older. You have no clue what you are talking about. I sell plenty of whole life as a State Farm agent, and there are PLENTY of times where whole life policies are far better than traditional investments. For one, people with high net income who would normally mech out a roth IRA can set up a whole life to essentially be a super charged RothIRA. They can dump as much money into them as they want without worrying about it mech-ing. That is interesting to hear you say. We are hardly high earners. I max my 401k at work, but we only have this one Roth IRA, and are deciding if we should max it out for the year or do the whole life. Are you saying that a whole life policy is really only useful once you have maxed out your Roth(s)? It really depends on your situation and goals, and how much you are willing to put into the policy each month. If you'd like, I could email you some whole life proposals set up for different goals and let you decide if they would work for you. Edited to add: I cannot sell you insurance unless you are in GA, so they proposals would solely be for your review. Of course any SF agent in your state could write the same proposal. There's a rule of thumb, Term insurance is less demanding on your budget in the short run, but it ends up costing you more over the years because you are left with nothing at the end and you build no cash value. Whole life policies demand more of your income, but they end up costing you far less over the years since you earn a cash value. |
|
Quoted:
Quoted:
Whole life can be a great tool. Consult a professional with credentials not GD about financial advice. Bullshit. Tell me one good use for it. The fees are high, the returns are low, when you die they keep your built up cash value. It sucks all the way around. The only people that recommend it are the ones who sell it. Term is all you need and here is why. Buy 20-30 yr depending on you needs. Buy the term long enough to cover you until your kids are grown. Get about paying off all your debts including your house. If you can't accomplish this in 20-30 years you are a moron and no financial plan is going to matter anyway because you don't have the discipline to follow it. Also invest the difference in what you would pay on whole life and what term life costs you as we'll as any extra. Lets say 30 yrs from now your term expires and you croak. Your kids are grown and gone, your house is paid for, you have no debts, you have a sizeable investment portfolio I think your wife can get by. You don't need life insurance at this point. Many people buy life insurance for the wrong reasons I think. The only reason I would buy life insurance on a kid is if I could not afford the five k or so to bury them. A kid does not have income that a family needs to get by so you don't need life insurance on them. On the other other hand a father with three little kids and a stay at home mom needs life insurance because if he dies his wife and three kids are fucked. The part in red is absolute bullshit. The cash value is added on top of the death benefit and when you die is just added to the check. Second, it does not cost you more. You are mixing up cost with demand. Term insurance over a 20 year span will actually COST you more than a whole life, but it will be less demanding on your budget on the short term/ |
|
Quoted:
Quoted:
Quoted:
Whole life is about the worst investment possible. Feed your IRA/Roth either in no load mutual funds or individual stocks. You'll thank me when you get older. You have no clue what you are talking about. I sell plenty of whole life as a State Farm agent, and there are PLENTY of times where whole life policies are far better than traditional investments. For one, people with high net income who would normally mech out a roth IRA can set up a whole life to essentially be a super charged RothIRA. They can dump as much money into them as they want without worrying about it mech-ing. Again says the guy who sells it. I have high net income , can't do a Roth and I would not think of buying that shit. Just because you can "dump as much as you want" in something does not make it a good idea. The policies have high fees which is why the people that sell them push them so hard. What fees are you talking about? If you bought a 30yr term for 200k and bought a whole life for 200 k, in 30 years you will have spent MORE money on the term than the whole - AND be left with nothing. The whole life will offset your premium with the cash value, and we can actually position it to PAY THE PREMIUM FOR YOU in a number of years. So, smart guy, tell me how you can say that term is less expensive, when I can have a whole life policy completely self sufficient in 10 years and STILL build cash value. ETA: We push them so hard because people like Glenn Beck, Dave Ramsey, and Clark Howard tell people that term is king and will fit everyone no matter what, when that couldn't be further from the truth. We have to battle the brain washed hoards who spout the same ridiculous crap that you are saying. |
|
Quoted:
Quoted:
Quoted:
Whole life can be a great tool. Consult a professional with credentials not GD about financial advice. Bullshit. Tell me one good use for it. The fees are high, the returns are low, when you die they keep your built up cash value. It sucks all the way around. The only people that recommend it are the ones who sell it. Term is all you need and here is why. Buy 20-30 yr depending on you needs. Buy the term long enough to cover you until your kids are grown. Get about paying off all your debts including your house. If you can't accomplish this in 20-30 years you are a moron and no financial plan is going to matter anyway because you don't have the discipline to follow it. Also invest the difference in what you would pay on whole life and what term life costs you as we'll as any extra. Lets say 30 yrs from now your term expires and you croak. Your kids are grown and gone, your house is paid for, you have no debts, you have a sizeable investment portfolio I think your wife can get by. You don't need life insurance at this point. Many people buy life insurance for the wrong reasons I think. The only reason I would buy life insurance on a kid is if I could not afford the five k or so to bury them. A kid does not have income that a family needs to get by so you don't need life insurance on them. On the other other hand a father with three little kids and a stay at home mom needs life insurance because if he dies his wife and three kids are fucked. The part in red is absolute bullshit. The cash value is added on top of the death benefit and when you die is just added to the check. Second, it does not cost you more. You are mixing up cost with demand. Term insurance over a 20 year span will actually COST you more than a whole life, but it will be less demanding on your budget on the short term/ Ok - Question. With a Roth, when are 59.5, you can cash it out tax free, right? At what point do you "cash out" a whole life policy? Or does it only get paid out on your death? |
|
Quoted:
Quoted:
Quoted:
Whole life can be a great tool. Consult a professional with credentials not GD about financial advice. Bullshit. Tell me one good use for it. The fees are high, the returns are low, when you die they keep your built up cash value. It sucks all the way around. The only people that recommend it are the ones who sell it. Term is all you need and here is why. Buy 20-30 yr depending on you needs. Buy the term long enough to cover you until your kids are grown. Get about paying off all your debts including your house. If you can't accomplish this in 20-30 years you are a moron and no financial plan is going to matter anyway because you don't have the discipline to follow it. Also invest the difference in what you would pay on whole life and what term life costs you as we'll as any extra. Lets say 30 yrs from now your term expires and you croak. Your kids are grown and gone, your house is paid for, you have no debts, you have a sizeable investment portfolio I think your wife can get by. You don't need life insurance at this point. Many people buy life insurance for the wrong reasons I think. The only reason I would buy life insurance on a kid is if I could not afford the five k or so to bury them. A kid does not have income that a family needs to get by so you don't need life insurance on them. On the other other hand a father with three little kids and a stay at home mom needs life insurance because if he dies his wife and three kids are fucked. The part in red is absolute bullshit. The cash value is added on top of the death benefit and when you die is just added to the check. Second, it does not cost you more. You are mixing up cost with demand. Term insurance over a 20 year span will actually COST you more than a whole life, but it will be less demanding on your budget on the short term/ There may be special whole life policies that work this way but most of them keep your money when you die and only pay the face value. Google it and read up on it if you don't believe me. And yes the fees/cost are high. Most whole life policies the first one or two years you build up zero cash value because all the money is going to fees. |
|
Quoted:
Quoted:
Quoted:
Quoted:
Whole life can be a great tool. Consult a professional with credentials not GD about financial advice. Bullshit. Tell me one good use for it. The fees are high, the returns are low, when you die they keep your built up cash value. It sucks all the way around. The only people that recommend it are the ones who sell it. Term is all you need and here is why. Buy 20-30 yr depending on you needs. Buy the term long enough to cover you until your kids are grown. Get about paying off all your debts including your house. If you can't accomplish this in 20-30 years you are a moron and no financial plan is going to matter anyway because you don't have the discipline to follow it. Also invest the difference in what you would pay on whole life and what term life costs you as we'll as any extra. Lets say 30 yrs from now your term expires and you croak. Your kids are grown and gone, your house is paid for, you have no debts, you have a sizeable investment portfolio I think your wife can get by. You don't need life insurance at this point. Many people buy life insurance for the wrong reasons I think. The only reason I would buy life insurance on a kid is if I could not afford the five k or so to bury them. A kid does not have income that a family needs to get by so you don't need life insurance on them. On the other other hand a father with three little kids and a stay at home mom needs life insurance because if he dies his wife and three kids are fucked. The part in red is absolute bullshit. The cash value is added on top of the death benefit and when you die is just added to the check. Second, it does not cost you more. You are mixing up cost with demand. Term insurance over a 20 year span will actually COST you more than a whole life, but it will be less demanding on your budget on the short term/ Ok - Question. With a Roth, when are 59.5, you can cash it out tax free, right? At what point do you "cash out" a whole life policy? Or does it only get paid out on your death? With a Roth the money you put in is tax free, but the interest is not. The interest you've earned will still be taxed. On a whole life policy, you are essentially your own bank. Let's say you have 30k in cash value built up in your policy after 35 years, and you want to help your grandchild with college. You can take out ALL of that money tax free, and you can either pay it back - or not. The cash value is yours to do with as you please. So you can pull out all 30k, and still have the other 100k in death benefit sitting there earning money. |
|
Quoted:
Quoted:
Quoted:
Quoted:
Whole life can be a great tool. Consult a professional with credentials not GD about financial advice. Bullshit. Tell me one good use for it. The fees are high, the returns are low, when you die they keep your built up cash value. It sucks all the way around. The only people that recommend it are the ones who sell it. Term is all you need and here is why. Buy 20-30 yr depending on you needs. Buy the term long enough to cover you until your kids are grown. Get about paying off all your debts including your house. If you can't accomplish this in 20-30 years you are a moron and no financial plan is going to matter anyway because you don't have the discipline to follow it. Also invest the difference in what you would pay on whole life and what term life costs you as we'll as any extra. Lets say 30 yrs from now your term expires and you croak. Your kids are grown and gone, your house is paid for, you have no debts, you have a sizeable investment portfolio I think your wife can get by. You don't need life insurance at this point. Many people buy life insurance for the wrong reasons I think. The only reason I would buy life insurance on a kid is if I could not afford the five k or so to bury them. A kid does not have income that a family needs to get by so you don't need life insurance on them. On the other other hand a father with three little kids and a stay at home mom needs life insurance because if he dies his wife and three kids are fucked. The part in red is absolute bullshit. The cash value is added on top of the death benefit and when you die is just added to the check. Second, it does not cost you more. You are mixing up cost with demand. Term insurance over a 20 year span will actually COST you more than a whole life, but it will be less demanding on your budget on the short term/ There may be special whole life policies that work this way but most of them keep your money when you die and only pay the face value. Google it and read up on it if you don't believe me. And yes the fees/cost are high. Most whole life policies the first one or two years you build up zero cash value because all the money is going to fees. This is my career, I don't have to read up on it. The insurance life insurance industry is the same pretty much everywhere. They may be select few companies who do it that way, but 99.999% of the companies do not and will not keep your cash value. I don't care what you say about fees, because I can prove you wrong over and over again. Whole life policies DEMAND MORE, but they COST LESS over a period of years. It's fact, and very easily demonstrable. |
|
Quoted:
If you bought a 30yr term for 200k and bought a whole life for 200 k, in 30 years you will have spent MORE money on the term than the whole - AND be left with nothing. The whole life will offset your premium with the cash value, and we can actually position it to PAY THE PREMIUM FOR YOU in a number of years. So, smart guy, tell me how you can say that term is less expensive, when I can have a whole life policy completely self sufficient in 10 years I don't know if I can even get a 200k term I don't know why someone would want a policy that small unless they made 20k a year. Give me a generic quote for a healthy 30 yr old male on a 500k whole life policy and we can compare. |
|
Quoted:
Quoted:
If you bought a 30yr term for 200k and bought a whole life for 200 k, in 30 years you will have spent MORE money on the term than the whole - AND be left with nothing. The whole life will offset your premium with the cash value, and we can actually position it to PAY THE PREMIUM FOR YOU in a number of years. So, smart guy, tell me how you can say that term is less expensive, when I can have a whole life policy completely self sufficient in 10 years that STILL builds cash value? I don't know if I can even get a 200k term I don't know why someone would want a policy that small unless they made 20k a year. Give me a generic quote for a healthy 30 yr old male on a 500k whole life policy and we can compare. I see your man of straw. You side stepped my question. |
|
Quoted:
Quoted:
Quoted:
Quoted:
Quoted:
Whole life can be a great tool. Consult a professional with credentials not GD about financial advice. Bullshit. Tell me one good use for it. The fees are high, the returns are low, when you die they keep your built up cash value. It sucks all the way around. The only people that recommend it are the ones who sell it. Term is all you need and here is why. Buy 20-30 yr depending on you needs. Buy the term long enough to cover you until your kids are grown. Get about paying off all your debts including your house. If you can't accomplish this in 20-30 years you are a moron and no financial plan is going to matter anyway because you don't have the discipline to follow it. Also invest the difference in what you would pay on whole life and what term life costs you as we'll as any extra. Lets say 30 yrs from now your term expires and you croak. Your kids are grown and gone, your house is paid for, you have no debts, you have a sizeable investment portfolio I think your wife can get by. You don't need life insurance at this point. Many people buy life insurance for the wrong reasons I think. The only reason I would buy life insurance on a kid is if I could not afford the five k or so to bury them. A kid does not have income that a family needs to get by so you don't need life insurance on them. On the other other hand a father with three little kids and a stay at home mom needs life insurance because if he dies his wife and three kids are fucked. The part in red is absolute bullshit. The cash value is added on top of the death benefit and when you die is just added to the check. Second, it does not cost you more. You are mixing up cost with demand. Term insurance over a 20 year span will actually COST you more than a whole life, but it will be less demanding on your budget on the short term/ Ok - Question. With a Roth, when are 59.5, you can cash it out tax free, right? At what point do you "cash out" a whole life policy? Or does it only get paid out on your death? With a Roth the money you put in is tax free, but the interest is not. The interest you've earned will still be taxed. On a whole life policy, you are essentially your own bank. Let's say you have 30k in cash value built up in your policy after 35 years, and you want to help your grandchild with college. You can take out ALL of that money tax free, and you can either pay it back - or not. The cash value is yours to do with as you please. So you can pull out all 30k, and still have the other 100k in death benefit sitting there earning money. I thought the principal contributions could be pulled out tax free at any time, but after you reached retirement age, the interest earned was also tax free??????? EDIT: http://www.fool.com/money/allaboutiras/allaboutiras06.htm Any qualified distribution from a Roth IRA is NOT included in gross income for individual tax purposes. Simple as that. In effect, a qualified distribution from a Roth IRA is tax-free... no taxes due on the principal... no taxes due on the earnings... no taxes due, period.
|
|
Quoted:
Quoted:
Quoted:
Quoted:
Quoted:
Quoted:
Whole life can be a great tool. Consult a professional with credentials not GD about financial advice. Bullshit. Tell me one good use for it. The fees are high, the returns are low, when you die they keep your built up cash value. It sucks all the way around. The only people that recommend it are the ones who sell it. Term is all you need and here is why. Buy 20-30 yr depending on you needs. Buy the term long enough to cover you until your kids are grown. Get about paying off all your debts including your house. If you can't accomplish this in 20-30 years you are a moron and no financial plan is going to matter anyway because you don't have the discipline to follow it. Also invest the difference in what you would pay on whole life and what term life costs you as we'll as any extra. Lets say 30 yrs from now your term expires and you croak. Your kids are grown and gone, your house is paid for, you have no debts, you have a sizeable investment portfolio I think your wife can get by. You don't need life insurance at this point. Many people buy life insurance for the wrong reasons I think. The only reason I would buy life insurance on a kid is if I could not afford the five k or so to bury them. A kid does not have income that a family needs to get by so you don't need life insurance on them. On the other other hand a father with three little kids and a stay at home mom needs life insurance because if he dies his wife and three kids are fucked. The part in red is absolute bullshit. The cash value is added on top of the death benefit and when you die is just added to the check. Second, it does not cost you more. You are mixing up cost with demand. Term insurance over a 20 year span will actually COST you more than a whole life, but it will be less demanding on your budget on the short term/ Ok - Question. With a Roth, when are 59.5, you can cash it out tax free, right? At what point do you "cash out" a whole life policy? Or does it only get paid out on your death? With a Roth the money you put in is tax free, but the interest is not. The interest you've earned will still be taxed. On a whole life policy, you are essentially your own bank. Let's say you have 30k in cash value built up in your policy after 35 years, and you want to help your grandchild with college. You can take out ALL of that money tax free, and you can either pay it back - or not. The cash value is yours to do with as you please. So you can pull out all 30k, and still have the other 100k in death benefit sitting there earning money. I thought the principal contributions could be pulled out tax free at any time, but after you reached retirement age, the interest earned was also tax free??????? That is exactly right. Earnings are tax free after 59 1/2 given that the seasoning period is met. I don't deal with a whole lot of people over 59.5.
|
|
Quoted:
I see your man of straw. You side stepped my question. How? What I am saying is give me a quote on a whole life policy for healthy 30 yr old male. I will get one for the same person except term. We can then compare the two and I will show you how they differ. I am not side stepping anything lets look at the numbers and compare. |
| My financial consultant keeps trying to sell me a whole life policy. I haven't caved yet, but there does seem to be some good parts to it. To me, it only makes sence as a fnancial vehicle after you have maxed out your 401k and Roth contributions. After that, it is about the only other investment vehicle where the gains are not taxed. Also, whole life allows you to lock into a policy while you are young and healthy; if you happen to get sick and lose your job, getting a term policy might not be as easy as some think. |
|
Quoted:
The part in red is absolute bullshit. The cash value is added on top of the death benefit and when you die is just added to the check. This is my career, I don't have to read up on it. The insurance life insurance industry is the same pretty much everywhere. They may be select few companies who do it that way, but 99.999% of the companies do not and will not keep your cash value. You sir are incorrect. I am not saying there are not some type of policies that let you keep your cash value and pay death benefit when you die but most do not. I will guarantee you 99.999% of whole life companies do not let you keep the cash value and pay your death benefit when you die. This is the whole premise of whole life and how they keep your rates the same over time is that their risk becomes less as you build up a cash value. This is also why if you have an outstanding loan on your cash value they subtract that from your death benefit. |
|
Quoted:
Quoted:
The part in red is absolute bullshit. The cash value is added on top of the death benefit and when you die is just added to the check. This is my career, I don't have to read up on it. The insurance life insurance industry is the same pretty much everywhere. They may be select few companies who do it that way, but 99.999% of the companies do not and will not keep your cash value. You sir are incorrect. I am not saying there are not some type of policies that let you keep your cash value and pay death benefit when you die but most do not. I will guarantee you 99.999% of whole life companies do not let you keep the cash value and pay your death benefit when you die. This is the whole premise of whole life and how they keep your rates the same over time is that their risk becomes less as you build up a cash value. This is also why if you have an outstanding loan on your cash value they subtract that from your death benefit. I don't even know where to begin. You don't seem to realize it, but there is very much wrong with pretty much everything you said above. This is my career. I spend up to 70 hours per week dealing with life insurance, and life insurance alone. Sometimes you just have to drop the act and acknowledge that there is someone out there that knows a LOT more about a partoicular subject than you do. I'm not even quite sure if you're being serious or trolling. That's how wrong you are on many points. |
|
Quoted:
If you bought a 30yr term for 200k and bought a whole life for 200 k, in 30 years you will have spent MORE money on the term than the whole - AND be left with nothing. The whole life will offset your premium with the cash value, and we can actually position it to PAY THE PREMIUM FOR YOU in a number of years. So, smart guy, tell me how you can say that term is less expensive, when I can have a whole life policy completely self sufficient in 10 years and STILL build cash value. I found a quote for a 200k term. Get me a quote on your 200k whole life that pays for it self after ten years and lets compare. |
|
Quoted:
My financial consultant keeps trying to sell me a whole life policy. I haven't caved yet, but there does seem to be some good parts to it. To me, it only makes sence as a fnancial vehicle after you have maxed out your 401k and Roth contributions. After that, it is about the only other investment vehicle where the gains are not taxed. Also, whole life allows you to lock into a policy while you are young and healthy; if you happen to get sick and lose your job, getting a term policy might not be as easy as some think. Exactly! If you lock into a whole life at 25 and you excercise your GIO option you can buy an additional 50k every 3 years - even if you are diagnosed with diabetes or AIDS. It wouldn't matter at that point. Good luck buying a term policy with diabetes. Even if you do get one you'd be paying an exorbitant amount for shit coverage. People just don't understand whole life, so they think it's a pointless product meant to make the agent money. It's laughable. |
|
Quoted:
I don't even know where to begin. You don't seem to realize it, but there is very much wrong with pretty much everything you said above. This is my career. I spend up to 70 hours per week dealing with life insurance, and life insurance alone. Sometimes you just have to drop the act and acknowledge that there is someone out there that knows a LOT more about a partoicular subject than you do. I'm not even quite sure if you're being serious or trolling. That's how wrong you are on many points. I don't claim to be an expert on it but I have read on it quite a bit. Maybe state farms pays both I don't know. I have not read every companies policy but I have read 3 or 4 of them and every single one I read keeps your cash value when you die and just pays your face value amount. Also if you had any outstanding loans on your cash value these were subtracted from the face value death benefit they pay you. AGAIN - maybe yours is not this way I am just talking about the several I have looked at. http://www.usacoverage.com/life-insurance/what-happens-to-the-cash-value-when-you-die.html http://www.financial-choices-matter.com/whole-life-insurance.html |