Re: Whole Life vs Term Insurance
Clarifying the differences between Whole Life, Universal Life, and Term Life Insurance.
Duration : 0:1:56
September 22nd, 2008 at 12:00 am
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Clarifying the differences between Whole Life, Universal Life, and Term Life Insurance.
Duration : 0:1:56
It’s too costly for …
September 24th, 2008 at 6:02 pmIt’s too costly for most people to pay for. You keep forgetting that you are selling life insurance to replace the income if there is a death of the policy holder. First, make sure your client’s family can continue to live witht he same income. Then, worry about the investments or savings. If you can do it with a cash value policy, more power to you. But, you can’t.
Bonehead! He’s …
September 24th, 2008 at 6:02 pmBonehead! He’s going to also sell them a million dollar term policy at a third of the price of your trash value policy. Stop with the nonsense.
See above. If you …
September 24th, 2008 at 6:02 pmSee above. If you want $4,340,000 at retirement instead of $243,320, then term and investing separate is better. If a person died with $15,000,000 estate, the estate taxes would be 30%. 70% of 4.34 mil is $3,038,000 which would be better than a life insurance policy DB of $2,500,000. Plus the term insurance would have probably decreased to about $700,000. Thus, $3,738,000 is much better than the whole life insurance. You are wrong.
So, tell me, who is …
September 24th, 2008 at 6:02 pmSo, tell me, who is the perfect person who deserves $24,332 instead of $434,000 at retirement with the same life insurance face amount??? I see no disadvantage to term and invest separately than any cash value policy. If you are wanting to talk about the very rich that need estate planning, then just multiply the coverage and return at retirement by 10. $2,500,000 coverage and $4,340,000 vs $2,500,000 coverage and $243,320 at retirement. Gee, I wonder what is better???
Such crap! Same …
September 24th, 2008 at 6:02 pmSuch crap! Same coverage but the CV projected at 10% is $434,000 vs. $24,332. Who cares if it was 5 days or 5 years or whatever! If you want the $24,332 be my guest. But, stupid is stupid gets. I’ll take the $434,000.
AFG,
by the way, …
AFG,
by the way, I rolled over their $520 cash value into a MetLife Primer Elite 3 annuity.
There is no reason not to replace an old policy. This person is going to have WAY more money when they go to retire than they would have had stuck with that WL crap they had before.
September 24th, 2008 at 6:02 pmwell first of all …
September 24th, 2008 at 6:02 pmwell first of all they were STUDPID enough to replace a 5 year old policy. as an insurance agent you should well know replacing an old policy is not a good idea. but i guess they were stupid and you were thinkin about what’s best for you. secondly, what do we know about our MARKET? everybody knows about investment? would you get a fixed mortgage or adjustible mortgage? 2-3 years ago those who got adjustable mortgage, they are the ones with the big F word on their front yard… FORCLOSURE
well said! there is …
September 24th, 2008 at 6:02 pmwell said! there is no good insurance or bad insurance. it all depends on how and when you take out a certain type of life insurance.
Actually, that’s …
September 24th, 2008 at 6:02 pmActually, that’s not right. You can pull out all cash tax free through the form of a loan- Basis has no impact for loans, if you surrender it- then you are correct 100k i premium and 150k CV = 50k in gain which would be taxed at ordinary income. But all in all, WL can be a great vehicle to park money into for the right people- no people living paycheck to paycheck.
It’s a great …
September 24th, 2008 at 6:02 pmIt’s a great investment. Understand that only the money you put into cash value is tax free b/c it’s after-tax money. The gain is just tax-deferred. Obviously the death benefit is tax free. The policy is awesome for multiple reasons. You can use it to pay for anything you would normally finance. And it allows you to spend down ets like a home in retirement (reverse mortgage) or an investment account. The death benefit will replace your spent equity when you die. That’s a huge plus.
thecoach17 is right …
September 24th, 2008 at 6:02 pmthecoach17 is right. If your policy was sold to you as a college funding vehicle, that’s a bad agent. However, that doesn’t mean you can’t use it that way. You might be paying interest on your loan but the policy treats that money as if it’s still in the policy so it’s earning interest. With a loan int rate of 8% and your money earning at least 4% but most likely closer to 6 or 7%, you’re getting a loan for 1% to 4% at the most! Try getting that at a bank! It’s still a great deal.
All life insurance …
September 24th, 2008 at 6:02 pmAll life insurance plans have advantages and disadvantages. A product that is perfect for you may not be perfect for your neighbor. Primerica is very limited in what it offers. Therefore, talking to an indepedent life insurance agent is crucial. There are lots of honest guys out there. For one company to boast that one insurance product is better than the rest is utterly unprofessional.
acestockbroker,
…
acestockbroker,
I just replaced a family’s WL policy. Paid almost $300/mo for their WL garbage. Each had $250,000 in coverage, and their WL investments had returned 2% in the last 5 years, the 1st 3 of which didn’t accumulate cash value. I gave them each $300,000 in coverage for $118/mo. I have them on a plan, investing the difference of $182 every month for the next 30 years, that grows to $434,000 at 10%. Their projected cash value at year 30 in their old WL policy was $24,332. Hmmmmm…
September 24th, 2008 at 6:02 pmThatphychostud, …
Thatphychostud, agreed! Suze Orman is a joke…she’s carismatic, passionate & entertaining which makes good TV, doesn’t make her a good planner or mean she gives good advice. Same as Dave Ramsey & Jim Kramer IMO.
If you liked Pirates of Manhattan, you’ll love “No Sales Man Will Call” by Lyle Manery. It’s a critical analysis of more than 10 books that promote Buy Term & Invest the Rest. Miscalulations on ‘returns’, misunderstanding on products, & contraditions of advice within the same books.
September 24th, 2008 at 6:02 pmBy hacks, I mean ” …
September 24th, 2008 at 6:02 pmBy hacks, I mean “one trick ponies” who recommend a one size fits all strategy not factoring in individual situations & do it part time. People aren’t born with financial knowledge, it’s taught through books and experience. How can anyone be good at anything they do part time & when they don’t understand the ‘big picture’ of a financial plan. Just my opinion. And if you were sold a whole life plan as a college fund then you had a bad agent…doesn’t mean whole life is bad all together.
Hacks into the …
September 24th, 2008 at 6:02 pmHacks into the industry? What? Are others who work in the finance industry born with that knowledge? I would think they had to go through training too and that when they first started, they didn’t know what they were talking about. Primerica has been around for 30 years, and the insurance is state-regulated. My wife & I were sold on whole life as a way to pay for the kids’ college. We paid $200/month & realized to pay for college actually meant taking a loan with interest. We dropped it!
I’m 26 years old, I …
September 24th, 2008 at 6:02 pmI’m 26 years old, I going to contribute 449/month on my Custom Whole life for 25 = $134,700 and I will get back $55,000/year for 20year = $1,100,000 ON TAX FREE CASH. how can this be a bad investment. ohh plus i still will have a life insurance.
I’m suprised this …
September 24th, 2008 at 6:02 pmI’m suprised this video is even legal! Perhaps whoever made it should talk about the disadvantages of Term as well…like that fact that eventually it will expire and get cancelled without the client having any options. Also, in the video it refers to Primerica revolutionizing the industry…how? By allowing part time hacks into the industry with now experience or background in financial matters? Buy term and invest the rest has been around longer than Primerica..what did they revolutionize?
Let’s say today I …
September 24th, 2008 at 6:02 pmLet’s say today I put $5000 into my Roth or $5000 into my WL policy and a year from I die in a car crash. At 12% my family will be left with $5600 from the Roth. From the WL policy my family will get $500,000. That’s a 9900% ROR. Which one looks like the better investment now?
Suze Orman? HA! …
Suze Orman? HA! hardly an expert. She’s a financial entertainer with her own best interests in mind. You lose any credibility by citing her.
Go read The Pirates of Manhattan. Learn about how mutual funds managers are the ones making all the money. Historically, these funds average below 3%. Fees and taxes of all sorts abound with mutual funds too.
September 24th, 2008 at 6:02 pmYou said it was a …
September 24th, 2008 at 6:02 pmYou said it was a safe place to invest….but its a very costly one. As for a Roth, if the mutual funds are well allocated it will provide an average growth of 10-12%. And any Roth will grow tax free!
Gee, and all this …
September 24th, 2008 at 6:02 pmGee, and all this time I thought the primary reason people got life insurance was to provide financial security to their dependents. You know it’s the death benefit that covers taxes on 401Ks/IRAs. And you can buy more death benefit in a term policy than you can in Crap Value insurance…dollar for dollar
Dude, get a clue. …
September 24th, 2008 at 6:02 pmDude, get a clue. $5.5% is great for your “safe” money. I NEVER said that WL was an alternative to a Roth and a Roth does NOT pay 10-12% - it earns what ever the investment it is invested in earns. Could be 12%, could be -35%. There is a big difference. When properly structured, any permanent policy will grow tax-deferred, provide tax-free income, and pay a tax-free benefit to your heirs.
desmoluvr, you’re …
September 24th, 2008 at 6:02 pmdesmoluvr, you’re kidding, right?! First, WL policies are NOT TAX FREE! You will pay taxes on the growth once you have exhausted the funds in the policy, that year, on ALL OF IT! Second, a GOOD WL policy pays 5.5%?? And you’re calling that good?? Gee, a ROTH IRA will pay you 10-12% with a lot less fees, and it will grow TAX FREE! Or, someone can invest in Municipal Bonds, TAX FREE without all the WL policy FEES. Not sure why you bring Primerica in this convo, but hey, whatever floats your boat!
coolmarc21, it is …
September 24th, 2008 at 6:02 pmcoolmarc21, it is true…I had a UL policy from New York Lie and it said I receive either the death benefit or the Cash Value, whichever is greater! Why not both?! When it was brought to my attention I was ed. I confronted the agent that sold me it and he said if I want both, I had to pay an extra $46. WTF!? Who would ever knowingly just choose one or the other…very deceptive in my opinion >:(