Are cash values subject to Medicare spend down?

[LostDollar]

Where else are you going to make 20% tax free in a minute?

Single Premium sales come down to math. Use a reasonable life expectancy and just see what you'd need to earn at the bank (money market, CD, fixed annuity, whatever) to match the number.

Live longer, the life insurance wasn't the best deal. Die sooner, a great deal.

Overall, single pay can be a great option for "dead" money. Same with ltc annuities like Forecare and Annuicare.

Caveat, not an agent.

Tell me about this 20%, how it is computed?

If you are doing what I think you are doing, I would have expected better from you.

 

[Allen Trent]

Caveat, not an agent.

Tell me about this 20%, how it is computed?

If you are doing what I think you are doing, I would have expected better from you.

I think he is merely stating 5k deposit that happens to buy $6k policy is 20% leverage 6k/5k is 1.2 (20%)

A bank CD paying a taxable 2% interest rate would take 10-15 years to grow to 6k depending on tax rate. A CD at 1% would take 20-30 years to grow to $6k

 

[Tahoe Ray]

Caveat, not an agent.

Tell me about this 20%, how it is computed?

If you are doing what I think you are doing, I would have expected better from you.

Lol...wut?

It is really simple math. It comes down to choosing a over b. You won't know if you're right because you're dead.

I do this type of analysis for a living. You're welcome to critique what I do when you've written a few thousand cases yourself and seen the outcomes.

 

[LostDollar]

Lol...wut?

It is really simple math. It comes down to choosing a over b. You won't know if you're right because you're dead.

I do this type of analysis for a living. You're welcome to critique what I do when you've written a few thousand cases yourself and seen the outcomes.

Here is a quote chain, starting with a specific post by me:

And I may be looking at too small policies, but I am not sure I see the leverage you suggest.

The leverage is in the Death Benefit. For every $10k, your beneficiary gets $20k-$30k, or more depending on age/heath. Not including the increasing DB over the years.

I think he realizes that part, but at those elevated ages & those small face policies with many carriers, $5k going in might only buy $6k face policy

Where else are you going to make 20% tax free in a minute?

Caveat, not an agent.

Tell me about this 20%, how it is computed?

If you are doing what I think you are doing, I would have expected better from you.

I was not addressing several thousand cases of life insurance you have written.

I was addressing a post that you made at the end of a specific chain of quotes relating to a post I made. In that post you suggested that I would make 20% when I purchased a SPWL policy with a premium of $10K.

That is not true.

 

[LostDollar]

The leverage is in the Death Benefit. For every $10k, your beneficiary gets $20k-$30k, or more depending on age/heath. Not including the increasing DB over the years.

I just had time to check.

Assurity will currently add around $700 additional death benefit to my $10K premium.
The cash value of the policy will not come to $10K in my lifetime.

Assurity's rates were in the range of rates of other carriers I was quoted when I was looking in early 2022. Assuming that is still the case, I think a reasonable expectation is that I would currently get $600 to $1,200 in addition to $10K premium for a death benefit from the kinds of carriers I can afford and qualify to do business with. That comes to an average of $50 to $100 per year if I should live another 10 years.

Edit
I am not suggesting that SPWL is not a useful financial tool.
I am not suggesting that you, as an agent don't sell SPWL policies with death benefit increases of $20K-$30K over premium.

Allen Trent has the description of what I said, as a senior, looking at advanced ages and smaller policies, I personally do not see, in quotes I have received in the last 2 years, the types of increases you threw out to me as expectations.

(And, as I also said in my earlier post, seniors (and others), still have to deal with health and underwriting considerations in order to purchase life insurance when it looks financially useful. Not everyone will pass.)
End edit.

 

[LostDollar]

I think he is merely stating 5k deposit that happens to buy $6k policy is 20% leverage 6k/5k is 1.2 (20%)

A bank CD paying a taxable 2% interest rate would take 10-15 years to grow to 6k depending on tax rate. A CD at 1% would take 20-30 years to grow to $6k

Thanks for working on the "middle ground".

Yes. The real return is going to be some smaller number than the percent obtained in a minute, in order to spread the difference between death benefit and premium over some life span. I lived trying to think through this stuff for a few months for my own specific financial circumstances, it was very stressful, and I don't care to do it again soon.

 

[Tahoe Ray]

In that post you suggested that I would make 20% when I purchased a SPWL policy with a premium of $10K.

That is not true.

I'm going to exit this because you don't have any idea what I'm talking about.

"You" don't make it, your balance sheet does when you die.

Several carriers have a 20% (or more) immediate increase of the premium for a death benefit for people in their 70s.

They also have several tables built in to mitigate health issues.

Just because you slept at a Holiday Inn last night doesn't mean you know all of the products on the market.

What I described certainly exists.

 

[scagnt83]

Edit
I am not suggesting that SPWL is not a useful financial tool.
I am not suggesting that you, as an agent don't sell SPWL policies with death benefit increases of $20K-$30K over premium.

Allen Trent has the description of what I said, as a senior, looking at advanced ages and smaller policies, I personally do not see, in quotes I have received in the last 2 years, the types of increases you threw out to me as expectations.

Single Premium Life Insurance certainly has the ability to have 2x-3x premium in the DB. It might not be immediate. And it certainly varies from carrier to carrier and between policy types. But it exists.

You own a single policy. Just because your policy does not do it, does not mean others do not exist that do.

What would it benefit me to make a claim that would just piss off a client? Or you think I am just trying to prove you wrong? I dont get it.

When you spend 16 years selling life insurance you can get back to me about what does and does not exist on the life insurance market.

If you dont want to believe any of the experts who have told you that you are wrong... well... there is a reason you are stuck with a policy you are unhappy with

 

[Newby]

Single premium life policies can vary by state also. Some states like Kentucky have rules that the companies do not work well with. Oxford will pay less on their single premium in Kentucky than they pay in other states.

One company I sold a lot of single premium with put all the premium in a savings account except $1 in the life policy for the first month. Then they paid additional premium into the life policy each month over 10 years until it was fully funded. They only did it this way in Kentucky.

 

[LostDollar]

Leverage might depend on carrier & age & you certainly could be right on small face simplified issue type policies & carriers.

MEC is a non issue for 99% of people over age 59 1/2 making a new purchase. A NQ annuity is already taxed exactly like a MEC during lifetime but doesn't get the benefit of tax free death benefit like MEC life insurance.

I guess I am in the 1% then. I will not look again at a SPWL for myself, and would do so only very, very reluctantly for others. There are several reasons for this, but the MEC issues you raised in other threads are a significant part of those concerns and I appreciate you taking the time to raise them.