Considering a Whole Life Policy

[VolAgent]

I did discuss the waiver of premium for disability and plan on including that. Is there any reason why 100k would pay out a better dividend rate than 75k? Are dividends scaled on the policy value (a diff rate for 50k-100k, 100k-200k, etc etc) ?

Generally yes. I'm no actuary, but I believe it has to do with lower costs to the company as the policy gets larger. Since it costs less to issue the policy, they can pass it along in lower cost per thousand and higher dividends.

It really doesn't happen with whole life, but I've seen $1 million dollar policies be cheaper than $900,000 policies when it comes to term.

But definitely get the wavier of premium, IMO its one of the best riders out there. Keeps your policy going when you need it most. Both Ohio National and Mass Mutual will turn your term policy into a par-WL at the end of the level period. Your insurance never goes away and it builds cash value, which you may need to replace retirement income you couldn't save up for. I'm sure more companies than just those two will do it, but they come to mind.

 

[STIBROKER]

Investment / savings. Not to cover future debts.

there are better investments........

 

[Freewheelin CPA]

there are better investments........

Well obviously... but I want the life insurance side of it as well. I do have a 401k & Roth IRA.

 

[VolAgent]

there are better investments........

You tell me something that does better, without risk to principal.

 

[STIBROKER]

You tell me something that does better, without risk to principal.

yes.........

 

[VolAgent]

yes.........

Let's hear it.

 

[STIBROKER]

Well obviously... but I want the life insurance side of it as well. I do have a 401k & Roth IRA.

then buy life insurance for life insurance......30 year rop or a GRT UL......
- - - - - - - - - - - - - - - - - -

Let's hear it.

IRA's and annuity's......

 

[briko3]

You've gotten some good advice here. I personally would get as much of the WL with waiver that $75 would buy and then use the other $25 to buy as much 20 year term with waiver as I could get for that amount. That way you'll have a good mix of WL and convertible term. (Make sure the term is convertible to WL and that it is convertible for the entire 20 years...make sure to see it in writing) Some companies only allow conversions for part of the term and some don't have WL to convert to.

Always begin with the end in mind. You're probably going to end up with at least a wife (even if you might not think so) and the term is going to be there if that happens. If not, you'll never have to convert it and it will stay at $25. Cheap "insurance" just in case.

Good luck and have fun. BTW, in my opinion, NWM is overpriced for what you get and there's no guarantee that dividends will be what they say they will be. Just keep that in mind when planning.

 

[dgoldenz]

What makes theirs so much superior?

A few reasons:

• Definition of disability, especially if you didn't opt for the true own occ definition. Guardian's standard policy has true own occ definition.
• No time/duties loss requirement for partial disability, only 15% loss required, dollar-for-dollar benefit for first 12 months
• Recovery benefit for full benefit period instead of only 12 months. Very important benefit for a CPA that might be self-employed at some point with a book of clients to service.
• 5-year waiver of elimination period after recovering from disability
• 6-month waiver of premium after recovering from disability
• Loss does not need to be irrecoverable on presumptive disability
• Built-in capital sum benefit
• COLA adjustment is guaranteed minimum 3% compounded instead of CPI-tied
• COLA adjustments stay on the policy after recovery at no charge. NWM resets the benefit to the original amount after recovery.
• Lifetime coverage available
• Retirement contribution protection available

Your group benefits are probably sorely lacking compared to an individual policy. I'd look at getting one single policy with the best coverage (read: with Guardian) for the full benefit amount and max out your future increase options. If you're making $75k now, $2400/mo isn't going to get you very far when you're making $150k or $250k in the future. DI coverage is way more important to your future than whole life. Don't skimp on it.


Edit - I attached a sample quote to show you what a full-benefit ($4000/month) Guardian policy costs with the riders included. I'd say your $75/mo is much better off put into that than WL....just my opinion.

 

[FloridaFinancial]

he sells it