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I will eventually probably look into an asset protection company. Right now I really don't have much, nor will I ever. Once I finish residency though, there will be a substantial salary increase.If you are only looking for asset protection, I'd find someone who specializes in that field, not a life insurance agent....sounds like you really need a good disability insurance policy though if you don't have one already.
Some of the asset protection companies seemed a bit shady. I was looking at some of their websites. I thought I could do some of it on my own, or at least get a jump on it now. I am wondering if simply a good lawyer and financial planner and agent is good enough...do I really need to pay an asset protection company??? The lawyer, planner, and agent will cost enough! plus, I am not making that much money. probably less than you guys. Talking like I need a lawyer, planner and agent makes it sound like I am a celebrity or something.
mx
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How much can a decent disability ins cost per month? do you guys think this is something a resident should look into? I know education loans are forgiven if you die...i wonder about disability. i have to look into that. it would suck if i had to pay on a 275+k loan if i couldn't work.Direct recognition isn't so bad so long as Northwestern has a different dividend rate for policy loans (a higher one).
On a completely different note, please tell me you and your agent have talked about disability insurance--you just spent all that time and money on med school, don't chance it--and please tell me you don't have a northwestern policy. I can give you mountains of reasons why I state this.
mx
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i have a headacheThe following is a lot of stuff, but here goes...
1.) The Fee NMFN is going to charge for over funding is quite high 9% compare others in the industry Massmutual at 7.5% Guardian at 5% and NYLife at 3%.
i dont even understand this. i need to discuss this more with him. i am going to have money taken away because i put extra in??? and why is NYLife so much less? how is NYLife for some of the other things we dicuscussed so far, like Direct vs Non-direct recognition?
2.) You haven't stated, but my guess is he's recommending NMFN's adjustable comp life, which is a guaranteed paid up policy at age 90. The sooner something is guaranteed paid up the higher the premium. both Guardian and Massmutual have products that are paid up later, bringing a lower premium, meaning more over funding, which will yield higher cash values.
paid up later than age 90?? this seems like another ding against Northwestern
3.) Northwestern's waiver of premium rider (this should definitely be on your policy) has a 2 year own occupation disability definition, Guardian is 5. Meaning you can be sick or hurt and unable to practice, but still able to work doing something else and still receive benefits (in this case your policy premiums will be paid for by the insurance company).
hmmm, my head is starting to hurt. riders? so what if disability went beyond 2 or 5 yrs and you were working doing something else? can you become disable doing anything? like skiing or biking?
4.) Northwestern will charge a higher modal factor when you pay your premiums monthly than Guardian. This one won't be a huge difference, especially at this point. It translates to about something in the range of 1-2 dollars more per month as a fee to NMFN.
wtf
5.) When it comes to loan interest rates (and this is only an issue if you never plan on repaying the loan, there are times when you might I'll explain more later if you wish) Northwestern will offer either a variable rate or a permanently fixed 8% rate. Guardian stats at 8% and drops to 5% after 20 years or age 65, which ever is sooner.
hmmm, i am not sure i understand about taking a loan out and paying it back or not paying it back and the pros and cons of the ramifications involved. but this is not up to you guys to explain. maybe i can ask him.
6.) Something we haven't talked about. Both companies will offer an accelerated benefit so you can access a portion of the death benefit if you become very sick. Northerwestern will give you access if you are terminally ill only and caps the benefit at $250,000. Guardian offers the benefit for both chronic and terminal illnesses (or the loss of two acitivites of daily living--no it's not long term care insurance, but it can act as a supplement) with no cap. Of course, the viatical and life settlement guys will tell you there are other options. There are, but this one leaves you in the most control
this seems like another negative for Northwest
Both are strong, both have been around for a long time, and both have remained on the top of the financial strength lists for a long time. Northwestern is bigger, has slightly higher ratings from the crediting agencies, and likes to boast about paying the most dividends to it's policy holders out of all the companies in the industry. Guardian has been able to compete toe to toe for over 100 years, and had an amazing year last year and has maintained it's impressive financial strength this year, they also currently have a higher dividend rate, but as I and others have mentioned earlier that number is only a piece of the puzzle.
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do you know if there is any kind of benefit to having two policies with one place...like if i got disability and whole life with one place...guardian, do i get any type of better rate?Guardian also has the own-occupation definition on their disability product. One of our long-time clients bought an own-occupation disability policy from us when he was just out of med school as an OBGYN. Didn't think he'd really need it and sort of balked at the high premiums, but decided to do it. 10 months later was diagnosed with cancer. He is still alive today and doing well, but received about $150k/year on the disability policy (tax-free) for about 20 years and was still able to work in another position when he recovered to supplement that substantially.
wow, that is a good story. it does make me want to get some. what kind of monthly premium approx would one have to pay for that kind of benefit? can you be doing something like rock climbing or bungee jumping and still claim these disabilities?
mx
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you guys are convincing of the disability, but i do not know how much i can afford monthly. what kind of monthly premiums are they?I know disabilities are for older people who don't take care of themselves. I too am a relatively young person in good health (run a lot and all that jazz) but I've seen too many cases where younger people got blind sided by things they never expected, and I may not remain healthy forever. the longer I wait the more it will cost, and I may come to the day that I can't get it. Keep in mind, your income drives all that you plan to do; without it, we wouldn't be able to have the conversation we're having now.
You want to retire at 50, but could you retire tomorrow? If the answer is no, I'd strongly encourage you to take another look at disability insurance.
As far as the MEC goes, you'd likely get another policy and begin over funding that when the time came for increased contributions. You can put a Guaranteed increase option on the policy. Again this is a point when I see Northwestern lagging a bit. They limit the GIO or $150,000, Guardian will give you up to 250,000 or your current death benefit. You could alternative put a very inexpensive term rider on your policy that you'd plan to convert to whole life inaurance later. Northwestern won't offer this feature. You'd need a separate term policy to do it, which will likely cost a little bit more to do.
term rider to convert to whole life?? but i would already have whole life?
so the likely scenario is that i would have this whole life now and then open a second whole life in a couple yrs so i can over-fund it more while staying below MEC status? is this stupid to have two concurrent whole life policies? or does it happen a lot? is there any major con to this?
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do you guys know off the top of your head of some other instruments protected from judgements or bankruptcy besides whole life?DHK, I wouldn't call him an *** for that. There is a trend of doctors practicing bare because E&O is so outrageous. They hold their assets in instruments protected from judgements or bankruptcy. In most situations life insurance is protected from judgements and bankruptcy. This sounds like a smart forward thinking individual to me. The danger of a personal judgement aren't too great if assets are untouchable. O.J. Simpson had a multi-million dollar verdict against him and was still able to live a life of leisure.
To me he sounds like he is thinking right concerning insurance. There is nothing wrong with NWML or Guardian but I would prefer a non-direct recognition company if I were planning on tapping the cash.
another vote for non-direct...this was Guardian i believe
mx
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okay, i can ask himImpossible to get that type of returns in conservative debt investments that most companies invest. Now, one can project better returns, but who knows. Interesting that the IRS considers life dividends as a refund of overpriced premiums. Get other options from other advisors. Ask the agent to do a IRR on policy equity. Never viewed WL as an attractive investment choice, a good risk management tool for some folks, but I can't think of a situation where it really fits.
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no no, we do not want it to reach MECFirst off congrats on finishing up medschool. My son is 3rd year in St.Louis. This month he's obgyn-ing it.
I don't know if I would overfund the policy to MEC status (ask your agent he'll explain) because if you plan to tap this a bit, you don't want to make dividend surrenders taxable. You will also do some other things too that you can tap.
congrats to your son too. i am catching babies this month as well...
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so i guess that offsets it?Did some additional research for my own edification. NMFN has a pretty hefty annual policy fee. It has a base 60 dollar fee, and a $3 per $1000 in death benefit fee.
I did confirm that NMFN has a different dividend rate for policy loans so the direct recognition deal isn't hugely a problem.
policy fees of NMFN makes it sound like guardian is better again
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