Suze Orman

[GonnaFlyNow]

Even with a lower tax rate (if you go back and actually read the math) your client would have to have a joint retirement income lower than $16k/year for the 401k to be more advantageous... And thats even using a 15% fed and your 2% state rates! Do you have many clients who plan to only live on 16k per year??? I hope not!!

What tax tables are you reading?

If you can't even understand a simple tax table, how can I expect that you understand something as complex as permanent insurance?

If you can't be honest about something as easily provable as a tax table, how do you expect me to believe what you say about a complex insurance product?

Married couples can have $67,900 of TAXABLE income (which is signifcant less than their total income) and only pay 15% income tax.

Where did you come up with $16,000 per year?

Again, if you can't even read a basic tax table, then how do you expect to be able to understand a complex insurance product?

How can you expect to be credible if you lie (or completely misunderstand) something as simple as a tax table?

I suspect that the problem is that you're not even looking at a real tax table. You're probably looking at some software that is used to sell permanent insurance.

When you base your conclusions on faulty information, your conclusions are going to be faulty as well.

Now, please start your diatribe all over again, but first go get a real tax table and read that.

 

[LGilmore]

guys, gonna fly is a troll. Every so often she comes in and stirs the pot. Your wasting your time and energy.

 

[scagnt83]

What tax tables are you reading?

If you can't even understand a simple tax table, how can I expect that you understand something as complex as permanent insurance?

If you can't be honest about something as easily provable as a tax table, how do you expect me to believe what you say about a complex insurance product?

Married couples can have $67,900 of TAXABLE income (which is signifcant less than their total income) and only pay 15% income tax.

Where did you come up with $16,000 per year?

Well, you just need to read a bit slower and maybe you wont skip over points.
First the math proves that even at 15% fed and 2% state the 401k has less after taxes. So even if i was wrong on my tax rates per income, the PI still has more $$ after tax.

I said that they would have to earn less than $16K for the 401k to be more efficient...actually i rounded down from $16,500... but that is where the breakpoint is at and it changes to 10% for joint fillings.
If you are taxed at 10% fed & 2% state, then the 401k comes out ahead if you earn the 8%

I look at the same 09' tables as hopefully everyone else does! I even carry a copy of them with me in my binder at all times... so that when some jerk says I am lying I can easily prove them wrong!

And to argue the semantics of what deductions a person may or may not have on their taxes, and what the taxable vs total income will be is a bit pathetic. This is something that is not constant at all due to tax laws and life events. And still does not change the numbers.
So take your own advice and redo your math

You are now avoiding the actual math and arguing semantics with me, plus you attack my professional credibility.... desperation....the sign of any failed attempt at logic

- - - - - - - - - - - - - - - - - -

Your wasting your time and energy.

I agree. I posted the initial numbers more for the real agents rather than for her. But after a few glasses of wine last night, somehow I was pulled into her blinded arguments. lol
But not enough agents take the time to work out the math in my opinion. Its a very powerful thing to show a client.

 

[TNMDRT]

Not only has everyone in this thread proved you wrong GonnaFlyNow, the math is now not only proving you wrong but also completely ignoring the benefits received along with the PI policy. In addition to the VERY reasonable returns based on risk level, there are a large number of valuable benefits that come along with a good PI policy.

What it comes down to is that sure, sometimes an investment portfolio will certainly outperform a PI policy. What you need to do is the actual math. What you will find is that even when the market is performing very, very well, you will typically give up somewhere between 1 and 2 percent earnings in order to also get the benefits of the PI policy. If you had any understanding of these benefits and were able to effectively communicate them to your clients, I am certain that you would all agree that PI is an excellent place to put some dollars.

I would be happy to compare my options at retirement to yours. You keep playing with your money and trying to time the market. I will keep pumping money into my insurance program and other retirement assets. I think we all know who is going to come out ahead... well all of us except apparently you. Good luck.

 

[GonnaFlyNow]

Not only has everyone in this thread proved you wrong GonnaFlyNow, the math is now not only proving you wrong but also completely ignoring the benefits received along with the PI policy. In addition to the VERY reasonable returns based on risk level, there are a large number of valuable benefits that come along with a good PI policy.

What it comes down to is that sure, sometimes an investment portfolio will certainly outperform a PI policy. What you need to do is the actual math. What you will find is that even when the market is performing very, very well, you will typically give up somewhere between 1 and 2 percent earnings in order to also get the benefits of the PI policy. If you had any understanding of these benefits and were able to effectively communicate them to your clients, I am certain that you would all agree that PI is an excellent place to put some dollars.

I would be happy to compare my options at retirement to yours. You keep playing with your money and trying to time the market. I will keep pumping money into my insurance program and other retirement assets. I think we all know who is going to come out ahead... well all of us except apparently you. Good luck.

exactly what is an insurance "program"? I guess you mean "policy", right?

Secondly, how many fee-only financial planners recommend PI?

Why is it that only commissioned sales people push pi? (sorry-correcxn--commissioned sales people, their sales mgrs, and those who sell the software commissions sales peopel use to sell pi.)

i can create a computer program to convince anyone to buy anything.

even your interest rate percentages are bogus.

can someone please show me an illustration with an interest rate of 4.5% or 5% (or whatever).

post the illustration and i'll show you that the money isn't really growing at that rate.

 

[Death Cab For Tootie]

GFN,

I just ran an illustration for a 35-year-old male with a $250k DB, payable to 65 with waiver of premium, select preferred non-tobacco. Annual Premium is $3,892.

CSV (guaranteed) at 65 - $136,353
Rate of Return - .97% per year
Tax-Equivalent yield at 25% Federal Tax Rate - 1.29%

CSV (non-guaranteed) at 65 - $253,172
Rate of Return - 4.1% per year
Tax-Equivalent Yield at 25% Federal Tax Rate - 5.47%

The non-guaranteed rates are based on historically low dividend rates. Not trying to make predictions, but for the long-term conservative part of my assets, I'll take a risk-free, tax-free, creditor-protected 4% (with a permanent death benefit too!). It winds up being a great compliment to other riskier investments (401k, stocks, etc), so that in retirement when your investments are down, you can withdraw from the WL. When things are going well, you can feel confident in withdrawing from the investments.

I hope this illustrates to you why, for people who believe in having some long-term conservative assets, WL is a great option. I hope you can prove me wrong, all I want to do is do right by my clients. If you can show me otherwise, I will need to change my practice around. However, CSV notwithstanding, you will need to prove to me why having a permanent death benefit in retirement is not a good thing.

 

[TNMDRT]

exactly what is an insurance "program"? I guess you mean "policy", right?

An insurance "program" typically consists of several policies purchased over the course of many years. It is very common for people to have many life insurance policies. People do want whole life insurance, but people cannot always afford to have the full amount of whole life insurance that they want when they purchase life insurance for the first time. This is the beauty of term life insurance. It allows people to purchase the right amount of coverage on nearly any budget. This is great for both temporary insurance needs and also for converting chunks of term to permanent when cash flow permits. Believe it or not, life insurance needs are often permanent. Shocking for you, I understand.

Secondly, how many fee-only financial planners recommend PI?

Do you have any concrete information that answers the question in favor of your view? I certainly have never collected the data to support either case, but I can tell you with absolute certainty that all of the fee-only financial planners I know and work with will absolutely recommend PI when it is suitable.

Why is it that only commissioned sales people push pi? (sorry-correcxn--commissioned sales people, their sales mgrs, and those who sell the software commissions sales peopel use to sell pi.)

As I just stated, this is completely false. I venture to guess that you are well aware that this claim is false. Anybody with any knowledge at all, let alone industry experience, wouldn't ever actually believe this.

i can create a computer program to convince anyone to buy anything.

Then perhaps your time is wasted on this forum, selling exclusively term life insurance, and gambling with your savings.

even your interest rate percentages are bogus.

I do not understand how many times you need to see this math done over and over and over for you to understand. The only thing bogus is your unfounded, uneducated assumption that permanent life insurance products are only useful for the wealthy and in estate planning purposes.

can someone please show me an illustration with an interest rate of 4.5% or 5% (or whatever).

post the illustration and i'll show you that the money isn't really growing at that rate.

I'm not sure why you seem to think that your ability to calculate returns is far superior to not only everyone else on this forum, but also everyone else in the industry. Furthermore an interest rate is not the same as a dividend rate or as the internal rate of return. If you do not know the difference that does not make us wrong or make a product poor. Just to humor you:

$1,000,000 permanent insurance
-Paid up at age 65
-Disability waiver included
-$14,324.34 annual premium
-Age 30, male, non-tobacco, excellent health
-Illustration displays 6.15% dividend rate

Age 65
-Total Paid Up Insurance=$2,451,757
-Cash Surrender Value=$1,319,388
-Annual Dividend=$41,829
-Total Premium Outlay=$501,352

Age 75
-Total Paid Up Insurance=$3,392,052
-Cash Surrender Value=$2,373,418
-Annual Dividend=$70,912
-Total Premium Outlay=$501,352

Age 85
-Total Paid Up Insurance=$4,637,238
-Cash Surrender Value=$3,843,621
-Annual Dividend=$119,394
-Total Premium Outlay=$501,352

Age 95
-Total Paid Up Insurance=$6,432,275
-Cash Surrender Value=$5,823,074
-Annual Dividend=$188,250
-Total Premium Outlay=$501,352

Go ahead and run the rates of return on the premiums. I would also love to see the total premium outlay to have the same amounts of in force death benefit at the same ages from your term insurance products. Have fun with that one.

Here's a thought... Have you ever considered that perhaps you just have not properly educated yourself on the ins and outs of permanent life insurance options, benefits, and companies? Have you ever considered that perhaps you are the one who is "drinking the kool-aid" and forcing blanket solutions to problems that need to be addressed on an individual basis? I have yet to see anyone that sells permanent life insurance say that it is the 100% best solution 100% of the time. This is a claim made exclusively by people that sell only term insurance. Who is really drinking the kool-aid here?

 

[TNMDRT]

exactly what is an insurance "program"? I guess you mean "policy", right?

An insurance "program" typically consists of several policies purchased over the course of many years. It is very common for people to have many life insurance policies. People do want whole life insurance, but people cannot always afford to have the full amount of whole life insurance that they want when they purchase life insurance for the first time. This is the beauty of term life insurance. It allows people to purchase the right amount of coverage on nearly any budget. This is great for both temporary insurance needs and also for converting chunks of term to permanent when cash flow permits. Believe it or not, life insurance needs are often permanent. Shocking for you, I understand.

Secondly, how many fee-only financial planners recommend PI?

Do you have any concrete information that answers the question in favor of your view? I certainly have never collected the data to support either case, but I can tell you with absolute certainty that all of the fee-only financial planners I know and work with will absolutely recommend PI when it is suitable.

Why is it that only commissioned sales people push pi? (sorry-correcxn--commissioned sales people, their sales mgrs, and those who sell the software commissions sales peopel use to sell pi.)

As I just stated, this is completely false. I venture to guess that you are well aware that this claim is false. Anybody with any knowledge at all, let alone industry experience, wouldn't ever actually believe this.

i can create a computer program to convince anyone to buy anything.

Then perhaps your time is wasted on this forum, selling exclusively term life insurance, and gambling with your savings.

even your interest rate percentages are bogus.

I do not understand how many times you need to see this math done over and over and over for you to understand. The only thing bogus is your unfounded, uneducated assumption that permanent life insurance products are only useful for the wealthy and in estate planning purposes.

can someone please show me an illustration with an interest rate of 4.5% or 5% (or whatever).

post the illustration and i'll show you that the money isn't really growing at that rate.

I'm not sure why you seem to think that your ability to calculate returns is far superior to not only everyone else on this forum, but also everyone else in the industry. Furthermore an interest rate is not the same as a dividend rate or as the internal rate of return. If you do not know the difference that does not make us wrong or make a product poor. Just to humor you:

$1,000,000 permanent insurance
-Paid up at age 65
-Disability waiver included
-$14,324.34 annual premium
-Age 30, male, non-tobacco, excellent health
-Illustration displays 6.15% dividend rate

Age 65
-Total Paid Up Insurance=$2,451,757
-Cash Surrender Value=$1,319,388
-Annual Dividend=$41,829
-Total Premium Outlay=$501,352

Age 75
-Total Paid Up Insurance=$3,392,052
-Cash Surrender Value=$2,373,418
-Annual Dividend=$70,912
-Total Premium Outlay=$501,352

Age 85
-Total Paid Up Insurance=$4,637,238
-Cash Surrender Value=$3,843,621
-Annual Dividend=$119,394
-Total Premium Outlay=$501,352

Age 95
-Total Paid Up Insurance=$6,432,275
-Cash Surrender Value=$5,823,074
-Annual Dividend=$188,250
-Total Premium Outlay=$501,352

 

[TNMDRT]

exactly what is an insurance "program"? I guess you mean "policy", right?

An insurance "program" typically consists of several policies purchased over the course of many years. It is very common for people to have many life insurance policies. People do want whole life insurance, but people cannot always afford to have the full amount of whole life insurance that they want when they purchase life insurance for the first time. This is the beauty of term life insurance. It allows people to purchase the right amount of coverage on nearly any budget. This is great for both temporary insurance needs and also for converting chunks of term to permanent when cash flow permits. Believe it or not, life insurance needs are often permanent. Shocking for you, I understand.

Secondly, how many fee-only financial planners recommend PI?

Do you have any concrete information that answers the question in favor of your view? I certainly have never collected the data to support either case, but I can tell you with absolute certainty that all of the fee-only financial planners I know and work with will absolutely recommend PI when it is suitable.

Why is it that only commissioned sales people push pi? (sorry-correcxn--commissioned sales people, their sales mgrs, and those who sell the software commissions sales peopel use to sell pi.)

As I just stated, this is completely false. I venture to guess that you are well aware that this claim is false. Anybody with any knowledge at all, let alone industry experience, wouldn't ever actually believe this.

i can create a computer program to convince anyone to buy anything.

Then perhaps your time is wasted on this forum, selling exclusively term life insurance, and gambling with your savings.

even your interest rate percentages are bogus.

I do not understand how many times you need to see this math done over and over and over for you to understand. The only thing bogus is your unfounded, uneducated assumption that permanent life insurance products are only useful for the wealthy and in estate planning purposes.

can someone please show me an illustration with an interest rate of 4.5% or 5% (or whatever).

post the illustration and i'll show you that the money isn't really growing at that rate.

I'm not sure why you seem to think that your ability to calculate returns is far superior to not only everyone else on this forum, but also everyone else in the industry. Furthermore an interest rate is not the same as a dividend rate or as the internal rate of return. If you do not know the difference that does not make us wrong or make a product poor. Just to humor you:

$1,000,000 permanent insurance
-Paid up at age 65
-Disability waiver included
-$14,324.34 annual premium
-Age 30, male, non-tobacco, excellent health
-Illustration displays 6.15% dividend rate

Age 65
-Total Paid Up Insurance=$2,451,757
-Cash Surrender Value=$1,319,388
-Annual Dividend=$41,829
-Total Premium Outlay=$501,352

Age 75
-Total Paid Up Insurance=$3,392,052
-Cash Surrender Value=$2,373,418
-Annual Dividend=$70,912
-Total Premium Outlay=$501,352

Age 85
-Total Paid Up Insurance=$4,637,238
-Cash Surrender Value=$3,843,621
-Annual Dividend=$119,394
-Total Premium Outlay=$501,352

Age 95
-Total Paid Up Insurance=$6,432,275
-Cash Surrender Value=$5,823,074
-Annual Dividend=$188,250
-Total Premium Outlay=$501,352

 

[TNMDRT]

exactly what is an insurance "program"? I guess you mean "policy", right?

An insurance "program" typically consists of several policies purchased over the course of many years. It is very common for people to have many life insurance policies. People do want whole life insurance, but people cannot always afford to have the full amount of whole life insurance that they want when they purchase life insurance for the first time. This is the beauty of term life insurance. It allows people to purchase the right amount of coverage on nearly any budget. This is great for both temporary insurance needs and also for converting chunks of term to permanent when cash flow permits. Believe it or not, life insurance needs are often permanent. Shocking for you, I understand.

Secondly, how many fee-only financial planners recommend PI?

Do you have any concrete information that answers the question in favor of your view? I certainly have never collected the data to support either case, but I can tell you with absolute certainty that all of the fee-only financial planners I know and work with will absolutely recommend PI when it is suitable.

Why is it that only commissioned sales people push pi? (sorry-correcxn--commissioned sales people, their sales mgrs, and those who sell the software commissions sales peopel use to sell pi.)

As I just stated, this is completely false. I venture to guess that you are well aware that this claim is false. Anybody with any knowledge at all, let alone industry experience, wouldn't ever actually believe this.

i can create a computer program to convince anyone to buy anything.

Then perhaps your time is wasted on this forum, selling exclusively term life insurance, and gambling with your savings.

even your interest rate percentages are bogus.

I do not understand how many times you need to see this math done over and over and over for you to understand. The only thing bogus is your unfounded, uneducated assumption that permanent life insurance products are only useful for the wealthy and in estate planning purposes.

can someone please show me an illustration with an interest rate of 4.5% or 5% (or whatever).

post the illustration and i'll show you that the money isn't really growing at that rate.

I'm not sure why you seem to think that your ability to calculate returns is far superior to not only everyone else on this forum, but also everyone else in the industry. Furthermore an interest rate is not the same as a dividend rate or as the internal rate of return. If you do not know the difference that does not make us wrong or make a product poor. Just to humor you:

$1,000,000 permanent insurance
-Paid up at age 65
-Disability waiver included
-$14,324.34 annual premium
-Age 30, male, non-tobacco, excellent health
-Illustration displays 6.15% dividend rate

Age 65
-Total Paid Up Insurance=$2,451,757
-Cash Surrender Value=$1,319,388
-Annual Dividend=$41,829
-Total Premium Outlay=$501,352

Age 75
-Total Paid Up Insurance=$3,392,052
-Cash Surrender Value=$2,373,418
-Annual Dividend=$70,912
-Total Premium Outlay=$501,352

Age 85
-Total Paid Up Insurance=$4,637,238
-Cash Surrender Value=$3,843,621
-Annual Dividend=$119,394
-Total Premium Outlay=$501,352

Age 95
-Total Paid Up Insurance=$6,432,275
-Cash Surrender Value=$5,823,074
-Annual Dividend=$188,250
-Total Premium Outlay=$501,352

Go ahead and run the rates of return on the premiums. I would also love to see the total premium outlay to have the same amounts of in force death benefit at the same ages from your term insurance products. Have fun with that one.

Here's a thought... Have you ever considered that perhaps you just have not properly educated yourself on the ins and outs of permanent life insurance options, benefits, and companies? Have you ever considered that perhaps you are the one who is "drinking the kool-aid" and forcing blanket solutions to problems that need to be addressed on an individual basis? I have yet to see anyone that sells permanent life insurance say that it is the 100% best solution 100% of the time. This is a claim made exclusively by people that sell only term insurance. Who is really drinking the kool-aid here?