Whole Life Insurance
- Thread starter bluemarlin08
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hello healthagent, you can fulfil your desire, Just contact with one of the famous life insurance providersjust contact with lifeinsurance.net.nz
Did you hear that healthagent? Fulfill your desires...
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This post is a great example of the many different approaches, focuses, and beliefs regarding whole life you find within our industry. No wonder there is so much confusion in the consumer marketplace....we don't even agree on the benefits of whole life within the industry!
Why I own participation whole-life insurance:
Since whole life is not an investment (has no risk or tax implications) we want to only compare it to other no risk options out there right? Can a government bond rivial the IRR of a par-whole life plan...factoring in tax equivalent yield? How about bank CD's....long-term IRR is lower than whole life, it's taxable, and provides no death benefit or ability to access cash during the term. Fixed annuities provide no means of becoming self completing upon disability, there are tax consequences, and I can only access a small portion of my money prior to 59 1/2.
Whole life is not just "a guaranteed place to park cash". Par-whole life is an asset class that can accomplish so many things other vehichles can not.
Why I own participation whole-life insurance:
- Steady, consistent annual returns
- No risk of loss
- Tax-deffered accumulation, tax-free withdraws
- functions as a low interest line-of-credit for life and business opportunities
- self completing part of my retirement plan. If your unable to work who is going to put into that annuity, mutual fund, or 401k for you?
- Within my asset allocation, is an asset class of its own, serving as a portion of my fixed income portfolio.
- creditor protection
- ease of making systematic contributions
- ease of making withdraws
- Only asset that I can own that is worth more at the moment of my death than what the current value currently is. So yes, I have an added 'benefit' at death, but I own it for the above listed living benefits.
Since whole life is not an investment (has no risk or tax implications) we want to only compare it to other no risk options out there right? Can a government bond rivial the IRR of a par-whole life plan...factoring in tax equivalent yield? How about bank CD's....long-term IRR is lower than whole life, it's taxable, and provides no death benefit or ability to access cash during the term. Fixed annuities provide no means of becoming self completing upon disability, there are tax consequences, and I can only access a small portion of my money prior to 59 1/2.
Whole life is not just "a guaranteed place to park cash". Par-whole life is an asset class that can accomplish so many things other vehichles can not.
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what exactly do you mean by the above bold?
thanks
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he paid 800k and it is only worth 350k in 20 yrs? I do not understand this? why is it not worth a lot more?
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Non qualified means not in a IRS tax deductible qualified plan (e.g. 401k, 403b, 412i, etc.) the accounts were you deduct from your taxable income now, and pay taxes on later when you retire and start withdrawing the money.
Tax deferral vs. non tax deferral is a way to accumulate more assets while the money sits in the account. So tax deferral for life insurance, or annuities is often more favorable than taxable accounts like CDs and regular brokerage accounts; paying the taxes on the dividends or interest every year impedes the growth of the money.
The example dgoldenz has given requires some more information. At that age that premium is extremely high. Prudential used to be a decent company for whole life insurance, and still maintains a generous dividend on the policies that remain in force (sadly they demutualized about 10 years ago and no longer issue participating whole life policies). That age with those premiums leads me to believe there was a rating and/or some other piece of information is missing. The example of the NYLife policies and premiums pushes me further to believe this.
Tax deferral vs. non tax deferral is a way to accumulate more assets while the money sits in the account. So tax deferral for life insurance, or annuities is often more favorable than taxable accounts like CDs and regular brokerage accounts; paying the taxes on the dividends or interest every year impedes the growth of the money.
The example dgoldenz has given requires some more information. At that age that premium is extremely high. Prudential used to be a decent company for whole life insurance, and still maintains a generous dividend on the policies that remain in force (sadly they demutualized about 10 years ago and no longer issue participating whole life policies). That age with those premiums leads me to believe there was a rating and/or some other piece of information is missing. The example of the NYLife policies and premiums pushes me further to believe this.
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If you withdraw above your basis, it can be. As a result, generally it is advised to take policy loans instead. YMMV.
Yup, as long as you know how to work it, you don't pay taxes on the distributions. This is typically where the greatest amount of confusion comes, many assosiate a loan as something that will then cost them money. Not the case with life insurance, the loan is more a process for getting the money out without creating a taxable event, just as dividends being a "return of premium" being a way to make a distribution without creating a taxable event.
Now if only they could find a work around for MEC status
Now if only they could find a work around for MEC status
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