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Old 02-10-2015, 12:55 PM   #1
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P&C With A Life Insurance Question P&C With A Life Insurance Question
Hello Life guys,

I have a life guy that sends me business every now and again and recently he had me do one of his financial profiles.

He states that he believes after reviewing with me that he thinks I should be in NYL's whole life policy with paid up additions and catastrophic rider with a 300K face amount as an investment.

I am 27 non married and don't own a home and really the only assets I have are my truck and my business. I feel like what I am really looking for is to set up a retirement plan for my business (which I don't believe this would be).

This is the only option he presented to me. Do you guys believe this is the right move in my situation or should I push back to see some additional options he can offer me?
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Old 02-10-2015, 01:25 PM   #2
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P&C With A Life Insurance Question Re: P&C With A Life Insurance Question
Max funded PLI is a great tool that imo would be a very good option to have as a part of your plan. Not the only thing your should have by any means, and how much is right for you... well I can't say for sure, not enough info.

Edit: Forgot to mention.... You can build some substantial wealth inside a properly structured pli contract that can be used for retirement income. So yes it could be a retirement plan if you wanted it to. Or a part of your retirement plans overall.
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Last edited by pfg1; 02-10-2015 at 01:30 PM.
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Old 02-10-2015, 02:10 PM   #3
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P&C With A Life Insurance Question Re: P&C With A Life Insurance Question
whole life is expensive. NYLife is expensive. WL = forced savings. CV life insurance should only be a supplement to a retirement plan. depending on the structure of the business some type of defined contribution plan (SEP/IRA/401k) would be more cost effective.
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Old 02-10-2015, 02:21 PM   #4
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You're 27, unmarried with no kids? Is that ever going to change?

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Old 02-10-2015, 04:02 PM   #5
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P&C With A Life Insurance Question Re: P&C With A Life Insurance Question
It's a decent investment but it's far from the first thing that would come to mind. Have you looked at a ROTH?
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Old 02-10-2015, 04:29 PM   #6
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P&C With A Life Insurance Question Re: P&C With A Life Insurance Question
Originally Posted by nyc2phi View Post
He states that he believes after reviewing with me that he thinks I should be in NYL's whole life policy with paid up additions and catastrophic rider with a 300K face amount as an investment.
You expected something different?
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Old 02-10-2015, 06:52 PM   #7
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P&C With A Life Insurance Question nyc2phi is the thread starter for: P&C With A Life Insurance Question

Originally Posted by moonlightandmargaritas View Post
You expected something different?
Haha never know if you are sarcastic or not.

I did not expect different given that he is a NYL agent but obviously just want to know if it's the right move.

Thanks everyone for your help.
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Old 02-11-2015, 07:14 AM   #8
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P&C With A Life Insurance Question Re: P&C With A Life Insurance Question
Originally Posted by Lewis_FL View Post
whole life is expensive. NYLife is expensive. WL = forced savings. CV life insurance should only be a supplement to a retirement plan. depending on the structure of the business some type of defined contribution plan (SEP/IRA/401k) would be more cost effective.
Statements without facts are opinions. Can you add some facts to your statement?
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Old 02-11-2015, 07:23 AM   #9
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moonlightandmargaritas on P&C With A Life Insurance Question
 
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P&C With A Life Insurance Question Re: P&C With A Life Insurance Question
I did not expect different given that he is a NYL agent but obviously just want to know if it's the right move.
"When the only tool you have is a hammer, everything look like a nail."
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Old 02-11-2015, 07:56 AM   #10
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P&C With A Life Insurance Question Re: P&C With A Life Insurance Question
Lots of opinions in this thread.

Lots of speculated ideas on what else to do too.

1) - is Whole Life "expensive"? It depends on your definition of the word "expensive". Buying a home is "expensive", but that doesn't stop most people from doing so.

Whole life has a higher required minimum premium compared to term insurance... so in that sense, it is "expensive". However, with guarantees, and with guaranteed cash value build-up and decent dividend performance, it can be a great way to accumulate money.

2) Why not a SEP/IRA/401k? Well... that primarily depends on if you have employees or not, and how much you would want to contribute to their plan balances too.

3) Why not a Roth IRA? We don't know your income levels. After you hit a certain level of income, you become ineligible for a Roth IRA contribution. BTW, the taxation rules on permanent life insurance and a Roth IRA are virtually identical with far less IRS regulation in the permanent life policy.


Here's the thing with life insurance though: The younger you are when you get it, the better it will perform if you keep it long enough. You don't know what the future will hold for you, so buying life insurance early is a good LIFELONG strategy.

If it were me, based on the info in this thread, I'd buy this policy as a "key man" policy for your business and use your business checkbook to pay for it. It can be a decent line of credit, if and when you need it - to help you expand your business, make payroll, etc.

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BTW, a $300k face amount isn't much. He definitely didn't take into account your full economic life value - unless you omitted any term life insurance recommendations from your post.

Looks like he's trying to maximize the cash accumulation within a smaller death benefit, without adding the additional expense (and conversion options) of a term policy.
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