A Tale of Two Policies

[pfg1]

I'm a consumer, and wish I understood cash value life insurance earlier. I bought a couple of large policies from Brandon (insuranceproblog) about 4 years ago, and in a few months, the WL policy will reach a milestone (cash value = premiums paid). Took under 5 years since we did the back dating policy start date maneuver. When the policy break even, this thing will be my best savings account ever.

I worry about my 401k balance, but I never worry about my insurance cash values.

Good for you! Funny how that works.... most folks that have done these type policies (and actually understand what they have) tend to say the same thing. Most of the naysayers don't have it and don't really understand it, yet they bash it as if it couldn't possibly ever be good.

Just curious, what company did you use?

 

[xrac]

I'm a consumer, and wish I understood cash value life insurance earlier. I bought a couple of large policies from Brandon (insuranceproblog) about 4 years ago, and in a few months, the WL policy will reach a milestone (cash value = premiums paid). Took under 5 years since we did the back dating policy start date maneuver. When the policy break even, this thing will be my best savings account ever.

I worry about my 401k balance, but I never worry about my insurance cash values.

Good move. Brandon (btnrs) knows his stuff.

 

[cardinal93]

We used Penn Mutual WL with a term rider. I was also rated super preferred, so I guess that helped.

After I understood the value of PLI and its place in my life, I actually put ALL my non-qualified funds into PLI.

Good stuff!

 

[LostDollar]

We used Penn Mutual WL with a term rider. I was also rated super preferred, so I guess that helped.

After I understood the value of PLI and its place in my life, I actually put ALL my non-qualified funds into PLI.

Good stuff!

Hi cardinal

I've been mulling over your comment and I am curious, why would you put all your non qualified money in insurance rather than splitting between stocks and insurance?

I am retired with minimal income, but as long as my health holds I have a little extra I can do some saving with. It didn't seem wise to put it all in one vehicle or the other. (Even though the amounts are small, I am planning on following my advice in another thread and talking with a professional-I was just interested in hearing your thought process to inform mine.)

Thanks.
LD

 

[cardinal93]

For me it's pretty simple.

I started the policies late in life at age 42, and my qualified funds are over 1 million while my PLI CV are maybe 200k.

So each year I contribute 50% of savings to qualified accounts and 50% to PLI.

Why? Because I have a special needs autistic son which was the reason why I started researching life insurance. I spent a month reading every article on Brandon's site and another month reading every posting on this forum from 2010 onwards. Just like the other gentleman in the other thread I created complex excel spreadsheets full of equations...but I came to a different conclusion.

I work for a very large mutual fund company...it is the best active money manager and all my qualified funds is tied to our mutual funds. It has done very well.

But you know what? My personal rate of return was similar to the DALBAR reports and I could be the poster child for why average returns are illusory when faced with suboptimal investor behaviors of being emotional about your investments. Do you know what it is like to have a loss equal to half a years salary? Intectually I know I should leave it alone...but fingers are itchy to do something.

In any case I wanted an asset class that is a stock's anti-acid. I wanted something that would perform no matter how stupid I was and no matter what other financial mistakes I may make.

Oh...the other reason is that I wanted to play the college financial aid game for my other normal son. Only assets I would have are PLI, large home equity from owning a home in SoCal and a large qualified account. My son can then go to many expensive colleges for very little since I plan to retire early and don't need to show much income. That is worth 250k at my alma mater

 

[LostDollar]

Thanks for the reply. You have given me some useful things to think about as I evaluate my own situation.