Tips for Buying Permanent Insurance?

[LostDollar]

The question is...how long do you plan on living?

You've got that right! and I'm not sure that gets any easier when you're older.

At age 72 I have a range of scenarios that run from dying within 5 years to living to 125 and outliving my wife and children.

I haven't quite figured out how to make my way through that mess. It gives me a headache!

 

[gordongekko513]

Any thoughts on adding a chronic care rider to the policy? Sure the irr takes a hit but youre insuring two risks now. Now if you want to compare BTID, youll have to include term insurance and a Long Term Care policy. That might make WL a little better, or not.
OP, if i run the numbers and show you how WLw/CCR is a better investment, apples to apples, than BTLTCID, would you go to your agent and buy it this week?

 

[DHK]

Chronic illness riders on a life insurance policy (101g) is NOT the same as a stand alone LTC policy (7702b).

http://www.ubsnet.com/assets/Uploads/Featured-Products/NW-LTC-comparison.pdf

 

[scagnt83]

Chronic illness riders on a life insurance policy (101g) is NOT the same as a stand alone LTC policy (7702b).

http://www.ubsnet.com/assets/Uploads/Featured-Products/NW-LTC-comparison.pdf

Excellent point.

But the idea is not far off track... especially since there are true 7702b Riders out there. Mass has one of the best on the market. The catch is that you cant use the LISR Rider along with the LTC Rider. So no overfunding.

BUT, you can use it on a 10pay, which is already a good bit overfunded by design.

 

[gordongekko513]

Excellent point.

But the idea is not far off track... especially since there are true 7702b Riders out there. Mass has one of the best on the market. The catch is that you cant use the LISR Rider along with the LTC Rider. So no overfunding.

BUT, you can use it on a 10pay, which is already a good bit overfunded by design.

the ones ive seen are eligible for the max federal per diem under 7702b, but if youre still losing sleep, which I imagine no 30 year old is, over LTC, you can 1035 exchange into a hybrid LTC policy...assuming theyre still out there 50 years from now.
With respect to apples to apples, throw in a stand alone critical illness policy along with a traditional LTC policy, assume that you get the tax breaks and calculate all that in...good luck.

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Chronic illness riders on a life insurance policy (101g) is NOT the same as a stand alone LTC policy (7702b).

http://www.ubsnet.com/assets/Uploads/Featured-Products/NW-LTC-comparison.pdf

thoughts on this?

https://www.newyorklife.com/chroniccarerider/

 

[DHK]

The Chronic Care Rider is a life insurance rider providing for an accelerated payment of the base policy face amount to the owner, where the insured has been certified as chronically ill. This rider is not intended to be a federally tax-qualified long-term care insurance contract under Internal Revenue Code 7702B. Therefore, the premiums payable for this rider do not qualify as long-term care insurance premiums and are not deductible from gross income for federal income tax purposes. Benefits provided by the rider may be taxable if the owner of the policy is neither the insured nor the insured’s spouse.

In Oregon, the Chronic Care Rider form number is ICC16216-285R. In Oregon the Policy Form Number for New York Life Whole Life and New York Life Custom Whole Life is ICC15216-50P.

The spacing at the bottom may be misleading.

This will pay out based on the remaining life expectancy of the insured.

 

[LostDollar]

Another video talking about accumulated wealth, lifestyle wealth, and transferred wealth. It might help... but who knows?

Thanks for the concepts. that may help another forum member in dealing with me.

 

[regularAgent]

All the detail you are giving here are not enought for structuring good whole life.

Because first we have to know what you are looking for with the policy or what your broker saw was your necesity for having one of those.

 

[AboutThatLife]

exactly. All I'm hearing is how great WLI is, but looking at actual numbers, that doesn't seem to be the case.

I am running projections for 91 years of policy age. As time goes on, it seems the BTID is a better and better and better option....

The real benefit comes when its time to take the money OUT. Whole Life provides the greatest flexibility in that. Flexibility and security you CANNOT get in any after-tax account.

BTID works off of the average return. All projections for every investment work that way. Whole life takes out "average" return out of the equation and provides you with legal guarantees and 99% guarantees.

If you start with $100,000. The market drops 30% the first year then goes up 37% the next year. You will have $95,900 but an average return of 3.5%.

So you have a positive average return on a loss of $4,100.

At best, those BTID charts you look at are misleading. An illustration for indexed-universal life will be more accurate than that.

P.S-When it comes to removing money from a policy, MassMutual DOES NOT have the best performance. IRR is not everything.

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That's no different fundamentally from getting the 0% loan from the bank and keeping the money invested in your Vanguard account earning whatever interest rate.

What bank gives out a 0% loan?You can barely get a free checking account.

 

[regularAgent]

I'm reading back the descripcion atxeng made about his financial situacion and I think I can see why his agent want to give him a WL. (I couldn't see the face amount anywhere), He has some problem with $410,000 in mortgage and $250,000 in term that he keep telling he is going to convert (does he knows about the way MassM is going to convert that term and in how many years is the convertion to take place?). He also want $2 MM for him and 500,000 for his wife, leaving the baby behind, and he is talking about Stocks and bonds. he also said about 529 plan (Does he figure out how he is going to take that money out the plan?).

I don't know why you don't trust your agent atxeng, but this is what I would do for you.

- You are young (30 year old), so you can run some risk, I would prepare an ENERGY companies portfolio for you, you give the number you want to place into that invetment.
- Get a 529 Plan for the baby, baby is 3 month old, so you have plenty time to make the plan grow, withough asuming so much risk (In theory).
- Because of you age, I would give a $400,000 WL, MassM include at no cost LTC on it, and I think that can cover a spose rider, 100,000 for your wife, and I also think that MassM cover the baby at no charge until ...... age?. Just incase you get fired or broke you can have some money here for paying you policies and investments.
- But because you have a lot of interes in investments, $150,000 UL Decreasing 30 years will do with the hole you have with the mortgage and the term you already have. if is well structure it will give you 6.5% to 7% (you can Check by S&P)

IMPORTANT, I wouldn't buy another term policy even the 30 years it may be too short and you can outlive you wife. BUY TERM AND INVEST THE REST IS NOT A GOOD IDEA, for me.

GOOD LUCK Mate...