Whole Life Question

[Justin Bilyj]

The reason I say a life policy over an annuity is simple. While both will pay out to the beneficiary at your passing, the annuity will also come with a tax bill for your beneficiary.

Roth IRA's don't have that tax problem.

 

[LGilmore]

It's going to depend on the terms of your annuity policies. Moving is a good idea as long as it doesn't kick you in the twigs and berries for doing it. Since I don't know what you've purchased previously, my first advice is to go to those policies and read the terms. Something is only a good idea after you've penciled out the "friction" of moving it around. Friction is a term used for costs associated with moving money from A to B, it could mean taxes, cancelation fees, commissions and so on. Make sure what ever you decide doesn't put you in a deep hole to come out of.

The other thing I want to advise is don't "overdo" a single product out there. Whole Life is "part" of a portfolio, not the entire portfolio. Same should be said for all financial products. I really don't know of any financial product that does everything for everybody. It is a combination of choices that usually leads a person down the right path.

So while it is nice that you've learned a bit about whole life and see it in a positive light now, remember it's not the only light on in the house.

As far as new money going in, you can keep this in mind. 26 years ago when I started a common phrase around the training table was annuities were for people who couldn't get life insurance(bad health). That's because they are more similar than different. With the advantage of being able to dump in extra money into a whole life, it's a pretty competitive product in the safe area of choice... Good luck.

 

[VolAgent]

Roth IRA's don't have that tax problem.

That is true. However, he said annuity, not Roth IRA. An annuity is one of many products that can be put inside a Roth IRA. Also, remember that there are rules for contributing to a Roth IRA, which may preclude him from doing so. Also, there are contribution limits to any IRA. The annual premium for his whole life is well under that limit, but he may want to contribute more in the future. Also, he may already be contributing to an IRA and this is for extra money. We simply don't know.

I will say, if the OP is putting money aside for a legacy, I hope he is already maxing out his retirement contributions for his own benefit.

 

[rickgibbspa]

yes It is expensive, $815 a year. You should consult with any Insurance specialist.

 

[DaKine]

I have a 100,000 whole life policy I have had for about 3 years. It is expensive, $815 a year. I keep reading where whole life policies arent worth the extra cost, but term life policies almost never pay out. On the other hand, I have read where life insurance would be better than annuities (which i also have) because youre not taxed on life insurance. All of this is too confusing, can someone help me?

Why do you have the insurance? If you are going to keep the insurance until you die then you are buying a dollar for 8 cents. The older you get the cheaper that insurance will seem compared to a term policy.

You can't get the deferred earnings out of the annuities now without paying taxes and penalties if you pull it out prior to 59 1/2. A MAX-Funded Indexed Universal Life policy can be used as a wealth accumulation vehicle, provide tax-free income during retirement and pass to your heirs tax free. The primary benefit of an annuity is that it can provide in income stream in retirement that you cannot out live.

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I guess I would think of it more as a tax shelter and growth vehicle more than anything else. Something to pass on to my heirs. I really have no plans to borrow against it or take money out of it and I want something that will 100% pay out and not be any red tape that might shock me in the future. Im just making sure I chose the right life insurance. The same thing with the annuities.

Sounds like you need to determine the death benefit you want and how much of a premium you can afford to fund the policy. The faster you fund the less the policy will behave like insurance and the more it will behave as a wealth accumulation tax shelter vehicle. Whole life is good depending on your goals another product may be better.

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From all your answers, is it feasible to take my annuity money at the end of their terms and transfer them to a whole life policy to reduce any tax burden? or should I be looking at purchasing more whatole life INSTEAD of annuities? Even though I won't be around to see the money, I hate for taxes to eat up what I have earned through my lifetime.

You will have to determine how much it will cost you to get the money out of the annuities and what direction you think tax rates are headed for your situation in the future. If you plan to pass the annuities to your heirs then you will need to consider what tax they would pay.

 

[rayalexander]

Hi jasonten,

you need a smart insurance agent, who could make you to understand these kinds of insurance policies. for that you can come to us or even contact us via phone call.

 

[HoosierLife]

Hi jasonten, you need a smart insurance agent, who could make you to understand these kinds of insurance policies. for that you can come to us or even contact us via phone call.

Oh there's so much I could say, but I decided I would stop posting that kind of stuff this morning.

Where's Gollini?

 

[goillini52]

Hi jasonten,

you need a smart insurance agent, who could make you to understand these kinds of insurance policies. for that you can come to us or even contact us via phone call.

Where would he find a "smart" insurance agent? What are you selling. 1st post and he's supposed to trust you. Why not talk to him here...something to hide???

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Oh there's so much I could say, but I decided I would stop posting that kind of stuff this morning.

Where's Gollini?

How's that?................

 

[unic.consulting]

A class must have got out...three new posters in a row and all of them equally helpful...