Whole Life As a Retirement Plan?

[iiinycboi]

So i've seen a lot of the pitch for using whole life as a retirement plan. what are your views of this? I do not know too much of life insurance, but it sounds like a viable plan.

They say you can take out 90% of your cash value and dont have to pay it back. it will be deducted from death benefits.

do you have to start paying interest or the policy premium if i took out 90% of the cash value?

sounds like a really good plan if it is what it is...

 

[BNTRS]

Yes, but only when correctly. When you sell whole life insurance for retirement wealth accumulation purposes, you aren't selling base premium. You're selling primarily for PUA's.

You also need to be well versed on loan and dividend provisions, this will make or break distributions from the policy.

A very viable strategy. Takes a deeper understanding of the product that one most people have. But truly a great asset to hold onto.

 

[agentjhc]

Newby question, Are most term life policies covertible? And can you convert a portion...say $100,000 of a $500,000 policy to WL and keep $400,000 TL?

 

[BNTRS]

Newby question, Are most term life policies covertible? And can you convert a portion...say $100,000 of a $500,000 policy to WL and keep $400,000 TL?

Not are are convertible. And not that many are convertible for the entire term period.

Some companies have different products with different conversion provisions. Other's allow conversion only for a certain number of years (say 5 years) and then only longer if a rider is added.

Usually the answer to the partial conversion is yes. Some companies have minimums that need to remain in force for the term policy to remain in force, but where you're talking you most likely don't need to worry about this.

 

[agentjhc]

Does convertible TL cost anymore than non?

Is WL the only option, or can you switch to UL?

 

[VolAgent]

Does convertible TL cost anymore than non?

Is WL the only option, or can you switch to UL?

It depends on the company, but yes usually good convertibility adds a bit to the cost. Also, there are various types of convertibility, the bad ones limit you to one option, usually a very poorly priced current assumption UL. Good ones let you choose from any permanent product offered by the company.

A great example of the pricing difference is Ohio National. The base product is convertible to a current assumption UL. They will tell you flat out it sucks. Pay just a bit more for the Plus product and you can convert to any permanent product of your choice that is currently being offered for sale.

 

[agentjhc]

Do most companies have "good" convertible TLs....Genworth, Prudential, Protective, Aviva, etc??

 

[BNTRS]

Probably the two best cheaper term carriers out there with really high quality convertible term products are Ohio National and SBLI. Banner actually has a pretty good UL with a solid guarantee on it. The big thing to keep your eye on is the length of the conversion period. This has been cut back a bit in recent years.

Oh and hey, Term was the topic of the most recent post on the Insurance Pro Blog

 

[agentjhc]

Is it easy to direct contract with Banner, ON and SBLI?

 

[BNTRS]

ONL yes, Banner and SBLI would be IMO contracts