Investing in life insurance can be an important asset in your investment portfolio.
- Related posts on Insurance in
- National Health Care System in Japan and Taiwan – would be …
- Elderly Term Life Insurance « Simple Way to Understanding …
- Cheap Car Insurance in Florida – 5 Reasons to shop from your …
- Related posts on investing Insurance
- Simple Facts to Know Before People Compare Life Insurance Quotes
- Choosing An Acceptable Pet Cat Insurance Quote
- madam sabrina tan
- Related posts on Life investing
- Risks inherent in mutual funds | Book of Wise Investors
- Nehemiah 13
- Freedom$oft is HERE, Get Your Copy Today!
Related posts:
- Dave Ramsey Laughs at Investing in a Whole Life Insurance Policy
- Life Insurance 101
- International Interests and Life Settlement Investing
- Kal Tak - Zaid Hamid blasts Bharat Varma Part2 News, Video news, News Jang, News Current Affairs, News Breaking, World News, Investing, financial information, Business News, Politics, Technology,
- Index Fund Investing
{ 20 comments… read them below or add one }
4-5% over 20 years? That’s a horrible investment, that won’t even keep up with inflation. These guys are giving horrible financial advice. I love how they didn’t say whole life once, glad that other guy called them out on it.
bweazel, first of all 4-5% compounded over 20 years tax free is not a bad investment (it’s not GREAT, but not bad). Second with the death benefit growing at 8-10% (also tax free), it’s not a bad deal either. Third, inflation varies from year to year (ranging annually from 18% to -10.5 since 1914). During the last 20 years it’s been around 3%. It hasn’t reached 4% since 1991.
Do your homework before you make biased uniformed statements.
What are you an insurance salesman? I didn’t hear the “internal rate” part. There is no reason your life insurance policy should also be your retirement policy, it is simple greed on the part of the insurance companies. I mean hey if you got the money, have at it, but if you have the money, you should be investing into many other things, not life insurance. I’ve done my homework. Your second part is a tad misleading there, at what point during the 20 years will your cash value grow at that rate?
Bweazel, there is no reason why Life Insurance can’t supplement a retirement plan.
When you ask about my “second part” you refer to CV, when I was in fact referring to DB. What have I said that was misleading? DB is the Death Benefit (what is paid out when the insured dies). As the CV grows in the policy, so does the DB. A 500K policy bought in 1980 would be 1 Million+ today (DB).
I have found that very few people commenting on CV LI policies actually do there homework.
Wodendog, there is no reason why life INSURANCE should suplement your retirement. Like I said before, it’s greed on the part of “insurers”, who have now turned into (always been) hedge fund whores.
I was under the impression your cash value grew and your death benefit remained constant. Your death benefit grows? Huh? Since when? 500K policy worth 1mil today… is that additional 500K not your cash value in the policy?
For the second time now, are you a life insurance salesman?
Oh by the way, yes there is a reason. Because people could use that money better on their own, instead of the insurance companies putting into hedge funds that may crash and burn. Your death benefit is garunteed, but I haven’t heard that any cash value in these plans are garunteed at all. Am I mistaken?
Of course I refered to the cash value. Are you saying the death benefit grows? Umm. From what I understand of whole life policies, it is permenant insurance. If I take out a 500K policy, I’m getting 500K when I die, plus any cash value that I have built up. Are you saying that you have to pay into these plans for a set time before you can have the entire benefit delivered upon your death? There’s doing homework, and then there’s just shitty sales pitches. Yours sounds like the latter.
Bweazel, ok . . . I’m going to try and be nice here. Virtually everything you say is wrong regarding WL. I’m going to take it from the top and address all of your questions and misconceptions.
First, I am not a LI salesmen. However, I “was” once a Financial Rep at Northwestern Mutual.
Second, the investing that happens in Hedge Funds and the investing that takes part at WL LI companies is like night and day. WL LI companies “legally” have to invest conservatively. The 4 top companies have been in business for 150+ years (Guardian is a little shy of 150). During all the US financial crises of the last 150, the top WL companies have been quite strong (including our most recent).
Third, DB in WL policies grow. They have been for a long time. One of mine has been for 30 years. It’s now worth 4 times its original value. This is one of the big reasons why people/banks/corporations get WL in the first place. This is a fact.
The DB and the CV are related, but not the same.
Fourth, CV is guaranteed. On an illustration there us a “guaranteed” Column and a “non-guaranteed” Column (legally, both have to be shown). Guaranteed values are much lower, but guaranteed.
Is there a fifth?
Continuing point Four: The “non-guaranteed” column on an illustration is based on the current dividend of the company. Dividend slowly go up and down over time so they won’t always be accurate, but fairly close. None of the top companies have ever had to fall back onto lower “Guaranteed” values.
Fifth, regarding your last 3 sentences, the answer is NO. Once you start paying your premiums, your policies DB and CV start to grow. Whenever you die, your beneficiaries get the “entire” DB.
I know what I’m talking about. Any other questions?
Just following up.
500k to 1 million today is about 2.3%. If that is true then what is the cash value growing at <2.3%? Maybe I am calculating wrong or am I misunderstanding you?
Now if what you are saying is true then that would be a growth of about 4.6%.
You are correct about the CV being guaranteed.
Not here for another pissing match…..Just want to clear a few things up. You wrote, “Second with the death benefit growing at 8-10% (also tax free), it’s not a bad deal either.”
So are you saying that a 40yr old buys a $1mil WL policy from NWM at age 70 his death benefit would be $10mil+? He makes it to age 85 his death benefit would be over $36mil? I am using 8% growth.
Insurance companies invest in some of the most conservative vehicles around.
Whole life the death benefit and CV is guaranteed.
Matter of fact bweazel listen to the last 4:15 of the video it will tell where the money is invested.
TheInsWiz, regarding my calculations. First, my figures are not actual projections, I was just demonstrating the fact that the DB grows. Second, that’s why I said “1 Million+”. I just wanted him to understand that WL DB is not stagnant at its original value.
TheInsWiz, regarding your 40 year old scenario. When calculating the Value of the DB growth, you are calculating the compounded interest equivalent of the premium, not the initial DB value.
So, a 30 year old person paying 10K in premiums each year for a $1 million policy who dies at age 70 might have a DB of 3.2 million (40 years of paying 10K growing at 8.5%). If he doesn’t die, he’d have 1.2 million+ in CV.
That’s how I calculate it at least. I hope it is more clear now.