Ask me about insurance!

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OssiansFolly: Aug 3, 2012; Suffering at the factory of sadness every year.

app posted:

Where have I called it an investment? Regardless of what you call it, with a whole life policy you pay money in now and then get a payout later. Whatever terminology you want to use that is effectively the same thing as an investment so it makes perfect sense to compare them.

So to be clear now you are saying whole life does not make sense for young adults? Because a lot of whole life has been recommend in this thread and I'm willing to bet 90-95% of the posters are between the ages of 20 and 50... Also it doesn't matter when you buy whole life, its still a lovely deal.

Single pay whole life ($50k) on a 5 year old costs $6,800 -
If you took that $6800 and invested it, around the expected time of death (80) you'd expect it to be worth over half a million dollars ($537k). If you were worried about dying while you had dependents, you could add in a 30 year term policy to cover 30-60 years old and would expect to have around ($526k). Both of these beat whole life conservatively by a factor of 10.

Single pay whole life ($50k) on a 70 year old costs $38,666 -
If you live just 5 years you've already more than broke even. I'd also question why, if you have $38,600 to spend on a life insurance policy at 70, you are buying life insurance at all. Also if you've lived to 70 your life expectancy is now upper 80's so again your expected return on the investments would be ~$100k, more than double the whole life pay out.

How are either of these a remotely good idea?

It is NOT an investment. An Investment is money for YOU. Life insurance is money for SOMEONE ELSE. I am sorry this is a tough concept to wrap your head around. You are comparing apples and bananas here.

Whole life has its uses. I've said it a dozen times and provided important examples of when it is optimal. You've chosen to ignore those reasons and repeat the same tired thing over and over and OVER again. The horse is dead sir...please leave it.

A single pay Whole Life at age 5 is a WONDERFUL gift from a grandparent or a parent to a child. It is less than $7000 and guarantees that the child will have coverage for the rest of their lives regardless of medical conditions or status in life. MOST of those Whole Life policies also offer an option to increase the coverage a set number of times throughout their life regardless of medical conditions as long as the premium is paid. This means you have offered protection for them and potentially their family even if they grow up to have diabetes, cancer, Hep C or anything else that could come along.

On a 70 year old you wouldn't buy a single pay life for $50k. And here is where I can tell you don't understand. You've taken my examples and improperly used them TWICE now all the while referring to investments...again. At 70 you'd be looking to get the biggest policy possible with whatever money is currently left. 70 year olds don't need "later money". 70 year olds have "never money". This money is to be left to the next generation in the hopes that they can somehow better their lives from it. That 70 year old with $250k in the bank can take that money and EASILY double it to $500k with a Single Pay Whole life. You took $250k and doubled it TAX FREE and IMPOSSIBLE for any kind of taxes, billing or any other agencies to touch.

You are right...YOUR ideas were terrible. We've all seen that you don't understand life insurance. Now, if I could just get you to stop spouting information as facts this thread would be a much better and much more informative place.

# ? Mar 19, 2015 13:31

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# ? May 26, 2024 13:54

DOMDOM: Apr 28, 2007; Fun Shoe

I have 25k in whole life as a safety to cover estate & death expenses.

I have no term because I have no immediate financial obligations to cover... kids, house, debt, etc.

I have no 401k but i do have a roth ira i contribute to haphazardly.

I'm not a big fan of whole life in large amounts at all, but I like the security of having a small amount permanently. I would never recommend it as an investment vehicle because as others are pointing out you'd get better returns elsewhere.

My best friends wife hounded me for months to sell them both 250k whole life policies. I told her it was a bad idea, suggested 30year term with either a good conversion option or a small supplemental whole life policy, and advised they invest the rest of the money elsewhere. She chose to ignore my advice and bought elsewhere.

Whole life has a place, unfortunately that's been distorted by agents pushing it in places & amounts that dont make sense for their own personal gain.

# ? Mar 19, 2015 14:24

OssiansFolly: Aug 3, 2012; Suffering at the factory of sadness every year.

dMastri posted:

I have 25k in whole life as a safety to cover estate & death expenses.

I have no term because I have no immediate financial obligations to cover... kids, house, debt, etc.

I have no 401k but i do have a roth ira i contribute to haphazardly.

I'm not a big fan of whole life in large amounts at all, but I like the security of having a small amount permanently. I would never recommend it as an investment vehicle because as others are pointing out you'd get better returns elsewhere.

My best friends wife hounded me for months to sell them both 250k whole life policies. I told her it was a bad idea, suggested 30year term with either a good conversion option or a small supplemental whole life policy, and advised they invest the rest of the money elsewhere. She chose to ignore my advice and bought elsewhere.

Whole life has a place, unfortunately that's been distorted by agents pushing it in places & amounts that dont make sense for their own personal gain.

Did you guys not have a Return of Premium Term product? I've found that people who want large amounts of Whole/Universal Life will typically bite on the Return of Premium products. You get your life insurance and 100% of the premium back as long as you keep the product in place for the full term.

# ? Mar 19, 2015 14:44

Jastiger: Oct 11, 2008; by FactsAreUseless

Thats not a bad idea, the return of premium thingie.

app posted:

Where have I called it an investment? Regardless of what you call it, with a whole life policy you pay money in now and then get a payout later. Whatever terminology you want to use that is effectively the same thing as an investment so it makes perfect sense to compare them.

So to be clear now you are saying whole life does not make sense for young adults? Because a lot of whole life has been recommend in this thread and I'm willing to bet 90-95% of the posters are between the ages of 20 and 50... Also it doesn't matter when you buy whole life, its still a lovely deal.

Single pay whole life ($50k) on a 5 year old costs $6,800 -
If you took that $6800 and invested it, around the expected time of death (80) you'd expect it to be worth over half a million dollars ($537k). If you were worried about dying while you had dependents, you could add in a 30 year term policy to cover 30-60 years old and would expect to have around ($526k). Both of these beat whole life conservatively by a factor of 10.

Single pay whole life ($50k) on a 70 year old costs $38,666 -
If you live just 5 years you've already more than broke even. I'd also question why, if you have $38,600 to spend on a life insurance policy at 70, you are buying life insurance at all. Also if you've lived to 70 your life expectancy is now upper 80's so again your expected return on the investments would be ~$100k, more than double the whole life pay out.

How are either of these a remotely good idea?

You're misrepresenting what both me and Ossians have said in this thread

# ? Mar 19, 2015 15:10

SiGmA_X: May 3, 2004; SiGmA_X

dMastri posted:

I have 25k in whole life as a safety to cover estate & death expenses.

I have no term because I have no immediate financial obligations to cover... kids, house, debt, etc.

I have no 401k but i do have a roth ira i contribute to haphazardly.

I'm not a big fan of whole life in large amounts at all, but I like the security of having a small amount permanently. I would never recommend it as an investment vehicle because as others are pointing out you'd get better returns elsewhere.

My best friends wife hounded me for months to sell them both 250k whole life policies. I told her it was a bad idea, suggested 30year term with either a good conversion option or a small supplemental whole life policy, and advised they invest the rest of the money elsewhere. She chose to ignore my advice and bought elsewhere.

Whole life has a place, unfortunately that's been distorted by agents pushing it in places & amounts that dont make sense for their own personal gain.

What does the 25k policy cost? Do you not have a retirement account that has >25k in it? I very much realize your post has been the most logical from an agent so far, but I still don't see the point. The goal of ones working life is to amass money to be able to retire, while enjoying life. Spending money on life insurance vs saving money seems pointless. Maybe a 25k 10yr term for an 18yo would make sense, but much after that the only reason is dependent support, not final expenses...

OssiansFolly posted:

It is NOT an investment. An Investment is money for YOU. Life insurance is money for SOMEONE ELSE. I am sorry this is a tough concept to wrap your head around. You are comparing apples and bananas here.

Whole life has its uses. I've said it a dozen times and provided important examples of when it is optimal. You've chosen to ignore those reasons and repeat the same tired thing over and over and OVER again. The horse is dead sir...please leave it.

A single pay Whole Life at age 5 is a WONDERFUL gift from a grandparent or a parent to a child. It is less than $7000 and guarantees that the child will have coverage for the rest of their lives regardless of medical conditions or status in life. MOST of those Whole Life policies also offer an option to increase the coverage a set number of times throughout their life regardless of medical conditions as long as the premium is paid. This means you have offered protection for them and potentially their family even if they grow up to have diabetes, cancer, Hep C or anything else that could come along.

On a 70 year old you wouldn't buy a single pay life for $50k. And here is where I can tell you don't understand. You've taken my examples and improperly used them TWICE now all the while referring to investments...again. At 70 you'd be looking to get the biggest policy possible with whatever money is currently left. 70 year olds don't need "later money". 70 year olds have "never money". This money is to be left to the next generation in the hopes that they can somehow better their lives from it. That 70 year old with $250k in the bank can take that money and EASILY double it to $500k with a Single Pay Whole life. You took $250k and doubled it TAX FREE and IMPOSSIBLE for any kind of taxes, billing or any other agencies to touch.

You are right...YOUR ideas were terrible. We've all seen that you don't understand life insurance. Now, if I could just get you to stop spouting information as facts this thread would be a much better and much more informative place.

Why would you need an insurance policy to provide money to non defendants, and if you have dependents, term provides a more appropriate amount! Final expenses should easily be handled by an IRA/401k, which passed outside of probate via a beneficiary - just like life insurance. If you're too poor to have a net worth, you surely are too poor to be throwing money away at a bad insurance product.

The only reason for any type of life insurance is to provide for dependents and cover funeral expenses. If you're 0-18, your parents pay for this and you need 10-25k of money set aside. If you're 18+ you pay for it and the same applies. If you're 50+ you have zero need because you have a solid 6 or 7 digit retirement saving.

This discussion is pretty pointless. You agents are convinced you're right, but mathematically you're very much wrong. Maybe teaching your clients to save money would be a better utility of effort, except you wouldn't make as nice of commissions.

SiGmA_X fucked around with this message at 15:28 on Mar 19, 2015

# ? Mar 19, 2015 15:11

OssiansFolly: Aug 3, 2012; Suffering at the factory of sadness every year.

SiGmA_X posted:

What does the 25k policy cost? Do you not have a retirement account that has >25k in it? I very much realize your post has been the most logical from an agent so far, but I still don't see the point. The goal of ones working life is to amass money to be able to retire, while enjoying life. Spending money on life insurance vs saving money seems pointless. Maybe a 25k 10yr term for an 18yo would make sense, but much after that the only reason is dependent support, not final expenses...
Why would you need an insurance policy to provide money to non defendants, and if you have dependents, term provides a more appropriate amount! Final expenses should easily be handled by an IRA/401k, which passed outside of probate via a beneficiary - just like life insurance. If you're too poor to have a net worth, you surely are too poor to be throwing money away at a bad insurance product.

This discussion is pretty pointless. You agents are convinced you're right, but mathematically you're very much wrong. Maybe teaching your clients to save money would be a better utility of effort, except you wouldn't make as nice of commissions.

You are still arguing with little to no experience in Life Insurance and it becomes more and more evident as you go.

Our "job" isn't to just sell people policies to make money. The difference between me and you is that I'm not a greedy, money grubbing crook. I do what is right for the customer. As dMastri said in his post, I have told people the policy they want is a bad financial decision and they should rethink the options I've provided. Life Insurance does no one any good if you buy something you can't afford in 5 years, 10 years or 15 years down the road. You have to not only be able to financially support that policy, but it has to make sense for your needs as well. Buying a $400/mo policy at age 25 when you are planning to have children in the near future is a bad financial decision. In a few years you will be calling to decrease coverage (bad idea), or convert to Term because you need that money to care for your family. Now I've done you a disservice and wasted however many months of $400/mo because you wanted the wrong policy for your needs. In the same respect it is also my job to make sure that your needs are covered on the benefit as well. Why would I sell a $50k Whole Life policy to a married man with 3 kids? It would be a smart decision to have something for burial later in life, but at the cost that late in life the ship has sailed. They'd need more coverage and in order to get more coverage you'd need more premium. The price point of Term makes more sense in this situation because for the same price as a Whole Life policy he'd get MORE coverage which is what he needs at this time.

Term isn't a product for the young or the old. Term is a product for the middle aged. Young people don't need term because they don't have expenses that are short term, and you don't know what kind of medical issues could arise. The old don't get Term because after 60 getting Term insurance is nearly impossible because Term policies have age limits.

Your IRA or 401k are for you. If there is money left in their for your next of kin and burial expenses then good for you, but that isn't often the case. More and more people are depleting those accounts as they live longer and longer.

I understand that you don't understand Life Insurance. I don't expect you to because you weren't educated and practiced in it. I've been doing this for years and have seen the good, bad, and sad associated with Life Insurance. I don't go into the Lawyer threads and offer legal advice because I got pulled over once and defended against a red light ticket I was given. Just because you have half assed, second hand knowledge of WHAT something is doesn't mean you understand HOW something is done. If you want to discuss investments and estate planning then I am sure there are a bunch of Goons out there that will be happy to discuss that, but this thread is NOT about investments or financial planning. You seem to have this misguided notion that all insurance salesmen are crooks, but I can't help that you were touched inappropriately by a salesmen in his office of horrors. Not everyone is looking for a whale to make a payday. Each agent in this thread knows a guy like that, and my guess is we don't like him/her very much for that reason. Our job is to do what is right for YOU, and incorrectly placing your money and family's security into a misguided policy doesn't do that.

# ? Mar 19, 2015 15:36

app: Dec 16, 2014; $$$$$$$$$

OssiansFolly posted:

It is NOT an investment. An Investment is money for YOU. Life insurance is money for SOMEONE ELSE. I am sorry this is a tough concept to wrap your head around. You are comparing apples and bananas here.

Whole life has its uses. I've said it a dozen times and provided important examples of when it is optimal. You've chosen to ignore those reasons and repeat the same tired thing over and over and OVER again. The horse is dead sir...please leave it.

A single pay Whole Life at age 5 is a WONDERFUL gift from a grandparent or a parent to a child. It is less than $7000 and guarantees that the child will have coverage for the rest of their lives regardless of medical conditions or status in life. MOST of those Whole Life policies also offer an option to increase the coverage a set number of times throughout their life regardless of medical conditions as long as the premium is paid. This means you have offered protection for them and potentially their family even if they grow up to have diabetes, cancer, Hep C or anything else that could come along.

On a 70 year old you wouldn't buy a single pay life for $50k. And here is where I can tell you don't understand. You've taken my examples and improperly used them TWICE now all the while referring to investments...again. At 70 you'd be looking to get the biggest policy possible with whatever money is currently left. 70 year olds don't need "later money". 70 year olds have "never money". This money is to be left to the next generation in the hopes that they can somehow better their lives from it. That 70 year old with $250k in the bank can take that money and EASILY double it to $500k with a Single Pay Whole life. You took $250k and doubled it TAX FREE and IMPOSSIBLE for any kind of taxes, billing or any other agencies to touch.

You are right...YOUR ideas were terrible. We've all seen that you don't understand life insurance. Now, if I could just get you to stop spouting information as facts this thread would be a much better and much more informative place.

Investments can grow for someone else too... you get that right? I don't understand why that is such a hard concept for you to understand.

You never provided one case where whole life comes out ahead, you only posted different ways to buy it.

Did you miss the part where that $7000 would grow to over half a million over the average life of that child? What is so great about giving $450k to the insurance company when you only get a $50k payout? That is a horrible deal.

The 70 year old I quoted would need $386k to buy a $500k whole life policy. Also at 70 your life expectancy is 86 so if they invested it instead it would end up with around $740k, again a couple hundred thousand better than the whole life policy.

Jastiger - how have I misrepresented anything you've said? All I've done is take the scenarios where you guys say whole life is better and run them as term + invest. I haven't misrepresented anything you've said.

# ? Mar 19, 2015 15:39

DOMDOM: Apr 28, 2007; Fun Shoe

SiGmA_X posted:

What does the 25k policy cost? Do you not have a retirement account that has >25k in it? I very much realize your post has been the most logical from an agent so far, but I still don't see the point. The goal of ones working life is to amass money to be able to retire, while enjoying life. Spending money on life insurance vs saving money seems pointless. Maybe a 25k 10yr term for an 18yo would make sense, but much after that the only reason is dependent support, not final expenses...

What happens when I retire and burn through my retirement funds and then die?

See you are coming at this from the perfect world example of a financial planner good with money. It makes logical sense, but I don't think it's grounded in reality for lots of folks.

I'm an idiot who spends too much on stupid stuff and doesn't save enough. There's a lot of idiots like me. Should we all be better with money? Sure. There's a lot of things we should all do - good luck changing the world.

The whole life policy is costing me $25 a month, so $300 a year. I got it when I was 21.

# ? Mar 19, 2015 15:54

OssiansFolly: Aug 3, 2012; Suffering at the factory of sadness every year.

app posted:

Investments can grow for someone else too... you get that right? I don't understand why that is such a hard concept for you to understand.

You never provided one case where whole life comes out ahead, you only posted different ways to buy it.

Did you miss the part where that $7000 would grow to over half a million over the average life of that child? What is so great about giving $450k to the insurance company when you only get a $50k payout? That is a horrible deal.

The 70 year old I quoted would need $386k to buy a $500k whole life policy. Also at 70 your life expectancy is 86 so if they invested it instead it would end up with around $740k, again a couple hundred thousand better than the whole life policy.

Jastiger - how have I misrepresented anything you've said? All I've done is take the scenarios where you guys say whole life is better and run them as term + invest. I haven't misrepresented anything you've said.

You misrepresent what we say by not actually reading anything, misquoting, misconstruing the statements and then finish with the same repetitive statements.

A prime example is where you got the notion that ANYONE is recommending you purchase a $50k policy for $450k. I'd love a direct quote for when this was stated, because it wasn't and you'd be fabricating statements again.

The 70 year old I quoted would need less than $250k to get a $500k policy. It is obvious that your resources on the subject are much more limited than ours. It would be nice if everyone lived to 86, but that isn't the case. The average life expectancy in the US is 78 currently. Sure you can base it off of Social Security, but their numbers are very inaccurate.

Life Insurance isn't a replacement for investments. I am sounding like a broken record here. You shouldn't be doing one or the other. You need to properly balance both and prepare for the future. What good is a large investment if you don't have the time for it to grow? Or you end up needing that money before it matures?

# ? Mar 19, 2015 16:03

SiGmA_X: May 3, 2004; SiGmA_X

dMastri posted:

What happens when I retire and burn through my retirement funds and then die?

See you are coming at this from the perfect world example of a financial planner good with money. It makes logical sense, but I don't think it's grounded in reality for lots of folks.

I'm an idiot who spends too much on stupid stuff and doesn't save enough. There's a lot of idiots like me. Should we all be better with money? Sure. There's a lot of things we should all do - good luck changing the world.

The whole life policy is costing me $25 a month, so $300 a year. I got it when I was 21.

A little planning goes a long way... Maybe I'm living in a different world, most elderly people I know are engineers or teachers or other professionals. I know zero retired adults who have financial issues because they *saved* all their life.. Savings before spending. It's off the top, not whatever is left over.

$300*50=$15,000. I don't have the mental availability to do the computation on my phone, but you should just throw an extra $300 a year into investments.

OssiansFolly posted:

You misrepresent what we say by not actually reading anything, misquoting, misconstruing the statements and then finish with the same repetitive statements.

A prime example is where you got the notion that ANYONE is recommending you purchase a $50k policy for $450k. I'd love a direct quote for when this was stated, because it wasn't and you'd be fabricating statements again.

The 70 year old I quoted would need less than $250k to get a $500k policy. It is obvious that your resources on the subject are much more limited than ours. It would be nice if everyone lived to 86, but that isn't the case. The average life expectancy in the US is 78 currently. Sure you can base it off of Social Security, but their numbers are very inaccurate.

Life Insurance isn't a replacement for investments. I am sounding like a broken record here. You shouldn't be doing one or the other. You need to properly balance both and prepare for the future. What good is a large investment if you don't have the time for it to grow? Or you end up needing that money before it matures?

I get where you're coming from. But mathematically you're wrong except in rare cases.

Can you do me a favor and legitimately make a recommendation for myself and my gf? Once we're married we will be buying more life (I have ~330k from work and she has 25k, going up to a few hundred k once she changes jobs shortly). Personal incomes of 55&40k, mortgage payoff of $250k, no other debt. We're 29/28 (or will be once this occurs) and in perfect health with no family history of health issues. What would you suggest to us?

SiGmA_X fucked around with this message at 16:34 on Mar 19, 2015

# ? Mar 19, 2015 16:23

NeurosisHead: Jul 22, 2007; NONONONONONONONONO

SiGmA_X posted:

$300*50=$15,000. I don't have the mental availability to do the computation on my phone, but you should just throw an extra $300 a year into investments.
I get where you're coming from. But mathematically you're wrong except in rare cases.

Can you do me a favor and legitimately make a recommendation for myself and my gf? Once we're married we will be buying more life (I have ~330k from work and she has 25k, going up to a few hundred k once she changes jobs shortly). Personal incomes of 55&40k, mortgage payoff of $250k, no other debt. We're 29/28 (or will be once this occurs). What would you suggest to us?

Do you plan to have kids at all? I'm probably not going to be the one to answer, but it can play a role for whoever is so we might as well clear it up now.

# ? Mar 19, 2015 16:27

Jastiger: Oct 11, 2008; by FactsAreUseless

SiGmA_X posted:

$300*50=$15,000. I don't have the mental availability to do the computation on my phone, but you should just throw an extra $300 a year into investments.
I get where you're coming from. But mathematically you're wrong except in rare cases.

Can you do me a favor and legitimately make a recommendation for myself and my gf? Once we're married we will be buying more life (I have ~330k from work and she has 25k, going up to a few hundred k once she changes jobs shortly). Personal incomes of 55&40k, mortgage payoff of $250k, no other debt. We're 29/28 (or will be once this occurs). What would you suggest to us?

THe first question you have to ask is one only YOU can answer- What do you want it FOR?

# ? Mar 19, 2015 16:34

SiGmA_X: May 3, 2004; SiGmA_X

No to kids.

Jastiger posted:

THe first question you have to ask is one only YOU can answer- What do you want it FOR?

To provide income replacement as to not put the other in a bind.

# ? Mar 19, 2015 16:36

OssiansFolly: Aug 3, 2012; Suffering at the factory of sadness every year.

SiGmA_X posted:

$300*50=$15,000. I don't have the mental availability to do the computation on my phone, but you should just throw an extra $300 a year into investments.
I get where you're coming from. But mathematically you're wrong except in rare cases.

Can you do me a favor and legitimately make a recommendation for myself and my gf? Once we're married we will be buying more life (I have ~330k from work and she has 25k, going up to a few hundred k once she changes jobs shortly). Personal incomes of 55&40k, mortgage payoff of $250k, no other debt. We're 29/28 (or will be once this occurs). What would you suggest to us?

Smokers? Overall health (you don't obviously have to tell me in a public forum if you have any conditions or medications you take regularly, but a great, good or fair would help)? Use any form of substance you don't have a prescription for (again, not asking to out you just giving examples of info I'd need)?

Yea kids question is obviously an important one, then whether you plan on paying for your kids education through college or just 18 if something happens. Is it important to have a policy that offers a child rider to cover the expenses of a child's burial in the event they pass before 18? How about the option to convert that child's coverage to their own policy at 18, 21 or 25?

Then I'd ask you to go to your employer and get details on that policy. Who is beneficiary? How was the amount calculated (appears to be 6 times your annual salary)? Does that change with your salary? Who owns the policy? Do you get the option to take it with you if you quit, get fired or retire? Can you purchase more from that carrier or make any portion of that permanent if the need arises?

If you died tomorrow how many years would it take your wife to recover with the loss of your income? 5 years? 10 years? Right away? Not concerned? How about the flip side if something happened to her?

Would you like to leave any money to a charity or anyone else in the family (god child or niece, nephew, etc.)?

These questions would have to be answered before I could even start to make suggestions.

Edit: Also, budget?

# ? Mar 19, 2015 16:38

SiGmA_X: May 3, 2004; SiGmA_X

OssiansFolly posted:

Smokers? Overall health (you don't obviously have to tell me in a public forum if you have any conditions or medications you take regularly, but a great, good or fair would help)? Use any form of substance you don't have a prescription for (again, not asking to out you just giving examples of info I'd need)?

Yea kids question is obviously an important one, then whether you plan on paying for your kids education through college or just 18 if something happens. Is it important to have a policy that offers a child rider to cover the expenses of a child's burial in the event they pass before 18? How about the option to convert that child's coverage to their own policy at 18, 21 or 25?

Then I'd ask you to go to your employer and get details on that policy. Who is beneficiary? How was the amount calculated (appears to be 6 times your annual salary)? Does that change with your salary? Who owns the policy? Do you get the option to take it with you if you quit, get fired or retire? Can you purchase more from that carrier or make any portion of that permanent if the need arises?

If you died tomorrow how many years would it take your wife to recover with the loss of your income? 5 years? 10 years? Right away? Not concerned? How about the flip side if something happened to her?

Would you like to leave any money to a charity or anyone else in the family (god child or niece, nephew, etc.)?

These questions would have to be answered before I could even start to make suggestions.

Edit: Also, budget?

According to my companies underwriters (I work for a life insurance company), I have great health. I have genetic spine issues but those couldn't ever lead to death, only disability. Our underwriters (who received a stack of medical info) said it doesn't factor into life expectancy. So, we both have 'perfect' life insurance bills of health and family history. Non smokers, no substance abuse, light drinkers.

No kids, no plans for them.

Employer plan is tied to a multiplier of income (6x, adjustable annually). It is portable but it's not exactly cheap - though maybe it is cheaper than whole life - it's $600 a year. I'm not sure about the 'owner', I'm guessing it's me but I'm unsure - It's group term, I bet if I listed my employer you could answer this, we provide group term and disability for about 7mil US employees... Beneficiaries are my gf and folks for now, but will change to almost entirely gf once we're married, with a small amount for my folks to repay them for my education (personal goal of mine) and to help them cover final expenses, as they'll incur plenty of costs if I died (travel, etc). I can increase the amount annually (November), and take it with me at the same rate per 1k if I'm fired, quit or become disabled. The portability can only be done upon parting ways with the company, and I can elect to make all, part, or none portable (retain, in other words). I just re read the portability document and it would last until I die or enter military service (so until I die).

She would likely never recover income wise on her own, and only would recover upon remarrying. So the need would be to support her long term as remarrying is a unknown (tho I'm sure likely, a ways down the road... I hope I don't die ha.) I would eventually be able to replace her income, but I would want her life insurance policy to be able to support me for a long while, 15-20yrs. Kind of depends on when we both die, and what our IRA balances are at that point, which leaves a big unknown (DOD, I can back out the IRA balance easily as we have set contributions and I can project growth conservatively and as such reasonably accurately)

Leaving money to others isn't really a concern, so I suppose, 50k to my folks and the same to hers. We'd both like to pay back the education expenses incurred on our behaves and cover flights to our location as both of our families live in different states.

Budget is *unlimited*, but reasonable... If I'm spending 2k/mo, I'd put that in my taxable brokerage account as it would have a better return...

# ? Mar 19, 2015 17:22

OssiansFolly: Aug 3, 2012; Suffering at the factory of sadness every year.

SiGmA_X posted:

According to my companies underwriters (I work for a life insurance company), I have great health. I have genetic spine issues but those couldn't ever lead to death, only disability. Our underwriters (who received a stack of medical info) said it doesn't factor into life expectancy. So, we both have 'perfect' life insurance bills of health and family history. Non smokers, no substance abuse, light drinkers.

No kids, no plans for them.

Employer plan is tied to a multiplier of income (6x, adjustable annually). It is portable but it's not exactly cheap - though maybe it is cheaper than whole life - it's $600 a year. I'm not sure about the 'owner', I'm guessing it's me but I'm unsure - It's group term, I bet if I listed my employer you could answer this, we provide group term and disability for about 7mil US employees... Beneficiaries are my gf and folks for now, but will change to almost entirely gf once we're married, with a small amount for my folks to repay them for my education (personal goal of mine) and to help them cover final expenses, as they'll incur plenty of costs if I died (travel, etc). I can increase the amount annually (November), and take it with me at the same rate per 1k if I'm fired, quit or become disabled. The portability can only be done upon parting ways with the company, and I can elect to make all, part, or none portable (retain, in other words). I just re read the portability document and it would last until I die or enter military service (so until I die).

She would likely never recover income wise on her own, and only would recover upon remarrying. So the need would be to support her long term as remarrying is a unknown (tho I'm sure likely, a ways down the road... I hope I don't die ha.) I would eventually be able to replace her income, but I would want her life insurance policy to be able to support me for a long while, 15-20yrs. Kind of depends on when we both die, and what our IRA balances are at that point, which leaves a big unknown (DOD, I can back out the IRA balance easily as we have set contributions and I can project growth conservatively and as such reasonably accurately)

Leaving money to others isn't really a concern, so I suppose, 50k to my folks and the same to hers. We'd both like to pay back the education expenses incurred on our behaves and cover flights to our location as both of our families live in different states.

Budget is *unlimited*, but reasonable... If I'm spending 2k/mo, I'd put that in my taxable brokerage account as it would have a better return...

So then you'd just need $250k for the home, $50k for burial (including travel since average funeral is $25k ish), $50k to repay education, and 14 years of income replacement at $55k ($770k). Total for you the goal would be $1.12M on the longest term available. Due to spine you may not qualify for the disability rider to pay for costs of policy in the event of becoming disabled, but that would be a separate policy if you needed a legit disability policy.

For her you'd be looking at $250k for home, $50k for burial, 50k to repay education and you'd need the full 20 yrs of income replacement at $40k ($800k). She isn't far from you with a total of $1.15M in coverage on the longest term available.

For you between $121-145/month
For her between $99-122/month

Those are based on the benefits I calculated and a 30 year term. I ALWAYS quote individuals as Standard Non-Tobacco so the premiums could come in lower if UW deems you fit for a higher bracket. I didn't include Accidental Death or Waiver of Premium for Disability in these quoted numbers.

The next question is, is there a NEED for this much insurance? There were a lot of words like "want, likely, and suppose" in your post, so my guess is that you don't NEED that much money and you are likely being cautious. As it stands you are looking at between $220-267/month in life insurance when you could probably trim that down by $50/month and use that $50 to go to dinner once a month, start a small $500 scholarship (since you mentioned how important it was you received your education and it was a financial "burden" that was placed on your parents), or maybe just $50 into a new stock that is higher risk than you usually want to place your retirement money.

# ? Mar 19, 2015 18:24

SiGmA_X: May 3, 2004; SiGmA_X

OssiansFolly posted:

So then you'd just need $250k for the home, $50k for burial (including travel since average funeral is $25k ish), $50k to repay education, and 14 years of income replacement at $55k ($770k). Total for you the goal would be $1.12M on the longest term available. Due to spine you may not qualify for the disability rider to pay for costs of policy in the event of becoming disabled, but that would be a separate policy if you needed a legit disability policy.

For her you'd be looking at $250k for home, $50k for burial, 50k to repay education and you'd need the full 20 yrs of income replacement at $40k ($800k). She isn't far from you with a total of $1.15M in coverage on the longest term available.

For you between $121-145/month
For her between $99-122/month

Those are based on the benefits I calculated and a 30 year term. I ALWAYS quote individuals as Standard Non-Tobacco so the premiums could come in lower if UW deems you fit for a higher bracket. I didn't include Accidental Death or Waiver of Premium for Disability in these quoted numbers.

The next question is, is there a NEED for this much insurance? There were a lot of words like "want, likely, and suppose" in your post, so my guess is that you don't NEED that much money and you are likely being cautious. As it stands you are looking at between $220-267/month in life insurance when you could probably trim that down by $50/month and use that $50 to go to dinner once a month, start a small $500 scholarship (since you mentioned how important it was you received your education and it was a financial "burden" that was placed on your parents), or maybe just $50 into a new stock that is higher risk than you usually want to place your retirement money.

I'm surprised by your calculations, and I generally agree with them (that's the surprising part!) The *only* thing I disagree with is income replacement projections because I believe in investing, so I come up with a bit lower number for each of us. I come up with 100k final expenses each (education and funeral and related), and 12.5x income per each which results in a 8% drawdown. So about 787k rounded to 800k for me and 600k for her. This comes out to $584 & $370 a year for a 30yr term, at 'preferred plus' which may or may not be what we fall under. Based on Zander Insurance's description and based on our last blood work, it is, but I'm not sure how much that lines up with what UW would say.

20yr drops the cost a fair bit too: $348 & $240 a year.

Back to your 'is there a need' question: probably not. I am guessing that a 20yr term at 10x income would easily suffice. If one of us died after 20yrs, the deceased will have enough in an IRA to support the other, and we won't have a mortgage in 20yrs. I'm drat glad I have a year to crunch numbers and figure out what type of need will really be present.

A scholarship is a nifty idea; her family has an 8 figure scholarship fund at a public university and talking to the donor, it's very cool to hear about all of the bright STEM students they've been able to give a full ride to, who otherwise would have had 100k+ in debt. Education wasn't a burden for either of our folks (both **very** financially comfortable, high income and generally good with money) but it's a personal thing of not liking to push our costs on others. It's not like our families didn't spend many hundreds of thousands due to our births, after all.

Thanks for the input and estimation.

One question: why no whole life?

SiGmA_X fucked around with this message at 19:06 on Mar 19, 2015

# ? Mar 19, 2015 19:01

DOMDOM: Apr 28, 2007; Fun Shoe

SiGmA_X posted:

A little planning goes a long way...

shutup mom

I will die alone & poor, thank you very much

# ? Mar 19, 2015 19:14

OssiansFolly: Aug 3, 2012; Suffering at the factory of sadness every year.

SiGmA_X posted:

I'm surprised by your calculations, and I generally agree with them (that's the surprising part!) The *only* thing I disagree with is income replacement projections because I believe in investing, so I come up with a bit lower number for each of us. I come up with 100k final expenses each (education and funeral and related), and 12.5x income per each which results in a 8% drawdown. So about 787k rounded to 800k for me and 600k for her. This comes out to $584 & $370 a year for a 30yr term, at 'preferred plus' which may or may not be what we fall under. Based on Zander Insurance's description and based on our last blood work, it is, but I'm not sure how much that lines up with what UW would say.

20yr drops the cost a fair bit too: $348 & $240 a year.

Back to your 'is there a need' question: probably not. I am guessing that a 20yr term at 10x income would easily suffice. If one of us died after 20yrs, the deceased will have enough in an IRA to support the other, and we won't have a mortgage in 20yrs. I'm drat glad I have a year to crunch numbers and figure out what type of need will really be present.

A scholarship is a nifty idea; her family has an 8 figure scholarship fund at a public university and talking to the donor, it's very cool to hear about all of the bright STEM students they've been able to give a full ride to, who otherwise would have had 100k+ in debt. Education wasn't a burden for either of our folks (both **very** financially comfortable, high income and generally good with money) but it's a personal thing of not liking to push our costs on others. It's not like our families didn't spend many hundreds of thousands due to our births, after all.

Thanks for the input and estimation.

One question: why no whole life?

Whole Life isn't for the middle aged...it is what I have been saying this whole time. Makes no sense at this time, and you can take a portion or all of the term that you are applying for and convert to permanent coverage later down the road in the event you feel the need to have something permanent.

My numbers were solely based on the information given to me...you asked for 20 years worth of income replacement so that is what was quoted, but as I pointed out it probably isn't necessary. Income replacement for 10 years is usually more than enough and that is being really cautious already.

I wouldn't recommend the 20 yr term, but that is just me. If you can afford the money take the full 30 yr term because once you hit 50 the pricing gets turned up and who knows what will happen in your 40s that may prevent you from getting more insurance. The goal is to get insurance early that will last as long as possible because the unknowns are troublesome.

Obviously that advice is only as good as the budget provides. Don't get into a policy that you can't pay the full term on.

# ? Mar 19, 2015 19:16

SiGmA_X: May 3, 2004; SiGmA_X

OssiansFolly posted:

Whole Life isn't for the middle aged...it is what I have been saying this whole time. Makes no sense at this time, and you can take a portion or all of the term that you are applying for and convert to permanent coverage later down the road in the event you feel the need to have something permanent.

My numbers were solely based on the information given to me...you asked for 20 years worth of income replacement so that is what was quoted, but as I pointed out it probably isn't necessary. Income replacement for 10 years is usually more than enough and that is being really cautious already.

I wouldn't recommend the 20 yr term, but that is just me. If you can afford the money take the full 30 yr term because once you hit 50 the pricing gets turned up and who knows what will happen in your 40s that may prevent you from getting more insurance. The goal is to get insurance early that will last as long as possible because the unknowns are troublesome.

Obviously that advice is only as good as the budget provides. Don't get into a policy that you can't pay the full term on.

Middle aged and not even thirty, you are making me feel as if one foot in the grave! Hah. Then again, we're all dying.

I definitely see the logic behind a 30yr over 20yr, and it is what all my spreadsheets show I've been thinking about, too. The one possibly mitigating factor is as I age, I will potentially need more coverage for a shorter term...

# ? Mar 19, 2015 20:08

OssiansFolly: Aug 3, 2012; Suffering at the factory of sadness every year.

SiGmA_X posted:

Middle aged and not even thirty, you are making me feel as if one foot in the grave! Hah. Then again, we're all dying.

I definitely see the logic behind a 30yr over 20yr, and it is what all my spreadsheets show I've been thinking about, too. The one possibly mitigating factor is as I age, I will potentially need more coverage for a shorter term...

Eh I am 29 too.

You can always add 5 yr terms as you need coverage...they are cheap, usually offer discounts for paying annually (or in full), and fit most short term needs. It isn't unusual for me to write 5 yr terms on people and for them to have 2-3 of them.

# ? Mar 19, 2015 20:18

app: Dec 16, 2014; $$$$$$$$$

OssiansFolly posted:

You misrepresent what we say by not actually reading anything, misquoting, misconstruing the statements and then finish with the same repetitive statements.

A prime example is where you got the notion that ANYONE is recommending you purchase a $50k policy for $450k. I'd love a direct quote for when this was stated, because it wasn't and you'd be fabricating statements again.

The 70 year old I quoted would need less than $250k to get a $500k policy. It is obvious that your resources on the subject are much more limited than ours. It would be nice if everyone lived to 86, but that isn't the case. The average life expectancy in the US is 78 currently. Sure you can base it off of Social Security, but their numbers are very inaccurate.

Life Insurance isn't a replacement for investments. I am sounding like a broken record here. You shouldn't be doing one or the other. You need to properly balance both and prepare for the future. What good is a large investment if you don't have the time for it to grow? Or you end up needing that money before it matures?

And you have yet to demonstrate a single concrete example where whole life insurance comes out ahead, seriously, just show us numbers how the whole life product ever comes out ahead. All you do is speak in generalities but can never provide any numbers. You complained that my first 30 year old example didn't make sense so i did a child and the elderly and still showed how bad it was. The $450k figure was the opportunity cost of purchasing the whole live policy ($50k payout vs. the ~$500k value of the investments). I am quoting my whole life policies right off state farm's website. When I asked for numbers in the first place both you and Jastiger said you couldn't provide anything concrete, what vast resources are you speaking of? I'm quoting my policies right off statefarm.com which should be a very close number to what companies will offer. Can you please offer concrete numbers how whole life is better? That is all I am asking.

Life expectancy at BIRTH is 78. Each year you live your life expectancy increases. By the time to make it to 70 its crept up from 78 to 86. You can look at numerous actuarial societies and they are all in the 85-87 range, change that doesn't have a material impact on the outcome.

You do understand I am not saying all insurance is bad, right? Your last comment about not having time for your money to grow is exactly why people with dependents should get term policies. They provide that benefit in the event of something unfortunate. I literally just wrote my $400 check for my annual premium last week. As for needing money before it matures, investments can be very liquid. You can take money out for home down payments, education, emergency medical, etc. at any time.

Edit: just read dMastri's comment about how it essentially forces him to save. That is an interesting argument. On one hand I can see, if you have a whole life bill, you are going to be more likely to pay it than stash it in savings. Thus whole life effectively forces savings upon people who don't have the willpower to do it. My guess is that this is probably true, its just a shame that the people who pay a fortune for these policies are the ones who can least afford it. Also, anyone coming to this thread and posting asking for advice clearly is taking initiative and should understand that whole life is going to cost them a lot more over the years than an investment.

app fucked around with this message at 07:00 on Mar 20, 2015

# ? Mar 20, 2015 06:56

OssiansFolly: Aug 3, 2012; Suffering at the factory of sadness every year.

app posted:

And you have yet to demonstrate a single concrete example where whole life insurance comes out ahead, seriously, just show us numbers how the whole life product ever comes out ahead. All you do is speak in generalities but can never provide any numbers. You complained that my first 30 year old example didn't make sense so i did a child and the elderly and still showed how bad it was. The $450k figure was the opportunity cost of purchasing the whole live policy ($50k payout vs. the ~$500k value of the investments). I am quoting my whole life policies right off state farm's website. When I asked for numbers in the first place both you and Jastiger said you couldn't provide anything concrete, what vast resources are you speaking of? I'm quoting my policies right off statefarm.com which should be a very close number to what companies will offer. Can you please offer concrete numbers how whole life is better? That is all I am asking.

Life expectancy at BIRTH is 78. Each year you live your life expectancy increases. By the time to make it to 70 its crept up from 78 to 86. You can look at numerous actuarial societies and they are all in the 85-87 range, change that doesn't have a material impact on the outcome.

You do understand I am not saying all insurance is bad, right? Your last comment about not having time for your money to grow is exactly why people with dependents should get term policies. They provide that benefit in the event of something unfortunate. I literally just wrote my $400 check for my annual premium last week. As for needing money before it matures, investments can be very liquid. You can take money out for home down payments, education, emergency medical, etc. at any time.

Edit: just read dMastri's comment about how it essentially forces him to save. That is an interesting argument. On one hand I can see, if you have a whole life bill, you are going to be more likely to pay it than stash it in savings. Thus whole life effectively forces savings upon people who don't have the willpower to do it. My guess is that this is probably true, its just a shame that the people who pay a fortune for these policies are the ones who can least afford it. Also, anyone coming to this thread and posting asking for advice clearly is taking initiative and should understand that whole life is going to cost them a lot more over the years than an investment.

I think basically everyone in this thread is done with you. We've provided you details. I've provided you quotes and costs for those quotes and yet you still make the same tired argument that it is better to invest your money because you are a magician of future sight.

We get it...you have no insurance background, you are a financial genius, and we all know when our time is being wasted. Please go back to one of the financial planning threads so we can get back to actually helping answer people's questions like this thread has been useful doing for months. You've done nothing but make this thread toxic and basically off topic for the last week.

# ? Mar 20, 2015 13:26

app: Dec 16, 2014; $$$$$$$$$

OssiansFolly posted:

I think basically everyone in this thread is done with you. We've provided you details. I've provided you quotes and costs for those quotes and yet you still make the same tired argument that it is better to invest your money because you are a magician of future sight.

We get it...you have no insurance background, you are a financial genius, and we all know when our time is being wasted. Please go back to one of the financial planning threads so we can get back to actually helping answer people's questions like this thread has been useful doing for months. You've done nothing but make this thread toxic and basically off topic for the last week.

'Everyone' meaning the two insurance sales guys are done with me. You've never provided concrete numbers and just offered generalities. You're advice is misleading at best. I am not sure why very concrete examples are considered a 'tired argument'.

Also I never mentioned this earlier, but I majored in finance, took a job in insurance and realized how those who got ahead were the ones pushing whole life policies with fat commissions. I could never bring myself to sell the crap so I got out.

Also you are a fool if you don't understand how insurance and financial planning are so closely related. I get it, this is your livelihood so you have literally convinced you're self how you are helping your customers. If I had stayed in the business that is probably what I would have done the same. But you're kidding yourself if you think my providing concrete numbers in the thread is making is 'toxic' or 'off topic'.

# ? Mar 20, 2015 15:27

spf3million: Sep 27, 2007; hit 'em with the rhythm

Ehh, I've found the discussion pretty interesting. All he's asking for is a hypothetical example (with numbers) of when buying a whole life policy makes more sense (meaning you end with more money) than just taking the premium and investing it. I would even be satisfied if they answer is, "buy whole life policy for newborn for $X with $Y payout, child dies at age 1. Parents make $Y-$X off of transaction which is more than $X*1.04 (assuming a 4% interest rate)".

Obviously this is a pretty lame example and would be a huge assumption since dying at age 1 is a major leap vs the normal life expectancy of a newborn but it's within the realm of possibilities. If there aren't any other less-lame examples out there I think all of us non-insurance people would be like, "ok thanks, so basically we'll never need whole life since we won't make such liberal assumptions" and we could get on with this otherwise very informative thread.

# ? Mar 20, 2015 15:29

SiGmA_X: May 3, 2004; SiGmA_X

OssiansFolly posted:

I think basically everyone in this thread is done with you. We've provided you details. I've provided you quotes and costs for those quotes and yet you still make the same tired argument that it is better to invest your money because you are a magician of future sight.

We get it...you have no insurance background, you are a financial genius, and we all know when our time is being wasted. Please go back to one of the financial planning threads so we can get back to actually helping answer people's questions like this thread has been useful doing for months. You've done nothing but make this thread toxic and basically off topic for the last week.

Hang on one second. Why app is still attacking *is* valid. A goon came in asking for advice and this is what he was told, without any background questions asked. The couple is in their early/mid-thirties too:

Jastiger posted:

Buy as much life insurance as you can afford.

Again: buy as much life insurance as you can afford. I think that is in the OP.

But yeah, buy as much as you can afford.

I myself find it a bit silly that the approach people have is tied directly to their income. Forget that. Instead, focus on what you actually WANT it to do for your family. Do you want it to put your kids through college if you die? Retire? Pay off all your/their debts? Help them start their own family? These are all more important than multiplying your lost income by a few years until college age.

If you can swing it, a whole policy that lasts forever is decent when supplemented with a term policy that will last for 30 years or so. That is the way I'd go. THe higher term for when they really are dependent, and the whole to be there to help after the fact.

And this type of 'advice' isn't advice in the least, as you just proved when giving insight to a term quote for me!

# ? Mar 20, 2015 15:31

Jastiger: Oct 11, 2008; by FactsAreUseless

app posted:

'Everyone' meaning the two insurance sales guys are done with me. You've never provided concrete numbers and just offered generalities. You're advice is misleading at best. I am not sure why very concrete examples are considered a 'tired argument'.

Also I never mentioned this earlier, but I majored in finance, took a job in insurance and realized how those who got ahead were the ones pushing whole life policies with fat commissions. I could never bring myself to sell the crap so I got out.

Also you are a fool if you don't understand how insurance and financial planning are so closely related. I get it, this is your livelihood so you have literally convinced you're self how you are helping your customers. If I had stayed in the business that is probably what I would have done the same. But you're kidding yourself if you think my providing concrete numbers in the thread is making is 'toxic' or 'off topic'.

Its off topic because we've said there are specific instances where whole makes sense, and you keep running numbers on 30 year olds at massive numbers.

SiGmA_X posted:

Hang on one second. Why app is still attacking *is* valid. A goon came in asking for advice and this is what he was told, without any background questions asked. The couple is in their early/mid-thirties too:
And this type of 'advice' isn't advice in the least, as you just proved when giving insight to a term quote for me!

I'll take the hit on this for not asking more questions. However, no where did I say to get whole life INSTEAD of term.

Also, this thread is not the same thing as sitting down with an agent for YOUR specific needs, its general strokes of information to learn more about insurance and what next steps to take if you have questions. Ossiansfolly gave you some information but I wouldn't bank on it because he only knows what you told him over a forum. For all we know your wife may want kids or have different plans. Maybe your housing needs are changing. There are just so, so, so many questions that we can't give specific information simply over the forum.

Saint Fu posted:

Ehh, I've found the discussion pretty interesting. All he's asking for is a hypothetical example (with numbers) of when buying a whole life policy makes more sense (meaning you end with more money) than just taking the premium and investing it. I would even be satisfied if they answer is, "buy whole life policy for newborn for $X with $Y payout, child dies at age 1. Parents make $Y-$X off of transaction which is more than $X*1.04 (assuming a 4% interest rate)".

Obviously this is a pretty lame example and would be a huge assumption since dying at age 1 is a major leap vs the normal life expectancy of a newborn but it's within the realm of possibilities. If there aren't any other less-lame examples out there I think all of us non-insurance people would be like, "ok thanks, so basically we'll never need whole life since we won't make such liberal assumptions" and we could get on with this otherwise very informative thread.

For me the best examples I've seen it used in are for younger people rather than the elderly. You get a whole life for youngster at a relatively low face amount, its a good gift to give someone with little to no risk to the purchaser or the kiddo. Its also a good safety net if the child becomes uninsurable later on in life, or due to poor health/life style insurance becomes prohibitively expensive. Get a whole life policy with a guaranteed purchase rider and you have an uninsurable person guaranteed insurance where they otherwise couldn't be. An extreme example would be if they are going to die young, I've heard stories of people dumping in massive amounts of money into these policies to make sure the family gets paid out. Cynical, yes, but if they don't have 20 years for an investment to mature due to life expectancy, getting life insurance can actually be the better deal.

# ? Mar 20, 2015 15:59

OssiansFolly: Aug 3, 2012; Suffering at the factory of sadness every year.

SiGmA_X posted:

Hang on one second. Why app is still attacking *is* valid. A goon came in asking for advice and this is what he was told, without any background questions asked. The couple is in their early/mid-thirties too:
And this type of 'advice' isn't advice in the least, as you just proved when giving insight to a term quote for me!

I provided numbers for both major times I'd recommend Whole Life...the really young and the really old.

I did not offer advice to buy that Whole Life when you are middle aged. I can see situations where it may work out, but it isn't the definition. If the OP for the discussion wants advice as to what to get in your 30's follow the same basic guidelines I posted for you just a page back. The questions don't change...just the math. Math is simple enough that anyone can do it.

app posted:

'Everyone' meaning the two insurance sales guys are done with me. You've never provided concrete numbers and just offered generalities. You're advice is misleading at best. I am not sure why very concrete examples are considered a 'tired argument'.

Also I never mentioned this earlier, but I majored in finance, took a job in insurance and realized how those who got ahead were the ones pushing whole life policies with fat commissions. I could never bring myself to sell the crap so I got out.

Also you are a fool if you don't understand how insurance and financial planning are so closely related. I get it, this is your livelihood so you have literally convinced you're self how you are helping your customers. If I had stayed in the business that is probably what I would have done the same. But you're kidding yourself if you think my providing concrete numbers in the thread is making is 'toxic' or 'off topic'.

This just in...closely related equals the same. The goals are similar therefore they are the same. This went from a discussion on insurance to philosophy.

# ? Mar 20, 2015 16:04

NeurosisHead: Jul 22, 2007; NONONONONONONONONO

app posted:

'Everyone' meaning the two insurance sales guys are done with me. You've never provided concrete numbers and just offered generalities. You're advice is misleading at best. I am not sure why very concrete examples are considered a 'tired argument'.

Also I never mentioned this earlier, but I majored in finance, took a job in insurance and realized how those who got ahead were the ones pushing whole life policies with fat commissions. I could never bring myself to sell the crap so I got out.

Also you are a fool if you don't understand how insurance and financial planning are so closely related. I get it, this is your livelihood so you have literally convinced you're self how you are helping your customers. If I had stayed in the business that is probably what I would have done the same. But you're kidding yourself if you think my providing concrete numbers in the thread is making is 'toxic' or 'off topic'.

What is, for you, an acceptable resolution to this discussion?

# ? Mar 20, 2015 17:01

BarbarianElephant: Feb 12, 2015; The fairy of forgiveness has removed your red text.

This thread is giving me the willies. My partner & I signed up for a variable universal life insurance policy about a year ago. We also have term life insurance. We have a very good income but we are not rich, and we are about 40 years old. We have a toddler. We are self-employed in our own small business.

Should we cut our losses and cancel the policy?

# ? Mar 20, 2015 18:17

Jastiger: Oct 11, 2008; by FactsAreUseless

BarbarianElephant posted:

This thread is giving me the willies. My partner & I signed up for a variable universal life insurance policy about a year ago. We also have term life insurance. We have a very good income but we are not rich, and we are about 40 years old. We have a toddler. We are self-employed in our own small business.

Should we cut our losses and cancel the policy?

Heh we really don't have enough information to answer that. Why not sit down with your financial planner and take a look? Especially the small print on there as far as the target premium and how much you will need to keep it funded. IF you're well ahead of the game and won't have to ever put more cash in it, then yeah, great, it might be a great vehicle for you guys! If its doing poorly or you're at risk of paying a lot more than you are now, or may have in the future...then yeah, lets take a look at it. Universal Variable has its place, but you want to make sure you're not banking on a low premium due to high performance! That can come out from under you real fast.

# ? Mar 20, 2015 18:27

BarbarianElephant: Feb 12, 2015; The fairy of forgiveness has removed your red text.

We don't have a financial planner. I have no idea how to get a reputable financial planner. They all seem to sell stuff based on what commission they will get. We do need one. How can I get one that gives advice unbiased by what he will get out of it?

I can't truly say we are "banking" on anything, that's how dumb we are. We wanted life insurance to cover our toddler's expenses if one or both of us died, and that's what we got sold. The salesman made it sound awesome, like it would eventually pay for itself, but I'm beginning to worry that it was bullshit and our term insurance would have been just fine.

BarbarianElephant fucked around with this message at 18:41 on Mar 20, 2015

# ? Mar 20, 2015 18:37

Jastiger: Oct 11, 2008; by FactsAreUseless

BarbarianElephant posted:

We don't have a financial planner. I have no idea how to get a reputable financial planner. They all seem to sell stuff based on what commission they will get. We do need one. How can I get one that gives advice unbiased by what he will get out of it?

Most advisers DO earn a commission based on what they sell. However, there are some that you can pay a flat fee or an up front cost for their advice. I would look for an independent financial adviser, hell, even google that term. Make sure they are independent and don't work for a single company, and shoot for one with the CFP designation. Straight up ask them, if they earn a commission or if you can just pay a fee for a consultation and they'll tell ya.

# ? Mar 20, 2015 18:39

OssiansFolly: Aug 3, 2012; Suffering at the factory of sadness every year.

BarbarianElephant posted:

We don't have a financial planner. I have no idea how to get a reputable financial planner. They all seem to sell stuff based on what commission they will get. We do need one. How can I get one that gives advice unbiased by what he will get out of it?

I can't truly say we are "banking" on anything, that's how dumb we are. We wanted life insurance to cover our toddler's expenses if one or both of us died, and that's what we got sold. The salesman made it sound awesome, like it would eventually pay for itself, but I'm beginning to worry that it was bullshit and our term insurance would have been just fine.

Can I ask who the policy is through? If it is one that I have dealt with then I may be able to tell you what to ask when you talk to your agent.

Ugh and this example is exactly the type of guy (your agent) that everyone in this thread is hating on. Unless you REALLY understand something it is THEIR job to make sure you fully understand what you are buying. I know Life Insurance can be intimidating, but ESPECIALLY with Universal Life you have to REALLY understand what you are getting.

Universal Life is a good, flexible product for a younger person (20s to early 30s) in my opinion. This is honestly one of my favorite insurance products and it is what I have for myself and my fianc�.

First, ask your agent if the current premium is enough to carry the policy until age 110, and if you are paying the intermediate premium, minimum or maximum recommended premium for that illustration. I know that age sounds ridiculous, but for all intensive purposes that is a good age to do estimates on for UL. Next, ask him if you can convert some or all of that to Term without any additional medical exams and at the attained age of the Universal Life policy. Finally, seriously consider sitting down with a financial planner...Universal Life may not be right for you, and the sooner you find that out, get out of the policy and get a new policy the sooner you get a lower premium policy. Don't sit on these things...it will end up costing you money in wasted premium on a policy you may not need and on a new Term policy because that premium is based on your age.

Universal Life policies need to be reviewed every 3-4 years to make sure they are being funded properly, so within that time frame each time it pops up you need to call or visit (preferably visit) your agent that sold that to you and make them review it again. There is nothing worse than thinking you bought a policy and it will last a lifetime only to have it underfunded and end up running out of money in your 50s or 60s.

# ? Mar 20, 2015 19:03

Jastiger: Oct 11, 2008; by FactsAreUseless

OssiansFolly posted:

First, ask your agent if the current premium is enough to carry the policy until age 110, and if you are paying the intermediate premium, minimum or maximum recommended premium for that illustration. I know that age sounds ridiculous, but for all intensive purposes that is a good age to do estimates on for UL. Next, ask him if you can convert some or all of that to Term without any additional medical exams and at the attained age of the Universal Life policy. Finally, seriously consider sitting down with a financial planner...Universal Life may not be right for you, and the sooner you find that out, get out of the policy and get a new policy the sooner you get a lower premium policy. Don't sit on these things...it will end up costing you money in wasted premium on a policy you may not need and on a new Term policy because that premium is based on your age.

Bolded part.

Flag on the post.

5 post penalty.

# ? Mar 20, 2015 19:12

BarbarianElephant: Feb 12, 2015; The fairy of forgiveness has removed your red text.

It's with New York Life.

# ? Mar 20, 2015 19:12

OssiansFolly: Aug 3, 2012; Suffering at the factory of sadness every year.

Jastiger posted:

Bolded part.

Flag on the post.

5 post penalty.

God drat Dragon speak to type program. That isn't the first time it has done that with that phrase. It tried to use irregardless instead of regardless on me before too.

BarbarianElephant posted:

It's with New York Life.

Go figure one that I don't work with. I don't know their subtle differences, so take that paragraph in my last post and get that info from your agent. Most importantly you needed how it is being funded, if you are paying the intermediate premium or what, and then you need to go talk to a financial planner.

# ? Mar 20, 2015 19:30

BarbarianElephant: Feb 12, 2015; The fairy of forgiveness has removed your red text.

OssiansFolly posted:

Go figure one that I don't work with. I don't know their subtle differences, so take that paragraph in my last post and get that info from your agent. Most importantly you needed how it is being funded, if you are paying the intermediate premium or what, and then you need to go talk to a financial planner.

Not sure what the significance of how it is funded. What should I look out for? What is an intermediate premium?

I'm 90% certain that I'll just cancel the damned thing. Everything I read about them on the internet seems to think they are worse than useless.

I would like to talk to a financial planner but they really aren't interested in anyone below the millionaire bracket.

# ? Mar 20, 2015 19:39

OssiansFolly: Aug 3, 2012; Suffering at the factory of sadness every year.

BarbarianElephant posted:

Not sure what the significance of how it is funded. What should I look out for? What is an intermediate premium?

I'm 90% certain that I'll just cancel the damned thing. Everything I read about them on the internet seems to think they are worse than useless.

I would like to talk to a financial planner but they really aren't interested in anyone below the millionaire bracket.

Universal Life policies have a "suggested premium". They are flexible premium policies that bank on the cash value of the policy to keep it going later on. If you don't put enough into it NOW then the policy won't have enough value to keep paying for the policy LATER. This is why we are concerned with what you are paying!

Before you cancel ask them if you can convert some or all of it into a Term policy, and if they say yes ask them if it will be at the age the UL policy was issued or at the attained age of the change. This way you can hopefully avoid another medical exam and possibly save premium by getting a policy with pricing from a year ago instead of now!

Financial planning is for everyone...the millionaire misconception is a popular one, but there are a lot more working class saving money that need a new investor than millionaires. This is one thing I am positive app and I will agree on.

# ? Mar 20, 2015 20:00

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# ? May 26, 2024 13:54

Jastiger: Oct 11, 2008; by FactsAreUseless

No he's saying the planners he sees aren't interested in people that aren't millionaires, which is kind of true. Most of the outfits I'm familiar with do only work on a fee basis with high capital clients vs the every day person.

# ? Mar 20, 2015 20:14

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