Does anyone have advice about whole life insurance?

[ljinvestor]

Yes, insurance doesn’t work well if you combine the risk need & investment. The more death benefit you purchase, the higher the cost of insurance and expenses are which lower any return in the future.

Insurance as an investment is typically only good for two groups. Younger 30-50yo with plenty of extra income that are already well diversified and have an approx 20yr timeline before taking any loans/withdrawals, or older individuals 60-80yo wanting to pass on legacy assets income tax free and then ROR on death benefit should be the focus.

If you don’t have lots of extra income each year then listen to a majority of the piggs and purchase a 20-30yr term to take care of the risk. If you are looking at it as another investment opportunity then buy the lowest death benefit for whatever amount you invest that still qualifies it as a life insurance contract with tax benefits (non mec) and use a high early cash value product in case you need to get to funds early. Lower death benefits and high early cash value mean less commission for agent

Besides NWML, I believe that New York Life, Mass Mutual, John Hancock, and Metlife are all considered strong companies with good whole life products.

[equalizer]

[quote=SK in CV][quote=Raybyrnes]SK in CV. Analyzing a financial investment based on the commission of the sales agent vs analyzing based on the benefit of the purchaser relative to other investments is pretty poor analysis. Northwestern Mutual is a very reputable company.

[/quote]

Yeah, you’re right. But having analyzed scores of whole life policies, both before and after clients have purchased them, I have almost always come to the same conclusion. They’re a better investment for the broker than they are the buyer. And there are almost always better alternatives.[/quote]
If one must buy commission product then search out a fee-only insurance consultant first. “Today, the agent and policy applicant have
considerable discretion in structuring a policy and premium so as to reduce the standard commission by 80% or more. This is done by designing a policy with a maximum amount of term insurance and a minimum amount of permanent insurance and then having most of the annual premium payments take the form of “additional premiums” or “dump-ins” on which the commission may run about 3 percent, or a mere 5 percent of the standard first-year agent’s commission.”

http://lifeinsuranceadvisorsinc.com/featured.html

http://breadwinnersinsurance.com/ — Appropriate Disclosure of Cash-Value Policies

[equalizer]

[quote=SK in CV][quote=Raybyrnes]SK in CV. Analyzing a financial investment based on the commission of the sales agent vs analyzing based on the benefit of the purchaser relative to other investments is pretty poor analysis. Northwestern Mutual is a very reputable company.

[/quote]

Yeah, you’re right. But having analyzed scores of whole life policies, both before and after clients have purchased them, I have almost always come to the same conclusion. They’re a better investment for the broker than they are the buyer. And there are almost always better alternatives.[/quote]
If one must buy commission product then search out a fee-only insurance consultant first. “Today, the agent and policy applicant have
considerable discretion in structuring a policy and premium so as to reduce the standard commission by 80% or more. This is done by designing a policy with a maximum amount of term insurance and a minimum amount of permanent insurance and then having most of the annual premium payments take the form of “additional premiums” or “dump-ins” on which the commission may run about 3 percent, or a mere 5 percent of the standard first-year agent’s commission.”

http://lifeinsuranceadvisorsinc.com/featured.html

http://breadwinnersinsurance.com/ — Appropriate Disclosure of Cash-Value Policies

[equalizer]

[quote=SK in CV][quote=Raybyrnes]SK in CV. Analyzing a financial investment based on the commission of the sales agent vs analyzing based on the benefit of the purchaser relative to other investments is pretty poor analysis. Northwestern Mutual is a very reputable company.

[/quote]

Yeah, you’re right. But having analyzed scores of whole life policies, both before and after clients have purchased them, I have almost always come to the same conclusion. They’re a better investment for the broker than they are the buyer. And there are almost always better alternatives.[/quote]
If one must buy commission product then search out a fee-only insurance consultant first. “Today, the agent and policy applicant have
considerable discretion in structuring a policy and premium so as to reduce the standard commission by 80% or more. This is done by designing a policy with a maximum amount of term insurance and a minimum amount of permanent insurance and then having most of the annual premium payments take the form of “additional premiums” or “dump-ins” on which the commission may run about 3 percent, or a mere 5 percent of the standard first-year agent’s commission.”

http://lifeinsuranceadvisorsinc.com/featured.html

http://breadwinnersinsurance.com/ — Appropriate Disclosure of Cash-Value Policies

[equalizer]

[quote=SK in CV][quote=Raybyrnes]SK in CV. Analyzing a financial investment based on the commission of the sales agent vs analyzing based on the benefit of the purchaser relative to other investments is pretty poor analysis. Northwestern Mutual is a very reputable company.

[/quote]

Yeah, you’re right. But having analyzed scores of whole life policies, both before and after clients have purchased them, I have almost always come to the same conclusion. They’re a better investment for the broker than they are the buyer. And there are almost always better alternatives.[/quote]
If one must buy commission product then search out a fee-only insurance consultant first. “Today, the agent and policy applicant have
considerable discretion in structuring a policy and premium so as to reduce the standard commission by 80% or more. This is done by designing a policy with a maximum amount of term insurance and a minimum amount of permanent insurance and then having most of the annual premium payments take the form of “additional premiums” or “dump-ins” on which the commission may run about 3 percent, or a mere 5 percent of the standard first-year agent’s commission.”

http://lifeinsuranceadvisorsinc.com/featured.html

http://breadwinnersinsurance.com/ — Appropriate Disclosure of Cash-Value Policies

[equalizer]

[quote=SK in CV][quote=Raybyrnes]SK in CV. Analyzing a financial investment based on the commission of the sales agent vs analyzing based on the benefit of the purchaser relative to other investments is pretty poor analysis. Northwestern Mutual is a very reputable company.

[/quote]

Yeah, you’re right. But having analyzed scores of whole life policies, both before and after clients have purchased them, I have almost always come to the same conclusion. They’re a better investment for the broker than they are the buyer. And there are almost always better alternatives.[/quote]
If one must buy commission product then search out a fee-only insurance consultant first. “Today, the agent and policy applicant have
considerable discretion in structuring a policy and premium so as to reduce the standard commission by 80% or more. This is done by designing a policy with a maximum amount of term insurance and a minimum amount of permanent insurance and then having most of the annual premium payments take the form of “additional premiums” or “dump-ins” on which the commission may run about 3 percent, or a mere 5 percent of the standard first-year agent’s commission.”

http://lifeinsuranceadvisorsinc.com/featured.html

http://breadwinnersinsurance.com/ — Appropriate Disclosure of Cash-Value Policies

[Ren]

[quote=UCGal]Also – look at what your insurance needs really are. Insurance agents will try to convince you that you need X million. In reality look at what expenses your wife would have (burial and income replacement) and work from there.

For us – we figured the surviving spouse would be fine supporting themselves and the kids if the mortgage was gone… And we want to cover the kids college. So that’s the number we used for insurance…[/quote]

Their estimates for the amount of coverage needed are ridiculous. They assume that as soon as one spouse gets the money, they’re going to stuff it in a mattress until it’s time to pay things off (college, etc.), and never work again, completely ignoring what decades of investing (not to mention working) can do. When we were interviewed by the nice NYL man, he came up with a number well over $1m+ each. $500k fit our situation much better.

[Ren]

[quote=UCGal]Also – look at what your insurance needs really are. Insurance agents will try to convince you that you need X million. In reality look at what expenses your wife would have (burial and income replacement) and work from there.

For us – we figured the surviving spouse would be fine supporting themselves and the kids if the mortgage was gone… And we want to cover the kids college. So that’s the number we used for insurance…[/quote]

Their estimates for the amount of coverage needed are ridiculous. They assume that as soon as one spouse gets the money, they’re going to stuff it in a mattress until it’s time to pay things off (college, etc.), and never work again, completely ignoring what decades of investing (not to mention working) can do. When we were interviewed by the nice NYL man, he came up with a number well over $1m+ each. $500k fit our situation much better.

[Ren]

[quote=UCGal]Also – look at what your insurance needs really are. Insurance agents will try to convince you that you need X million. In reality look at what expenses your wife would have (burial and income replacement) and work from there.

For us – we figured the surviving spouse would be fine supporting themselves and the kids if the mortgage was gone… And we want to cover the kids college. So that’s the number we used for insurance…[/quote]

Their estimates for the amount of coverage needed are ridiculous. They assume that as soon as one spouse gets the money, they’re going to stuff it in a mattress until it’s time to pay things off (college, etc.), and never work again, completely ignoring what decades of investing (not to mention working) can do. When we were interviewed by the nice NYL man, he came up with a number well over $1m+ each. $500k fit our situation much better.

[Ren]

[quote=UCGal]Also – look at what your insurance needs really are. Insurance agents will try to convince you that you need X million. In reality look at what expenses your wife would have (burial and income replacement) and work from there.

For us – we figured the surviving spouse would be fine supporting themselves and the kids if the mortgage was gone… And we want to cover the kids college. So that’s the number we used for insurance…[/quote]

Their estimates for the amount of coverage needed are ridiculous. They assume that as soon as one spouse gets the money, they’re going to stuff it in a mattress until it’s time to pay things off (college, etc.), and never work again, completely ignoring what decades of investing (not to mention working) can do. When we were interviewed by the nice NYL man, he came up with a number well over $1m+ each. $500k fit our situation much better.

[Ren]

[quote=UCGal]Also – look at what your insurance needs really are. Insurance agents will try to convince you that you need X million. In reality look at what expenses your wife would have (burial and income replacement) and work from there.

For us – we figured the surviving spouse would be fine supporting themselves and the kids if the mortgage was gone… And we want to cover the kids college. So that’s the number we used for insurance…[/quote]

Their estimates for the amount of coverage needed are ridiculous. They assume that as soon as one spouse gets the money, they’re going to stuff it in a mattress until it’s time to pay things off (college, etc.), and never work again, completely ignoring what decades of investing (not to mention working) can do. When we were interviewed by the nice NYL man, he came up with a number well over $1m+ each. $500k fit our situation much better.

[abell]

Insurance agents are funny when you ask them about amounts for life insurance. The one that worked with us suggested we insure my husband at a level so that if my husband died so that I remain a stay at home mom. I thought that was crazy, as at that time I was pregnant (and had a 2 year old), and I was not going to add up 18 years of my husbands income to determine the amount on top of everything else we wanted to include (we put two years of current income just to give me time to adjust and find work).

[abell]

Insurance agents are funny when you ask them about amounts for life insurance. The one that worked with us suggested we insure my husband at a level so that if my husband died so that I remain a stay at home mom. I thought that was crazy, as at that time I was pregnant (and had a 2 year old), and I was not going to add up 18 years of my husbands income to determine the amount on top of everything else we wanted to include (we put two years of current income just to give me time to adjust and find work).

[abell]

Insurance agents are funny when you ask them about amounts for life insurance. The one that worked with us suggested we insure my husband at a level so that if my husband died so that I remain a stay at home mom. I thought that was crazy, as at that time I was pregnant (and had a 2 year old), and I was not going to add up 18 years of my husbands income to determine the amount on top of everything else we wanted to include (we put two years of current income just to give me time to adjust and find work).

[abell]

Insurance agents are funny when you ask them about amounts for life insurance. The one that worked with us suggested we insure my husband at a level so that if my husband died so that I remain a stay at home mom. I thought that was crazy, as at that time I was pregnant (and had a 2 year old), and I was not going to add up 18 years of my husbands income to determine the amount on top of everything else we wanted to include (we put two years of current income just to give me time to adjust and find work).

[Author]

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