Whole life ins

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PostPosted: Thu Jul 30, 2009 3:03 pm   Post subject: Whole life ins  







Hi everyone,

Hope you can help. My husband and I were convinced that whole life insurance was a good thing for ins. as well as investment for retirement.

We have a total of three policies which we have been paying for 20 some years. Now I'd like to "cash" in some of that investment, but here's SOME

of the catches. First, there seems to be very little growth if any on the money we have "invested". Second, the amount we can take out is almost equal to the amount we've paid in and if we take it, we must close the policy, hence no insurance. Third, we can 'borrow' against the policy, but must pay back the "loan", or the interest on it which is 6.4% annually. It can be arranged to have 'dividends' pay this, thereby reducing that amount which could be used to pay premiums, now that I am working only 1/2 time.

In addition, after the dividend money runs out, they will use the accummulated insurance value to pay the premiums - kind of like a snake eating its own tale until, oops, nothing's left? Shocked



At this point, we need to keep the insurance. I'd like to take advantage of having 'invested' in whole life but it looks like the best I can do is just stop paying the expensive premiums, using the dividends to do that.



Please let me know what you think.

Peggy in CA

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PostPosted: Thu Jul 30, 2009 4:39 pm   Post subject:   

Whole life insurance can be a great thing. It is not an investment. Without knowing your complete financial picture, it is impossible to know what you should be doing.

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PostPosted: Thu Jul 30, 2009 4:55 pm   Post subject:   

Quote:
Whole life insurance can be a great thing. It is not an investment. Without knowing your complete financial picture, it is impossible to know what you should be doing.




x2



Without knowing the full details, it will be impossible for anyone to offer the right advice. If you are both still in good health and there is a significant amount of cash value in the policy, you may want to look at the option of cashing out the policy and applying for a no-lapse universal life policy. However, be advised that if your dividends are large enough to cover a big chunk of your premium on the current policy, the UL policy could end up being more expensive. There are many factors that would go into this decision and you would really need to talk to a good independent life agent that can review everything with you. I'd offer to do so, but am not licensed in your state.
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PostPosted: Thu Aug 06, 2009 5:49 am   Post subject:   

^^^^ Very good advice. You may be able to put some of the cash from your old policies into a new guaranteed UL policy, and keep a portion for yourself.



New UL policies are much more efficient than the old whole life policies.



You may want to find an independent life insurance agent in your area to evaluate your situation.



If you can't find one, I'm in CA, feel free to PM me.



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PostPosted: Thu Aug 06, 2009 9:22 am   Post subject:   

Quote:
New UL policies are much more efficient than the old whole life policies.




What does this mean?
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PostPosted: Thu Aug 06, 2009 3:00 pm   Post subject:   

New cars will get better gas mileage than old cars, even if they have the same horsepower, torque, etc. They are more efficient.



Newer life products are more efficient in the sense that they provide similar death benefit, guarantees, cash value, etc. as the old whole life policies (or even old UL policies) for a lower premium. It probably is the result of using newer mortality tables, and designing niche products. An actuary could better answer that one.



Does that analogy work?



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PostPosted: Fri Aug 07, 2009 2:08 pm   Post subject:   

Thanks, but the analogy doesn't work. It does work when comparing a old UL policy with a new one. It often makes sense to cheap because the new one can have a lower cost of insurance and the insurance costs are based upon attained age and not age at purchase.



It doesn't work when looking at an old participating whole life policy. Keep in mind that regardless of what mortality table is used, an old policy is going to be impacted by actual mortality and not the mortality table. In other words, an older table means higher premiums and higher dividends. If someone buys a policy as a 30 year old, and they are now 70, they are still paying the rates of a 30 year old with the WL, but with UL, they are paying the rates of a 70 year old.

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PostPosted: Mon Aug 10, 2009 11:36 am   Post subject: insurance  

I have my Auto Insurance at a very 'popular' and reliable comapny. I looking into getting Life Insurance through them ,as well. I DO have a Life Insurance policy with the Military,..however....I'm just looking for 'peace of mind'. I've talked to a few different agents, from the Insurance company. The 'products' they are selling, and what benefits that are IN these products, are not really being clarified, too well, for me. Yep...I've asked LOTS of questions, but,..not really getting a 'clear' (or simple) answer. Kind of frustrating.

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PostPosted: Mon Aug 10, 2009 12:06 pm   Post subject:   

Hey SD why don't you speak to a different agent? Maybe the one you are speaking to right now is not being able to explain things properly to you. Maybe if you could formulate your questions in manner where the agent has to go into details to answer them would help you.



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PostPosted: Mon Aug 10, 2009 12:26 pm   Post subject:   

sdchargersfan, you'll overpay by using that company. I know this for two reasons. 1) The companies that sell auto insurance are rarely competitive with life insurance. 2) There are hundreds of life insurance companies. What are the chances that the one in which you have called is the best for you?



It's much better to use an insurance broker instead of an agent for a company. A broker will help you choose the best company for you. An agent's job is to get you to buy a policy from XYZ company.

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PostPosted: Mon Aug 10, 2009 11:47 pm   Post subject:   

SDchargersfan,

Sincy you are ex-military, are you eligible for an USAA life policy? Their products tend to be pretty good.



If you would like a second opinion, I can give you the name of a good agent in SD.



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PostPosted: Tue Aug 11, 2009 9:48 am   Post subject: insurance  

Hi, MKORTZ,..........I'm still in the Military. To tell you the truth, I din't even think of USAA. I live in PA now. I have a Life policy (SGLI),...howver, just looking for some 'extra protection'. Something that can build cash value, etc. Thanks for the advice.

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PostPosted: Wed Aug 12, 2009 1:09 am   Post subject:   

SD, I would imagine the military would offer some of the best plans for their former members or even current ones. Is there a place you could call or even look up on the internet to see what is available? Since you are still active maybe you could ask someone personally.

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PostPosted: Wed Aug 12, 2009 12:12 pm   Post subject:   

Hey..don't you get extra protection with Veterans Special Life Insurance? I guess you could add to your coverage, if you have this one in place. Playboy


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PostPosted: Wed Aug 12, 2009 11:24 pm   Post subject: insurance  

The SGLI coverage 'kicks in' ONLY when something happens to me (God forbid), then it's 'content' is handed to my POA/friend and my son. ...both, of whom are 'Primary' Beneficiaries. The SGLI doesn't hold any kind of 'cash value'. I think I can still hold on to it, even when I leave the Military, but, I would have to pay a MUCH higher price for being a 'Civilian'. I pay $27.00 for $400,000.00 of Life Insurance right now.

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