Quote:
Originally Posted by MUTGR
No, actually with the benefit of time I am very pleased with the purchase although admittedly I knew little about it at the time. In fact, my only regret is I didn't purchase more when I was younger. As I've learned more about the product over time. I'm glad I own some and will be able to use it to fund some major expenses in the coming years.
Like I said, I appreciate that component of my overall plan showing slow but steady growth on a tax advantaged basis compared to the gyrations in the values of my 401(k) and IRA, not to mention the non-qualified mutual funds I also own. Obviously, the 401(k) and IRA are for retirement and I'd rather not sell mutual funds to fund college expenses.
Perhaps I did fall of the turnip truck. I live very well but simply and I am largely debt free (except for a very managable mortgage at a very attractive 30 year fixed on a home with a lot of equity even in this market) so I'll just keep bumbling along. Ignorance is bliss I guess.
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talking about how nice ignorance could be ,if you fell asleep the last 3 years and just woke up you wouldnt even have known much happened to the markets over those years. everything would look quite boring . in fact if you fell asleep for the last 15 years you would be sooooooo happy looking at your portfolio value.
getting back to life insurance there are very definate uses for life insurance other than dying. but none of those uses act as investments of any sort.
the expenses of using whole life as a saving vehicle are very very high . most expenses are not apparent either. you can see all the time how folks look at the premium as their only cost.
the real costs are that premium and decades of expenses and dividends and interest you got.
the re-investment of all the interest and dividends back into the policy can out weigh the premiums over time. figure in the effect of them now confiscating the cash value of all that extra dough you sent in and all that interest and dividends you got over decades and handing your heirs a death benefit only and you begin to see the real cost structure.
your actual premium for that death benefit is all the premiums you payed in, all the extra cash you sent in for the saving aspect and all the dividends and interest you got for decades .
still sound like a good deal because they are paying you 5 or 6% on that cash value they will take anyway?
sure you can borrow some out and they will be happy to charge you interest for borrowing your own money back that you handed them. they then subtract off the death benefit what you didnt pay back so in effect they are still confiscating your cash value.
if you borrow money out and not pay it back it can leave the accruing interest terminating your policy and a tax bill depending on the loan size..
they will be happy to sell you a rider too that passes on some of that cash value however what they really are doing is just selling you more insurance increasing the death benefit.
i love the financial markets ,always did even as a kid and although i never worked a day in my life at it i spend alot of time learning to plan for my upcoming retirement from the smartest people i can find and i enjoy helping others learn to think for themselves and develop good plans.
i have been featured in money magazine, fidelity investment magazine and the wall street journal a few times as i dispute many of the myths that keep folks from doing well financially themselves.
my intention when i retire is to do some selling of insurance products but i intend to market them to baby boomers who are in situations where they do the most good.
none of those uses i have would be as any form of saving or investment as even selling those products i couldnt live with myself and pass them off as good deals.
annuities and life insurance have tremendous uses in wealth passing, in making taxable ira money un-taxable to a spouse ever, in 2nd marriages , for boosting success rates in retiree portfolios and pensionizing an income stream are all valid good solid reasons for these products .
the ironic part is that these products are usually all sold for the very wrong reasons to the very wrong people.