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Old 01-18-2019, 01:22 PM
 
1,226 posts, read 521,410 times
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why is their a need for whole life?

just get term insurance, and invest the difference between term and whole life into equity markets. The returns on whole life arent that great i think, certainly doesnt beat the s&p 500.

if the purpose is estate planning.... the estate tax is now up to 11.4m, certainly 99% of families passing down wealth wont even reach that point. . for families who have more, they would just create a trust to pass on assets. why would you buy whole life to try to pass on as inheritance?
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Old 01-18-2019, 01:38 PM
Status: "Re-edit status" (set 15 days ago)
 
Location: Was Midvalley Oregon; Now Eastside Seattle area
4,154 posts, read 1,892,872 times
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I don't see it either.
State estate taxes are a different matter: IIRC, Oregon's threshold is$3million to dollar 1. Washington's threshold is $2million to dollar 1. Consult your tax advisor!!!!
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Old 01-18-2019, 01:44 PM
 
10,058 posts, read 4,657,640 times
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You can't pass on a life insurance? The part that is passed would be the investment portion, which you could do with any investment.
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Old 01-18-2019, 01:44 PM
 
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It's to make some insurance salesman a nice, fat commission.
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Old 01-18-2019, 01:54 PM
 
71,517 posts, read 71,694,121 times
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Quote:
Originally Posted by DonaldJTrump View Post
why is their a need for whole life?

just get term insurance, and invest the difference between term and whole life into equity markets. The returns on whole life arent that great i think, certainly doesnt beat the s&p 500.

if the purpose is estate planning.... the estate tax is now up to 11.4m, certainly 99% of families passing down wealth wont even reach that point. . for families who have more, they would just create a trust to pass on assets. why would you buy whole life to try to pass on as inheritance?
buy term invest the rest has been proven to only provide the highest balance until retirement . few looked under the hood at what happens after retirement .

in over 10,000 different outcomes run by dr pfau , 67% of the time a comprehensive plan using an immediate annuity , your own investing and permanent life insurance left the biggest balance and 100% of the time the highest income , why ???? the life insurance provides 100% tax free money with no rmd's for a spouse who now has to file single .. the spia provides a base income higher then you can take from yourself utilizing the cash and bonds portion of a balanced portfolio .

most people rarely buy term and invest the rest which is another problem .. studies show you are better off with a single spia , not joint and use the life insurance which is tax free coupled with your own investing . .

there are low cost permanent life insurance policies offered by all the brokerages .

basically the money you pay in coupled with the interest is priced so by age 100-105 you are self insuring . in fact many insurers deem the policy endowed and dead or alive mail you a check back .

on the policy i had it had a floor of 4% when interest rates were zero .

you can over fund a whole life policy and there is no fees , expenses or commissions allowed on any over funding . in this case you could get 4% tax free . you simply borrow the excess out , never pay it back as a retirement income .

you still have the entire face value of the policy because remember this is over funded money .

you can over fund whole life up to within a dollar or so where the point is it is no longer considered life insurance but a modified endowment policy .

aren't you glad you asked ?

Last edited by mathjak107; 01-18-2019 at 02:04 PM..
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Old 01-18-2019, 01:54 PM
 
Location: Aurora Denveralis
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It was conceived as an E-Z investment strategy that could be profitably sold to people generally below the investing level. It's whole-ly obsolete and has been for years.
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Old 01-18-2019, 02:06 PM
 
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however research today looked at todays low cost life policies in conjunction with your own investing and the use of an spia . like i said in 10,000 different scenarios the comprehensive strategy beat buy term and invest the difference , 67% of the outcomes in balance and 100% of the time had the highest income flow.

you can't look at many products in isolation ..when they are part of a strategy they can have very different outcomes when combined with other vehicles..
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Old 01-18-2019, 02:11 PM
 
71,517 posts, read 71,694,121 times
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Originally Posted by Quietude View Post
It was conceived as an E-Z investment strategy that could be profitably sold to people generally below the investing level. It's whole-ly obsolete and has been for years.
whole life is never an investment ... your premium is 100% the price of insurance . there is no investment aspect to it at all .

the cash value is merely an agreement on a refund amount if you cancel , the same as an un-used gym membership would be refunded . in fact it comes from the company cash register as there is no such thing as a cash value account in your name . no one should ever buy whole life for anything but 100% certain pay out at death .
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Old 01-18-2019, 02:11 PM
 
Location: Aurora Denveralis
8,594 posts, read 3,026,483 times
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Quote:
Originally Posted by mathjak107 View Post
hou can't look at many products in isolation ..when they are part of a strategy they can have very different outcomes when combined with other vehicles..
There's always someone who can use the most bizarre, convoluted financial tool or option to some advantage. However, whole life is a largely outdated tool that was aimed squarely at people who wanted more than passbook savings but did not have access to real investment opportunities. Since any schmo with a few hundred dollars can now manage his or her own investments, with layers and layers of options up to their own Wall Street investment banker, whole life is at best a niche tool for someone trying to finesse the last million of their estate past the revenooers.
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Old 01-18-2019, 02:18 PM
 
71,517 posts, read 71,694,121 times
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you would be most incorrect on that view. it is used more and more in retirement across the board today . especially by those who have modest portfolio's and need to maximize the dollars to their spouse as well as get the highest level of income they can get without substantial sequence risk . read the works of milevsky , kitces , ed slott , blanchett or dr pfau for a good education on why the comprehensive package does better under a much wider range of outcomes then buy term and invest the rest .

i was raised on believing that whole life and any type of annuity was bad . but it really stemmed from mis-informed people parroting other mis-informed people who just went on believing their own bull....

the more i learned from some of the most knowledgeable researchers the more my view changed as i learned not all annuity and insurance products are bad . once the think tank turned their focus on to how to improve on what we all believed was the only way to plan a retirement income , the more the old school thinking was wrong .

Last edited by mathjak107; 01-18-2019 at 03:06 PM..
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