Ensuring enough money if live to be super old

[REWahoo]

I like the concept of being my own banker but most definitely through an insurance product.

Did you leave out a "not"?

 

[Dtail]

I sure hope I'm dead long before 140.

140. Geeze. Probably look like emperor Palpatine

Yeah but think about what dough you can blow at 130 y.o.

 

[Harrald]

I may be new to this forum but I am certainly not new to the internet. I've been using it since long before the web had pictures.



The Infinite banking scam is not new. The doctor used as an example of living to 140 has had his ethics called into question since he has now moved from a researcher to selling "Live longer" snake oil that no other labs can recreate. Quick searches will show this.


That being said, I'm surprised that this thread hasn't been locked. If IBC can even get one or two people to jump into this scheme, it's been worth the time spent.



Just MHO. Cheers all

 

[RunningBum]

It's good entertainment. Hope it stays open.

 

[6miths]

That being said, I'm surprised that this thread hasn't been locked. If IBC can even get one or two people to jump into this scheme, it's been worth the time spent.

+1

Each year I get an illustration for my universal life policy and use it in a personal finance talk that I give to the students hoping that they will learn from my mistake. The only way to win with permanent life insurance is to die early and even then one could have won much bigger by spending the same on term life. Apparently there may be a few very wealthy people who might benefit from permanent life insurance but I bet that they don't use it.

 

[braumeister]

That link in Post #73 by Walt34 does a really good job of explaining the concept (and drawbacks) of the OP's program IMHO.

 

[H2ODude]

This is kind of a hoot. Nothing like whole life salesman wandering into this beehive!

 

[Harrald]

Point taken. The comedic value is worth it.

This is kind of a hoot. Nothing like whole life salesman wandering into this beehive!

 

[marko]

The OP's #1 opening post says: "American born baby “today” is expected to have an average lifespan of 140 years"

I can state with almost absolute certainty that anyone born today (or over the past decade) is NOT a member of this forum....or even lurking.

Those of us not born today have little hope of reaching 140 years old...IMHHO, so I'm not sure of the relevance of his statement.

 

[braumeister]

I can state with almost absolute certainty that anyone born today (or over the past 3 years) is NOT a member of this forum.

I believe the implication is that the OP believes we were all actually born yesterday.

 

[Gumby]

Well, I was born at night, but it wasn't last night.

 

[marko]

Brilliant!!

I believe the implication is that the OP believes we were all actually born yesterday.

 

[JDARNELL]

Did you leave out a "not"?

Yes I did. Good catch!

 

[NW-Bound]

Those of us not born today have little hope of reaching 140 years old...IMHHO, so I'm not sure of the relevance of his statement.

For a while, I wondered if I would make it to the early SS age of 62.

Phew, I made it!

I guess I now turn optimistic and delay it to 70. Oh well, if it does not work out, my wife will get my higher SS so it is not a total loss.

 

[OldShooter]

Looks like the OP may have decided on his own to go traveling. Probably he is looking for forums with more gullible people than he found here.

I did get a kick out of his concern that people here think "my work of choice is some sort of scam.” Which of course it is.

I went to one of those steak dinner things one time and the huckster warmed up the crowd by getting them to repeat in unison: "The market is gambling." Pretty much the same lie as the OP's " the job of the market is to take the most amount of money from the most amount of people in the least amount of time." I guess they teach this at huckster school.

 

[pb4uski]

Here's a nice article about the "Be Your Own Banker" concept that explains things in a bit more detail. And includes some little bits that proponents seem to leave out, such as this paragraph:

https://kahlerfinancial.com/financial-awakenings/insurance/byob-dont-join-this-party

That link in Post #73 by Walt34 does a really good job of explaining the concept (and drawbacks) of the OP's program IMHO.

+1 The build-up of cash value is way too slow to make this BYOB concept realistic. The cash value is nil for the first 3-5 years so the insurer doesn't get stuck with the cost of the commissions paid to the producer.

In the example below, after 20 years Joe has paid $8,370 of premium and the guaranteed cash value is $3,050 and the projected cash surrender value is $5,094. Typically, you can only borrow ~90% of cash value.

Joe would be better off investing the money and then either redeeming a portion if needed or even using the account as collateral for a loan.

I know whole life well. There are some instances where whole life is a wonderful product... where the client has a permanent need for life insurance protection... but it isn't a great product for saving money.

https://www.quia.com/files/quia/users/sherflf/WLsample

 

[RunningBum]

Looks like the OP may have decided on his own to go traveling. Probably he is looking for forums with more gullible people than he found here.

Nope, he's still lurking.

 

[Aerides]

To me the whole "benefit" behind the concept is a solution for a problem most of us will never have: Being able to lend yourself money for very cheap. Yeah, so? I can already do that via the HELOC I have waiting for me if I ever needed it. Or from my savings/CD's. I mean I wrote a check for my last two cars.

I have no plans to ever need money lent to me in ER. Maybe one day when I go to move if I found the perfect home before I sold this one, I'd have a choice of selling some stuff and paying capital gains, or a bridge loan, or maybe even a mortgage for a few months, but...I would do that once or twice in the rest of my life in the most imaginative future. And the costs I'd incur to do so would no doubt far less than a lifetime of fees for an alternate insurance approach.

I'm quite sure everyone of us that has ER'd on this forum can tell you how they'd fund a need for a new car, roof, or house, with the least financial impact, and everyone that can tell you isn't including whole-life-insurance in that answer.

 

[IBC_FriendOfNelsons]

@6miths Though the IBC (Infinite Banking Concept) is not focused on the death benefit (or the traditional perception of a life insurance policy’s value), you are correct to show your students, the long term failure of Universal Life (UL) policies, though incorrect to lump them together with Whole Life (WL). You are also misleading them when stating, “The only way to win with permanent life insurance is to die early and even then one could have won much bigger by spending the same on term life.
First, you are correct that UL gets more costly as time goes on (huge egg on the face of the industry), though it is the opposite for WL which gets less expensive over time (and can/does become basically free for many owners).
Second, it is well-know that Term Life (TL) typically pays out less than 3% of time which makes it the most costly of all types for many individuals. The following article goes even further by stating TL policies pay out less than 1% of the time: https://www.money-zine.com/financial-planning/buying-insurance/term-life-insurance-policies/
Lastly, no “true” IBC practitioner would ever recommend a UL policy as the platform to run the banking processes for their clients’ bank(s).
I respect that you are even talking with your students about these matters, though I hope you will take a deeper dive on the IBC, and I would be happy to have an open, two-way discussion with you, if you are interested.

 

[Retch The Grate]

Ignoring the Whole Life nonsense, my plan is built around going infinite at the moment since my timeframe to 100 is still far out. I'm planning a 3% withdrawal rate, which historically succeeds across all time frames, so I'll continuously reset to 3% of my highest value ever, which should leave me skating just below the historical failures. If some miracle of science gives us incredibly extended lifespans, I'm good to go. While noting of course that the historically we don't have any infinite time periods without some sort of devastating event that is outside investment returns to handle. The Yellowstone Caldera detonating, a planet-killer asteroid strike, WWIII, an influenza pandemic, etc. Lots of things outside of investments that can clobber your infinite life span success.

 

[MarieIG]

Plug 140 into FireCalc.

 

[rodi]

I don't need an infinite banking scheme based on whole life insurance. I have a balanced portfolio (stocks/bonds/cash/real estate). I have flexibility with it - can access it all after paying taxes on whatever IRA withdrawals or gains. And my withdrawal rate is low enough (approx 3%) that I doubt I will ever run out of money.

As for the claim that term life doesn't pay out. That's because of people like me... I had term life when the kids were young and the hubster and I were working... We used it for income replacement in case one or both of us died. Now that we're retired, no need for term life... or any life insurance at all. Kids will still likely inherit a pretty penny... without us needing to pay premiums. For us , life insurance was like car insurance or home owners insurance.... there in case we need it.... I'm very glad we never collected on term life insurance... that would have meant one of us died.

I strongly prefer to put my savings in accounts that I can control, unfettered. Whole life doesn't meet that need.

 

[REWahoo]

As for the claim that term life doesn't pay out. That's because of people like me... I had term life when the kids were young and the hubster and I were working... We used it for income replacement in case one or both of us died. Now that we're retired, no need for term life... or any life insurance at all.

+1

IBCFON, you keep swinging and missing. Have to wonder how many strikes the mods are going to allow you.

 

[Major Tom]

My gosh. I spent several months (about 6) after joining this forum before making my first post. It's the way I usually proceed with forums. The very first thing I do is to spend a great deal of time reading as many threads and posts as I can, to get the general feel of the place - and to learn as much as possible. This way, I avoid having to ask questions that have already been answered, and also get a good feel for the "culture" of the forum, so I can determine whether it's a good fit for me.

OP joined yesterday, and began posting the very same day. To me, this is the equivalent of barging into a room full of people and immediately talking loudly at them all, without making the effort to get to know any of them first. Of course, he/she could have spent considerable time "reading the mail" before even joining, but it sure doesn't look that way.............

 

[HadEnuff]

Increased lifespan, without an antidote for increased aging, sounds to me like the definition of hell on earth.