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Old 06-06-2014, 11:16 AM   #21
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The balance has increased - that was my error. When I put it back to cash in 2009, it was $93k. It is now $98.7k. So close to 3%? If i keep it it will be because in cash it cannot go less than 3% but could go up AND I have the $194k death penalty and in retirement my tax rate should be max 15% as it will be taxed as part of estate. Does that sound right? Anyway Im still considering my options.

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Old 06-06-2014, 11:19 AM   #22
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My advisor said nothing about any annuity payment or anything like that. The cash value is $98.7k and the death penalty total is 194k. He says it is not a life insurance product. It is an annuity that has a death penalty clause. I also add a clause that said that the death penalty of milk would never go below a certain amount but it can go up.

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Old 06-06-2014, 11:22 AM   #23
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Doesn't look as if you got 3% over the last 5 years. If you had, the balance would be $93k*1.03^5 = $107.8k. Obviously the exact value depends upon when it was converted in 2009 vs now (it may be a little less than 5 years).

Math shows your return (if actually 5 years) was only 1.2%. Not much better that a basic savings account.
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Old 06-06-2014, 01:00 PM   #24
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It sounds like the account gets credited with 3% interest but then is also assessed an administrative expense charge (0.25%?) and mortality and expense charges (0.85%) and perhaps some other charges that at the end of the day net down to somewhere between 1-2%.

Deb, verify whatever your FA says by looking at your statement and see what increases and decreases are made to your account balance between periods and if they make sense. It could be that there are other charges that the FA is conveniently not telling you about and if you figure it out and ask then he'll say something like "I thought you knew about that charge".
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Old 06-06-2014, 07:31 PM   #25
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Yeah, he is not being up front... he actually said to me - looking at it and growth from 2009, it looks about 3% minus the .25 expense.... so not cool

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Old 06-06-2014, 08:19 PM   #26
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Sounds to me like one of two things. He's clueless and winging a response hoping that you will accept it and go away. Or he really knows what is going on and is purposely trying to deceive you to keep the business. Either would be a problem in my view.
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Old 06-07-2014, 07:52 PM   #27
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My advisor said nothing about any annuity payment or anything like that.
If it's an "annuity" it has a lifetime income option. One more strike against the "advisor".

OTOH, based on your updated numbers, it probably just turns the current surrender value into income, and that's not something you'd want to pursue.
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Old 06-07-2014, 10:39 PM   #28
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One thing the advisor mentioned is that I can remove any of the cash value but the death benefit is reduced by that amount. So I am going to see if I can remove most of the cash, and then just leave the death benefit in play? Have to see what fees would affect it but if I can move 95k to Vanguard and still have an ongoing death benefit of $104k in place, that might be the best option. Then I could leave the remaining 3-4k in getting 3% just to have the life insur stay in play. I'm going to see what ongoing fees/costs would be involved to see if it even makes sense. Thoughts?

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Old 06-07-2014, 10:55 PM   #29
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One thing the advisor mentioned is that I can remove any of the cash value but the death benefit is reduced by that amount. So I am going to see if I can remove most of the cash, and then just leave the death benefit in play? Have to see what fees would affect it but if I can move 95k to Vanguard and still have an ongoing death benefit of $104k in place, that might be the best option. Then I could leave the remaining 3-4k in getting 3% just to have the life insur stay in play. I'm going to see what ongoing fees/costs would be involved to see if it even makes sense. Thoughts?

Debbie


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I think that you are forgetting that you will probably be paying interest on that borrowed money..... and will have to pay for the insurance that you still have...

It is not like it is free....



For some reason you are hung up on the life insurance aspect.... get that out of your mind... IF you really need life insurance, you can get a cheaper option buying term... I really think that you are trying to make it look like it was not as bad a decision that it really is... don't make another bad decision trying to justify one that you already made and cannot do anything about....
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Old 06-07-2014, 11:21 PM   #30
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I think you should not take advice from people who have no knowledge of the actual contract. Maybe you should cash out, but maybe not. In any case, how is there any rush?

Ha
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Old 06-08-2014, 07:42 AM   #31
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Texas

Thanks for the input.

Obviously I wouldn't consider the above if there was any interest on monies taken out. I didn't get that impression from him and as I mentioned will check out any fees first.

The life insurance is appealing for my grown son just as additional cushion - because term life for a 57 year old in below average health is not inexpensive.

Either way, like Ha mentioned, it is not at immediate risk, just very slow growth of the cash value due to fees.

Debbie

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Old 06-08-2014, 08:58 AM   #32
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Texas

Thanks for the input.

Obviously I wouldn't consider the above if there was any interest on monies taken out. I didn't get that impression from him and as I mentioned will check out any fees first.

The life insurance is appealing for my grown son just as additional cushion - because term life for a 57 year old in below average health is not inexpensive.

Either way, like Ha mentioned, it is not at immediate risk, just very slow growth of the cash value due to fees.

Debbie

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I actually do agree with HaHa about reading the contract to determine what you can and cannot do.... and what is best for you NOW.... do your own research.... don't rely on what your FA says...
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