Multi Index Universal Life Insurance

[nun]

it's also a great tool in retirement because of of all its tax benefits because the income taken out on LI policy loan can't be reported as income.. so it won't affect your taxable income for Social security .. Munis would

Of course you are funding the whole life policy with after tax dollars. I just don't see the need for these expensive and constrictive policies for most people if they have access to 401k, 403b, ROTHs etc. and even if they are maxing out those tax advantaged savings a taxable investment account is far more flexible ....and IMHO sensible and less risky.....than borrowing from a life insurance policy.

 

[COcheesehead]

Of course you are funding the whole life policy with after tax dollars. I just don't see the need for these expensive and constrictive policies for most people if they have access to 401k, 403b, ROTHs etc. and even if they are maxing out those tax advantaged savings a taxable investment account is far more flexible ....and IMHO sensible and less risky.....than borrowing from a life insurance policy.

Number 1, never confuse an investment and insurance.
Number 2, just because it is not a benefit for you doesn't mean, it is not a benefit for someone else.
Number 3, long term tax deferred saving usually trumps taxable savings.
Number 4, for true diversification, one should look at having some unattachable funds.
Number 5, your results may vary.

 

[jzajzz]

Of course you are funding the whole life policy with after tax dollars. I just don't see the need for these expensive and constrictive policies for most people if they have access to 401k, 403b, ROTHs etc. and even if they are maxing out those tax advantaged savings a taxable investment account is far more flexible ....and IMHO sensible and less risky.....than borrowing from a life insurance policy.

Whole life requires a lot of commitment in the early years but once you break even it's pretty flexible. especially if it's properly designed with Paid up additions(PUA) .. that's just a bonus..
-You don't have to pay it if you don't want to of course you won't accumulate as fast if you don't us PUA's but if you lose your job.. that's a nice feature to have.
- it's also flexible because there is no age restrictions and no RMD.
- let's say we have another market correction tomorrow.. and you'd like to use that opportunity to invest in the market.. this is where the flexibility of WL is so useful.. you just take a loan on your cash value ... it's like a collateral loan .. so you still earn your interest rate in the policy for the full amount. use that loan amount to buy and hold for when the market goes back up.
- WL policies don't show their expenses ..you must be thinking about Universal LIfe that shows the costs. what matters is how much money you can withdraw after all your expenses. it's a lower risk savings tool with higher potential returns than other liquid assets. it's more liquid than your 401k Roths etc. lower risk but lower potential returns than the market. It has its place. it's a great way to diversify. BTW UL policies have high expenses early but very low later on that's why it's a long term strategy.

 

[Big_Hitter]

Of course you are funding the whole life policy with after tax dollars. I just don't see the need for these expensive and constrictive policies for most people if they have access to 401k, 403b, ROTHs etc. and even if they are maxing out those tax advantaged savings a taxable investment account is far more flexible ....and IMHO sensible and less risky.....than borrowing from a life insurance policy.

How is taking out a policy loan risky? that's my safe safe safe money

 

[nun]

Number 1, never confuse an investment and insurance.

I'd say never combine an investment and insurance.

 

[Another Reader]

Whole life requires a lot of commitment in the early years but once you break even it's pretty flexible. especially if it's properly designed with Paid up additions(PUA) .. that's just a bonus..
-You don't have to pay it if you don't want to of course you won't accumulate as fast if you don't us PUA's but if you lose your job.. that's a nice feature to have.
- it's also flexible because there is no age restrictions and no RMD.
- let's say we have another market correction tomorrow.. and you'd like to use that opportunity to invest in the market.. this is where the flexibility of WL is so useful.. you just take a loan on your cash value ... it's like a collateral loan .. so you still earn your interest rate in the policy for the full amount. use that loan amount to buy and hold for when the market goes back up.
- WL policies don't show their expenses ..you must be thinking about Universal LIfe that shows the costs. what matters is how much money you can withdraw after all your expenses. it's a lower risk savings tool with higher potential returns than other liquid assets. it's more liquid than your 401k Roths etc. lower risk but lower potential returns than the market. It has its place. it's a great way to diversify. BTW UL policies have high expenses early but very low later on that's why it's a long term strategy.

Let me guess. Insurance salesman?

 

[jzajzz]

Let me guess. Insurance salesman?

damn proud..
now what do you have to say about the actual points being made?

 

[COcheesehead]

I'd say never combine an investment and insurance.

LOL, that's more or less what I said.

 

[nun]

damn proud..
now what do you have to say about the actual points being made?

Whole life requires a lot of commitment in the early years but once you break even it's pretty flexible. especially if it's properly designed with Paid up additions(PUA) .. that's just a bonus..

PUA...ie dig yourself a deeper hole

-You don't have to pay it if you don't want to of course you won't accumulate as fast if you don't us PUA's but if you lose your job.. that's a nice feature to have.

You are on the plus side immediately with a ROTH, 401k etc and you can stop paying into that too...

- it's also flexible because there is no age restrictions and no RMD.

early tapping makes whole life an even worse deal and RMDs don't worry me as I'm doing IRA to ROTH rollovers.
I like to access my money without paying interest on a loan.

- let's say we have another market correction tomorrow.. and you'd like to use that opportunity to invest in the market.. this is where the flexibility of WL is so useful.. you just take a loan on your cash value ... it's like a collateral loan .. so you still earn your interest rate in the policy for the full amount. use that loan amount to buy and hold for when the market goes back up.

I don't market time....rebalancing works just fine

- WL policies don't show their expenses ..you must be thinking about Universal LIfe that shows the costs. what matters is how much money you can withdraw after all your expenses. it's a lower risk savings tool with higher potential returns than other liquid assets. it's more liquid than your 401k Roths etc. lower risk but lower potential returns than the market. It has its place. it's a great way to diversify. BTW UL policies have high expenses early but very low later on that's why it's a long term strategy.

ROTHs are liquid and 72t makes IRAs liquid. Anything described as "it's a lower risk savings tool with higher potential returns than other liquid assets" sets alarm bells off with me. I'll stick with simple index fund investing in 401k, 403b ROTH, solo 401k etc and after tax savings that have produced 8.5% annual return for the last 30 years. As I'm single I have no need of any life insurance...even term and certainly not whole life.

 

[jzajzz]

PUA...ie dig yourself a deeper hole



You are on the plus side immediately with a ROTH, 401k etc and you can stop paying into that too...



early tapping makes whole life an even worse deal and RMDs don't worry me as I'm doing IRA to ROTH rollovers.
I like to access my money without paying interest on a loan.



I don't market time....rebalancing works just fine



ROTHs are liquid and 72t makes IRAs liquid. Anything described as "it's a lower risk savings tool with higher potential returns than other liquid assets" sets alarm bells off with me. I'll stick with simple index fund investing in 401k, 403b ROTH, solo 401k etc and after tax savings that have produced 8.5% annual return for the last 30 years. As I'm single I have no need of any life insurance...even term and certainly not whole life.

I'm definitely not playing that game ..where this thread become a big back and forth that's going nowhere ... and I'm certainly not telling you specifically that you should get insurance because it's better... It's not my intentions and those arguments tend to be pointless... so how you don't market time or how you rebalance .. that's great. I have my own opinion on what I would do with my own money. However my point about WL or UL is to say what it is and what it's not.

I can tell you that you really don't have to pay interest on a loan if you don't want to with WL .. but it's probably in your best interest to since you end up with more money than withdrawing the cash. or on the other side I can tell you that if you plan to tap in early (1st five yrs in WL) .. it's a bad idea .. so it's definitely not the Magic potion. Point being I can tell you what it is and what it's not .. it's not a magic pill .. but it's really not really this evil thing that should never be touched. You decide what you want to do with your own money .. I just hope you have the right correct info..and a lot of what I saw being said in this thread were definitely incorrect.

BTW.. Roths being liquid ? hopefully you meant to say after age 59.5 .. and trust me I love Roth .. . it's one of the most underused tool by the American people

 

[samclem]

BTW.. Roths being liquid ? hopefully you meant to say after age 59.5 .. and trust me I love Roth .. . it's one of the most underused tool by the American people

Any contributions made to a Roth can be withdrawn at any time without penalty. That's fairly liquid.

 

[COcheesehead]

Any contributions made to a Roth can be withdrawn at any time without penalty. That's fairly liquid.

Problem is, Roths have income caps. WL, not so much.

 

[samclem]

Problem is, Roths have income caps. WL, not so much.

Not relevant. The insurance salesman implied that a Roth is not liquid until one is 59.5 YO. I was responding to that.

 

[COcheesehead]

Not relevant. The insurance salesman implied that a Roth is not liquid until one is 59.5 YO. I was responding to that.

I am just saying that Roths are great, but they have limits. If you want more Roth like benefits and you have high income WL may work.
Just because something isn't of value to you personally, doesn't mean it is not of value to someone else.
Too much advice on this board is centric to the poster's situation, instead of being, just good advice.

 

[brewer12345]

What percentage of the population can really make use of WL or UL? 1%? .1%? I am comfortable saying the everyone that it is a terrible idea. If I am wrong about their very unusual situation, one of their many advisors will point it out to them.

 

[nun]

I'm definitely not playing that game ..where this thread become a big back and forth that's going nowhere ... and I'm certainly not telling you specifically that you should get insurance because it's better... It's not my intentions and those arguments tend to be pointless... so how you don't market time or how you rebalance .. that's great. I have my own opinion on what I would do with my own money. However my point about WL or UL is to say what it is and what it's not.

I can tell you that you really don't have to pay interest on a loan if you don't want to with WL .. but it's probably in your best interest to since you end up with more money than withdrawing the cash. or on the other side I can tell you that if you plan to tap in early (1st five yrs in WL) .. it's a bad idea .. so it's definitely not the Magic potion. Point being I can tell you what it is and what it's not .. it's not a magic pill .. but it's really not really this evil thing that should never be touched. You decide what you want to do with your own money .. I just hope you have the right correct info..and a lot of what I saw being said in this thread were definitely incorrect.

BTW.. Roths being liquid ? hopefully you meant to say after age 59.5 .. and trust me I love Roth .. . it's one of the most underused tool by the American people

Sorry, you asked for a response to your points about whole life so that's what I did.

ROTHs are liquid after 5 years in as much as you can withdraw your principal.

 

[jzajzz]

Any contributions made to a Roth can be withdrawn at any time without penalty. That's fairly liquid.

contributions only.. that's great when compared to a 401K.

 

[brewer12345]

Awesome. We have a barely paper-trained insurance agent running around the forum again.


I wish DW didn't like suburbia so much. Ready for that Unabomber abode...

 

[samclem]

ROTHs are liquid after 5 years in as much as you can withdraw your principal.

You don't have to wait 5 years to withdraw >contributions< to a Roth IRA, they can be withdrawn immediately and without regard to age. It's only the >earnings< in a Roth IRA that have restrictions WRT the age of the account and the age of the Roth's owner.

 

[jzajzz]

Sorry, you asked for a response to your points about whole life so that's what I did.

ROTHs are liquid after 5 years in as much as you can withdraw your principal.

no need to apologize.. I'm not saying you should not have responded

I just don't want to go down this never ending road of back and forth.. I think discussions are great when both sides learn from each other but that typical back and forth .. "this thing is the greatest .. the other thing is the worst" .. is childish to me..

There are many tools at your disposal.. learn as much as you want about each so you know when it's best to use each tool for your own application. Insurance agents for the most part are under educated about life insurance.. and the financial industry has an incentive to bash permanent insurance .. but it has its place.

 

[samclem]

Awesome. We have a barely paper-trained insurance agent running around the forum again.

I can't wait to hear about the amazing advantages of Variable Annuities ("why, yes, they are perfect for your IRA!") and [-]Equity Indexed Annuities[/-] Fixed Index Annuities (product name changed to avoid scaring the marks).

 

[brewer12345]

Single and under $117,000. Married and under $184,000. Pretty sure that encompasses many more than the 1%.
Stop the Dave Ramsey half truths about WL insurance. It is tiresome, OK?

Based on? When I was considerably above that income level I never found WL/UL attractive in the least.

 

[brewer12345]

I can't wait to hear about the amazing powers of variable annuities and [-]Equity Indexed Annuities[/-] Fixed Index Annuities (product name changed to avoid scaring the marks).

What was that about the fiduciary rule?

 

[jzajzz]

I can't wait to hear about the amazing advantages of Variable Annuities ("why, yes, they are perfect for your IRA!") and [-]Equity Indexed Annuities[/-] Fixed Index Annuities (product name changed to avoid scaring the marks).

.. and here ladies and gentlemen .. is my case and point. Here comes the childish responses

 

[COcheesehead]

Based on? When I was considerably above that income level I never found WL/UL attractive in the least.

Whatever instrument you chose or decided against to defer taxes to a high income individual, provide LTC and give yourself unattachable funds is your private decision, but to say publicly that something is wrong, as a blanket statement, is naive.