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Indexed Universal life
Old 12-24-2016, 08:31 AM   #1
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Indexed Universal life

So my friend turned me onto his financial guy. I sat with him and he tried to sell me on this policy. Sure it sounds great. By putting almost $300k into it over 12 years I can pull about $55k a year out tax free as a loan against like $750k in life insurance. Of course I have $750k in life insurance from day 1 but it starts to drop as I borrow against it. It sounds good and is probably good I think for younger people but at age 57 not sure it makes sense for me. Anyone have a policy like this?
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Old 12-24-2016, 08:37 AM   #2
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Walk away!!!!!!!!!!
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Old 12-24-2016, 08:42 AM   #3
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So my friend ........
Trust me, this is no friend. You've been served up as raw meat.
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Old 12-24-2016, 08:48 AM   #4
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Run. They are attempting to drown you in snake oil.
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Old 12-24-2016, 09:02 AM   #5
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So my friend turned me onto his financial guy.
This 'financial guy' is looking to make a juicy commission by selling you something that will almost certainly benefit him far more than you. Tell him no thanks...
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Old 12-24-2016, 09:05 AM   #6
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After researching it that was my decision and I didn't do it. Now he is trying to sell me an annuity. Not sure why I am so scared of all these things that promise large returns then in small print say "not guaranteed". I have done very well on my own. It wonder if I am missing or on moves I should make that I am not.
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Old 12-24-2016, 09:12 AM   #7
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I had one try to sell me something similar.... maybe identical. I ran into roadblocks when I tried to find out the details... fees, cost of insurance, participation rates, interest rate charged for borrowing my own money, etc.
The devil is in the details, and it expensive to terminate. If you get upside down ... where the interest payments and fees are more than the growth, you could have to make payments just to keep the policy from failing in which case you could owe quite a bit in taxes as those loans become taxable.

If you don't understand what you are buying ... don't walk, but run.
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Old 12-24-2016, 09:14 AM   #8
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Not sure why I am so scared of all these things that promise large returns then in small print say "not guaranteed". I have done very well on my own. It wonder if I am missing or on moves I should make that I am not.
Doubtful. Most likely you're just making it a little harder for some salespeople to make their boat payments.
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Old 12-24-2016, 09:34 AM   #9
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Have you read the actual document(s) you will sign?

If not ask for a copy to go over. The first thing to notice is how many pages make up this contract. Then, can you read and understand all of it? If not, how do you know what you are signing.

My guess is that the contract has a clause in it that says only the contract terms and conditions apply, and anything the salesperson or brochure says is essentially meaningless.
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Old 12-24-2016, 12:10 PM   #10
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Note to OP~The next time that he/she contacts you, I suggest that you inquire if he/she is a fiduciary. If the response is anything other than yes, ask that your name be removed from his/her contact list.
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Old 12-24-2016, 12:25 PM   #11
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This sounds similar to a LIRP (Life Insurance Retirement Plan) that I read about in "The Power of Zero". I was researching LIRPs after reading David McKnights book still have not done anything or completely see how to make it work (including Long Term Care option). Sorry can not help other than to state to do your research.....slowly
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Old 12-24-2016, 02:04 PM   #12
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The only annuity you should ever consider is a Single Premium Fixed Annuity and only then in very particular circumstances and with a full understanding of your income requirements and how it fits in with the rest of your portfolio.
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Old 12-24-2016, 02:24 PM   #13
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Originally Posted by capjak View Post
This sounds similar to a LIRP (Life Insurance Retirement Plan) that I read about in "The Power of Zero". I was researching LIRPs after reading David McKnights book still have not done anything or completely see how to make it work (including Long Term Care option). Sorry can not help other than to state to do your research.....slowly
CapJack -
You can find out more about different ways to use WHOLE life insurance policies at InfiniteBanking.org

I was impressed by The Power of Zero. I see McKnight has a new book all about LIRPs and plan to read it soon.
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Old 12-24-2016, 02:53 PM   #14
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I have a whole life policy I bought when younger and needed extra life insurance. It has a decent cash value and I still pay the premium just because the amount it goes up in value is more than the premium I pay so why not. When I calculate out the yield over time I am making a decent rate of return. Obviously if I drop dead tomorrow my rate is return is even better. My plan is to keep it as long as the rate of return is decent. It's extra money for my beneficiaries.
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Old 12-24-2016, 03:03 PM   #15
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Read the fine print.
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Old 12-24-2016, 04:44 PM   #16
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Read the fine print.
You'll probably be dead before reading and understanding the fine print on a Whole Life Insurance policy. I'd be amazed if the OP is getting a "decent return"........so a whole life insurance policy or a LIRP.......where do we begin? I follow the simple rule of never combining financial products and never buying anything I don't fully understand so my insurance policies are just that...they pay out if something breaks and have no investment component or cash value.
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Old 12-24-2016, 05:39 PM   #17
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Originally Posted by djr59 View Post
I have a whole life policy I bought when younger and needed extra life insurance. It has a decent cash value and I still pay the premium just because the amount it goes up in value is more than the premium I pay so why not. When I calculate out the yield over time I am making a decent rate of return. Obviously if I drop dead tomorrow my rate is return is even better. My plan is to keep it as long as the rate of return is decent. It's extra money for my beneficiaries.
Ok. So what is the decent rate of return
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Old 12-24-2016, 06:30 PM   #18
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Around 6%
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Old 12-24-2016, 07:01 PM   #19
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Around 6%
So after fees the cash value of your policy works out to be the value of your premiums compounded at 6%?
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Old 12-24-2016, 09:19 PM   #20
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Yes
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