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Old 01-22-2017, 02:46 PM   #21
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Permanent life insurance is a loser unless you die in the first few years of the policy or you are the one selling it. If you were counting on dying in the first few years of the policy then you still would have been better to go with term life insurance as you would have been able to buy 10 times as much for the same cost. If you have 20k a month in excess then it might be worth considering for a portion of it. For $200 a month, not to be disrespectful but I'm surprised your FA is even interested unless it is to get you on the hook for when you do have more. These policies usually get surrendered at a loss or turn into good money after bad propositions. Run away!
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Old 01-22-2017, 02:51 PM   #22
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Yes, doing that and seeing all the comments. Thing is I thought she had excellent advice up to now in identifying gaps in insurance and making sure the whole package fit with the goals I specified, making sure there is a plan. I can see where my asking what else I can do lead to the MIULI. When I first went to her I was just shoving money in an ING savings account and forgetting it so I don't look back on my time there as bad. Saving the money has never been my problem, figuring out how to maximize it has.

I'm pretty good on forums and reading though, guess I'll be spending time here.
What insurance did gaps do you have?.....you are single with no kids so you don't need any life insurance, just car, health and home and maybe long term care if that worries you.

How has your FA organized your finances, what are the investments, what are the expenses and what does the FA charge? You might go over to http://www.bogleheads.org and ask for an analysis of your arrangements. They have a standard format and lots of people willing to give advice......just like here....or maybe we just like the sound of our own voices look of our own typing
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Old 01-22-2017, 04:12 PM   #23
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What insurance did gaps do you have?.....you are single with no kids so you don't need any life insurance, just car, health and home and maybe long term care if that worries you.

How has your FA organized your finances, what are the investments, what are the expenses and what does the FA charge? You might go over to http://www.bogleheads.org and ask for an analysis of your arrangements. They have a standard format and lots of people willing to give advice......just like here....or maybe we just like the sound of our own voices look of our own typing
Basically disability. I have it through work but I didn't check out the coverages and how it worked. Overall if I would be in trouble if I had a problem and had to rely on it, so I got some additional coverage (again riversource) to bring my disability income up to something approaching my current salary.

Right then, I think I'll have to take a more hands on approach here and the answer is no to the MIULI.
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Old 01-22-2017, 04:50 PM   #24
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Maxburn, I would dump your advisor. If you really feel a need for some outside help, find a fee-only planner who charges by the hour or some other way that is not related to a percentage of your assets. Use them sparingly because the heavy lifting is done. Just keep aggressively saving and investing and you will do fine.


Since you do not have access to a 401k I would continue maxing out the Roth IRA. After that, I would take your excess savings and dump it into a tax efficient fund. Vanguard tax managed balanced fund is an example of an extremely low fee, low tax fund that can serve as a one-and-only fund for a taxable portfolio if you want to keep it simple. Details here: https://personal.vanguard.com/us/fun...FundIntExt=INT
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Old 01-22-2017, 04:59 PM   #25
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Basically disability. I have it through work but I didn't check out the coverages and how it worked. Overall if I would be in trouble if I had a problem and had to rely on it, so I got some additional coverage (again riversource) to bring my disability income up to something approaching my current salary.

Right then, I think I'll have to take a more hands on approach here and the answer is no to the MIULI.
FYI - My company's LTD/STD policies offered are paid in full by employees, which means that all payments made under them are 100% tax free to the beneficiary. So, when collecting disability in that situation, it may only be 60% of your gross pay, but it's 60% of your gross pay and no taxes are taken out of it. No SS, no medicare, no state, no federal. (if the employer pays for it, then the tax situation changes)

For me, that 60% after tax would actually replace 82% of my gross income minus just taxes. If I wasn't working because of a disability, I also wouldn't be contributing to my 401k or HSA (since I would have no income to put into it), so that 60% replacement actually would result in more take home pay than I get when going to work currently.

Even if it didn't though, my budget doesn't utilize 82% of my gross income for necessities, and I expect you would find a similar thing is true for you. Just food for thought on that extra disability insurance.
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Old 01-22-2017, 05:02 PM   #26
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Basically disability. I have it through work but I didn't check out the coverages and how it worked. Overall if I would be in trouble if I had a problem and had to rely on it, so I got some additional coverage (again riversource) to bring my disability income up to something approaching my current salary.

Right then, I think I'll have to take a more hands on approach here and the answer is no to the MIULI.
Sounds like you are over insured. Most policies will replace 60% of income (that is not taxable if you paid with after tax dollars) and very few people get more. There are worrying signs with your FA.
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Old 01-22-2017, 05:03 PM   #27
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FYI - My company's LTD/STD policies offered are paid in full by employees, which means that all payments made under them are 100% tax free to the beneficiary. So, when collecting disability in that situation, it may only be 60% of your gross pay, but it's 60% of your gross pay and no taxes are taken out of it. No SS, no medicare, no state, no federal. (if the employer pays for it, then the tax situation changes)

For me, that 60% after tax would actually replace 82% of my gross income minus just taxes. If I wasn't working because of a disability, I also wouldn't be contributing to my 401k or HSA (since I would have no income to put into it), so that 60% replacement actually would result in more take home pay than I get when going to work currently.

Even if it didn't though, my budget doesn't utilize 82% of my gross income for necessities, and I expect you would find a similar thing is true for you. Just food for thought on that extra disability insurance.
Damn, that's an angle I didn't know about. I'll have to ask work about that.
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Old 01-22-2017, 10:06 PM   #28
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Old 01-23-2017, 03:57 PM   #29
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I checked with HR regarding disability today. They pulled up the paperwork of someone that was on disability and it is all filed under taxable income. Additionally this policy doesn't pay the whole 60% either, it only makes the difference between what the government disability gives you and the 60% of what you would be making working. So doesn't look like my financial adviser was leading me wrong there.
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Old 01-23-2017, 04:11 PM   #30
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Many insurance companies won't go much over 60% because they don't want to create a situation where the insured has a big financial incentive to remain disabled. One thing to watch for is how they define disabled. Is it unable to perform the normal necessary duties of your existing job or is it any job? If it is any job, then they might be able to deny payments if you are still in good enough shape to sweep the floors and flip burgers for minimum wage. The best policies will bring guarantee you a minimum income, so if you are sweeping floors for minimum wage they will supplement that.
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Old 01-23-2017, 04:13 PM   #31
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I checked with HR regarding disability today. They pulled up the paperwork of someone that was on disability and it is all filed under taxable income. Additionally this policy doesn't pay the whole 60% either, it only makes the difference between what the government disability gives you and the 60% of what you would be making working. So doesn't look like my financial adviser was leading me wrong there.
IF you pay it out of your taxable income (not the company paying the premium), then if you collect it, it is tax free. If your employer isn't paying the premiums, the benefits aren't taxable. You'd get a W-2 from it with the disability income in block 12 with a code of "J" (nontaxable disability pay).

As for the "pays the difference" part, they're going to pay you up front, but if you get awarded SSDI by the government later, they'll require you to repay them what the government back-pays you for the time you were collecting from them (I say repay because in 95% of cases, SSDI isn't decided within a year of claiming it).

Just some additional information for you to consider. The odds are your HR person doesn't know much about this stuff unless they've actually had someone utilize it recently, and then they'll probably only be kinda familiar with it. I'm up to speed on it right now from helping a friend who was on STD and then LTD for the past year and just came back to work today.
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Old 01-23-2017, 04:15 PM   #32
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Many insurance companies won't go much over 60% because they don't want to create a situation where the insured has a big financial incentive to remain disabled. One thing to watch for is how they define disabled. Is it unable to perform the normal necessary duties of your existing job or is it any job? If it is any job, then they might be able to deny payments if you are still in good enough shape to sweep the floors and flip burgers for minimum wage. The best policies will bring guarantee you a minimum income, so if you are sweeping floors for minimum wage they will supplement that.
Our policy leaves it up to the doctor to state whether or not you can do your job. A "no" from them = eligible to receive disability". I hadn't heard of any that require you to change jobs if you can do something else until now.
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Old 01-23-2017, 04:25 PM   #33
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IF you pay it out of your taxable income (not the company paying the premium)~
That seems to be the heart of the issue, this is company paid.
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Old 01-23-2017, 04:46 PM   #34
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That seems to be the heart of the issue, this is company paid.
I'd double check that and think about whether you really need that extra disability insurance....it should be ridiculously inexpensive so maybe it's not a big issue.

You have yet to describe you funds beyond the insurance policy. It would be interesting to see what your FA has don and the charges.
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Old 02-01-2017, 04:56 AM   #35
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First post here, please be gentle!

I have a financial adviser that I pay to handle my retirement financials and I think we have done some great things for my future but now I'm searching for more options to retire early.

She brought up a Riversource multi index universal life insurance package. In general the thing is too complex for me to comprehend but I'm researching it and finding a lot of negativity. I like some of the long term care benefits it has and of course the ability to use it as an additional vehicle for retirement. What are your thoughts?

I have around $200/mo that I feel I should be doing something with to further my early retirement. Ideas welcome!


My situation
-I'm single and 42, earning around 70k/y in a low cost of living area.
-Mortgage is being overpayed currently, roughly on track to pay it off by 63.
-I have a substantial IRA from previous employment 401k that is basically just sitting and growing, no contributions.
-I have a separate Roth IRA that I am contributing the maximum to.
-I have medium term savings investments that I am contributing to that is being managed and has a decent amount of funds in it to take care of projects like new roof for the house, new vehicle etc.
-I keep a good amount of money in checking to take care of unexpected things, I could live for six months off of checking if I had to.
-I have health, vision, dental etc through work.
-Disability insurances through multiple places adding up to something like 90% current income.
-I started a new 401k from my employer but for overhead reasons (small company) they decided they can't do that any more and are ending it. I was putting in 5%. This is the recent change that has me searching for new options.
-Before the 401k caved in I was on track to retire around 63 with over 80% income.
Index UL could be a great retirment vehicle... however you'd need a reliable company... Riverside doesn't sound like one of the players to me.. unless of course you're not in the US..
As far as fees and expenses, from earlier posts, that is a function of the agents... it can be expensive if the agent/advisor designs it so they get a high commission but if they design it to be efficient .. it is definitely a lower risk savings vehicle. There is a podcast that talks about it in depth.
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Old 02-02-2017, 08:13 PM   #36
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If it's too complex to understand, you won't be able to decide if it's good for you...
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Old 02-03-2017, 06:54 AM   #37
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Index UL could be a great retirment vehicle... however you'd need a reliable company... Riverside doesn't sound like one of the players to me.. unless of course you're not in the US..
As far as fees and expenses, from earlier posts, that is a function of the agents... it can be expensive if the agent/advisor designs it so they get a high commission but if they design it to be efficient .. it is definitely a lower risk returnsavings vehicle. There is a podcast that talks about it in depth.
FIFY.

I disagree... index UL is a poor retirement vehicle... Riversource is Amerprise which is horrible. Agents don't "design" product, but they may be able to chose from different products or flavors within a product family with varying levels of commissions and fees/expenses.
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Old 02-03-2017, 08:52 AM   #38
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Very much agree with the proceeding two posts. Permanent life insurance is a dog for all but a very, very select few (and for the agents and companies who can convince some sucker that it is a good investment).
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Old 02-03-2017, 11:27 AM   #39
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The only real good application of permanent life insurance that I am aware of are situations where one needs permanent life insurance to pay estate taxes where one owns a valuable family business or family farm.

In most other instances permanent life insurance is more like a hammer in search of a nail.
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Old 02-03-2017, 11:34 AM   #40
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will I get flamed if I post a good experience with regard to "permanent" LI?

my policy was "paid up" last year with a cv over $300K and a db of $1.2M - I bought the $1M policy in 2000 with $12K annual premiums

however, DW had (FI)RED and I needed to make sure she was taken care of in case I took a golf shot to the temple; if I were single i probably wouldn't have bought the LI
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