Golden sunsets
Thinks s/he gets paid by the post
- Joined
- Jun 3, 2013
- Messages
- 2,524
Yesterday I asked for opinions on LTC and appreciated the responses. Today I'd like to ask for opinions on a type of insurance policy known as a universal life wealth protector. Before I describe this policy let me describe our situation:
DH/me: Ages 67/64. Retired/semi-retired. Pension/VA Disability/SS Income in retirement $137,000, fully cola'd. Total expenses $185,000, including $50,000 estimated annual taxes.
TA: 2,850,000. No debt. SWR less than 2 percent.
So we manage our own investments but have sought legal estate planning assistance and did visit a fee based financial planner once in 2008, to validate our plan. Upon legal advice in 2000, we purchased this Wealth protector universal life policy, face amount $500,000, referred to as a second to die policy. The premium is variable. The purpose of the policy, was to build an asset to cover estate taxes and/or build additional wealth for our heirs. For the past 14 years we have paid annual premiums of $5,460. The premiums are placed in a mix of investments. Premiums for the insurance are deducted from the investment portfolio. The idea is that after 15 years one can decide whether or not to stop paying the premiums and the investment portfio will pay the insurance premiums indefinitely. Upon the death of the second to die the policy pays out the five hundred thousand plus the value of the assets. We have elected a moderate aggressive investment portfolio. The portfolio is now worth $88,000. (not included in our TA). Depending on investment performance the total payout upon death could be several million dollars. If we continued to pay premiums beyond 15 years that number jumps substantially.
There have been fees assessed throughout the years , which have declined over time. At year 15 the fees drop to $60/yr.
I have never known and always wondered whether this has been a wise investment. Our financial planner in 2008 was not wild about it but stopped short of recommending that we cash out. After 15 years we could cash out with no penalties, but of course, no policy.
Do any forum readers maintain such a policy and what are your thoughts on this policy? Insurance company rip off or wise estate planning tool
DH/me: Ages 67/64. Retired/semi-retired. Pension/VA Disability/SS Income in retirement $137,000, fully cola'd. Total expenses $185,000, including $50,000 estimated annual taxes.
TA: 2,850,000. No debt. SWR less than 2 percent.
So we manage our own investments but have sought legal estate planning assistance and did visit a fee based financial planner once in 2008, to validate our plan. Upon legal advice in 2000, we purchased this Wealth protector universal life policy, face amount $500,000, referred to as a second to die policy. The premium is variable. The purpose of the policy, was to build an asset to cover estate taxes and/or build additional wealth for our heirs. For the past 14 years we have paid annual premiums of $5,460. The premiums are placed in a mix of investments. Premiums for the insurance are deducted from the investment portfolio. The idea is that after 15 years one can decide whether or not to stop paying the premiums and the investment portfio will pay the insurance premiums indefinitely. Upon the death of the second to die the policy pays out the five hundred thousand plus the value of the assets. We have elected a moderate aggressive investment portfolio. The portfolio is now worth $88,000. (not included in our TA). Depending on investment performance the total payout upon death could be several million dollars. If we continued to pay premiums beyond 15 years that number jumps substantially.
There have been fees assessed throughout the years , which have declined over time. At year 15 the fees drop to $60/yr.
I have never known and always wondered whether this has been a wise investment. Our financial planner in 2008 was not wild about it but stopped short of recommending that we cash out. After 15 years we could cash out with no penalties, but of course, no policy.
Do any forum readers maintain such a policy and what are your thoughts on this policy? Insurance company rip off or wise estate planning tool