Indexed Universal Life Insurance

[disneysteve]

I guess you fellas don't call earned interest compounded yearly without taxation not Tax Deferred?

How the cash value is handled for tax purposes is totally irrelevant to the policy holder because that money doesn't belong to you. It belongs to the insurance company. It isn't your money. You can borrow that money but it needs to be repaid. Of course you wouldn't be expected to pay taxes on the insurance company's money. That would make no sense at all.

[dczech09]

Hi Friend i am 25 years old and i amplanning to take an insurance policy and i ahve cleared all my doubt with the firm, butthey have added two new plans and that confuses me, any idea, about how can i get the best one?

Hi, I am 24 years old myself, so same age group.

Tell me, at 25 years old, why are looking for life insurance? Are you married with children? Single? Tell me about your situation.

What I can tell you for sure is that life insurance has a lot to do with the right company. Different life insurance companies price things differently, so the company can make a big difference.

I take it that the firm you are working with has several options other than the two new plans, right?

A good rule of thumb is this:
At our age, we simply need life insurance to provide protection for our loved ones in the event we die early. If you are single, I would get a small policy to cover funeral costs and everything. If you are married with children, you should be looking to replace income that would be lost if you passed early. You can do this by getting a policy that has a death benefit of about 10 to 12 times your income. So if you make $40,000 per year, shoot for $400,000 to $480,000.

Only buy term life insurance, unless you have some special needs in your family. Term is VERY inexpensive, only covers you for as many years as you set it up for, and does not have the "cash value" that myself and the other guys have been bashing in this thread.

[bjl584]

If you are single, I would get a small policy to cover funeral costs and everything.

Average funeral today is around $10,000. My grandfather passed away last summer, and he had a policy in that amount. It almost exactly covered the cost of his funeral.

[disneysteve]

Average funeral today is around $10,000.

That's only because people buy all the bells and whistles that are not required or needed to bury someone. A basic funeral should be less than half that price. You can get a pine casket for $500 but many people choose to spend thousands on fancy bronze, velvet lined, hermetically sealed and all that other nonsense.

[bjl584]

That's only because people buy all the bells and whistles that are not required or needed to bury someone. A basic funeral should be less than half that price. You can get a pine casket for $500 but many people choose to spend thousands on fancy bronze, velvet lined, hermetically sealed and all that other nonsense.

My grandfather's funeral wasn't all that fancy. Middle of the road casket, one day of viewing. He did have a full military service at the cemetary since he was a WWII vet, but that was paid for by the Veterans.

Maybe funeral prices are different regionally, but I know for a fact that my family didn't get all that extravagent with his funeral.

[jpg7n16]

What I've learned from this forum is...well...nothing really...just that people debate and stab at each other for the sake of I believe I know more than you.

That's what happens when you're not trying to learn anything.

We posted a lot of information about the policies you love, but you just didn't want to see what we had to say. I mean, if you're trying to learn about these policies, look back at what we wrote. What more do you want?

It's hard to learn when we say things like: "sure, cash value grows tax deferred, but withdrawing it reduces your death benefit, and if you pass away the cash value goes to the insurance company, not your heirs (unless you paid more for the priviledge); furthermore, the amount of expenses you pay on the policy really limits your 'returns' and you'll be paying premiums long after your need for the insurance has ended " [1 positive, 4 negatives]

And all you see is: "cash value grows tax deferred"

What about the negatives??

I truly hope people don't come here for real Advice. Good Luck!

What happened to trying to learn? We don't agree with you so we don't offer "real" advice? (what? as opposed to "fake" advice?) You made your argument, we made ours. People can see both sides and choose for themselves. Either way, they found the advice they needed.

Besides, there is much more advice on these forums than just related to whole life policies.

[Wayde]

That's what happens when you're not trying to learn anything.

We posted a lot of information about the policies you love, but you just didn't want to see what we had to say. I mean, if you're trying to learn about these policies, look back at what we wrote. What more do you want?

It's hard to learn when we say things like: "sure, cash value grows tax deferred, but withdrawing it reduces your death benefit, and if you pass away the cash value goes to the insurance company, not your heirs (unless you paid more for the priviledge); furthermore, the amount of expenses you pay on the policy really limits your 'returns' and you'll be paying premiums long after your need for the insurance has ended " [1 positive, 4 negatives]

And all you see is: "cash value grows tax deferred"

What about the negatives??



What happened to trying to learn? We don't agree with you so we don't offer "real" advice? (what? as opposed to "fake" advice?) You made your argument, we made ours. People can see both sides and choose for themselves. Either way, they found the advice they needed.

Besides, there is much more advice on these forums than just related to whole life policies.

Look...I mentioned the last post was my last but this one for sure. It is not the agreeing and disagreeing that I dislike this forum. It's your attack on me that is a waste of time. Re-read some of your last reply posts and you will see...but wait...it's your posts so you may not notice it.

Anyways...I am going to leave you and everyone with this...Please read it carefully...digest it...research it...before looking for a rebuttal.

WHERE DOES THE ULTRA RICH INVEST THEIR MONEY? And I'm not talking about people who have a couple of million or less. I'm talking about super rich...$10 Million to Billion plus Individuals.

I've never met a Multi-Millionaire who has their money tied up in a 401k. Again...stop looking for a rebuttal to my post. I'm not asking or looking for a rebuttal. Since you like researching...please research that. You may never find out the answer...because it's not in books, stats, media...etc...that kind of information is usually kept behind closed doors within their circle. And No, I'm not in their circle or know of anyone in their circle. I, purely by luck, stumbled on it by accident.

Again...

WHERE DOES THE ULTRA RICH INVEST THEIR MONEY?

Find out this answer and it will shock you.

Good Luck Everyone!

[jpg7n16]

I've never met a Multi-Millionaire who has their money tied up in a 401k.

No shock there as 401ks have contribution limits. Kinda hard to keep a billion dollars in your 401k, when you can only do $17k/year (at $17k/year, it would take 58,823 years to put $1 billion into a 401k - and most people don't live that long)


And are you suggesting that since 401ks didn't make them super-wealthy, that universal life insurance is therefore the best option??

WHERE DOES THE ULTRA RICH INVEST THEIR MONEY?

Find out this answer and it will shock you.

Okay sure, let's see...

The 400 Richest People in America - Forbes

Bill Gates: currently has 95%+ of net worth in MSFT - stocks, not life insurance
Warren Buffet: currently has 95%+ of net worth in BRK-A - stocks, not life insurance
etc.

How many of the top 400 richest people in America got rich through their cash value policies? Find out this answer and it will shock you.

Out of the top 400 wealthiest people in America, only person 375 has "insurance" as the source of his wealth - but alas, not through buying life insurance, but through owning a company that sold it. Patrick Ryan - Forbes

So are you now saying that you found how the super-rich got their wealth, that it wasn't life insurance policies, but rather stocks, and you've changed your mind?


Now there's no denying that the super-rich are more likely to own a whole life policy, but that is not how they got rich. Whole life policies are good for estate liquidity - something the average person doesn't need, but the super wealthy may need.

There is a big difference between how to get rich, and what to do once you're there.


And just for the record, I'm not trying to attack YOU, but I am definitely trying to attack YOUR IDEAS.

[dczech09]

And just for the record, I'm not trying to attack YOU, but I am definitely trying to attack YOUR IDEAS.

I completely agree. Wayde, we are not trying to attack you and have nothing against you personally. The stuff we talk about here is purely professional and is about ideas and advice. There is no need to take anything as a personal attack.

jpg and I certainly do not agree on 100% of things. DS and I certainly do not agree on 100% of things. And we should not agree on everything- there is no point in that.

We have simply dispelled your beliefs on life insurance because your beliefs on it do not match our beliefs. All of our beliefs, whether it is mine or yours, is based on fact and interpretation of fact.

As for the richest people... you should read a book call The Millionaire Next Door by Dr. Thomas Stanley. Fantastic book based on his research of wealthy people.

The super wealthy may certainly have life insurance, but it is not for investment or wealth creation. It is for two things: protection and estate liquidity. I did mention earlier that permanent life insurance policies have a role when it comes to estate planning.

To assume that the super wealthy have built their wealth on life insurance policies is a ridiculous idea- unless of course they are in the business. Life insurance has the word "insurance" in it. That should be a hint for what it is for.

[disneysteve]

WHERE DOES THE ULTRA RICH INVEST THEIR MONEY?

By your own admission, life insurance is NOT an investment so nobody invests in life insurance, not the poor, not the middle class, not the ultra rich. We all agree that permanent insurance does have a place in estate planning for those whose estates exceed a certain size but you're truly talking about the 1% for whom that applies. For the other 99%, it is a rip off.

[Petunia 100]

Look...I mentioned the last post was my last but this one for sure. It is not the agreeing and disagreeing that I dislike this forum. It's your attack on me that is a waste of time. Re-read some of your last reply posts and you will see...but wait...it's your posts so you may not notice it.

Anyways...I am going to leave you and everyone with this...Please read it carefully...digest it...research it...before looking for a rebuttal.

WHERE DOES THE ULTRA RICH INVEST THEIR MONEY? And I'm not talking about people who have a couple of million or less. I'm talking about super rich...$10 Million to Billion plus Individuals.

I've never met a Multi-Millionaire who has their money tied up in a 401k. Again...stop looking for a rebuttal to my post. I'm not asking or looking for a rebuttal. Since you like researching...please research that. You may never find out the answer...because it's not in books, stats, media...etc...that kind of information is usually kept behind closed doors within their circle. And No, I'm not in their circle or know of anyone in their circle. I, purely by luck, stumbled on it by accident.

Again...

WHERE DOES THE ULTRA RICH INVEST THEIR MONEY?

Find out this answer and it will shock you.

Good Luck Everyone!

It's no secret. The ultra rich who are self-made get that way by starting businesses which become wildly successful. They do not become ultra rich by "investing" their money in high-commissioned insurance products. What a ridiculous notion.

Anytime anyone hints that they have an investment "secret" which will "shock" me, I am already 99.99% certain that they are trying to sell me something.

[Wayde]

Hello again...man...now I know why people can really get caught up in these forums.

JPG...just wow...I will leave at that

Look...all of you have made great points about your beliefs, which was built from experience or your own research.

The only thing that still shocks me is, all this time: I have never sided with Cash Value policies or 401Ks. I nearly suggested that they are used for many different purposes. That's why I suggested people to see a well qualified adviser in each field. I am not a one sided individual. In my practice over the years, I've done what is suitable for the client...and that is not whether I believe in Cash Value policies or not. It's what's best for the client at the particular time in their lives.

If they have a greater need for Term then that is what is given. If they are in need of a Cash Value policy, whether it's for permanent coverage or simply for estate protection, that will be also given. Their specific needs are known through a Financial Analysis and many other approaches.

All of you who believe so strongly against cash value policies have gravely mistaken me to be pushing cash value policies as an Investment. They are not, and I believe I have stated that before. If you feel I'm stating that they are...reread the posts (without assumptions) and you realize I've never stated or assumed they are investments. The Pros I listed for Cash Value policies are the actual things that you can do with them. They are not my assumptions or opinions.

Anyways, you probably won't find the answer to my question...because I'm not too clear with what I'm talking about anyways. I will leave it with that because it may open another can of worms. All I know is, I have stumbled onto something the Ultra Rich have been doing for generations and it's an incredible Wealth Creation and Wealth Protection Strategy.

[Robert742]

All I know is, I have stumbled onto something the Ultra Rich have been doing for generations and it's an incredible Wealth Creation and Wealth Protection Strategy.

Wealth protection - yes. Wealth creation? No.

[disneysteve]

Hi Friend i am 25 years old and i amplanning to take an insurance policy and i ahve cleared all my doubt with the firm, butthey have added two new plans and that confuses me, any idea, about how can i get the best one?

1. I am 25:
2. unmarried.

and i am searching for the life insurance that could give me a better return with in 15- to 20 years. SO i was confused about should i choose a cheaper insurance or the expensive one.

If you are 25 and single, why do you need life insurance at all?

You mention wanting "a better return." Life insurance is not an investment. It doesn't generate any return. That's kind of been the focus of this thread. If you are looking to grow your money, you don't want or need life insurance.

[dczech09]

If you are 25 and single, why do you need life insurance at all?

You mention wanting "a better return." Life insurance is not an investment. It doesn't generate any return. That's kind of been the focus of this thread. If you are looking to grow your money, you don't want or need life insurance.

I agree. I would say MAYBE get a small policy to cover funeral costs and whatever. Also if you have a car loan that your parents co-signed for, you may want to look at covering that too. But nothing more than that.

If you are looking for a "better return," stick to a 401k or IRA of some sort. I know everyone says "401ks and IRAs" are bad investments, but what they do not understand is that the 401k or IRA is not the investment. These are tax shelters.

So invest in some good mutual funds and shelter them with a 401k or IRA. That is really the best that most people in our age group will be able to do.

If your agent is trying to sell you life insurance as even an implied investment, you should send the person packing. Life insurance is never an investment. The word "insurance" should be a hint