Life Insurance Facts : How to Use Life Insurance as an Investment

[blueangel7883]

And it's overpriced life insurance too

[blueangel7883]

Cash value "whole life, universal life, variable life" is an awful investment to have in your portfolio. Buy Term and Invest the Difference! Cash value is guaranteed to screw you over one way or another. If you die before you take out your cash value all your savings go to the insurance company and not your beneficiaries. Your money only grows 3-4% after first three years which grows at 0% and if you take out some of the money and still are keeping the life insurance they charge you 7-8% to pa

[joepirsoto]

The flaw in your plan is that when you give you money to a life insurance policy, they make the 37 million and give you the 3.5 million. Trying to make real money in any kind of CV life insurance is like trying to dump water out of the Titanic to keep if from sinking.

[joepirsoto]

Now this is VERY important to you: The S&P index over a 30-year period has not dropped below 10%. In fact from Dec of 79 to Dec 09 the S&P was 11.23%. Now, your same money (15k a year over 50 years) invested at an average of 11.23 will grow to $37,790,161 million.

[joepirsoto]

☺ Now we’re talking real numbers. From what you said you look to be 23 years old, or about. And if you want 15K a year to turn into 3.5 million would have to get you a ROR of about 5%. (FYI, I am so happy to see a young man like you taking charge of your money like this, good for you.)

[joepirsoto]

If you wanted to, take a look at a WLP contract and read the section on "cost of insurance." This will blow your mind. Think of paying $100 a month in premium but your monthly cost of insurance is $300 or more and growing every year. This WLP's are designed to laps when people are alive and then guess what... that's right you have to pay the loan back & with taxes. That is one of the reasons people say buy term.

[joepirsoto]

My point is WLP is not a smart idea. If your family needed 200k when someone passes they would, in our explanation, be 100k short. Why would we do that to our family? Also if they only need 100k why are we saying pay hundreds of dollars for something we don't need?

[GuitarOwl]

@Rejjiy You don't need to pay the loan back! You can change your dividend to pay the interest and the only thing the insurance company will do is just say ok well so and so took lets say 100K (out of a 200k face amount) then were just going to pay you 100k.

But loans do NOT need to be paid back.

[joepirsoto]

@GuitarOwl Bad news, your mistaken. The loan will have to be paid back. If you don't do it when your alive the company will take the loan out of the benefit amount.

If you take out 100k out of a 200k and use just the dividend to pay the premium, when you pass away your family will only get 100k from the 200k.

[GuitarOwl]

@joepirsoto Isn't that what I just said?? You do NOT need to pay the loan back the company will just take it out of the death benefit. Thank you for confirming what I just said. So it is true! Thanks lol

[joepirsoto]

@GuitarOwl If you have to pay the money "back," even if it comes out of the death benefit, then you ARE paying back the loan. So, after reading the first line of your statement, "You don't need to pay the loan back" you are mistaken. I think we both have the same facts, we just have different points. Yours I think is pay for more, i.e. the cost of a 200k WLP, and get less, i.e. a beneficiary get 100k. Why would anyone ever pay for two things just to get one?

[GuitarOwl]

@joepirsoto Ok lets use some big numbers here for a moment. This is what I plan on doing anyway. If I put 15K into a WL policy every year till I retire around 73 ( I love what I do so I plan to be there long plus with retirement going up lol) I will have put in the policy 750K through out my life. BUT my CV will be around 3.5 million and the death benefit be at 5 million. If I took out lets say 2 million for retirement after only putting in 750K I think that is a good deal and then when I do die

[GuitarOwl]

@joepirsoto my beneficiary will get another 3 million dollars. To me that's like getting paid twice. I can take the money out of the CV or since my CV is so high I can just live off the dividend. To me that is a great choice.

[magicktrick]

@GuitarOwl regardless of what joe said, whole life can be a good supplement for retirement while providing a growing death benefit over time. You would want some market exposure as well, but Joe's numbers a little off. Earning 5%, which the average lifetime IRR is on WL, you would be closer to 4MM. Also, the S&P has had years of negative return so it depends on when you entered the market. That's why investing is for long term, and WL is a good guaranteed fixed portion of an overall portfolio

[GuitarOwl]

@magicktrick Oh I agree. I plan to do other things but WL is great for long term. What I mean by getting paid twice is because you get what you put in and then you almost get that same amount when you die. Your right I double checked and it is around 4MM. But with what I'm doing I would be getting a little above 6% for the policy I'm getting. But your right it is 4.5MM or so.

[GuitarOwl]

@joepirsoto Make sure you read the whole comment before you say some one is mistaken.

[jjwoodruff74]

This is one of the strategies that the very wealthy use to reduce their tax liabilities. It's not for everyone and there should definitely be some consultation with a good financial planner and insurance adviser to determine the needs and goals of your plan.

[TheTeemroper]

This goober should be put under the jail. He needs to go back to selling snake oil. Gives the rest of us a bad name

[danielsp9]

GO WITH TERM!!!! TermLifeAssurance,org

[jsamaroaftercare]

OMG did this guy have a brain fart cause what he is saying is sooooo ilegal. Insurance can not be stated as an investment product.

[IncorruptibleTruth]

I guess the insurance company this gentleman works for forgot to tell him that in all 50 states it is unlawful to represent any kind of insurance policy as an investment and constitutes fraud. Life insurance of any kind is not an investment. If you need clarification, ask your state insurance commissioner. That's what he's there for.