Annuity for a 33 Year Old?

[FedUpWithIMOs]

If his health is good, what about an IUL? No chance for loss. Even if the gains are minimum, since he's conservitive minded, he'd be good with it. Odds are the gains would be pretty decent. At only 33 years old, I think it'd be great.

 

[Full Throttle]

If his health is good, what about an IUL? No chance for loss. Even if the gains are minimum, since he's conservitive minded, he'd be good with it. Odds are the gains would be pretty decent. At only 33 years old, I think it'd be great.

Hope you don't say that to clients, because it's not true. But it could be a fit depending on the details.

 

[annuityseller]

Me thinks someone forget the insurance costs!!!!!

 

[FedUpWithIMOs]

Hope you don't say that to clients, because it's not true. But it could be a fit depending on the details.

Of course I would not tell the client there is absolutely "no chance for loss." There always is. I just meant that there would be no loss due to market downturns, which a lot of other investment options would be subject to.
As far as the risk level IULs do have, I'm sure you'd agree that it's on par with any other low risk/nearly risk free product out there. He's only 33 and has the money to over fund the IUL as much as he can for the next few years. Those of us who have IUL quoteware, see what illustration you get on 300-500k invested over the next 10, 15, or 20 years, especially while over funding the first few years to the extent he could. I get that illustrations are only illustrations, but it does look good.

 

[iceco1d]

Someone walk me through this...

How does a conversation with a client/prospect that starts with CD rates or investments, and somehow turn into a discussion about life insurance? This is a serious question.

 

[DHK]

Someone walk me through this...

How does a conversation with a client/prospect that starts with CD rates or investments, and somehow turn into a discussion about life insurance? This is a serious question.

Permanent life insurance has tax-deferred growth, but you can access your cash values at anytime without IRS penalties. Can't do that with an annuity. It could be that life insurance for a 33-year old might be a more suitable recommendation depending on how it is structured.

 

[briko3]

Permanent life insurance has tax-deferred growth, but you can access your cash values at anytime without IRS penalties. Can't do that with an annuity. It could be that life insurance for a 33-year old might be a more suitable recommendation depending on how it is structured.

Yeah, until the policy lapses and there is phantom income to pay taxes on. Especially nice when they don't expect a 5 figure tax bill.

 

[iceco1d]

Exactly. Also, why pay the COI when there are products out there that don't have a COI?

I'm not a noob to this game, so please feel free (anyone) to give me a more in depth answer (in support or opposition of the concept, I don't care which).

PS - You can access a large portion of your Roth IRA balance at any age, without IRS penalties as well.

 

[scagnt83]

Exactly. Also, why pay the COI when there are products out there that don't have a COI?

I'm not a noob to this game, so please feel free (anyone) to give me a more in depth answer (in support or opposition of the concept, I don't care which).

PS - You can access a large portion of your Roth IRA balance at any age, without IRS penalties as well.

You can access basis in a ROTH at anytime... which is usually a good bit of the account. But earnings fall under the same withdrawal guidelines as a traditional IRA.


The pros and cons of permanent insurance for cash accumulation has been beat to death around here. If you want more info go to the LI section and read a few hundred pages...


But I will say that many who use PI as supplemental retirement do no qualify for a ROTH IRA.

Also, when comparing the two, you have to take into account the lesser money going into the ROTH, since you would be needing some type of LI.


More importantly, the distributions from the PI will be at a much higher withdrawal rate than the IRA.

I currently have a client taking withdrawals from an old WL I wrote; lifetime sustainable withdrawals came in around 7% of CV. (he is 65)

With an IUL/UL using GPT, you can get up to 8%-10% withdrawals usually. (assuming a max overfunded policy)