Buy Term and Invest The Difference Piece

[Larry Tew]

I want to share a section from a larger project I'm finishing up. The attached is the BTID section. If you have any suggestions, feel free to share. I included the "page 8" that was referenced for context.

 

[Jerard]

Nice job on this. You do great Acrobat work. Do you mind if remove the page numbers and add it to my website? Or link to it?

 

[Larry Tew]

Nice job on this. You do great Acrobat work. Do you mind if remove the page numbers and add it to my website? Or link to it?

I'm going to post the full project when it's finished and anyone can use it if they want to. BTW, I did it in Word.

 

[scottstreet]

Larry, really good stuff. the only suggestion/criticism i would have is that while it is common ";human behavior" to spend the rest, such behavior has nothing to do with the discrepancy in return, In fact further down you lay out the true reasons for the discrepancy. So";human behavior" is why BTID fails, but it is not the reason for discrepancies in returns. Also, what source are you using for the whole life return? It should probably be noted. Lastly, in referring to financial entertainers I would replace "endorsed providor" with "paid sponsor" All in all, a fantastic piece!!

 

[sandypal]

Currently the market trend is not supporting the real value of BTID. A large number of amendments required in the guidelines. Have you ever compared short term life insurance policies with whole life plans according to BTID?

 

[Larry Tew]

Larry, really good stuff. the only suggestion/criticism i would have is that while it is common ";human behavior" to spend the rest, such behavior has nothing to do with the discrepancy in return, In fact further down you lay out the true reasons for the discrepancy. So";human behavior" is why BTID fails, but it is not the reason for discrepancies in returns. Also, what source are you using for the whole life return? It should probably be noted. Lastly, in referring to financial entertainers I would replace "endorsed providor" with "paid sponsor" All in all, a fantastic piece!!

Thanks for the feedback. My point is to address human behavior first and then address the real return issue for those who think they are the exception and would actually follow the plan.

The bottom line is that people won't follow the investment side of BTID as evidenced by the QAIB, and even if they would or could, they still wouldn't be better off with BTID based on returns and other benefits.

The chart is from an Ohio National piece (approved for client use) but I removed the company name in the chart. I mentioned it's available upon request.

A point I didn't include is that with BTID you would have less to invest compared to whole life because you have to pay for the term. If you subtracted the cost of term from the whole life premiums paid, the rate of return on the whole life would have been above 5%.

The product was their "Executive Equity Builder" issued in 1993 measured for 20 years. It was the product replaced by Prestige Max.

I used "endorsed provider" to give a clue as to who I was referring to. I'm not sure "paid sponsor" would fit since the endorsed providers pay to be an endorsed provider rather than get paid to advertise for ramsey.

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Currently the market trend is not supporting the real value of BTID. A large number of amendments required in the guidelines. Have you ever compared short term life insurance policies with whole life plans according to BTID?

Sandy, I don't understand your post. If you find something in my piece that's factually inaccurate, I'll be glad to correct it.

 

[xrac]

Currently the market trend is not supporting the real value of BTID. A large number of amendments required in the guidelines. Have you ever compared short term life insurance policies with whole life plans according to BTID?

I do not understand this either.

 

[2112Greg]

Nice job, as usual, Larry. Good COW-based material there, I'll lift it once you finalize it!

 

[blue_wynd]

We can start a donation page for Larry.

 

[Larry Tew]

We can start a donation page for Larry.

Sounds good to me!