Sure they invest it.. They invest it in Chevrolet, Westinghouse, Sea Ray, Harley Davidson, etc.. If you don't believe me, just look at all the new cars, trucks, appliances, boats, bikes, etc. they have sitting around their house.
Buy Term And Invest The Difference
- Thread starter Atlas
- Start date
Sure they invest it.. They invest it in Chevrolet, Westinghouse, Sea Ray, Harley Davidson, etc.. If you don't believe me, just look at all the new cars, trucks, appliances, boats, bikes, etc. they have sitting around their house.
Sure they invest it.. They invest it in Chevrolet, Westinghouse, Sea Ray, Harley Davidson, etc.. If you don't believe me, just look at all the new cars, trucks, appliances, boats, bikes, etc. they have sitting around their house.
.............that cruise to the Bahamas, tickets to the pacers game, the trip to Disney World, the closet full of designer clothes, that 60" HD TV, the firearms collection, the new ATV, coffee at Starbucks, lunch at Texas Roadhouse, dinner at Bonefish Grill......................................
- 10,708
That is not the only reason. I recently saw a study on how the 1% allocates their investments. On average they have around 5%-8% of their total wealth in Permanent Life Insurance Cash Values.
That is down from 10 years ago when it was 10%.
So for someone with 1Billion in the bank, that is $50mill in LI CV.
Rich people get permanent insurance. And once they do, they buy very large amounts of it. Agents who think otherwise just dont understand the product.... and most likely have not made an honest effort to try and understand it...
When someone in a 45% tax bracket sees 4%-5% tax-free growth, they realize that is equal to 8% taxable growth.
Then they see there is no risk of loss.
Then they see how well it generates income. Then they see how the DB never goes below the amount of CV... so their loved ones always get a higher amount.... and that higher amount is income tax free...
If you know the product well, it is a very easy thing to sell to the wealthy.
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- 5,243
Don't know if the last paragraph was directed at me or not, but I'll address it. I get it and I agree with what you posted. I was making a general statement, similar to how everyone else makes General statements that Life insurance is a great investment vehicle....both are way to general to every be 100% correct. It is about stages of life, at least to me. If I had invested in life insurance in my 20's I wouldn't be anywhere near where I am today.
I'm done....not interested in a debate about LI as an investment.
- 10,708
The last part was not directed at your post. This thread is full of LI bashing, it was just a general comment.
- 4,132
Sometimes I look at the people turning their noses up at whole life and see it this way....
It's like putting down the best looking girl in HS. You try and find fault in her looks, behavior and anything else she does, because you figure you never had a chance in hell of dating her. So you build yourself by tearing her down.
I usually find those who are most opinionated against whole life to also be those who couldn't pay the premium for it either at the same time. That's human nature. If you can't afford something, it must be because the product is bad......
It's like putting down the best looking girl in HS. You try and find fault in her looks, behavior and anything else she does, because you figure you never had a chance in hell of dating her. So you build yourself by tearing her down.
I usually find those who are most opinionated against whole life to also be those who couldn't pay the premium for it either at the same time. That's human nature. If you can't afford something, it must be because the product is bad......
- 8,707
Let me ask you a question. If you had a husband and wife and you knew on death the pension option they took would have them lose the income of one pension would you talk to them about a life insurance policy that could replace that income? Since the death may happen very late in life would you recommend that it be permanent coverage? Realizing that the costs of those policies increase with age would you recommend they consider these policies at an earlier age?
What I am getting at is an old concept of Pension Max. Now I realize fewer and fewer people have pensions however the vast majority have social security and upon the death of one spouse the smaller social security benefit will disappear.
People have continueing need for what life insurance can provide.
- 5,243
Slow down fella! 1st, the post you quoted was in response to Rouse, making a GENERALIZATION. So, a facetious manner, was just as general.
Next, see my post about 3 post up. I'm not saying LI is a bad investment strategy. I just don't think it's the end all be all like some of you guys who get your panties in a wad every time someone disagrees with you.
As to the pretty girl in highschool analogy above...not that I can't afford WL an IUL etc... just doesn't work in my investment strategy, which has been discussed, ad naseum about 2 months ago.
- 8,707
My post has nothing to do with life insurance as an investment. It's a pure use of a death benefit to solve a lifetime problem.
- 5,243
Gotcha. As for DB as a lifetime problem, it is not problem for most in my circle. To be clear, I was talking about myself...not potential clients.
I failed to see your pension scenario as being relevant to talking about multimillionaires becasue simply it was not the topic I was previously discussing and not a topic I'm remotely interested in talking about. *worst run on sentence ever*
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