Can a Non-HNW individual obtain any value from a LIRP?

[LostDollar]

I really don't know what I am asking here.

Elsewhere on the site there is discussion of at least one of David McKnight's books.

One of his ideas seems to center around a product called LIRP.

I am attempting to understand if this is a concept that could have any use for a non-HNW person, ie would it be worth my time and effort to learn something about it and attempt to use it, or is it something that would probably not have any particular benefit for me?

Thanks.

LD

 

[Allen Trent]

No such product called LIRP from any carriers & no such thing in the IRS codes called a LIRP

LIRP is merely a concept or sales strategy term used by some to give permanent life insurance a cooler sounding name. Basically, designed to maximize cash accumulation inside the policy by overfunding it. Some people like to use the LIRP terminology to avoid calling it a life insurance policy. 30 years ago, some used terms like personal pension plan.

 

[LostDollar]

No such product called LIRP from any carriers & no such thing in the IRS codes called a LIRP

LIRP is merely a concept or sales strategy term used by some to give permanent life insurance a cooler sounding name. Basically, designed to maximize cash accumulation inside the policy by overfunding it. Some people like to use the LIRP terminology to avoid calling it a life insurance policy. 30 years ago, some used terms like personal pension plan.

Hey!

As usual, I appreciate you taking the time to make a post for me. I think that tells me what I need to know about that idea for my own planning.

I have been exposed to some new (to me) ideas and just wanted to be sure I wasn't missing something I should be considering.

 

[PrivClientSG]

I don't know what this specific recommendation is all about, or who the target market is; however, remember, whole life insurance can play a very different role inside the world and the planning of HNW clients (as opposed to non-HNW clients, who more often than not, typically, do not use whole life insurance. The HNW client has options, flexibilities, planning and utilization opportunities, etc. -- that non-HNW clients do not have.

A non-HNW client buys life insurance for specific reasons, often, typically "need" based. A HNW client buys life insurance, perhaps for some of those or similar reasons, but also can utilize that life insurance before, during, and after, when those needs are no longer present. Very different worlds, and as such, very different planning.

 

[LostDollar]

I don't know what this specific recommendation is all about, or who the target market is; however, remember, whole life insurance can play a very different role inside the world and the planning of HNW clients (as opposed to non-HNW clients, who more often than not, typically, do not use whole life insurance. The HNW client has options, flexibilities, planning and utilization opportunities, etc. -- that non-HNW clients do not have.

A non-HNW client buys life insurance for specific reasons, often, typically "need" based. A HNW client buys life insurance, perhaps for some of those or similar reasons, but also can utilize that life insurance before, during, and after, when those needs are no longer present. Very different worlds, and as such, very different planning.

It goes to David McKnights book discussed in another thread on the site.

 

[panzercanvasser]

No such product called LIRP from any carriers & no such thing in the IRS codes called a LIRP

LIRP is merely a concept or sales strategy term used by some to give permanent life insurance a cooler sounding name. Basically, designed to maximize cash accumulation inside the policy by overfunding it. Some people like to use the LIRP terminology to avoid calling it a life insurance policy. 30 years ago, some used terms like personal pension plan.

“Personal pension plan” is epic. Thank you.

 

[DNicholsIns]

It probably is, but all the same I believe it depends with the circumstances. A LIRP (Life Insurance Retirement Plan) can be helpful especially if you’re not a wealthy man, but only if you have a need for tax-free retirement income or life insurance. It ain’t like that, so perhaps getting the fundamentals for yourself will assist with deciding whether it would hold suitable for you.

 

[scagnt83]

Life Insurance should be part of a retirement plan. Not the only component.

If appropriate to use PLI as a savings/accumulation vehicle. It is rarely suitable for those over age 60 (as a generalized statement).

 

[Allen Trent]

It probably is, but all the same I believe it depends with the circumstances. A LIRP (Life Insurance Retirement Plan) can be helpful especially if you’re not a wealthy man, but only if you have a need for tax-free retirement income or life insurance. It ain’t like that, so perhaps getting the fundamentals for yourself will assist with deciding whether it would hold suitable for you.

Can't I get tax free retirement income from borrowing money anywhere? IE is a 7% loan from the insurance companies General accounts more tax free than a 7% bank loan against equity in my house, cottage, seasonal, rental, air bnb, etc

 

[scagnt83]

Can't I get tax free retirement income from borrowing money anywhere? IE is a 7% loan from the insurance companies General accounts more tax free than a 7% bank loan against equity in my house, cottage, seasonal, rental, air bnb, etc

You dont get the interest paid back to you in those other scenarios.

PLI lets you recapture the interest instead of paying it to someone else.

Better comparison would be a 401k Loan.