Helping a friend for term.. etc

[Allen Trent]

Yup I have seen it.

Buy a bigger house and car they could not have afforded when daddy was alive. Suddenly rolling large. Then a few years later an equity loan ........

my good friend died after terminal cancer. had 401k & a lot of term totaling $1.4M. Even though it all went to a trust to provide for his wife income annually & then to his 2 kids, she emptied it in about 7 years & it was gone by the time the kids were 16 & 18. most was not just blowing money on trips & house addition, but also by making horrible tax moves by taking money out of IRA/401k & then owing 30-40% at tax time from tax/penalties, which then required more of the funds to be taken out to pay the tax man. then that triggered another 20-40%

I had always had the wrong impression that a trust limiting a person to annual 5% of the funds really would do that. But, if the spouse is the trustee, they get to pull out funds whenever they want & say it is used for the kids benefit.

 

[scagnt83]

I had always had the wrong impression that a trust limiting a person to annual 5% of the funds really would do that. But, if the spouse is the trustee, they get to pull out funds whenever they want & say it is used for the kids benefit.

It all depends on what kind of trust it is and what its for. Sounds like it was more for tax purposes or perhaps legacy purposes. You can get as creative as you would like with stipulations. But unless the trustee abides by those stipulations, none of it matters. That is why lawyers are often appointed trustees when there are certain serious stipulations that must be met. And that is why trustees (who have a fiduciary duty to the beneficiaries) can be sued for misuse of funds and taken off the trust by a court.... even have to pay for damages if possible.

In that case, had there been stipulations being broken, someone such as a family member likely could have sued on behalf of the children and attempted to have her taken off as trustee.

 

[Newby]

Yeah...I was two. Learning how to walk better, fitting the square block in the square hole, learning that apple starts with "A". Man, those were the days.

I hope you weren't reading those awefull Dr. Seuss books. I hear those things are terrible for young minds.

 

[scagnt83]

I hope you weren't reading those awefull Dr. Seuss books. I hear those things are terrible for young minds.

So you are against a private business making an ethical decision they feel is best for their business? Interesting. Not sure what that has to do with insurance... but ok.

Does that mean you support me being forced to sell certain products just because a certain minority of people in our country demands me to do so?

 

[PhxSunsFan]

do any carriers offer 25 year level term?

 

[Tahoe Ray]

do any carriers offer 25 year level term?

Several. Pac, Cincy, SBLI, Banner, Protective, AG, and more.

 

[Ghost]

do any carriers offer 25 year level term?

Yes they do, 10-15-20-25 and 30. Some of them offer also a living benefit, so if somebody gets critically ill or chronically ill they can access the death benefit. If they're self- employed, they can add the disability income to the policy as well.

 

[Tahoe Ray]

If they're self- employed, they can add the disability income to the policy as well.

Disability income attached to a life policy is absolutely terrible. If you're self-employed, you need a real disability policy.

 

[Ghost]

Disability income attached to a life policy is absolutely terrible. If you're self-employed, you need a real disability policy.

What would be the difference between adding a rider for that or having a separate disability policy? I haven't sold one with the rider yet, so I thank you for your answer.

 

[Tahoe Ray]

What would be the difference between adding a rider for that or having a separate disability policy? I haven't sold one with the rider yet, so I thank you for your answer.

Disability insurance is all about your occupation and ability to make a claim. The insured should be able to make a claim if they can't do THEIR SPECIFIC JOB (in most cases) and not be forced into some other profession to make a living.

There are very limited life carriers that even have those riders, and they are nowhere near comprehensive enough to offer anything meaningful by way of disability coverage (unless the insured ends up a paraplegic or something, and even then the coverage isn't going to provide the benefit amount or benefit length necessary in most cases).

Here's the analogy I use: It's like buying a recreational vehicle. You can live in it, but it's not as nice as your house. You can drive it, but it's not as nice as your car.

In most cases, RV-like insurance products don't do anything particularly well. There may be a few exceptions but this isn't one of them.