How to reduce these expenses

[mespinosa]

Final expense policies are not designed to do this.

Your opinion and advice on how I conduct my business and make my recommendations... was not solicited.

Ahem, can I add that Casinos work exactly like this? You feed the slot machine with your hard earned dollars for a "shot" at the jackpot and we all know how this ends, don't we?

The house always wins, my friend

 

[DHK]

Debt is a double edged sword and the funny thing here is, it's your money and you still live in fear of it when you think about it as debt.

Life Insurance Planning Tools & Techniques | NationalUnderwriter

"Even though federal tax law treats a policy loan as a classic loan, it is not. A debt, per se, never exists and the policyowner and insurer do not have a traditional debtor-creditor relationship. During the insured’s lifetime, the insurer is always 100 percent secured against loss because the amount that the policyowner can borrow can never exceed the amount the insurer would have to pay the policyholder if he chose to surrender the policy. In fact, during lifetime, the loan can never exceed that amount (less the interest payable on it). Furthermore, the insurer can (and will) deduct the loan value, plus interest from the proceeds otherwise payable if policyowner has not repaid the loan before the death of the insured."

 

[DHK]

Ahem, can I add that Casinos work exactly like this? You feed the slot machine with your hard earned dollars for a "shot" at the jackpot and we all know how this ends, don't we?

The house always wins, my friend

And we can add that Wall Street and Modern Portfolio Theory is based on gambling statistics.

Yes, insurance is a ponzi scheme. It is the most moral and ethical ponzi scheme there is. It is voluntary, and only the good risks are factored in at a pricing that is appropriate for their health and program (policy).

 

[DHK]

Keep in mind that MOST middle class people RAID their 401(k) and other retirement savings due to mounting credit card debts that they incur. This prohibits most people from having compounding interest work FOR them in their favor. Why? Because retirement plans are not liquid so that people who are otherwise saving... could access that money and prevent the higher amount of interest from being charged against them.

Not saying that you fall into this category, but it impacts MANY people. Life insurance, due to it's liquidity provisions, helps with this in a great deal - with a properly structured and funded policy.

New Report Shows Credit Card Debt Is Hindering 401(k) Savings

 

[DHK]

Using Debt to consume is fastest way to financial ruin. You don't live off your credit card debt and think it's great way to live, Right? But you can use your credit card debt to start a business and live off that.

Unless the interest thrown off by your CV in the later years is a lot higher and you borrow a little, This is not for poor and middle class. You are way better in having that CV outside where there are not that many moving parts and everything is not controlled by the counter party(they can reduce caps, they can increase expenses to levels that is sure to lapse the policy the next year).

You don't understand "debt" in terms of life insurance loans. Please see above.

You've got the ratios right - just as I illustrated myself above.

Caps reduce due to prevaling bond rates and stock option pricing that are used to purchase the stock market call options for the general account. They are not just "arbitrarily lowered" because the insurance company is "greedy".

 

[mespinosa]

And we can add that Wall Street and Modern Portfolio Theory is based on gambling statistics.

Yes, insurance is a ponzi scheme. It is the most moral and ethical ponzi scheme there is. It is voluntary, and only the good risks are factored in at a pricing that is appropriate for their health and program (policy).

Correction! It is disguised as the most moral and ethical ponzi scheme. It is the only scheme where you lure someone in, lock them in with surrender charges and fleece them. Finally letting them out just before death after taking everything they got. Your bad Karma will catch up with you, don't forget that.

 

[DHK]

Ah! So your true colors are showing! Or you're just bitter about the agent that, you feel "sold" you. (You can substitute 'rape' or 'assault' for "sold" if it makes you feel better.)

Surrender charges are client benefits.

What? While this link talks primarily about annuity surrender charges, it equally applies for the difference between account value and surrender value on life policies.

How to explain annuity surrender charges to avoid complaints | ThinkAdvisor

Mr. Prospect, we’ve talked about these surrender charges which will cost you money if you take money from this annuity in the first few years, but not why those charges exist. Let me explain.

Insurance companies know that when they issue a deferred annuity contract — or a life insurance policy, for that matter — it will take time before it can recoup the initial costs of putting that policy on the books. These so-called “acquisition costs,” including the company’s regular overhead costs (salaries, operating expenses, agent commissions, etc.), always exceed the first year’s premium. The company will literally lose money if the policy is not kept in force for long enough to see the insurer’s investment return for investing the premiums equal those acquisition costs.

There are three things the insurer can do to make sure it doesn’t lose money.

1) It can impose an initial sales charge — say 6 percent — and credit your contract only with 94 percent of your premium and credit interest only on that 94 percent. Does that strike you as something you’d like to buy?

The answer, in my experience, is always no.

OK, I thought so.

2) The second thing the insurer can do is pay you less interest that it could afford or impose annual fees. How’s that sound to you?

Again, the answer is always, “No. I don’t like that.”

Right.

3) The third thing the insurer can do is to recognize that it only loses money when some buyers cash in the product early, and that it can simply impose on those buyers — and only those buyers — an early surrender charge, which will not be imposed on those buyers who do not cash in early. How’s that sound? Does that strike you as a fairer arrangement?

In my experience, the answer is always, “Yes, I prefer that arrangement. “

Well, that’s why I’m recommending an annuity that does that. If you don’t cash it in early, you won’t ever pay these charges. But let’s make sure that you won’t. Is there any chance that you’ll need the money in this contract in the first [insert length of surrender charge period] years, given that you have the other liquid assets you’ve told me about?

If the answer is anything but a definite no, then I recommend we reduce the premium and put the difference into something liquid. Then, I repeat the process with that reduced amount. If necessary, we’ll repeat the process until I get a definite no to my “is there any chance…?” question. I then confirm that assertion by saying, “So, you’re telling me that you’re willing to lock up this particular pot of money for X amount of years to get the benefits we’ve discussed?” If I don’t get a yes, I suggest that the annuity may not be appropriate and ask the prospect if he or she agrees. But I usually get a yes.

 

[mespinosa]

Keep in mind that MOST middle class people RAID their 401(k) and other retirement savings due to mounting credit card debts that they incur. This prohibits most people from having compounding interest work FOR them in their favor. Why? Because retirement plans are not liquid so that people who are otherwise saving... could access that money and prevent the higher amount of interest from being charged against them.

Not saying that you fall into this category, but it impacts MANY people. Life insurance, due to it's liquidity provisions, helps with this in a great deal - with a properly structured and funded policy.

New Report Shows Credit Card Debt Is Hindering 401(k) Savings

There is a reason why there are penalty built into those ponzi schemes. Those people need them. Anyway, it's not upto you guys to save them with your half baked knowledge and false titles.

Properly structured and funded policy? Yet to see that. All I got so far are numbers cooked to appear as properly structured.

 

[DHK]

Yet to see your policy illustration too - as requested earlier in the thread.

 

[mespinosa]

Ah! So your true colors are showing! Or you're just bitter about the agent that, you feel "sold" you. (You can substitute 'rape' or 'assault' for "sold" if it makes you feel better.)

You got it backwards. It's your kind of people's true colors that are showing.