How to Unwind 412i

[BNTRS]

Nope not cash value basis, just based on cost of premium for new db.

As scagnt stated, most will let you reduce--it's part of conservation.

And nope also to any additional commissions being paid. That would require a new policy to be purchased.

 

[houcoogster]

Forgive me for asking this, but wouldn't zero coupon (tax-free) muni-bonds have been a better option for this gentleman?

 

[rex]

thanks

thus if my 2million costs 36k per year and i want a 500k policy instead, do they just sort of credit me 4 years worth of payments?

 

[Norwayguy]

thanks

thus if my 2million costs 36k per year and i want a 500k policy instead, do they just sort of credit me 4 years worth of payments?

Nope...You had 2 Million of coverage during that time if you had passed...You will benefit will the lower premiums going forward.

 

[rex]

certainly that makes sense that it shouldnt be an exact equivalent.
with whole life there is a sort of initial start up cost since it has zero cash value but that year of risk probably isnt 36k.
thus do i just eat the loss and go forward with the new premiums?

 

[rex]

just thought id post that ive spoken to 412i folks at other companies and they have recommended either buying out the whole life soon and then reducing the benefit of the 412i so much so that little contributions are necessary for a copy of years so i can get to 5 years then close the plan or convert the plan to a regular DB plan after buying out the insurance. at least then i dont have the costs of both the 401k/ps and DB plan and im not in a plan where im losing money on an annuity year after year. even after paying the 1.5 k per year for the plan yet not really contributing, id be losing less than i currently am losing by doing monthly financing. interestingly there was some debate on if i would have to pay the perc or nitr amount. The IRS reg seems to me to indicate PERC but none the less at least one company thought i could still buy it out for the NITR at this time.