Is he WRONG about borrowing against policy and compounding?

Apr 8, 2019

  1. Lloyds of Lubbock
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    Lloyds of Lubbock Super Genius

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    Sorry the link does not work, this is cut and pasted
    Fixed loan interest with Direct Recognition  The loan interest rate is guaranteed in the contract. Guardian’s rate is 8% to the later of age 65 or policy year 21. Thereafter, the guaranteed interest rate decreases to 5%.  The dividend paid on policies varies based on the percentage of cash value that the policyholder borrows.2 Under Guardian’s 2010 dividend scale, a higher dividend is paid on policies with a loan than on those without.3
     
  2. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    I bet that makes you feel like a big boy to say that doesnt it... grow up.

    There is a reduced NET to the policy owner in most cases based on recent economic times. But with all the variables involved, you can never say one is better than the other all the time.

    And ever wonder why Guardian keeps cherry picking years for their DR material?? Plenty of years it was a reduction for Guardian. Its easy to cherry pick years.

    The exact term Guardian uses is "Modified Dividend Rate" if I remember correctly. And there are many companies that do use what often amounts to a reduced dividend.


    You seem to think I am bashing one method over the other. I am not. They both have pros/cons.

    Many agents believe DR loans receive no dividends at all. I was simply pointing out that is not the case.
     
  3. Lloyds of Lubbock
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    Lloyds of Lubbock Super Genius

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    It hasnt been lower for years.
    Guardian, NML Penn or even Mass on a fixed loan does not cherry pick the years.
    It is strickly a math function.
    Actually on new Guardian policies that have a 6% loan rate, you do get a lower dividend.
    I agree with you they both have pros and cons.
    As far as finding another agent, it makes me feel bad that there are so many people in the industry who bash something, when they dont know how it works.
    There is a reason the industry has a bad name.
    You said it yourself Many agents believe DR loans receive no dividends at all. I was simply pointing out that is not the case.
     
  4. pfg1
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    pfg1 Guru

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    The whole Non-DR thing has been promoted by the pamela yellen types, touting it as THE ONLY WAY. Everything else is crap. That is bogus. Its really 6 of one, half dozen of the other when you understand how it works.
     
    pfg1, Apr 9, 2019
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