IUL vs WL vs TL - lets talk

I personally believe in a diversified life portfolio with inclusions of products outside of the life life market. As far as short term goals, depending on age and income, I believe Term Life is usually the best fit to cover outstanding debt (including family calcs) with a minimal Whole life policy while premiums are cheap(er) for final expense, probate, and estate tax (if their estate is large enough). Excess funds up until the desired inheritance value, in my belief, is best put in a well designed IUL policy or potentially a Bond. Any excess funds beyond that, should be split into higher risk investments to accelerate wealth building. My personal belief. I would love to hear more opinions.

You're taking an investment advisor or CFP approach to life insurance planning by substituting a risk policy for a portion of a portfolio allocation.

The Life Insurance Agent as Financial Planner

I incorporate spending, saving, investing, insuring, and planning all together into a comprehensive strategy... not just asset allocation. More and more people can use help to reduce their debts... and, strangely enough, a 401(k) won't help with that. In fact, a 401(k) can make a family's debt situation worse.

I'm still left with the impression that you may be biased towards whole life when in the grander scheme of things... its not close to an ideal investment or savings vehicle, there are many different vehicles that outperform it when it comes to cash value accumulation.

Ah, see? You're still on a "rate of return" basis. :) So much more to consider long-term.

I have compared a maximum-funded (up to the MEC guidelines) WL or IUL vs 401(k)/IRA, Roth IRA, 529 plans, and after-tax brokerage accounts on 24 points.

There are only two points where WL/IUL are negative:
1) Non-deductible contributions
and
2) Non-deductible losses within the contract (because there are no losses - not including variable insurance contracts).

Unfortunately, many of the ones that need financial direction the most cannot afford a CFP, ChFC, or a CLU. Welcome to the massive socioeconomic divide.

Most people on here don't charge these fees, nor would they actually meet the client minimums as outlined in this research article:
How Much Does A (Comprehensive) Financial Plan Actually Cost?
 
You said... Unfortunately, many of the ones that need financial direction the most cannot afford a CFP, ChFC, or a CLU. Welcome to the massive socioeconomic divide.

I assume by this you are referring to broker fees being a division point between the haves and have nots? Now bear in mind I'm primarily working in a state that doesnt allow broker fees... nor do I charge them in the states I can...

Also the socio economic divide is accented of course by where you are born and brought up. Me, I didnt come from means but I worked my tail off to get somewhere comfy. I never had the pedigree or fancy school (college if you are wondering) and during high school my back was often higher than my gpa...

To me, socioeconomic divide is real, but its partly due to complacency.

That said, back to the insurance...

Who needs the most direction? Honestly I think the haves need it far more than the have nots. Just look back at your life and tell me WHEN you made the soundest financial decisions? For me it was as when I had no cash to waste or lose. But when I have money I've made some of the worst mistakes ever (and learned from them fyi).
 
Well, as for the last part
Most people on here don't charge these fees, nor would they actually meet the client minimums as outlined in this research article:
When you consider the AUM may be only 20k-40k for many of the clients that need direction to improve their financial standing, their are some concepts to keep in mind...

Each person has a basic living expense. 3-4 people in a household often times live somewhere close to the poverty line, drastically below, or slightly above. And unfortunately, they are more often than not the ones that need the most financial advice.

When you take into consideration that even 0.5% of the AUM may be $150 to $200, that may be $100-150 outside of their monthly budget. At least for the ones that are genuinely trying... trying to pinch a dime out of a nickel.

As for the rate of return, yes and no... Yes on the investment portion. If there's excess funds to utilize for investment purposes to develop wealth, then IRR and ROI are critical metrics, whether on the annual, 5 year, 10 year, or 40 year basis. An investment is oriented around profit, period. That's a big part of why S6 and S7 licencing requirements exist. Don't want a joe-blow that has no comprehension of the market to play with 5, 6, or 7 figures of your money lol. The no portion is long term oriented only. There's certain expenses that are pretty close to static, that must be accounted for... such as burial costs, estate tax (if any. Certain farms and ranches are much more susceptible due to land value), probate costs, etc, as well as accounting for the (most of the time over-accentuated) approximated inflation rate.

Side note... as for all of the people out there fighting and trying to make it in this industry, it can be ridiculously rough, keep hope. It's possible. Work smart AND hard. Personally, I was raised in a double-wide trailer, so I know if I can do it, you can too! Keep fighting!
 
Wow. I hope your compliance officer (if you have one) doesn't read that.

That's a big part of why S6 and S7 licencing requirements exist. Don't want a joe-blow that has no comprehension of the market to play with 5, 6, or 7 figures of your money lol.

There is almost NO "market" training in obtaining a Series 6, 7, 63, 65, or 66. Market forces change things constantly.

Licensing is all about liability and compliance. It has nothing to do with any SKILLS.

Investing is about RISK management, or rather, it SHOULD be.



 
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Apologies DHK, I just wrapped up a few side projects, and have an appointment in at 7am for a group health plan. I'll have to return to this discussion tomorrow. I wanted to say, I appreciate all your input, and yours too BADTROUT. Above all else, we all strive hard to be professionals and grow daily in this industry. Nobody has a perfect view (if someone did, they would have by far dominated the market by now lol), but we all try as best we can. Goodnight all!
 
Ask a question, argue with the answers. 3 different products (Term, WL, UL) and I hate to see or use the phrase " income classes". Mr and Mrs Jones, how much can you afford to pay for Life Insurance which will not cause a hardship for you month to month? Let me find how much I can get you qualified for using that amount. It may be a combination of products. How long do you see a need for this policy? Would it be okay for a large amount now and a smaller amount in the future, say 30 years
 
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