Looking For a Whole Life Policy

[BNTRS]

Why does this feel like deja vu? I swear I've seen the exact same posts from BNTRS and the same people ignoring his points.

When I see these debates go on and on, it reminds me of a poem by Robert Burns:

"A man convinced against his will...

is of the same opinion still."

What's that old saying about the only thing needed for evil to prevail?

Where can I go to learn about this arbitrage strategy? I am not familiar with an arbitrage in conjunction with WL.

If you take a loan from a WL policy and pay interest rate X while receiving rate of return Y and Y>X that is by definition an arbitrage in Economic terms, aka cash flow arbitrage.

why dont you outlay your exact plan for doing so? if you have a source that shows the return on investment of insurance companies over time id love to see it.

There's something I have on this from a little while ago that I can show you. I need to find it. Be back to you, soon.

Concerning 412i, dodgy subject in many respects. Strong in my opinion when it's very annuity heavy. The focus for this sort of plan is more for extremely high contributions at a later age because it's based on income generation (defined benefit) so the amount going in is higher than other qualified plans. Very poorly understood product in most cases, if you want my opinion, and too many agents try to dabble here to sell life insurance, much to their detriment.

 

[rex]

you are dead on with the correct use of a 412i. great for someone 5 years until retirement. convincing a 39 year old that maximizing deductions will greatly benefit them so they should buy a 412i with whole life bc that has the most deductions and when shown why this isnt true come up with a plan to buy it out cheaply which i find out later isnt legal, not such a great plan.

 

[Larry Tew]

What's that old saying about the only thing needed for evil to prevail?

I hear you, brother, but I'm also reminded of something I learned from my first manager in 1980:

1. Don't fight a battle you can not win.

2. Don't fight a battle that isn't worth winning - even if you could.

Getting into these debates with consumers is like the old joke:

Consumer: "Pete and Repeat were in a boat, and Pete fell out. Who was left in the boat?"

Agent: "Repeat."

Consumer: "Pete and Repeat were in a boat..."

 

[LGilmore]

Rex,

Take heart Rex, while we don't get along all that great, I would NEVER do to you what happened to you. I disagree with you about Whole life, but then again I've never had a whole life policy used as a colonoscopy scope on me. I can see where you feel the way you do.

This takes me back decades ago when I sat in a securities sales meeting put on by a couple of former NY stock brokers. A a certain point in the meeting they talked about how they loved doctors, cause they'd buy anything if you made it complicated enough. Then they just chuckled at their inside joke. Yes, that is a true story.

Have you ever thought that your work is complicated and challenging enough, shouldn't the rest should be KISS?

 

[VolAgent]

I hear you, brother, but I'm also reminded of something I learned from my first manager in 1980:

1. Don't fight a battle you can not win.

2. Don't fight a battle that isn't worth winning - even if you could.

Getting into these debates with consumers is like the old joke:

Consumer: "Pete and Repeat were in a boat, and Pete fell out. Who was left in the boat?"

Agent: "Repeat."

Consumer: "Pete and Repeat were in a boat..."

Well said. My philosophy is, never put in more energy into convincing a consumer on an online forum than you would with a real prospect.

 

[scagnt83]

Well, since my 3:00 didnt show today


I figured I would show a college funding scenario using PI.


Rex,
This is why PI makes better sense economically.


You take $12K/year for 16 years and put it into a policy and get 6%; you have $310,000 and some change.

You pay for 4 years of college starting at year 17 (you dont liquidate the policy, you just loan out the money needed each year)

I take $80K per year for 4 years totaling $320K

Now with a 529, its gone.

With PI, you have a little over $75K left in your account (this is after the loan calculations and free for use or continued growth)


Now at age 75, without putting in any more money into it; you have $750K+ surrender value. Thats afterfully paying for college on a tax free basis.

With that $750K+ surrender value;
I start with an $80,000 yearly distribution and increase that 2% every year.
In year 100 I have an income of $131K/year and a $1.4+million dollar DB to leave my loved ones.


You have contributed $192K to this.
You have received well over $1.7 million over your lifetime. You will leave over a million to your loved ones...... so really the policy will pay well over $3 million......

Tell me again why a 529 is better than WL??????

 

[xrac]

Well, since my 3:00 didnt show today


I figured I would show a college funding scenario using PI.


Rex,
This is why PI makes better sense economically.


You take $12K/year for 16 years and put it into a policy and get 6%; you have $310,000 and some change.

You pay for 4 years of college starting at year 17 (you dont liquidate the policy, you just loan out the money needed each year)

I take $80K per year for 4 years totaling $320K

Now with a 529, its gone.

With PI, you have a little over $75K left in your account (this is after the loan calculations and free for use or continued growth)


Now at age 75, without putting in any more money into it; you have $750K+ surrender value. Thats afterfully paying for college on a tax free basis.

With that $750K+ surrender value;
I start with an $80,000 yearly distribution and increase that 2% every year.
In year 100 I have an income of $131K/year and a $1.4+million dollar DB to leave my loved ones.


You have contributed $192K to this.
You have received well over $1.7 million over your lifetime. You will leave over a million to your loved ones...... so really the policy will pay well over $3 million......

This is better than a 529 how?????

Why would anyone want a 529? Oh, the registered reps and brokers want to sell your mutual funds or stocks.

 

[Bluefin646]

How the hell do i do the above? How many years do i contribute 16k?

 

[BNTRS]

How the hell do i do the above? How many years do i contribute 16k?

As many as you want, the cool part is the more years, the better it gets.

 

[scagnt83]

How the hell do i do the above? How many years do i contribute 16k?

Larry,
Thx for proving my pt that majority of insurance agents are interested in yld to them via upfront commission vs benefit to client over a lifetime. The primary reason most buy term is cause it's limited outlay for max protection and the screw factor via greedy salesman is minimal.
......

Yes, I think industry is slimy at best, unless I can get a policy that works for MY Family I will also buy a 30 yr term so I don't finance your 4th car payment, or 2nd home payment from a policy that benefits you, the salesman, on the front end, the insurance co the life of the policy, and maybe me.
What a bz, sell shXt products and then complain when the custy asks a question. That, my lowly salesman, is Funny.

The above is an Indexed UL policy that is overfunded.
Agents sell them all the time.
You can contribute for as long as you want to.



As far as huge commissions, I have to disagree with that.

In the scenario you commented on I would make a one time $3700 on the policy, and then I think its 3% of yearly premium years 2-5 ($350) and 1.5% all years after (it might be 2, I cant remember).

Compare that to a stock broker who will take 1% of the total assets:
So when the account gets to $200K you are paying $2K per year to the broker....EVERY YEAR!!

So for the 20 years after it reaches $200K you will pay him well over $40K..... how much do you think I have made at that point with my $3700 and $350/year after?????


An overfunded PI policy pays the lowest commissions out there.

I would much rather sell you on a 30 year term, then replace it every 5-10 years since there is a 98% statistically proven chance it will happen..... (I make 100% of every first year of premium on term.... even more sometimes, especially for 30 year term...)