Looking For a Whole Life Policy

[WinoBlues]

So,......... Did he ever buy a Whole Life policy?

I've read several posts started by others and greatly appreciate the time other people have put into educating us consumers. My situation is similar to threads started by mx_599, johnyblu, slick_spe3, and luxlux. Quick background:

- Married healthy male 31, one child, a second on the way (might qualify for the highest tier, definitely should qualify for the preferred tier, using term4sale's mini calculator).
- Have an emergency fund, and am maxing out 401k and Roth IRA.
- Plan to keep this new policy long term.
- Cash value accumulation is of primary importance, death benefit is an important but secondary benefit.
- Would like to "front fund" the policy as much as possible without triggering MEC.
- In 10 years or so, I would like the flexibility to stop paying all premiums (primary concern). If possible, would like the option to continue funding to grow the cash value as well.
- Basically, will treat the WL policy as a conservative part of my after tax investment portfolio, so cash value accumulation (and associated IRR) is the most important factor for me.

From what I've read, a 10 pay WL policy with a term rider and the maximum amount of paid up additions is the route I should go. Does anyone have any other suggestions for my situation?

Specific questions:

1) What happens at the end of a 10 pay WL policy? Am I able to continue to add to the policy? How do I make sure I don't put too much into it and make it a MEC?
2) How important is a disability rider? Would it be less expensive to get a separate disability policy?
3) I haven't been able to find much on the variance in the IRR from different companies. Shouldn't I focus on companies that have historically had a higher IRR?

Thanks for your help!

 

[BNTRS]

I doubt it, this one seems suspicious. I called SBLI the same way he suggested and told them I was in Chicago and wanted to buy life insurance, I got a very different response.

I wasn't surprised when I called. My experience with SBLI has never been super impressive, and nothing as he described.

 

[stevew7]

So,......... Did he ever buy a Whole Life policy?

Yes, I did purchase the SBLI policy. My timeline is below.

4/26: Called the SBLI agent back, who took my application over the phone.
4/26: Parmed examiner emailed, asking to call to setup an appointment.
4/29: Received my paperwork in the mail. I was required to pre-complete part of the application and give the entire app to the paramed examiner.
4/30: Had my paramed exam. Nurse recorded a higher BP than normal (I am usually 120/80).
5/11: Automated email saying SBLI has received everything and started underwriting.
5/17: Agent contacted me saying underwriting wanted evidence of normal BP. I provided it.
5/18: Underwriting accepted my documentation and approved my policy as preferred plus (as quoted).
5/27: Received my policy in the mail.
5/31: Faxed my acceptance document.


So I applied on 4/26 and was approved on 5/18.

I would have preferred to have purchased my policy from a larger, higher rated carrier, but it is what it is.

I appreciate everyone's help in educating me on this forum. The one thing I do wish I could have is that ability to keep paying beyond 10 years (like I would have with Guardian/Mass Mutual/etc), but I couldn't stomach the negative IRR for the first few years of those policies. I guess I will take it as a compliment that several of you thought I was an agent!

Have a nice weekend all.

 

[Franz Kafka]

Now let me show you how a maxed out level paid up addition on a maximum death benefit designed whole life will just bury your SBLI cash value in 20 years!

 

[Chuckles21]

Now let me show you how a maxed out level paid up addition on a maximum death benefit designed whole life will just bury your SBLI cash value in 20 years!

I showed him just this and he chose to ignore it. I find it funny that he says he would have rather gone with a bigger more established carrier, which I showed him, and then went with SBLI still. I don't know what his plans are with the policy, but he doesn't understand that short term performance means almost nothing for him. If he truly plans on using this policy for long term security, God only knows why he is so worried about the first few years.

Steve, in 5 years when you want to 1035 over to something that will perform better for you shoot me an email.

 

[dgoldenz]

I showed him just this and he chose to ignore it. I find it funny that he says he would have rather gone with a bigger more established carrier, which I showed him, and then went with SBLI still. I don't know what his plans are with the policy, but he doesn't understand that short term performance means almost nothing for him. If he truly plans on using this policy for long term security, God only knows why he is so worried about the first few years.

Steve, in 5 years when you want to 1035 over to something that will perform better for you shoot me an email.

Put the Kool-aid down man...let it go.

 

[WinoBlues]

I showed him just this and he chose to ignore it. I find it funny that he says he would have rather gone with a bigger more established carrier, which I showed him, and then went with SBLI still. I don't know what his plans are with the policy, but he doesn't understand that short term performance means almost nothing for him. If he truly plans on using this policy for long term security, God only knows why he is so worried about the first few years.

Steve, in 5 years when you want to 1035 over to something that will perform better for you shoot me an email.

And of course you know what performance should mean to him. Gawd! Takes me back to my captive days.

 

[stevew7]

I showed him just this and he chose to ignore it.

Hi Chuckles,

I appreciate that you posted a competing illustration. However, you never re-ran it using a 5% dividend scale like I requested. I suspect if you did, your illustration would never look better than SBLI's. You instead said that it was fairer to use the current scale.

If you compare the two illustrations, SBLI's "guaranteed" column is always higher than NWML's "guaranteed" column. Running your illustration at a higher dividend scale will of course show better performance after enough years have passed.

A simple analogy:

I deposit $1 every year into two savings accounts.

With SBLI, at the end of the first year, my guaranteed balance is 1.03. With NWML, my guaranteed balance is 0.73. Each company offers a dividend they can change every year, and you used 6% while SBLI used 5%. Of course after some period of time, the higher percentage will perform better.

Basically, I am not willing to sacrifice the short term performance hit in order to hold a policy from NWML. I'd rather just not have a WL policy at all. I understand I am in the minority here.

I also understand that NWML is like Bank of America, while SBLI is like a small local bank, when you compare their overall size and history. However, due to the guaranteed performance being so much better with SBLI, that was my deciding factor. A big comfort is if life throws me a curve ball, I can surrender the SBLI policy as soon as at the end of year one, pay taxes on the gains, and not lose all my principal - as long as SBLI itself doesn't go under.

Appreciate the time and knowledge everyone shared.

 

[arnguy]

Well, Steve, I guess we can wrap up this long-winded thread at long last!

 

[dgoldenz]

At least it only took 24 pages.