- 15,041
Yes, but at least he doesn't take as many words as you do to add nothing. Larry is short and concise as he adds nothing. Perhaps you would do well to learn that trait.
Looking For a Whole Life Policy
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Yes, but at least he doesn't take as many words as you do to add nothing. Larry is short and concise as he adds nothing. Perhaps you would do well to learn that trait.
- 4,132
"Where did I say NWM would go bankrupt and SBLI wouldn't"
The poster did. In sticking up for his point, maybe unintentionally, I answered you. I know you know better, but the guy basically implied that NWM guarantee was less than SBLI's because Shearson went tits up.
As I said then that was smart dumb. The assumption is basically goofy.
The poster did. In sticking up for his point, maybe unintentionally, I answered you. I know you know better, but the guy basically implied that NWM guarantee was less than SBLI's because Shearson went tits up.
As I said then that was smart dumb. The assumption is basically goofy.
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The most likely scenario: SBLI and NWML both will be in business and paying dividends in 30 years.
All I meant with the Lehman Brothers bankruptcy example was big, profitable companies that have existed since the late 1800s can go bankrupt. I did not say nor did I intend to imply that NWML would go bankrupt and SBLI would not.
AIG had a COMDEX of 99 before it effectively went bankrupt (the government had to bail it out). Ratings have some value, but aren't perfect. If SBLI MA was rated B+ instead of A+, I wouldn't have purchased the policy. I have said several times that I understand SBLI is smaller and I understand that risk.
Nothing is guaranteed if the life insurance company goes bankrupt and no one buys it out (my state guaranty association would provide some cover). My indirect question, which I should have asked more directly: why don't the big boys make guaranteed values higher or alternatively, make early performance better in their WL policies? I think it would make your lives easier as agents to sell policies if you could compete with savings accounts and bond funds instead of spending time trying to explain the bad short term performance and having to focus on the power of the compounding non-guaranteed dividend over the long term.
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Chuckles,
You are correct in that if I surrender the SBLI WL policy, I lose the DB, but I have a separate cheap 30 year term policy. The WL policy's death benefit is not of primary importance. I've been reading enough posts here where I do understand PUAs but I appreciate the reminder.
Could you tell me more about this exit strategy of 1035'ing my policy if I'm unhappy with SBLI's performance down the road? Why would performance differ with 1035 funds versus funds deposited annually? From what I've read, putting in such a big chunk of dollars at the beginning of a new policy would potentially make the new policy a MEC. If that can be avoided, why would 1035 funds be treated differently than annual payments from a typical policy like you quoted?
I told all of you that I'm an engineer and like to understand how all this works so maybe you'll believe me now.
All I meant with the Lehman Brothers bankruptcy example was big, profitable companies that have existed since the late 1800s can go bankrupt. I did not say nor did I intend to imply that NWML would go bankrupt and SBLI would not.
AIG had a COMDEX of 99 before it effectively went bankrupt (the government had to bail it out). Ratings have some value, but aren't perfect. If SBLI MA was rated B+ instead of A+, I wouldn't have purchased the policy. I have said several times that I understand SBLI is smaller and I understand that risk.
Nothing is guaranteed if the life insurance company goes bankrupt and no one buys it out (my state guaranty association would provide some cover). My indirect question, which I should have asked more directly: why don't the big boys make guaranteed values higher or alternatively, make early performance better in their WL policies? I think it would make your lives easier as agents to sell policies if you could compete with savings accounts and bond funds instead of spending time trying to explain the bad short term performance and having to focus on the power of the compounding non-guaranteed dividend over the long term.
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Chuckles,
You are correct in that if I surrender the SBLI WL policy, I lose the DB, but I have a separate cheap 30 year term policy. The WL policy's death benefit is not of primary importance. I've been reading enough posts here where I do understand PUAs but I appreciate the reminder.
Could you tell me more about this exit strategy of 1035'ing my policy if I'm unhappy with SBLI's performance down the road? Why would performance differ with 1035 funds versus funds deposited annually? From what I've read, putting in such a big chunk of dollars at the beginning of a new policy would potentially make the new policy a MEC. If that can be avoided, why would 1035 funds be treated differently than annual payments from a typical policy like you quoted?
I told all of you that I'm an engineer and like to understand how all this works so maybe you'll believe me now.
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- 15,041
Look into that a little further. See what happened to the actual insurer, not the holding company. They didn't miss a beat, it was the holding company that was in trouble.
- 220
You are correct in that if I surrender the SBLI WL policy, I lose the DB, but I have a separate cheap 30 year term policy. The WL policy's death benefit is not of primary importance. I've been reading enough posts here where I do understand PUAs but I appreciate the reminder.
Could you tell me more about this exit strategy of 1035'ing my policy if I'm unhappy with SBLI's performance down the road? Why would performance differ with 1035 funds versus funds deposited annually? From what I've read, putting in such a big chunk of dollars at the beginning of a new policy would potentially make the new policy a MEC. If that can be avoided, why would 1035 funds be treated differently than annual payments from a typical policy like you quoted?
I told all of you that I'm an engineer and like to understand how all this works so maybe you'll believe me now.
Steve,
As long as you have that other coverage in place then that strategy makes more sense. With the 1035 you can dump a very big chunk into a new policy and if set up correctly it will not MEC. Here is my analogy, it does not mean they work the same just an easy way to understand it. Say you have a 401k with $50,000 in it from a previous employer. You can roll that $50k into an IRA even though the IRA yearly contribution limits are $5000 and pay no taxes on the rollover. In somewhat the same way if you have cash value in a current policy. You can roll it over into a new policy without MEC and avoid any tax consequences. I actually do a good many 1035's as most companies policies are dogs. The downside to this strategy is that if you are not insurable anymore or you are now rated it can affect the benefit of doing so.
It affects the performance because those funds automatically go towards the cash value essentially jump starting the policy as if it was in place for years. It is in place so that those that are not happy with their current policies are not stuck with them.
- 4,132
Steve,
You were doing fine until you went that route. Even the AIG comments are wrong. The life insurance side was and is strong. The reason the rest of that holding company faultered is insurance laws wouldn't allow them to raid AIG insurance to bail out the rest. Look a little deeper.
But then again, why are you coming back here? You've purchased a product and from all your research are quite happy with it. So why come back here at this point? Let it go so the NWM guy can calm down. Again good luck, hope you're right. Later.
You were doing fine until you went that route. Even the AIG comments are wrong. The life insurance side was and is strong. The reason the rest of that holding company faultered is insurance laws wouldn't allow them to raid AIG insurance to bail out the rest. Look a little deeper.
But then again, why are you coming back here? You've purchased a product and from all your research are quite happy with it. So why come back here at this point? Let it go so the NWM guy can calm down. Again good luck, hope you're right. Later.
- 220
How is this ridiculous? Please explain further. Or are open ended, non informative sentences your thing?
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- 4,132
Chuck let this tread die, man. It's old yeller buddy.
- 15,041
Ol' Yeller? Its night of the living dead in here. Someone needs to go all Highlander on this thread.
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