Ohio National and Constellation

[DHK]

That also depends on how you're selling the product.

I didn't engage in dividend selling. In fact, when we compare the cash flow from the policy based on only a 4% dividend (basically no dividend and current mortality)... the policy is still very good.

 

[scagnt83]

That also depends on how you're selling the product.

I didn't engage in dividend selling. In fact, when we compare the cash flow from the policy based on only a 4% dividend (basically no dividend and current mortality)... the policy is still very good.

Are you saying you sold based on Guaranteed Scenarios? Or based on a 4% Dividend Rate?

 

[DHK]

I sold based on cash flow against the policy. Yes, that was based on current dividend performance - knowing that dividends aren't guaranteed anyway.

But I'd rather have tax-exempt cash flow than taxable income from investments... so even if the projected cash flow is going to be lower... it's still better than the alternative.

 

[Tahoe Ray]

I'd rather have tax-exempt cash flow than taxable income from investments... so even if the projected cash flow is going to be lower... it's still better than the alternative.

Disagree...otherwise why shouldn't everyone just buy munis?

I'll take equities in a non-qual account every day as the majority of an account for someone not retired.

Whole life is a great bond alternative, though.

 

[DHK]

Disagree...otherwise why shouldn't everyone just buy munis?

Still makes social security taxable and higher Medicare/IRMAA premiums.

 

[DayTimer]

Disagree...otherwise why shouldn't everyone just buy munis?

The biggest reason is munis are not life insurance: spend the proceeds of munis your are spending your capital, Spend the CV from your life insurance you are borrowing against your capital. Once you spend down money from your muni fund, that capital is no longer available - you've forever lost the opportunity to earn a return on that same capital. Compare spending the dividends earned on your bonds to cash flow taken as a loan against the policy: the insurance company continues to pay the policy owner his or her interest and dividends on the entire cash value.

Life insurance is a great alternative to bonds because it is so much more than bonds. It is a great alternative to bonds not because it is a bond, but because it exceeds what bonds can deliver.

Bonds cannot come close.

Bonds cannot compete with par whole life because only par whole life can give you an uninterrupted compounding of interest while cash-flowing your accumulated capital.

 

[Tahoe Ray]

Bonds cannot come close.

How do you think that these insurance companies pay their dividends?

Do you think that your carriers aren't making a profit, even with all of these "favorable terms"?

I'm not talking about buying some bond mutual fund. A bond broker can do everything whole life can do, without the insurance costs.

I believe in CV life insurance, I just don't think it's as magical as some make it out to be.

 

[Tahoe Ray]

Still makes social security taxable and higher Medicare/IRMAA premiums.

I'd still rather have my big pot of money creating those minimal costs than a little pot avoiding them.

 

[pfg1]

Disagree...otherwise why shouldn't everyone just buy munis?

I'll take equities in a non-qual account every day as the majority of an account for someone not retired.

Whole life is a great bond alternative, though.

I use Roth as much as possible. That combined with WL is a huge winner in the long run, imo.

I know alot of folks push the having all the $ in WL for the "benefits" and tax free income stream and that is great. However if you use Roth in a diversified portfolio it will crush what the WL does for sure. Its not even close. WL is not designed to perform like equities... more like bonds as Ray said. I like having both, not just one.

What will the income stream will look like with ON's policies in the future... who knows? They weren't so high to begin with on income payouts, and now likely much lower.

 

[Allen Trent]

Still makes social security taxable and higher Medicare/IRMAA premiums.

While what you are stating is true, most of the clients you are talking about that pay 5k or 50k annually into a WL for tax free retirement distributions will already be paying taxes on 85% of their SS checks as that already happens for single people at 34k a year & joint return at 44k......and that amount includes 1/2 of their Social Security check. Most people earning the kind of money needed to fund a max funded WL will already have very large SS checks. Plus, those with even higher incomes that already pay taxes on 85% of SS are not impacted because the tax on SS is limited to the actual amount of your SS