Roth IRA on steroids

May 11, 2019

  1. pfg1
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    There isn't a WL policy that shows higher CV in the guaranteed column. The guaranteed column will typically be substantially lower. It illustrates no dividends being paid ever.
    He's saying the client hasn't broken even yet. (his CV hasn't equaled his premium paid in) Don't forget, there is a cost of insurance to be paid each year. Its not a savings account. The costs go down substantially over time, but are the highest at the start. Most will have broken even by year 10 if designed and funded correctly. Some a couple years sooner.
     
    pfg1, May 16, 2019
    #61
  2. Allen Trent
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    the problem is agents who state a specific interest rate as if every dollar being deposited makes it to the Cash Value & earns that interest rate.

    I didn't mean "simple interest", I meant a simple calculation of interest. Sorry about that confusion.

    like I said, I believe these problems start with agents giving the impression that a life insurance policy is "identical to saving in a 401k or roth or investment account, but better". at the core, it is first & foremost life insurance for all the great reasons life insurance is good. I don't comprehend why it needs to be spun to be a magical superior product. it is a great product when used properly in addition to saving in 401k plans, roth, etc. it is a supplement to, not a replacement of the other plans.

    I own all of the various plans, but I know exactly why I own and contribute to each (401k, Roth, brokerage account, 529 savings, term, WL, UL, NQ Annuity & bank money). to this day, I have never compared any of them against the other as every single one of them has an entirely different intended purpose both short term & long term.
     
  3. Allen Trent
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    not sure. It likely will have something close to what you see in those projected columns as I believe they are a solid company.

    that appears to be a supplemental page of the illustration, not the main pages of the illustration that would show the guaranteed columns & the projected columns. Projected columns include the dividends they hope to credit & have historically credited, but cannot guarantee they will credit dividends going forward. Those pages you included will not at all be part of the actual policy contract language, it appears to be mainly a supplemental illustration. but others that write for Guardian may know more than I
     
  4. pfg1
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    No, it won't be $100k. We don't know exactly what it will be, but imo... higher than $100k for sure.
     
    pfg1, May 16, 2019
    #64
  5. Allen Trent
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    You could also trigger a huge tax problem at about age 75 if you really took all those projected partial surrenders (withdrawals) & then loans. Policy could implode/lapse from the cash value being gone because of those monies taken out or the interest costs compounding. You can receive a taxable 1099 in the year the policy ends for the "gains". you would then owe income taxes not only on the amount of money you received over & above what you paid in "gains", but also on all the interest charges as the IRS counts the entire loan balance including the loan interest charges as money received by you because you had use of the money.

    so, it is important to never let a policy that has been depleted from distributions to lapse or be moved to a new carrier with those massive loan balances zeroed out by the current carrier as it will trigger the tax problem explained in the following. Life Insurance Policy Loans: Tax Rules And Risks
     
  6. DHK
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    Or you sell policies with overloan protection riders.
     
    DHK, May 16, 2019
    #66
  7. Golfnut2112
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    Do you need life insurance?
     
  8. pfg1
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    The question could also be: Do you WANT life insurance (and the benefits it provides)?
     
    pfg1, May 16, 2019
    #68
  9. Golfnut2112
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    I agree but ONLY after someone explains ALL the options available to him. If a life only guy shows him only life Insurance he may not realize the high fees in order to obtain the coverage and the few benefits it may provide. I have seen people who WANT life insurance for protection and wealth transfer but never as a savings vehicle if there is not a need for the insurance.
     
  10. ls015
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    Me? Sure, I could use a million dollar policy but after seeing this, I am rethinking the whole thing. Just got the lab results from Guardian but no class information yet. I can afford $2000 per month. 30 year term policy and 401k + Roth IRA OR WL?
     
    ls015, May 16, 2019
    #70
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