Selling Life Insurance...

[Crabcake Johnny]

Agreed. Worst case scenario with perm life is you earn the minimum rate and take don't see a real gain due to inflation, but your money's there. You can put your money in stocks/mutual funds and yes, it can evaporate.

CDs, however, offer the same, if not more protection then perm life policies.

Regarding stocks please remember - there is no reward without risk. Uneducated people like to make the "but there is reward without risk" comments to clients. Really.....if there was reward without risk every person and financial institution would be in it.

 

[CHUMPS FROM OXFORD]

I'd love to see your numbers...

OK. Here they are:

Company A matches first 3% with 100%. Our employee makes 30,000 per year and contributes $900 and it is immediately matched by another $900. That's a 100% rate of return, not even taking into account the 3%-5% she will be getting by putting it in the fixed account.

She paid $180 out of her own pocket to get that $900. Not to mention some interest. Keep in mind, this is not a recommendation, but a hypothetical scenario.

"You can (and will) lose money if you invest in the stock market."

You're a tool. When I look at how much money I have in my 401K after 27 years, I just have to laugh at that statement. And laugh again...

 

[Crabcake Johnny]

I won't argue either when it's a waste of time but my wife's 401K with Bank of America after 14 years is obscene.

 

[CHUMPS FROM OXFORD]

You better be nice to her!

 

[Crabcake Johnny]

And for what it's worth - Enron workers only lost what was put in Enron stock. There's no rule that says you have to put your 401K money in the company's stock. You're supposed to diversify. So these "everything I had was in Enron stock" people weren't the sharpest tacks in the box.

 

[bobson]

OK. Here they are:

Company A matches first 3% with 100%. Our employee makes 30,000 per year and contributes $900 and it is immediately matched by another $900. That's a 100% rate of return, not even taking into account the 3%-5% she will be getting by putting it in the fixed account.

She paid $180 out of her own pocket to get that $900. Not to mention some interest. Keep in mind, this is not a recommendation, but a hypothetical scenario.

"You can (and will) lose money if you invest in the stock market."

You're a tool. When I look at how much money I have in my 401K after 27 years, I just have to laugh at that statement. And laugh again...

You appear to be a tool of the mutual fund industry. Think of all the tax you will have to pay out when you start withdrawing it. Think of how much better off you'd be paying long-term capital gains taxes. Think of how much more money you'd have if your mutual fund didn't siphon off so much off the top. Plus you are assuming we won't have a major correction before you need the money. And lets not forget the risk, unless you are already retired, that tomorrow you won't be able to get out of bed. How much matching contribution does your employer offer when you are unable to work?

I was referring to your numbers about charging your contribution with a 20% charge card.

Over the last 20 years the stock market has done blah blah blah. So in the future the stock market will do blah blah blah.

 

[Crabcake Johnny]

Regarding fund companies taking money off the top - what exactly are the fees for perm life policies?

I'm a big proven fan of index funds. Very low fees.

 

[Crabcake Johnny]

Another question - when you buy a perm policy, what does the life company invest in? If it's other investments like stock, bonds, etc...why aren't they all losing money?

 

[moonlightandmargaritas]

OK. Here they are:

Company A matches first 3% with 100%. Our employee makes 30,000 per year and contributes $900 and it is immediately matched by another $900. That's a 100% rate of return, not even taking into account the 3%-5% she will be getting by putting it in the fixed account.

She paid $180 out of her own pocket to get that $900. Not to mention some interest. Keep in mind, this is not a recommendation, but a hypothetical scenario.

"You can (and will) lose money if you invest in the stock market."

You're a tool. When I look at how much money I have in my 401K after 27 years, I just have to laugh at that statement. And laugh again...

The problem is all these LEAP-trained (LEAPers I call 'em) whole lifey's is that it's whole life insurance at the exclusion of every other financial product available. This is because this is what they, and they're company want to sell - it's the most profitable for both!

I am LEAP trained. I think permanent life insurance is a GREAT product for the right application. Estate planning cases, deferred-comp, etc. It is a great rich man's product for when tax-advantaged choices are maxed out.

So this difference is this; I see a need/want application for a lot of products accross the financial spectrum. They see only whole life insurance. To wit: when all you have is a hammer, everything looks like a nail.

As for mutual fund and 401(k) charges - just check out the charges inherent in whole life insurance....

 

[CHUMPS FROM OXFORD]

bobson....It's Ok not to well-informed in certain areas. But when you fake as if you know something...and you don't...well jeez...you end up with harebrained statements!

"Think of all the tax you will have to pay out when you start withdrawing it."

Uh....ever hear of electing the Roth option in your 401K???



"Over the last 20 years the stock market has done blah blah blah"

http://allfinancialmatters.com/Graphics/SP 500 20-Year Rolling Period Returns.pdf