Tips for Buying Permanent Insurance?

[atxeng]

Northwestern Vs Mass for Whole Life Policies?

So my financial adviser is also a broker (for MassMutual?) and is starting to push whole life on me pretty hard. Not sure if this is the best forum to discuss this, but how do yall usually compare and project this? I'm trying to run projections and it seems at best to be equal to a 5.5% RoR on an after-tax account.

Thoughts? I have a lot I can talk about.

Hey, here's some more details.

• Age 30, male
• Married, wife is 30 y/o
• new baby born, 3 months old
• $150k/yr income (wife stays at home)
• Live in TX, own a home. $410k mortgage (about 75% LtV)
• maxing out all tax-advantaged retirement accounts (401k, IRA, HSA), I'd say maybe $250k between wife & I in tax-advantaged accounts
• due to recent windfall inheritance, we have about $600k in after-tax accounts
• currently have $250k TERM policy with MassMutual that can be converted.
• Group insurance & ADD through employer, 2x salary free (option upto 8x but its expensive)

So I'm in a pretty good financial situation and am looking for ways to create a well balanced portfolio. I understand really well the concepts of Whole Life (personal banking, dividend, loans, etc). With the new baby and being young, I definitely need to up my insurance levels. I am looking at at least $2M for myself & $500k on the wife.

So I'm looking at 2 main conversations here:

1. BTID vs permanent insurance for wife & I. Converting my existing $250k term and buying new policy w/ higher DB.
2. buying large permanent policy on new baby to use as investment tool for college education.

For Item #1, I dunno, I just don't know if I'm convinced that it is an equal or better investment vs BTID. I see that the Current Value projections, it is showing 12 years just to break even and reach 0% IRR and a long term 4.6% IRR for 30+ years.

I will try to attach some projections I made.

For #2, they are proposing something big, like a 10-pay $2M policy on baby (~$20k/yr premium) to then use as a college tuition investment & long term gift to child.

Which item can we discuss first?

also:
So my insurance broker is pushing Mass Mutual, claiming they have the best returns and dividends. However, it looks like Northwestern is better. Is this a one-off statistic or am I splitting hairs?

20 year returns: bleakes report:

--Northwestern Mutual, 4.44%
--New York Life, 3.37%
--Thrivent, 3.20%
--MassMutual, 3.01%
--The Guardian, 2.62%

 

[STIBROKER]

So my financial adviser is also a broker (for MassMutual?) and is starting to push whole life on me pretty hard. Not sure if this is the best forum to discuss this, but how do yall usually compare and project this? I'm trying to run projections and it seems at best to be equal to a 5.5% RoR on an after-tax account.

Thoughts? I have a lot I can talk about.

First why is he suggesting that you need a WL.....and what face amount does he want on you.......

 

[DHK]

When banks barely pay 1%... you're questioning a projected long-term 5.5% after-tax on a conservative policy?

Whole life insurance, when properly structured, is like a fine wine that just gets better and better the more it ages. Plus, you can access the cash values via policy loan and borrow against it without tax penalties.

 

[LGilmore]

All I can say is I own whole life and have for over 25 years. VERY HAPPY with the results (NYL) It's done what it's supposed to do which is offer a safe return. It does very well for what you should actually be comparing it to.

In 2008 when all my other investments kicked me in the ass, I mean lost 50% of my investment portfolio, except my whole life still paid a dividend and for that year, was by far the best return on anything I had money into.

If you're young buy some keep it, you'll be glad you did.

 

[jboussea]

So my financial adviser is also a broker (for MassMutual?) and is starting to push whole life on me pretty hard. Not sure if this is the best forum to discuss this, but how do yall usually compare and project this? I'm trying to run projections and it seems at best to be equal to a 5.5% RoR on an after-tax account.

Thoughts? I have a lot I can talk about.

The projections that he is running is based on CURRENt dividend rate which is historically low because of the low interest rate environment that we are in. It's great to use that projection because IMO it's conservative.. so if dividends rate go up .. you'll be happy ...

Mass Mutual has one of the best WL products out there.. you want to make sure it's designed properly. Showing projections of 5.5% .. depending on your age and outlook .. is probably a good design ..as long as your goal is to have as much cash as possible.

The Insurance Pro Blog is a good resource if you want to learn more before you make this decision .

 

[Mattschmidt]

whole life is a great form of permanent insurance, that builds cash value over time. However, has your advisor done a financial plan for you???

Do you need a form of permanent insurance to protect your family and accomplish your financial goals???

Those are questions you'll need to ask. If you advisor hasn't presented this option to you along with a financial plan, then ask him. If you don't trust the guy, maybe seek out another financial professional.

Lastly, avoid the insurance pro blog site.

 

[LostDollar]

All I can say is I own whole life and have for over 25 years. VERY HAPPY with the results (NYL) It's done what it's supposed to do which is offer a safe return. It does very well for what you should actually be comparing it to.

If you're young buy some keep it, you'll be glad you did.

At age 72 looking back, what he said.

 

[atxeng]

update...I tried posting more but it looks like MODS instead edited my OP. Please see that for details.

 

[STIBROKER]

Re: Northwestern Vs Mass for Whole Life Policies?

it's still all here....but in one thread........

Hey, here's some more details.

• Age 30, male
• Married, wife is 30 y/o
• new baby born, 3 months old
• $150k/yr income (wife stays at home)
• Live in TX, own a home. $410k mortgage (about 75% LtV)
• maxing out all tax-advantaged retirement accounts (401k, IRA, HSA), I'd say maybe $250k between wife & I in tax-advantaged accounts
• due to recent windfall inheritance, we have about $600k in after-tax accounts
• currently have $250k TERM policy with MassMutual that can be converted.
• Group insurance & ADD through employer, 2x salary free (option upto 8x but its expensive)

So I'm in a pretty good financial situation and am looking for ways to create a well balanced portfolio. I understand really well the concepts of Whole Life (personal banking, dividend, loans, etc). With the new baby and being young, I definitely need to up my insurance levels. I am looking at at least $2M for myself & $500k on the wife.

So I'm looking at 2 main conversations here:

1. BTID vs permanent insurance for wife & I. Converting my existing $250k term and buying new policy w/ higher DB.
2. buying large permanent policy on new baby to use as investment tool for college education.

For Item #1, I dunno, I just don't know if I'm convinced that it is an equal or better investment vs BTID. I see that the Current Value projections, it is showing 12 years just to break even and reach 0% IRR and a long term 4.6% IRR for 30+ years.

I will try to attach some projections I made.

For #2, they are proposing something big, like a 10-pay $2M policy on baby (~$20k/yr premium) to then use as a college tuition investment & long term gift to child.

Which item can we discuss first?

also:
So my insurance broker is pushing Mass Mutual, claiming they have the best returns and dividends. However, it looks like Northwestern is better. Is this a one-off statistic or am I splitting hairs?

20 year returns: bleakes report:

--Northwestern Mutual, 4.44%
--New York Life, 3.37%
--Thrivent, 3.20%
--MassMutual, 3.01%
--The Guardian, 2.62%

 

[pfg1]

Max funded WL is awesome. I wish I could go back to age 30 and knew what I know now.