Whole Life Policy Review

[LGilmore]

Control Alt Delete worked?

For about 30 days. Left me with a big oval burn on my chest and when I got up off the gurney, unbelievable pain in my glutes. They put you out to do this and shock the crap out of you. Felt ok till I went to get up, never had such muscle pain before, sobers you right up.. Imagine the worst cramps you've ever had in the largest muscle group you have. I just slip in and out of afib all the time. Not painful at all, take a couple meds for it to relax the heart and so far so good.

 

[scatteredRubbish]

This policy should have been designed and implemented differently if savings vehicle was the primary objective. Paid up at 65 at least mean's you'll accumulate slightly more cash than their 90 Life product. But Adjustable Comp Life was the product from NML that you really wanted for your intended purposes.

As far as where you go from here, I'd keep it if I were you (I have a serious bias towards insurance, though). Unfortunately, I believe you're stuck with the current policy as is unless you completely replaced it internally at Northwestern, might be worth considering nonetheless. But before that, I'd ask Northwestern about exchanging to ACL since you're inside a year (some companies allow this; some don't). Don't drag your feet, though, you've only got four months left if they say yes.

On the 401k side, if available to you, I'd make Roth contributions to it. At your current and soon-to-be new income, I imagine income taxes are annoying, but still pretty tame. The $6,800/year tax deduction only saves you around $1,700, possibly less. You're likely to be far happier long term when not faced with an acrobatic tax feat to access money when you need it.

Hey thanks for your response, I read a bunch of your blog posts and listened to some of the pod casts. Great stuff. Can you expand more on why my policy is structured inefficiently and also what the differences between ACL and WL are and why I would want to switch? Also, do you have any idea if NWM would restructure a policy like that?

In terms of contributing to my 401(k), do you have any resources on when I would want to roth contributions over traditional or vice versa, and or what income/tax rate you want to switch? Thanks for your time!

EDIT: Sorry some of my responses never posted to the thread do to my account being so new. Here is one of my other responses to DHK:

To maximize cash value accumulation, there are riders that allow for "cash dump-ins" often called "Paid Up Additions" or "Additional Life Insurance Riders". However, they do buy additional paid up life insurance as well, therefore, they may require additional medical underwriting to qualify.

It may be worth asking about adjusting your policy to allow for this. Now, each policy design is different, but I would *think* that it would be available with a 'paid up at 65' policy.

Is this the same thing as dividends going to buying PUA's? If so, that's what my policy is set up to do. If not, can riders like that be added to a policy at any time? I think I've decided to stick with the policy, but definitely would like to do my best to make sure I make the most out of it.

 

[AboutThatLife]

10 years ago the 10 Year Yield was around 4.5%-5%. Today it is at 2%. That is a little over a 50% decrease in yield.

Another way to look at it is that they have increase around 3.5% per year. Which is pretty much in line with general inflation. But since we are living longer than ever you would think that premiums increases would stay below inflation.

Interest rates are the only logical reason Premiums would increase that much. Insurers are making 50% less on the majority of their holdings... so they are forced to charge 50% more.


But that is a great example for why putting off coverage just makes things more expensive. Thank you for sharing that Robert. I think it would be really cool to see a graph showing average term rates and gul rates over the past 20 or 30 years.

Well....never thought of it this way. If I had bought insurance(I looked at it decided to do stocks) when I was 19 I would have been making way more interest than I could today.

 

[DHK]

That's the power of uninterrupted compounding. Even though it's not as sexy and that rate of return number doesn't look as fun... it certainly works.

 

[Lloyds of Lubbock]

Anyone who has a qualified plan, should have permanent life insurance also.
The life insurance will help you max out the plan and will accumulate for you on a steady basis.
Read E Slott!

 

[rousemark]

WinoBlues said: ↑
"Larry, are you more insurable today than you were two years ago?"
Don't know about Larry but I certainly am!

Now that two more years have passed, the answer is now no..

 

[LGilmore]

Just out of the hospital "again" a week ago. I am so uninsurable at this point in life that you would find my face in the definition of uninsurable. I have spent so much time in hospital that I get a W2 from them.

Hey just glad to still be here. I am dealing with little tiny microscopic stuff that is trying to kill me. Every so often it puts me into care. Still happy as heck to have purchased WL years ago and not trying to get some now.