100 Insurers Message Board

Subject: Re: Re: Re: Re: example of cash value life

Comments:
: : enrique's comments..) With WL, if you need some of the money in an emergency, you borrow it, but then owe it back with interest (which the insurance company keeps). In mutual funds, its your money, do what you want with it. : : WRONG! Better learn how cash value life works before you make such false claims. : <Okay, how does it work? If you take out a loan and you have to pay it back with interest, who gets the interest? OH yeah, how does that loan AND interest affect the face value of the policy? : I know, it decreases the face value of the policy by the amount of the loan, and as the value of the loan goes up, so does the amount taken off of the face value of the insurance policy. How exactly is THIS good for the insured? Especially if they NEVER pay back the loan???> : : 3) If you die with Whole Life, you lose all the savings. WRONG AGAIN! : <Too limited in explanation! You do lose the cash savings UNLESS you have a face PLUS savings rider in effect. This is typically treated as a rider to cover the cash savings as a side account. The point is that to get this policy it will cost more than a typical cash value policy.> : : If you live, you can take the savings out but then the policy is cancelled. WRONG! : <See note above, removing of savings decreases the policies face value.> : : But you cant have both. If you die with the Term, you get the death benefit plus you keep all the savings. You get both. : : VERY MISLEADING MY FRIEND! : <How is it misleading? Other than to say that your savings are based on market valuation and is not gauranteed. As is any investment in stocks, mutual funds, business loans, real estate, etc... The only time you get a gaurantee is if it is in writing. There did I not mislead, or should I have dragged that on more?> : : Enrique, thanks for proving you don't know how cahs value life works. Your comments are simply wrong...the borrowing, the interest crediting, who gets what at death...its all wrong! : : Please get educated, then lets chat! : : : : "Provide an example of a cash value policy vs a term policy and saving the difference.(illustrate 5, 10, 15, 20, 30 & 50 year time frames)" : : : Here is some data from one of my clients that had a whole life policy which I replaced with Term. : : : Whole Life policy : : : ================= : : : Coverage: Him: 100,000 Her: 50,000 Total: 150,000 : : : Combined Cost: $130/month ($1,560/yr) : : : Avgerage ROR: 5% : : : yr1: 0 : : : yr2: 0 : : : yr5: 2,518 : : : yr10: 7,653 : : : yr15: 14,242 : : : yr20: 22,698 : : : yr30: 47,477 : : : yr50: 155,506 : : : 30 Year Level Premium Term : : : ========================== : : : Coverage: Him: 358,000 Her: 316,000 Total: 674,000 : : : Combined Cost: $54/month ($648/yr) : : : Savings: $76/mo (invested below) : : : Avgerage ROR: 12% (Aggressive/Value split mutual funds) : : : yr1: 963 : : : yr2: 2,050 : : : yr5: 6,206 : : : yr10: 17,482 : : : yr15: 37,968 : : : yr20: 75,183 : : : yr30: 265,617 (insurance ends here, savings goes from 76/mo to 130/mo from here to 50) : : : yr50: 3,021,850 : : : Other advantages to Term: : : : 1) With the WL, the couple didnt even have adequate coverage to begin with to cover their lives. This is the ENTIRE point of owning insurance in the first place - to replace the loss of income of the dead spouse. With only 100k (or 50k), the surviving spouse was screwed. With the Term, they could afford what they NEEDED in order to pay off all their debt *and* create an annuity which would provide the survivor with income replacement for the lost spouse, so they can live their life as close to what it was prior to the death as possible. (Note: this is the major benefit, the rest is just icing on the cake.) : : : 2) With WL, if you need some of the money in an emergency, you borrow it, but then owe it back with interest (which the insurance company keeps). In mutual funds, its your money, do what you want with it. : : : 3) If you die with Whole Life, you lose all the savings. If you live, you can take the savings out but then the policy is cancelled. But you cant have both. If you die with the Term, you get the death benefit plus you keep all the savings. You get both. : : : As you can see (hopefully), $3 million is more than $155,000. : : : Any other questions?

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