Re: Re: Re: whole life

Subject: Re: Re: Re: Re: whole life

Comments:
: : Hindi, : : I have to admire your consistency. : Thank you, Rock! I felt you'd be disappointed if I didn't jump into this bottomless pit with something about UL, inasmuch as everyone seems to view the spectrum as term on one side...and whole life on the other...with nothing in the middle. : You are uncomfortable with the idea : : of cash value insurance in general. : Absolutely not. It gives you the lowest total cost. Budget issues just make term appropriate in a "two step" process. The need is permanent, however, not temporary. : : Universal Life policy, you almost apologetically refer : : to any accrued cash value as a "negative cost"? : That's only because I don't buy the argument that life insurance is an "investment". It's an expense! So, if it can post a "negative net cost" over time, then what is it? It's really just "the difference between what you've paid in...and what's it's worth". Perhaps "gain" would be an appropriate term. : : I absolutely admit that Whole Life has a heavy up-front load. : : Someone who can't maintain the policy for at least 10 years : : will almost certainly lose money and have paid for some : : of the most expensive life insurance around. But in a long-term : : comparison (15, 30, or 40 years) of total out-of-pocket : : expense with accrued cash value, participating WL from a solid, : : honest company will probably perform at least as well as : : the equivatently funded UL policy. : Unfortunately, I can't illustrate UL on a retroactive basis. It's all prospective, based on current conditions only. This is an advantage whole life and mutual funds have over UL. They can illustrate projections on something other than today's actual situation. But, there are other benefits to UL other than just ROR -- like withdrawl to basis...ability to voluntarily overfund under option B (including make-up for all lost years of overfunding all at once, plus no "red tape" like with qualified plans)...and ability to distribute tax-free income through wash loans, not 8% gross loans. The loan issue is huge for cost-efficient distribution of the money, Rock. : : You make the valid point that all life insurance is the same. : : What varies is the payment plan : Thanks. It's all the same thing -- a "you die, they pay" legal contract. No matter how you pay for it, you won't change the contract itself or the face amount. All you'll change is your total cost. : and whether there is any accrued value. : Not sure what you mean here. : : A UL policy is term insurance tied to a conservative investment plan. : But, with a lower, flexible payment plan. : : So is WL. WL is less flexible, : WL has an INflexible payment plan. : but you typically gain partial : : ownership of the company and "participation" in its earnings. : But, no control. : : UL has more guarantees, but less potential of beating their : : projections. : They both have about the same potential, I believe. UL just pays you for the better experience at least several years sooner than WL does. : Either type can fall short of their projections, : : but some WL companies have an extremely long record of meeting or surpassing them. : Of course they do. WL has been around much longer than UL. : : On openness and comprehensibility, I think UL may have a significant : : lead. : Yes. That's why it's design is unbundled. : I'm guessing this is one of the reasons you don't sell WL. : Actually, no. It's all the other reasons -- flexibility...liquidity...ability to minimum fund to leverage 40% to 90% more spendable income from 401(k)...tax-free income...etc. : : If the company can't explain it to its own agents, how can : : an agent explain it to his clients? : They can't. That's part of the problem. One of the reasons why nobody understands how life insurance works. But, I'm not saying you need to be a electrical engineer to turn on a light switch either. : In my case, there was a : : "leap of faith". I did not understand my policy, but I "knew" : : that I wanted Whole Life. : We call that ESP in the insurance business, Rock. : Now with the Visible Policy, I am : : going back and figuring out what the heck I have. So far I have not found anything which makes me regret my decision. : And, Rock, I hope you never do! hindi : : I don't think I would have regretted UL either. But I'm six : : years into this and don't see any reason to change what I have. : : -- Rich : : --- http://rocq.home.att.net

Please enter the characters in the image above.