Then, for whatever year you want to calculate the return for, you enter the projected cash surrender value on that date as the cash flow on that line (as a positive number). Keep in mind that your projected cash value at the start of year 10 is actually the cash value they show on the year 9 row (that’s the projected cash value at the END of year 9, which is equivalent to the start of year 10).

In my experience it is rare to find a policy for which the cash value growth by year 6 doesn’t exceed the annual premium (except for policies purchased at older ages, or policies of low face amounts, which have inherently higher costs), that is more than likely to hold true by year 9 or 10! Catching onto some words in my statement, while ignoring the facts presented, doesn’t make you more credible. I challenge you to post images of inforce illustrations where cash value growth is less that the annual premium by year 6.
Point Two: There is NO SAVINGS in literally 99% of all whole life or cash value policies! In the event of the death of the insured, the LIFE INSURANCE COMPANY TAKES THE SAVINGS TO PAY OFF THE FACE VALUE OF THE INSURANCE!!! The only person who saves money is the agent and the insurance company. The insured or beneficiaries saves nothing! There may be a few divergent exceptions with cumbersome addons, but NO SAVINGS TO YOU is the result.
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +25.28% per year. These returns cover a period from January 1, 1988 through February 4, 2019. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
This is a very helpful example of why WL insurance IS a good investment: http://www.mypersonalfinancejourney.com/2013/04/infinite-banking-concept-whole-life-insurance.html. Also, Paradigm Life has several very good models to show how WL policies can out pace “buy term and invest the difference” products long term. One size does not fit all. I have Term Life insurance supplementing my WL policies right now, but they are all convertible. So I will be able to lump in money later and convert them into permanent policies with all of the borrowing and tax sheltered benefits.
My advice: Load up on Term, especially when you are young and healthy, but make sure it is renewable and convertible. As well, buy some permanent coverage to at least pay for final expenses. When you buy term insurance the premiums are gone forever. Unless you die no one benefits. At least with whole life insurance someone will get back all, and in most cases more, than you ever put in. The most important question to be answered when getting insurance is, how much do you need? Typically, you will need 5 – 10 times your income plus debt coverage, if you have someone financially dependent upon you.
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I have whole life that I’m not understanding . I’m under the understanding I pay $401 for 7 years I’m done paying on a &135,000 policy that they tell me the more I borrow from the more it grows.But I’m starting to question if the interested charged doesn’t go back to me how it’s it growing. I’m very confused suopose to sit down with agent so he can explain it better. But from talking to other insurance people like my house and car insurance agent he says this is not possible about it growing. HELP


In July 2007, The Federal Trade Commission (FTC) released a report presenting the results of a study concerning credit-based insurance scores in automobile insurance. The study found that these scores are effective predictors of risk. It also showed that African-Americans and Hispanics are substantially overrepresented in the lowest credit scores, and substantially underrepresented in the highest, while Caucasians and Asians are more evenly spread across the scores. The credit scores were also found to predict risk within each of the ethnic groups, leading the FTC to conclude that the scoring models are not solely proxies for redlining. The FTC indicated little data was available to evaluate benefit of insurance scores to consumers.[54] The report was disputed by representatives of the Consumer Federation of America, the National Fair Housing Alliance, the National Consumer Law Center, and the Center for Economic Justice, for relying on data provided by the insurance industry.[55]
I really wish you would have stated more clearly the difference between the typical whole life plans with zero overfunding and a participating overfunded whole life policy. But I agree with you: What’s the point of not overfunding? Those policies have such a low cash component that they typically are just a ploy to make money by the agent and it seems as if that was your point all along. Which you should have clarified. Why minimum whole life insurances plans are a scam, especially when sold as a main investment vehicle. But then a little drama drives traffic right?
Rates quoted are subject to change and are set at the company's sole discretion. Rates for other underwriting classifications would be higher. Further underwriting restrictions may apply. Other face amounts and guaranteed premium terms are available but will have different rates than those shown here. Premium may be paid annually, semi-annually, quarterly or monthly; premium paid may differ based on payment mode selected. A medical exam may be required depending on age, health or amount of coverage requested.
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There is no right or wrong answer. Buying term insurance is as stated a pure play, cheap when young, expensive when old or with medical issues. Whole life from a bad insurance company is bad. However, one of the best ways to invest money is to diversify. Often, customers buy “Universal” whole life policies that are underfunded, meaning as they get old, these policies become expensive and are often cancelled. Not good. What I have done was term policies when young along with a small (50k) whole life policy. Having a whole life policy allows forced savings and a build up of capital. With the right policy with guaranteed returns, my whole life police has doubled in value and will be inherited tax and probate free to my dependents. If I had no money, it would pay for my funeral and leave funds to my spouse. I have saved and invested money, have multiple 401K’s, and no longer need the insurance. However, 30 years ago, I could not predict the future, and if I had to do it all over again, I would still buy the same policies. However, times have changed, interest rates are low, and the future is uncertain. I still believe, a small whole life policy with a great company (constant, unchanging premium) for a young family just starting out is a good way to provide some security while forcing one to save and invest capital. Is it the best way to invest? No. But many young do not know where to start and it is a great start. Also note, that often as the cash value increases, the death benefit also increases in many policies. Hindsight is always 2020, but one cannot predict the future, that is why we buy insurance. I also found that converting a term insurance police into whole life can be very expensive. Would a whole life policy be my only investment. No. I buy stocks, bonds, CD’s, have 401K, IRA, bank deposits, etc. A whole life policy is a small slice of the pie; diversity. In summary, both policies have merit.


Then, for whatever year you want to calculate the return for, you enter the projected cash surrender value on that date as the cash flow on that line (as a positive number). Keep in mind that your projected cash value at the start of year 10 is actually the cash value they show on the year 9 row (that’s the projected cash value at the END of year 9, which is equivalent to the start of year 10).

2 If you had a total loss with your brand new auto within the first year or 15,000 miles (whichever occurred first), we would repair or replace it with a brand new auto and take no deduction for depreciation. This does not apply to a substitute auto, an auto you do not own, nor a vehicle leased under a long-term contract of six months or more (subject to deductible). Does not apply to theft of tires or batteries, unless the entire vehicle were stolen. Deductible applies for special parts. Not available in NC.

Insurance Rider Company


There is no right or wrong answer. Buying term insurance is as stated a pure play, cheap when young, expensive when old or with medical issues. Whole life from a bad insurance company is bad. However, one of the best ways to invest money is to diversify. Often, customers buy “Universal” whole life policies that are underfunded, meaning as they get old, these policies become expensive and are often cancelled. Not good. What I have done was term policies when young along with a small (50k) whole life policy. Having a whole life policy allows forced savings and a build up of capital. With the right policy with guaranteed returns, my whole life police has doubled in value and will be inherited tax and probate free to my dependents. If I had no money, it would pay for my funeral and leave funds to my spouse. I have saved and invested money, have multiple 401K’s, and no longer need the insurance. However, 30 years ago, I could not predict the future, and if I had to do it all over again, I would still buy the same policies. However, times have changed, interest rates are low, and the future is uncertain. I still believe, a small whole life policy with a great company (constant, unchanging premium) for a young family just starting out is a good way to provide some security while forcing one to save and invest capital. Is it the best way to invest? No. But many young do not know where to start and it is a great start. Also note, that often as the cash value increases, the death benefit also increases in many policies. Hindsight is always 2020, but one cannot predict the future, that is why we buy insurance. I also found that converting a term insurance police into whole life can be very expensive. Would a whole life policy be my only investment. No. I buy stocks, bonds, CD’s, have 401K, IRA, bank deposits, etc. A whole life policy is a small slice of the pie; diversity. In summary, both policies have merit.
How do you feel about Single Premium Index Life? I am 65 years old with no need for life insurance as my grown son will already be well taken care of with my other assets. The ability to care for myself in my retirement outweighs my desire for an additional legacy. this policy is being sold to me more like a long-term care policy where I can use the death benefit, if needed, for nursing home or chronic care. The single premium is $100K with the death benefit to go no lower than $182K. This is money sitting in saving accounts now because I value the feeling of liquidity. I may, or may not, need part of this money during my retirement. This policy is being presented to me by an insurance salesman who presented himself in a seminar as an expert in Social Security to target his audience. Thanks.
Each type of life insurance product has its advantages and disadvantages. You can’t say term life is the best, whole life is the best or universal life is the best. It depends on what an individual client need and his or her situation. As a client, they should know all the advantages and disadvantages but of course, they are under the supervision of a certain type of insurance agent that can be biased and try to sell what they have to offer to form their companies. Avoid an agent that focuses on selling one type of product. Talk to an agent who can provide the knowledge of each type and you can choose what best for you.
Advanced economies account for the bulk of global insurance. With premium income of $1.62 trillion, Europe was the most important region in 2010, followed by North America $1.409 trillion and Asia $1.161 trillion. Europe has however seen a decline in premium income during the year in contrast to the growth seen in North America and Asia. The top four countries generated more than a half of premiums. The United States and Japan alone accounted for 40% of world insurance, much higher than their 7% share of the global population. Emerging economies accounted for over 85% of the world's population but only around 15% of premiums. Their markets are however growing at a quicker pace.[40] The country expected to have the biggest impact on the insurance share distribution across the world is China. According to Sam Radwan of ENHANCE International LLC, low premium penetration (insurance premium as a % of GDP), an ageing population and the largest car market in terms of new sales, premium growth has averaged 15–20% in the past five years, and China is expected to be the largest insurance market in the next decade or two.[41]
A corollary to the liquidity issue is the concept of flexibility of your contributions. Even with a 401(k) or IRA, where you can’t access your money without penalty, you can always choose to stop contributing for a period of time if you need that money for other purposes. In the meantime, your account stays intact, steadily earning tax-deferred returns on the money you’ve already put in.
I disagree that an insurance policy has to pay for it to be valuable. Its purpose is to provide you with protection from scenarios you couldn’t otherwise handle, not to pay you money no matter what. Is your emergency fund worthless if you never have an emergency? Would you pay extra for an auto insurance policy that guaranteed you money for a brand new car (at the cost of the new car, not the value of your old on) once yours is done? Even if was more cost-efficient to save the money yourself? Again, I do agree that there are situations where the insurance component of a whole life policy can be valuable. I will never argue that it is a worthless product. I just think that many times it is sold to people who have options for meeting their needs in better ways. That doesn’t make it evil, just inefficient for many circumstances.
In determining premiums and premium rate structures, insurers consider quantifiable factors, including location, credit scores, gender, occupation, marital status, and education level. However, the use of such factors is often considered to be unfair or unlawfully discriminatory, and the reaction against this practice has in some instances led to political disputes about the ways in which insurers determine premiums and regulatory intervention to limit the factors used.
3This feature is accessible through the accelerated death benefit rider on some life insurance policies. Please see riders for terms, conditions and restrictions. Additional costs may apply. Subject to state-specific terms and availability. A disclosure form must be completed prior to receiving benefits under these riders. An administrative expense may be charged if the benefit is used. Receipt of accelerated benefits may be taxable. Tax laws relating to accelerated benefits are complex. Please consult a tax advisor. Receipt of accelerated benefits may also impact eligibility for public assistance programs.
Second, when it comes to investing, my experience shows that most insurance companies charge MUCH higher fees than are necessary. And since cost is quite possibly the most important factor when it comes to investing, that matters a lot. I would much rather see people using a simple, low-cost index investing strategy that’s both easy to implement and backed by all the best research we have as the most likely route to success.
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It’s very true that you don’t own the cash value in anywhere near the same way that you own your other investments. You can only access it in certain circumstances, and even then there are big conditions like surrender charges and interest. And you’re also correct that you can’t get the cash value AND the insurance proceeds. It’s either/or. All good points.

Did you mention anywhere that the cash value of “permanent” insurance is owned by the insurance company? Did you mention that you don’t own it; the insurance oompany does. Did you mention that the only way the client ever gets the cash value is to cancel his policy? If the client dies, then the cash value is taken to pay off part of the face value of the insurance.
This isn’t entirely accurate. Whole life insurance isn’t a product designed to replace term insurance. It wouldn’t make sense to have a retirement account disappear in the event of someone passing early. This would be irresponsible on the part of an agent to suggest this. Whole life has to be used with the intent of using it as collateral for loans, enhanced retirement and for leaving a legacy. In the early years it should be set up with a term rider to ensure a family’s needs will be met. Yes this is more expensive but it is a tool with an objective and if that’s not the objective then whole life makes no sense at all. It is not right for everyone.
Your premise is that whole life insurance is a bad investment. Fine, however, it is not a bad purchase. It is insurance and when thinking about the defined purpose of insurance then it can be a different story. Your electric service is a bad investment but think of the difficulty in living without electricity. Sure you could invest the bill amount each month into a nice Roth IRA but we seek the benefits of the service and willingly pay the bill. I suggest that people look at insurance the same. In my case and for my intent, whole life insurance was prudent. Like any car lease deal or stock purchase, there can be good and bad deals; one should not declare all forms at all points in time to be definitive. I gifted my child a whole life policy. The rates for a young person are as good as they get; she will never have insurance bills nor be without insurance. There is much left to explain but in short her $25,000 baby policy is growing $1,000 per yea. She will never have to pay a premium but will have $225,000-$350,000 payout one day while providing some protection also during the income/mortgage/child rearing adult years because I purchased it for her at the cost of $120.25 per year! No way could a poor farm kid without inheritance or wealth and limited income but high student loan debt create that kind of wealth for his children in the immediate or most vulnerable time period. To leave her in the same boat, as my parents did, is in no way wealth building. I got married and had mortgage, student loans, and large term life insurance bills because to go without any seemed irresponsible having no wealth but whole life was too expensive. So yes, it is far from a great investment but it is the most responsible gift I ever gave my child. It will not depreciate like a car and it is more certain than lottery tickets! Could I really produce that protection for her with liquidity via investing for only $120 per year? Tip: an insurance agent once told me (he should not have mentioned it) they have NEVER paid out on a life insurance policy because people always eventually let them expire and quit paying on them. Rates are so cheap for young healthy people because they are not likely to die. So this is also an exercise in discipline and responsibility not just finding the right stream to pan for gold.
Though not an absolute separation; an insurance agent is an insurance company's representative by way of agent-principal legal custom. The agent's primary alliance is with the insurance carrier, not the insurance buyer. In contrast, an insurance broker represents the insured, generally has no contractual agreements with insurance carriers, and relies on common or direct methods of perfecting business transactions with insurance carriers. This can have a significant beneficial impact on insurance negotiations obtained through a broker (vs. those obtained from an agent).

4 If your rental car were damaged in a covered loss, this coverage would provide additional protection under your policy’s Physical Damage Coverage (subject to deductible). We would pay the expenses to the rental agency for: loss of use (the rental agency’s loss of rental income); reasonable fees and charges (e.g., storage fees incurred by the rental agency); and loss of market value of the damaged rental.   Not available in NC.

With whole life insurance, you can’t just decide to stop paying premiums. Well, you can, but if you do then the policy lapses and you’re forced to withdraw the cash value, which will subject you to taxes and possibly a surrender charge. And if you haven’t had the policy in place for multiple decades, you will also be left with meager, and possibly negative, returns.
Life insurance helps you plan ahead and provide long-term financial security for your family when they would need it most. You can't put a dollar amount on your loved ones, but a term life insurance policy can help ensure their future is protected. Determine how much coverage you need and how long it's needed, and the GEICO Insurance Agency, Inc. and Life Quotes, Inc. can provide an affordable life insurance policy that is the perfect fit for you and your family. Get a life insurance quote online or call us at (888) 532-5433 and get the satisfaction of knowing your loved ones are protected.
Will you need life insurance when you’re 50-60? I’m assuming that the $13,000 per year you could put into universal life is on top of maxing out a 401(k), IRA and HSA, since those are very likely to be better savings avenues. If so, considering that you’re 22, I would imagine that you will be well on your way to financial independence by 50-60 and will have little, if any, need for life insurance at that point.
Universal life insurance (ULl) is a relatively new insurance product, intended to combine permanent insurance coverage with greater flexibility in premium payments, along with the potential for greater growth of cash values. There are several types of universal life insurance policies, including interest-sensitive (also known as "traditional fixed universal life insurance"), variable universal life (VUL), guaranteed death benefit, and has equity-indexed universal life insurance.
Any reputable source will report mutual fund and stock returns as “annualized” figures, which takes the sequence of returns into account. Another term for this is “geometric average”, which again accounts for the order in which returns are received. So while there are some financial “experts” out there touting average returns (cough, Dave Ramsey), for the most part what you’re talking about here is not a factor. 

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