Please help fix my WL policy

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Before anyone jumps on me for buying a WL policy consider first that I have maxed out my 401k and Roth (Vanguard) for both myself and my wife. I also have other investment accounts so this is just a smaller piece of the big picture. That said, I think our insurance agent may have put the screws to us... we have two NWML $500k policies, one for each of us. For some reason they are setup differently, one is 100% Base WL while the other is 50% Base and 50% Term if I am looking at these correctly. We told the agent we want them to be paid up ASAP so we will have extra flexibility with payments down the road. What we got appears to be very different than what we asked, but we are already 2 years into them.

Policy A 100% Base WL (30 years old Healthy female)
Payments ~500/month
Paid up 50+ years (yes 50 years)
Cash value: $13k
Last Div: $508

Policy B 50% Base / 50% Adjustable Term Protection (32 years old Healthy male)
Payments ~500/month
Paid up 17 years
Cash value: $8k
Last Div: $828

Whats more is that we put an extra 7k right off the bat into Policy A to pay things up faster, since my wife had the ability to put more money in up front. Now, 2 years later, Policy A has a cash value of $13k while Policy B has a cash value of $8K. The strange thing is that Policy B earns more dividends than the higher cash value Policy A.

Our goal from the start was to get a policy for both of us that would:
1. Be paid up ASAP
2. Have a death benefit of 500K
3. Provide a tax-free fixed income stream in retirement (kinda like our own pension) So maximum dividends at retirement age.
(We made these points very clear to the agent)

My questions:
1. What is the bottom line difference between the 2 policies, one being 100 base and the other 50/50?
2. Why is the higher cash value policy producing lower dividends?
3. In relation to other policies, are they as bad as they look, and if they are can they be adjusted (fixed) ie: can we go from 100 base to something else like 25% base and 75% term without having to kill these policies and start over. (remember these are 2 years in, we want to salvage what we can)

Yes, it took me two years to finally review this stuff and do my own research... and from what I have learned so far we may have been setup with policies that benefit our agent while not meeting a single one of our goals effectively.

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Well first of all that blended one is $250k as is and its set for 17 years. I mean if you want you can reduce that later... (more)

dshibb (Feb. 21, 2012 @ 2:27p) |

Thanks dshibb! I really am bummed that these arent 10 year paid up plans like I had requested, thats my main gripe. Sure... (more)

RoyEMunson (Feb. 21, 2012 @ 3:16p) |

Just to pre warn you 1035ing to another product WL policy is not the solution here even if the agent suggests it(it will... (more)

dshibb (Feb. 21, 2012 @ 3:50p) |

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First off you have listed goals for your whole life policy. You didnt list actual goals. If you didnt want a permanent death benefit then this is still a mistake regardless of your other investments. You should understand why that is the case since otherwise you might make more bad decisions in the future. Many people get suckered by the tax free angle. Just so you know, that tax free loan will cost you currently around 8% in interest per year. Keep in mind that used after tax dollars to pay for this policy. Except for single premium and limited pay policies (such as a 10 pay or 10 year policy), whole life always requires a payment per year. Its just whether or not the dividends currently generated will be enough to pay the premium. This continues your entire life.

Now with that said, likely surrendering the policy is not a good move. If you are paying these policies monthly then switch to yearly since this typically has a finance charge of around 6%. To maximize your policies for the intended purpose of using loans, you want to accelerate the cash surrender value by purchasin as many PUAs (paid up additions) that you can without going over the MEC (modified endowement contract) limit. The company can provide this information to you.

Bottom line is if you did this just for income later in life, you made a mistake.

RoyEMunson said:   Yes, it took me two years to finally review this stuff and do my own research... and from what I have learned so far we may have been setup with policies that benefit our agent while not meeting a single one of our goals effectively.

Agreed. Also agree with dhodson's points 100% (as usual).

A 500k death benefit will be insufficient during your peak adult responsibility years (30-55) and potentially for your retirement needs (70-95) as well.

I don't understand how or why you picked the "goals" that you did, especially as they seemed to have put the cart before the horse.

First would have been to identify the need.
Then identifying the vehicle for asset accumulation.
Third to identify the funding mechanism.

Having it paid up seems to me to be a particularly poor decision. But that's probably just my own personal bias.

I don't think your agent put the screws to you. You asked for specific things that ultimately were not in your best interest. Your agent did them.

i should also add that if you are really only 2 years into these policies and thus paid about 12k in premium each, then frankly for whole life you are about as good as it gets with cash surrender values. Except for a whole life policy by SBLI, all whole life policies have an initial negative return on "investment".

Tough crowd, but the feedback is appreciated... I need to take my medicine. What still remains to be answered is if the policies could be adjusted at all... why are they setup differently if we have the same terribly thought out goals? They seem to be setup to maximize commissions, not to reach my terribly thought out goals.

"Having it paid up seems to me to be a particularly poor decision."

Whats so terrible about having paid up WL? The policy will gain in CSV and coverage after I stop paying... I want to leave my family with as much as possible if (die early) / when I eventually die which is quite a certainty.

RoyEMunson said:   Tough crowd, but the feedback is appreciated... I need to take my medicine. What still remains to be answered is if the policies could be adjusted at all... why are they setup differently if we have the same terribly thought out goals? They seem to be setup to maximize commissions, not to reach my terribly thought out goals.

"Having it paid up seems to me to be a particularly poor decision."

Whats so terrible about having paid up WL? The policy will gain in CSV and coverage after I stop paying... I want to leave my family with as much as possible if (die early) / when I eventually die which is quite a certainty.


You would have have done better to break your needs up into 3 basic life stages and looked at the needs separately ...

During your peak responsibility years (30-55), you probably would have been better off with a 20 year level term policy with much higher ($1mm - 2mm limits).

During your retirement years (65 or 70 - 95), you might have been better off with some sort of deferred annuity or single-pay product.

During the transition years (55-65 or maybe 70), your insurance needs would have been relatively low ... but you've locked yourself into paying for insurance for those years.
(edit: and those are relatively expensive years to insure)

If you were looking at intergenerational wealth transfer, the $500k limit is so low as to be essentially meaningless in the greater scheme of what your assets are likely to be 45 years from now in inflation adjusted terms.

If you were looking for a good tax deferred place to stash cash which could be removed later, there are other avenues you could have explored which would not have involved large commissions and expense ratios.

I'm guessing you probably cannot "adjust" the policies at this point. They are good products from a good company. But you asked for things that made them a poor choice for what seem to be your financial needs and circumstances.

The above are for starters ...

again, not the absolute worst choice you could have made, but it points to the need to look at ones overall portfolio and planning first, then figure out where insurance products fit in.

You dont have paid up whole life. A paid up policy would require no further premium. You seem to have policies that will always require a premium but it is anticipated that dividends will eventually be sufficient to cover those premiums. Dividends have been going down for a long time and likely will for several years to come. Thus your current illustration could easily be wrong and you may be required to pay more out of pocket until you get to the point where dividends (which are not guaranteed) can pay the premium.

If you live long enough, the return on whole life is such that you very likely would have left more for your family upon your eventual death even with the tax free death benefit. If you had a need for a permanent death benefit then it makes sense but as a strict investment it doesnt. You dont seem to have an insurable interest but instead want money for yourself in retirement and money to pass along. Given the high costs, low returns, and costs of accessing the money via loans, it isnt a great decision. With that said, once purchased, typically its best to just continue with whole life. Id ask the agent to explain why the differences and to provide information on the max PUAs you can purchase with illustrations as well as current in force illustrations.

1. Your seeing it. The blended one will start off with slower cash value growth, but more dividends and will eventually catch up later. And the non blended one will have better early cash value performance, but lag later on and spin off less dividends.
2. Because they are separate things. Dividend scale of a carrier is not disclosed, but a blended needs to catch up so they grant it higher dividends. This may or may not be because of a rider being attached. The 100% whole life is more permanent insurance so its obvious that should carry more cash value. And actually probably more important you are overfunding the blended to a higher degree than the non blended. $8k in cash value on $250k policy is better than $13k on $500k(half of that would be $6.5k) and that plus the extra dividends is because more of each premium is going to performance and less to cost of insurance.
3. Call the carrier, but I sincerely doubt it. And the blended reduces the agents commission.

Your best bet if you want to reduce your exposure, premiums, etc. is to elect to reduce the face value to paid up at some point in the future based on when you didn't want to make any more payments anyway.

RoyEMunson said:    I want to leave my family with as much as possible if (die early)

Looking at just this one objective, you probably could have purchased 2x as much coverage for 1/12th the cost via a 20 year level term policy.

If you had put the other $5500 per year into some sort of deferred annuity, you likely would have had more retirement funds.

Difficult to say for certain without finding out more about you and doing the math. and given the choice between doing that and heading out for a round of golf, I know which choice is more appealing to me today.

Given the rest of your finances, the choice you made is not likely to derail your life's plans. You probably will need to sit down again with some sort of financial planner to figure out what gap, if any, still remains between what you have purchased and what you've purchased.

First, can I ask if you folks have WL or Term?

"You dont have paid up whole life. A paid up policy would require no further premium."
Im starting to think that you guys have not read or understand my post. I understand that the policies are not paid up thats why I illustrated the terms. I understand that things may change and they may not be paid up in the projected 17 or 50 years. I wanted something simple, pay 10 years then done like the SBLI policy that you mentioned. The policy continues to grow while I pay nothing more after 10 years... Also, the policy will have coverage much higher than 500k when I retire 35-40 years from now.

"You seem to have policies that will always require a premium but it is anticipated that dividends will eventually be sufficient to cover those premiums."
Sorry but I am still learning... is this not the same as being paid up?

Also why are the dividends much lower on the higher cash value policy?

Just found this... This looks much more inline with what I asked for, except 500k not 100k. Notice that the coverage (albeit not guaranteed) grows by 50% in 35 years. Notice that it is paid up at 10 years. This looks much better to me.

http://www.fatwallet.com/static/attachments/129979_sbli10_paywl1...

RoyEMunson said:   Im starting to think that you guys have not read or understand my post.

Perhaps, but it's looking more and more like there's an hour of my life I'm never going to get back.

RoyEMunson said:   First, can I ask if you folks have WL or Term?

"You dont have paid up whole life. A paid up policy would require no further premium."
Im starting to think that you guys have not read or understand my post. I understand that the policies are not paid up thats why I illustrated the terms. I understand that things may change and they may not be paid up in the projected 17 or 50 years. I wanted something simple, pay 10 years then done like the SBLI policy that you mentioned. The policy continues to grow while I pay nothing more after 10 years... Also, the policy will have coverage much higher than 500k when I retire 35-40 years from now.

"You seem to have policies that will always require a premium but it is anticipated that dividends will eventually be sufficient to cover those premiums."
Sorry but I am still learning... is this not the same as being paid up?

Also why are the dividends much lower on the higher cash value policy?


Well you have 2 choices if that's what you want. 1 is to pay more and the 2nd is to reduce the face. You can't have current premium and current face and be done in 10 years.

Bolded part: See post above where I answered your 3 questions.

RoyEMunson said:   Just found this... This looks much more inline with what I asked for, except 500k not 100k. Notice that the coverage (albeit not guaranteed) grows by 50% in 35 years. Notice that it is paid up at 10 years. This looks much better to me.

http://www.fatwallet.com/static/attachments/129979_sbli10_paywl1...


See above post its not like you can't do that. Just be careful about the MEC level.

They are not the same thing. A paid up policy is either a single or limited pay period policy where you are not required to make any payments on after a specific time period. Some policies can also be converted to paid up after a specific period of time. As oppossed to a paid up policy, a policy that requires ongoing payments may or may not require more out of pocket expenses later then projected. Given the direction of dividends, likely many new policies will require more than originally projected. Additionally, if one is considering loans, the lack of dividends can impact how much you can safely take out without busting the policy.


And yes unfortunately i have whole life insurance. I wasnt always so knowledgeable on the topic.


If you do nothing else, convert your payments to yearly instead of monthly to save the finance charges. If this is a small part of your portfolio, id try not to take any loans or at least take then as late as possible in life. Loans of course reduce the death benefit by whatever amount is taken out plus unpaid interest.

dhodson said:   They are not the same thing. A paid up policy is either a single or limited pay period policy where you are not required to make any payments on after a specific time period. Some policies can also be converted to paid up after a specific period of time. As oppossed to a paid up policy, a policy that requires ongoing payments may or may not require more out of pocket expenses later then projected. Given the direction of dividends, likely many new policies will require more than originally projected. Additionally, if one is considering loans, the lack of dividends can impact how much you can safely take out without busting the policy.


And yes unfortunately i have whole life insurance. I wasnt always so knowledgeable on the topic.


If you do nothing else, convert your payments to yearly instead of monthly to save the finance charges. If this is a small part of your portfolio, id try not to take any loans or at least take then as late as possible in life. Loans of course reduce the death benefit by whatever amount is taken out plus unpaid interest.


You know there's a limit to how much minutia I care about with a product that I don't deal with all that much, but I'm pretty sure that practically all WL policies can be retroactively corrected by selecting "reduced paid up" down the road.

dshibb said:   You know there's a limit to how much minutia I care about with a product that I don't deal with all that much,

+1

I'm thinking of adopting that as my own personal motto.

yes but initially that amount of death benefit is about zero. im pretty sure it takes a good deal of time before that becomes a truely viable option. in this case my guess is that lets say after 10-15 years he/she wanted to do that, it would be okay but not at year 2.

dhodson said:   yes but initially that amount of death benefit is about zero. im pretty sure it takes a good deal of time before that becomes a truely viable option. in this case my guess is that lets say after 10-15 years he/she wanted to do that, it would be okay but not at year 2.

Yeah that's pretty obvious, I thought we were addressing the OPs desire to stop premiums at about year 10 or soon after? Well just decrease the face after year 10 problem solved.

RoyEMunson said:   Just found this... This looks much more inline with what I asked for, except 500k not 100k. Notice that the coverage (albeit not guaranteed) grows by 50% in 35 years. Notice that it is paid up at 10 years. This looks much better to me.

http://www.fatwallet.com/static/attachments/129979_sbli10_paywl1...


That is my illustration. I went the 10 pay route because I needed a bit of perm insurance and I didn't want to pay for a lifetime.

If you call them, they will email you an illustration for whatever amount you want. You possibly could look into a 1035 exchange.

The only way the policy gets a positive ROI right out of the gate is to do the 10 pay option (they offer a few different limited-pay plans), and a minimum of 100k face (Anything below 100k drops you into standard class). You also have to qualify for super-preferred UW. If you Google, you can find the UW guides online.

fueldude said:   RoyEMunson said:   Just found this... This looks much more inline with what I asked for, except 500k not 100k. Notice that the coverage (albeit not guaranteed) grows by 50% in 35 years. Notice that it is paid up at 10 years. This looks much better to me.

http://www.fatwallet.com/static/attachments/129979_sbli10_paywl1...


That is my illustration. I went the 10 pay route because I needed a bit of perm insurance and I didn't want to pay for a lifetime.

If you call them, they will email you an illustration for whatever amount you want. You possibly could look into a 1035 exchange.

The only way the policy gets a positive ROI right out of the gate is to do the 10 pay option (they offer a few different limited-pay plans), and a minimum of 100k face (Anything below 100k drops you into standard class). You also have to qualify for super-preferred UW. If you Google, you can find the UW guides online.


Well both of the OPs policies are in positive territory in the 2nd year(even though the blended one doesn't seem like it, but that policy is only $250k and the rest is term) and one of them is a 50 pay, LOL. SO I doubt he stands to really gain anything by switching at this standpoint.

BEEFjerKAY said:   RoyEMunson said:   Im starting to think that you guys have not read or understand my post.

Perhaps, but it's looking more and more like there's an hour of my life I'm never going to get back.


I guess we are both in the same boat, thanks for that helpful comment... But really, I do appreciate the constructive feedback. The reason I am thinking something is amiss is because we both have the same goals (we were clear with the agent on this) but ended up with very different policies. I wanted to be paid up in 10 years so one policy almost hits that mark while the other misses completely, 50 years... thats not very close to ten I asked for. Also, the reason the 100% base policy has a greater cash value probably has something to do with the 7k extra we put into that one up front.

dshibb said:   dhodson said:   yes but initially that amount of death benefit is about zero. im pretty sure it takes a good deal of time before that becomes a truely viable option. in this case my guess is that lets say after 10-15 years he/she wanted to do that, it would be okay but not at year 2.

Yeah that's pretty obvious, I thought we were addressing the OPs desire to stop premiums at about year 10 or soon after? Well just decrease the face after year 10 problem solved.


Im not actually trying to argue against your line of thinking, but i believe in doing so, you will reduce your return on investment as a death benefit significantly depending on when it is done and how the policy was structured with policies with higher cash surrender values "doing better". Thus im not sure if we have enough information to pick a good date to solve the problem of paying indefinitely.

You could call the company and ask if they can be converted to a limited-pay option. If so I'd imagine they'd backdate the premium and give you credit for the years paid.

dshibb said:   fueldude said:   RoyEMunson said:   Just found this... This looks much more inline with what I asked for, except 500k not 100k. Notice that the coverage (albeit not guaranteed) grows by 50% in 35 years. Notice that it is paid up at 10 years. This looks much better to me.

http://www.fatwallet.com/static/attachments/129979_sbli10_paywl1...


That is my illustration. I went the 10 pay route because I needed a bit of perm insurance and I didn't want to pay for a lifetime.

If you call them, they will email you an illustration for whatever amount you want. You possibly could look into a 1035 exchange.

The only way the policy gets a positive ROI right out of the gate is to do the 10 pay option (they offer a few different limited-pay plans), and a minimum of 100k face (Anything below 100k drops you into standard class). You also have to qualify for super-preferred UW. If you Google, you can find the UW guides online.


Well both of the OPs policies are in positive territory in the 2nd year(even though the blended one doesn't seem like it, but that policy is only $250k and the rest is term) and one of them is a 50 pay, LOL. SO I doubt he stands to really gain anything by switching at this standpoint.


id also have to agree (assuming the information given to us is true) especially given that nwm is stronger than sbli. if anything, id personally consider just surrendering in total.

dhodson said:   dshibb said:   fueldude said:   RoyEMunson said:   Just found this... This looks much more inline with what I asked for, except 500k not 100k. Notice that the coverage (albeit not guaranteed) grows by 50% in 35 years. Notice that it is paid up at 10 years. This looks much better to me.

http://www.fatwallet.com/static/attachments/129979_sbli10_paywl1...


That is my illustration. I went the 10 pay route because I needed a bit of perm insurance and I didn't want to pay for a lifetime.

If you call them, they will email you an illustration for whatever amount you want. You possibly could look into a 1035 exchange.

The only way the policy gets a positive ROI right out of the gate is to do the 10 pay option (they offer a few different limited-pay plans), and a minimum of 100k face (Anything below 100k drops you into standard class). You also have to qualify for super-preferred UW. If you Google, you can find the UW guides online.


Well both of the OPs policies are in positive territory in the 2nd year(even though the blended one doesn't seem like it, but that policy is only $250k and the rest is term) and one of them is a 50 pay, LOL. SO I doubt he stands to really gain anything by switching at this standpoint.


id also have to agree (assuming the information given to us is true) especially given that nwm is stronger than sbli. if anything, id personally consider just surrendering in total.


I probably wouldn't if this is what he was after. He's positive in year 2. He's in a high tax bracket. He's already paid a decent chunk of the fees. He's maxing out his tax advantaged accounts.

Look I wouldn't own one just because I don't like long duration fixed income these days, but he could be doing a lot worse than this right now and since he seems to fit the prereq's of even considering this(maxed out accounts, high income, etc.) than I'd say knock yourself out OP there are worse things he could do with his money.

I just hope he takes our advice and decides to never borrow from these things in the future if he can avoid it, and if that is a problem then I would cash them in today.

dhodson said:   dshibb said:   dhodson said:   yes but initially that amount of death benefit is about zero. im pretty sure it takes a good deal of time before that becomes a truely viable option. in this case my guess is that lets say after 10-15 years he/she wanted to do that, it would be okay but not at year 2.

Yeah that's pretty obvious, I thought we were addressing the OPs desire to stop premiums at about year 10 or soon after? Well just decrease the face after year 10 problem solved.


Im not actually trying to argue against your line of thinking, but i believe in doing so, you will reduce your return on investment as a death benefit significantly depending on when it is done and how the policy was structured with policies with higher cash surrender values "doing better". Thus im not sure if we have enough information to pick a good date to solve the problem of paying indefinitely.


Well lets see it would mean that he will overpay for some insurance for the next 10 years. His dividends will reduce a little, but other than that his performance shouldn't be impacted much. Hell I'd bet taking out a decent sized policy loan for 10 years would do more damage. A rough guess is that if he goes reduced paid up in another 10 years he's probably shaving off 10-15% of the returns over the long haul(like if IRR to life expectancy is ~5% if he kept it as is then .5%-.75% IRR) would probably evaporate if he did that which is enough to care, but if he wants to be done in 10ish more years then that's probably what it'll cost it.

The point is that he can't have his cake and eat it too. He has 3 variables that he would seem to care about length of premiums, size of premiums, and face. Well he can't keep the latter 2 the way they are and be out in 10. He needs to give up something.

since he never actually listed his goals but instead goals for life, i think we are interpreting things differently. Im probably weighing more heavily on personal income and you are weighing more heavily on death benefit goals. Now i of course agree that whole life should be purchased for the permanent death benefit goal, im just not sure that is his/her primary goal. I also agree that not everything the OP wants is feasible without compromise. Since there doesnt seem to be an insurable interest and the CSV is close to premiums paid, id get out. I wish my policy was somewhat near this but unfortunately it isnt.

dhodson said:   since he never actually listed his goals but instead goals for life, i think we are interpreting things differently. Im probably weighing more heavily on personal income and you are weighing more heavily on death benefit goals. Now i of course agree that whole life should be purchased for the permanent death benefit goal, im just not sure that is his/her primary goal. I also agree that not everything the OP wants is feasible without compromise. Since there doesnt seem to be an insurable interest and the CSV is close to premiums paid, id get out. I wish my policy was somewhat near this but unfortunately it isnt.

Where did he state his personal income? You may be confusing this guy for the person in the other thread who claimed wants to buy every piece of insurance he can even though he was out of work for 2 years.

But between maxing out his 401k and Roth and being able to afford another $12k in premiums without breaking a sweat I figured he's at least got a decent income to boost his tax equivalency on these policies IRR's.

Look I'd probably get out regardless personally, but at least he's got his bases covered somewhat if he wants to stay in.

i might have been more focused on

3. Provide a tax-free fixed income stream in retirement (kinda like our own pension) So maximum dividends at retirement age.

dhodson said:   i might have been more focused on

3. Provide a tax-free fixed income stream in retirement (kinda like our own pension) So maximum dividends at retirement age.


Yeah hence why I added this note at the bottom:

dshibb said:   
I just hope he takes our advice and decides to never borrow from these things in the future if he can avoid it, and if that is a problem then I would cash them in today.

OK, not sure what you are looking for here but this is how I envision the ideal policy for myself.
Main goals:
1. Paid up in 10 years (not 50)
2. Grows in face value, and cash value even after I am no longer making payments
3. Provides my family with an additional windfall of assets upon my death. (I plan to NEVER cash it out OR take loans on its value)

Would be nice, but not a requirement goal:
4. 30-40 years from now I have at least little fixed income provided by yearly dividends from the policy.

A vast majority of my retirement is in traditional investment accounts, I will be just fine.
I just like the idea of buying insurance that my family will definitely benefit from, where as term will get too expensive when I get older. I know as my assets build that insurance wont be needed as much but I want my kids / grand kids / great grand kids to benefit from this policy. Im not entirely thinking about myself here.

For those wondering our income is well into in the 100k range between the 2 of us. Only debt is our mortgage.

From doing a little more research on different parts of this forum it would seem that, for what I would like, the policies I have are not structured the way they should be, which would be like this: http://www.fatwallet.com/static/attachments/92380_nwml_forum_ste...
Looking at only a small fraction as base with a majority as term. Paid up in 10. This policy looks beautiful to me!

you need to get rid of number 4 if you plan to never take loans. while you could get cash from dividends once/if they are greater than premium, that isnt the best way to do it. Loans would be but you must be careful.

just keep in mind what frequently happens in these situations is that now your grandkids are hoping you will die instead of live longer. It is frequently better to give money while you are alive then to give a lump sum upon your death. You then will also get to feel the gratitude (unless you think you can appreciate it from the grave). This is in particular true if one of them has some need like college etc for the money.

if you were thinking of putting this money into fixed income then sure whole life would have been better but otherwise if you are talking 30-40 years from now, then you very likely could have given more with vanguard index funds for instance. Insurance companies dont have magical investments. They also have high costs. Thus when purchasing whole life, you are paying for insurance, buying bonds with an expensive middle man, and reducing your liquidity.

while again you have listed goals for a particular whole life policy instead of financial goals, if your number one goal was to be completely paid up in 10 years, you didnt get that and you should ask the agent why he didnt sell you a 10 pay policy.

"now your grandkids are hoping you will die instead of live longer"
lol, my grandparents are quite wealthy but I would never wish an early death so I could benefit. Really, thats an incredibly morbid and selfish way to think! Though I probably could not predict that my grandchildren will think the same way... Still its possible so I see your point .
As far as financial goals go, I should already be set if things continue the way they are and I continue to max roth and 401k.

The ideal policy would fulfill my insurance goals, not much else more.

dhodson said:   you need to get rid of number 4 if you plan to never take loans. while you could get cash from dividends once/if they are greater than premium, that isnt the best way to do it. Loans would be but you must be careful.

just keep in mind what frequently happens in these situations is that now your grandkids are hoping you will die instead of live longer. It is frequently better to give money while you are alive then to give a lump sum upon your death. You then will also get to feel the gratitude (unless you think you can appreciate it from the grave). This is in particular true if one of them has some need like college etc for the money.

if you were thinking of putting this money into fixed income then sure whole life would have been better but otherwise if you are talking 30-40 years from now, then you very likely could have given more with vanguard index funds for instance. Insurance companies dont have magical investments. They also have high costs. Thus when purchasing whole life, you are paying for insurance, buying bonds with an expensive middle man, and reducing your liquidity.

while again you have listed goals for a particular whole life policy instead of financial goals, if your number one goal was to be completely paid up in 10 years, you didnt get that and you should ask the agent why he didnt sell you a 10 pay policy.


Why do you think the policy loans would be better than just electing late in life to receive dividends net of premium in checks instead of paid up additions?

Not that I would tell my grand kids how much I am worth dead, thats nobodies but my wife's and possibly lawyer's business, but also consider that the policy face value should grow the longer I stay alive too.

RoyEMunson said:   From doing a little more research on different parts of this forum it would seem that, for what I would like, the policies I have are not structured the way they should be, which would be like this: http://www.fatwallet.com/static/attachments/92380_nwml_forum_ste...
Looking at only a small fraction as base with a majority as term. Paid up in 10. This policy looks beautiful to me!


I've answered your question. You can reduce the death benefit or increase your premium(starting now) and that will solve this problem for you so that you can stop at exactly the same time or maybe a little later as in that illustration.

Skipping 5 Messages...
RoyEMunson said:   dshibb said:   RoyEMunson said:   dshibb said:   RoyEMunson said:   From doing a little more research on different parts of this forum it would seem that, for what I would like, the policies I have are not structured the way they should be, which would be like this: http://www.fatwallet.com/static/attachments/92380_nwml_forum_ste...
Looking at only a small fraction as base with a majority as term. Paid up in 10. This policy looks beautiful to me!


I've answered your question. You can reduce the death benefit or increase your premium(starting now) and that will solve this problem for you so that you can stop at exactly the same time or maybe a little later as in that illustration.


One last bit of clarification that I need would be how the balance of term and base insurance effect the policy in the short and long term. Sorry, im extremely dense with this stuff. Again, everyones feedback here has proven to be very valuable to me, big thanks.


Well first of all that blended one is $250k as is and its set for 17 years. I mean if you want you can reduce that later a little so it hits 10-15 years, but the question really is do you want to reduce it down anyway since its 17 years? Its not like more payments wont end up going into the product and generating more cash value and death benefit. Its not 10 years of needed payments and the remaining 7 are a waste. Those get put into the policy as well they don't just disappear. If its very important to reduce the amount of years in that then go for it and talk to the carrier about your options for how to best handle the blend.

Otherwise if your curious as to how its functioning now basically term insurance is cheaper(especially annually renewing) and so more of each payment you make is going into the $250k policy once the term insurance is taken care of. That higher payment per dollar of death benefit is causing the cash value of the $250k to grow faster with a worse starting point than the $500k one. Its also spinning off more dividends because your paying more into it. So in comparison to the non blended one its starting from a lower spot, but is growing much faster(think about it in 30 years that $250k policy is going to have a death benefit of $500k so that you no longer need that term insurance hence that's why the blend ends at that time).



Thanks dshibb! I really am bummed that these arent 10 year paid up plans like I had requested, thats my main gripe. Sure the money will go into the plan but I didnt want such a commitment to this product. Now the 50 year paid up plan, that is my main concern now... very strange that he put us into 2 completely different policies. I will contact my "adviser" and see what I can do... these are no good to me the way they are.


Just to pre warn you 1035ing to another product WL policy is not the solution here even if the agent suggests it(it will be another commission), just get him to help you change the composition of the current WL policies either now or make a plan to do it 10 years from now or whatever.



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