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OP, I am very sorry for your health situation. I will pray for you and your family.

Your therapy goes through April 19, which is my birthday. It may seem like a regular day, but search Google and you can see that some crazy stuff has happened on April 19 and right around. Not just my birthday, but I fell it is a special time of the year and I pray it works well for you.

I did not see it mentioned, but I am curious... How old are you?

I am practically in tears for you and your family and will donate. What does it mean when it says the donations will be given at a later date? Give it as we donate.
I wish I had some advice or suggestions for you, but prayers are what I will give for you.

Good luck to you and your family OP.

Donation made. Good luck. I hope you pull through.

dshibb said:   Found it: All Time Greatest Heavy Hitter?

OP you should read this!! This is something you should definitely look at.

As a sad followup for the all time HH, the insurance companies pushed hard enough on law enforcement to "find something he was guilty of" and a few month back he plea guilty to 2 out of 66 counts, agreeing though he clearly did not beleive it, that his loophole was a scheme to defraud the insurance companies based on some stretched definition of identity theft and of course wire fraud since there was some money involved.

http://www.fbi.gov/boston/press-releases/2012/rhode-island-estat...

He later changed attorneys and is trying to retract his guilty plea, so the jury is still out on this one. Here's the latest I could find:

http://news.providencejournal.com/breaking-news/2013/01/cranston...

As for the practical implantation of this, I think in the wake of getting so publicly ripped off from their own stupidity, I expect there are now some medical questions as part of variable annuity purchasing but I could be wrong.

http://www.fatwallet.com/forums/finance/740005/

My post from 2007 has some good info, and also some rays of light. Here we are 6 years later, and she's healthier than ever. Let's hope your FW story has a similarly happy middle (we're not done yet!).

xerty said:   dshibb said:   Found it: All Time Greatest Heavy Hitter?

OP you should read this!! This is something you should definitely look at.

As a sad followup for the all time HH, the insurance companies pushed hard enough on law enforcement to "find something he was guilty of" and a few month back he plea guilty to 2 out of 66 counts, agreeing though he clearly did not beleive it, that his loophole was a scheme to defraud the insurance companies based on some stretched definition of identity theft and of course wire fraud since there was some money involved.

http://www.fbi.gov/boston/press-releases/2012/rhode-island-estat...

He later changed attorneys and is trying to retract his guilty plea, so the jury is still out on this one. Here's the latest I could find:

http://news.providencejournal.com/breaking-news/2013/01/cranston...

As for the practical implantation of this, I think in the wake of getting so publicly ripped off from their own stupidity, I expect there are now some medical questions as part of variable annuity purchasing but I could be wrong.


That is sad the guy did nothing wrong. But that also has nothing to do with the OP taking advantage of this. That guy was running around to thousands of terminally ill clients taking advantage of this. It means zero about 1 person taking advantage of it for themselves.

I'm pretty sure that market hasn't changed at all.

dshibb said:   ProfessorEd said:   There is one other technique to look at.

This is a variable annuity. These typically ave a death benefit (needed to make them an insurance product). These are frequently the greater of the actual value of the investments, or the amount put into them.

You would then get one for the largest single premium you culd swing. Let say it was $200,000.It should then be invested in the riskiest manner. To make the logic clear, suppose the outcomes were one of two possibilities. You make $100 or lose 100,000 on the investments. If you lose, the death benefit is the $200,000 (your initial payment). If you win, the policy is worth $300,000 and that is what is received on your death.

The is usually the highest rate of return someone with a short life expectancy can get, making it very attractive.

I would fund it by methods such as selling the house, possibly cashing out the life insurance, using credit card debt. etc.

Such contracts involve an annuity option, and she may want to take it if there is a profit just to minimize the tax hit (If the investment yields $100,000 she may not want to take it all as cash since that will be $100,000 o income, and if spread out she will probably be in lower brackets in later years, from what you said.

I have discussed this with several advisers and they agree. to my knowledge no firms ask any health questions (the closest is that they have a maximum age for contracts, which is often at least 80 or ninety).
The fees on these are often high, but with your life expectancy, this would be a very good deal. I don't' know who to use. The fellow who calls himself Brody Insurance seems smart a may have an insurance business business, and I could mention at least one agent who I have a decent amount with (in the millions) who has discussed the very short life expectancy case with me.

If you want to discuss this idea in more detail, PM me and we can exchange phone numbers.



^^^Actually this is smart. I'll throw my weight behind this, but it doesn't seem like he has enough to make this worthwhile himself, but based upon the amazing success another person had(that was reported by I believe public radio and then posted on here) it might even make sense to 'investor'(read family) money behind this. It makes a lot of logical sense to take advantage of this one.

Can someone track down that thread on this and re-post it?


I'll third this. The OP probably isn't a great candidate for this due to lack of cash. This allows someone to invest with no chance of loss. What can even be better is if there is a death benefit that is guaranteed to grow. With most (every?) company now, the owner has to be the annuitant.

God bless you and your family now and in the future OP.
You haven't said what your kids know about your illness. You may want to consider keeping the 9 year old's teacher as well as the school's principal in the loop as concerns your current medical condition as well as the uncertainty of the future. They may be able to provide a referral for the 9 year old who is in the school system and possibly the younger kids, to an ongoing support group for youngsters whose families are facing the same types of issues.

Take this as good advice from someone that knows a fair amount about your disease . . . Get a second opinion.

PM, me and I can try to make a recommendation. There are some novel treatments available like vaccinations that can help. Long term survivor rates are higher than the literature quotes.

Please do this before you start your current treatment.

FatWalletLurker said:   http://www.fatwallet.com/forums/finance/740005/

My post from 2007 has some good info, and also some rays of light. Here we are 6 years later, and she's healthier than ever. Let's hope your FW story has a similarly happy middle (we're not done yet!).


Did you ever go through with this? Did they fight you on the $10k balance, or cancel it?

- Something to consider discussing with your heme/onc doc is quality of life post radiation/chemo that can be expected.
- As time progresses, what to expect (depending on the location of the tumor in the brain, neurological deficits, etc) and metastatic workup (though for something like GBM, the likelihood of mets beyond local cns spread would be questionable, but I don't know; talk to your onc doc).
- Other than finances, have you though about a bucket list of things you want to do (now while you can, physically and mentally).
- This is probably thinking way far ahead but, discuss with your family and docs when to say no to additional treatment after your initial round of xrt/chemo. This ties back to the first point I made.

I am very sorry you're going through this. Know that our hope and prayers are with you during this difficult time.

Several replies have made me think of the following thread and WallStreetJournal article. "Why Doctors Die Differently"
http://www.fatwallet.com/forums/finance/1173362/
http://online.wsj.com/article/SB10001424052970203918304577243321...

I'm not sure how much this applies to Op because of several reasons. (Op may want to live long enough his young children can remember him, Work to increase savings and for life insurance benefits as applicable.) Still these are things someone should consider.


Op, make sure your wife doesn't accept payment responsibility for any of your procedures.


* On a side note, I support Op doing an AOR. Op may need credit to provide end of life care or security for his family. Because Op only has 2 cards currently, it would need to be planned carefully. Suggestions: Apply for US Bank first and get approval before applying for others, or avoid altogether. Avoid Capital One all-together, or apply last because they pull all 3 reports. Don't run up balances until needed. Depending on how long Op continues to work current job, additional rounds of AORs may be possible. Start by focusing on getting 1 card each from banks known for giving generous limits: Navy Fed, USAA, Chase, Citi, Barclay, Capital One (I'm sure other members have better examples. these are my cards with the highest limits. - I realize I listed Capital One both ways, as they have some decent cards, but they take 3 pulls to get!) - Ask for credit limit increases, especially when it may not result in a pull (Such as getting instant approval on the phone, then asking for an increase)

For building your wife's credit, if you happen to have a Capital One card with good payment history, you can add your wife as an authorized user to jump-start her credit. - Capital One is known for reporting full ownership to both Primary and Authorized users. I.e. You duplicate some of your good credit onto her file. - Just realize if you end up defaulting on the card it may report negatively on her report until she challenges it and gets it removed. (Perhaps remove her as an authorized user before getting too high of a balance)

Dear OP - very sorry to hear about your situation. My prayers for you and your family. May God give you the courage and strength to get through this difficult time.

chocula said:   OP, I am very sorry for your health situation. I will pray for you and your family.

Your therapy goes through April 19, which is my birthday. It may seem like a regular day, but search Google and you can see that some crazy stuff has happened on April 19 and right around. Not just my birthday, but I fell it is a special time of the year and I pray it works well for you.

I did not see it mentioned, but I am curious... How old are you?

I am practically in tears for you and your family and will donate. What does it mean when it says the donations will be given at a later date? Give it as we donate.
I wish I had some advice or suggestions for you, but prayers are what I will give for you.

Good luck to you and your family OP.


It means that I don't want to flood the OP with donations in varying amounts. I figured I'd let it go for a week, see if it got traction, and then give to the OP in certain amounts. While I do believe the OP, I am still waiting on a name, facebook page, etc. Nothing personal to OP, but I can't just give people's money away to someone without at least seeing a profile, talking to them, etc. OP is reasonable, and I'm sure he'll understand that. In the meanwhile, it sits in a PayPal account and is not going anywhere yet.

Also, OP doesn't *NEED* the money now, so he implies from his posts. This is simply a preemptive measure that I figured would be a good idea for future use. If you disagree with my idea, then you don't have to donate to me. You can donate directly to the OP, I'm sure he'll give his information for you to send a donation to. Why do you care how it's done? All that matters is 100% of the donations (less paypal fees) are going to the OP at some point or another. I am not touching a single cent of the money. I donated $75 ($100 less domain name and privatization of my information on the WHOIS record) initially to get the ball rolling (and I even paid the paypal fee), and will donate a bit more later on depending on the performance of this whole deal.

Not trying to sound combative, but you have to see it from my position. I'm trying to do a good thing here and I'm getting a complaint..."no good deed goes unpunished" rings a bell.

This thread is emblematic of how great FWF can be. Thank you for your post and exploring a sensitive issue. I wish you the best. You may find Ira Byock's perspective on the end of life helpful. His work is obscure because of the American perception of death as failure rather than another stage of life.

http://www.dyingwell.org/

OP, I wish you the very best.

I think you've already received some really good advice here that I'll second:
1. Explore all insurance options that don't require a medical exam/no questions asked coverage
2. Think about moving in with your parents /your wife's parents or having them come to live with you. Time with your family is the most important thing right now.
3. I love the idea of your wife opening up a daycare. Look into your states requirements, its not uncommon to charge $1000+/kid in daycare. You may need to do some renovations to your home to be compliant, however it will be the easiest way for your wife to stay home with the kids.

Special thanks to JayTrader, just made my donation and hope others do the same.

Although I'm not a country music lover, this song gets me every time http://www.youtube.com/watch?v=6xSGLZd9Vg4

Prayers and strength!

OP . I don't have any suggestions but a small donation and prayers. This made me realize that I need to live my life to the fullest and take some measures for my family going forward

You are in my prayers OP.

Saddened to hear what you are going through OP. My best wishes and prayers are with you and your family... I hope you pull through.

Chipped in my few cents as well.

So far we're up to $669.18, folks. Good response so far. Let's hope we can get $95,000 like that homeless guy is getting for just returning some dumb lady's ring...

http://www.cnn.com/2013/02/22/us/missouri-diamond-ring-returned/...

I don't know you and I'll never meet you in my life, but please please please kick cancer's ass. I chipped in a few bones.

OP-
You and your family are in my thoughts and prayers. One thing that wasn't mentioned with respect to the potential benefits of your wife finding work in the near term is her employee benefits may include being able to purchase additional life insurance for you.

BrodyInsurance said:   My prayers are with you, but please allow me to try to just get right to the chase and give some advice. My focus will be strictly on the life and disability insurance issues.

The advice is designed to try to help you, but it also should serve as a cautionary tale for others.

Your basic situation is 1) you are uninsurable and 2)you might die within the next two years. That second part is true for all FWF readers and we are all insurable until that very day that we are not.

Questions:
Long Term Disability Insurance:
1)Is your long term disability insurance through work? If so, if you can make any of the following changes either now or at open enrollment, make the changes!
A)Increase the benefit.
B)Shorten the elimination period.
C)If your employer is paying the premium, see if you can find the way for you to pay it. For instance, maybe your employer can up your salary and then have you pay for it.
D)If you are paying the premium, pay it post tax and not pre tax. (C and D are so that the benefits would be tax free.)
E)"Terminal Illness" does not equal "disabled". Being disabled is all about the contract. What does your contract say? Does your policy expire as soon as you separate from your employer? For example, you get to the point where you realistically know that are not going to survive. You are still capable of working part time. However, obviously, you would rather use that energy to spend as much time as possible with your wife and children. If you quit to do this, would you lose your disability insurance?

Short term disability insurance:
1)If you can add it, do it!

Life Insurance:
1)If you can get any additional coverage through open enrollment, do so.
2)If you leave your job, do you lose all of your coverage? It may or may not be something that you can keep. It is very possible that in order to keep it as term insurance, you will have to show evidence of insurability. You may be able to convert it to permanent insurance, but expect to pay significantly more money. I think, but am not certain, that you won't be able to keep your employer paid portion of coverage.
3)It has been a number of years since I've explored it, but I have sold policies to people who had terminal diseases. I'm not sure if these policies still exist for decent amounts. Basically, they are graded death benefit guaranteed issue policies. In English, for the purpose of this discussion, it typically means that if you die within 2 years, you would get the premiums back + interest, and after that, the full death benefit would be paid. If I recall correctly, they made sense for people who realistically were not going to live for 10 years.

SSDI:
1)This may be useless to you. If your long term disability policy is through work, it is going to integrate with SSDI. Collecting $1,000 from SSDI will reduce your group DI benefit by $1,000.

Here is the cautionary tale for everyone:
1)Not only is getting life insurance through work usually more expensive, it is dangerous. It is very possible that the coverage will force someone to remain employed when they want to be with their family or take a different job. If one can't/doesn't remain employed, they may lose coverage.
2)Group disability coverage will be lost when one leaves their job. The contractual terms make collecting in the best of situations difficult. For example, if the OP is capable of working part time, there is a very good chance that despite being terminal, he may not be disabled.

Please, everyone, get your life insurance outside of work and, if possible (often it isn't), try to do the same with DI.

One of the things that the OP said was something along the lines of "If I knew that I was going to die in 30 days (or 60 or 90 or whatever), I would quit and spend all of my time with my family." We all feel that way. Having coverage through work may very well take away this option.

While I do disagree with the most of post.. my two cents

Long Term Disability
In Group policy you typically don't have option to change B) or C).
Some employer allows changes in A)
Moreover OP yearly renewal is done . So he has to wait for next annual enrollment.

STD
1) Sometimes state covers STD like in NJ

If you lose job you should be able to use COBRA to continue coverage

Don't lose hope and continue praying while exploring the ideas suggested.
It ain't over until it is.
Thank you for taking the courage & time in posting this. I am sure many henceforth will be prepared to face the u turn life throws at you.

I am sorry for your situation. I would encourage your family and friends to look for supportive services and groups to share information. There is a website that is free and can help co-ordinate people who will want to do things for your family. Meals, support , childcare http://www.lotsahelpinghands.com/
It is possible that your wife can get some work from her previous employer and do work virtually from home ?
I hate to say this but, it would be best if you have an experienced adviser to transfer assets to wife or trust, get your care paid for. There is a lot offered by state. Take it. You paid into the system and that is what it was set up for. No use to burn up all the cash for things that the state will give you free. My prayers are with you

HumDoHamaraDo said:   Sorry to hear your news. Might be too soon or too painful to hear, but someday your wife might remarry. You may want to setup something to ensure your kids are taken care of.

I'm not the OP but the idea of my wife remarrying if she lost me doesn't bother me at all. The other way around (the more likely scenario as she is older than me) she only worries about my ability to choose a good person.

ggmon said:   BrodyInsurance said:   My prayers are with you, but please allow me to try to just get right to the chase and give some advice. My focus will be strictly on the life and disability insurance issues.

The advice is designed to try to help you, but it also should serve as a cautionary tale for others.

Your basic situation is 1) you are uninsurable and 2)you might die within the next two years. That second part is true for all FWF readers and we are all insurable until that very day that we are not.

Questions:
Long Term Disability Insurance:
1)Is your long term disability insurance through work? If so, if you can make any of the following changes either now or at open enrollment, make the changes!
A)Increase the benefit.
B)Shorten the elimination period.
C)If your employer is paying the premium, see if you can find the way for you to pay it. For instance, maybe your employer can up your salary and then have you pay for it.
D)If you are paying the premium, pay it post tax and not pre tax. (C and D are so that the benefits would be tax free.)
E)"Terminal Illness" does not equal "disabled". Being disabled is all about the contract. What does your contract say? Does your policy expire as soon as you separate from your employer? For example, you get to the point where you realistically know that are not going to survive. You are still capable of working part time. However, obviously, you would rather use that energy to spend as much time as possible with your wife and children. If you quit to do this, would you lose your disability insurance?

Short term disability insurance:
1)If you can add it, do it!

Life Insurance:
1)If you can get any additional coverage through open enrollment, do so.
2)If you leave your job, do you lose all of your coverage? It may or may not be something that you can keep. It is very possible that in order to keep it as term insurance, you will have to show evidence of insurability. You may be able to convert it to permanent insurance, but expect to pay significantly more money. I think, but am not certain, that you won't be able to keep your employer paid portion of coverage.
3)It has been a number of years since I've explored it, but I have sold policies to people who had terminal diseases. I'm not sure if these policies still exist for decent amounts. Basically, they are graded death benefit guaranteed issue policies. In English, for the purpose of this discussion, it typically means that if you die within 2 years, you would get the premiums back + interest, and after that, the full death benefit would be paid. If I recall correctly, they made sense for people who realistically were not going to live for 10 years.

SSDI:
1)This may be useless to you. If your long term disability policy is through work, it is going to integrate with SSDI. Collecting $1,000 from SSDI will reduce your group DI benefit by $1,000.

Here is the cautionary tale for everyone:
1)Not only is getting life insurance through work usually more expensive, it is dangerous. It is very possible that the coverage will force someone to remain employed when they want to be with their family or take a different job. If one can't/doesn't remain employed, they may lose coverage.
2)Group disability coverage will be lost when one leaves their job. The contractual terms make collecting in the best of situations difficult. For example, if the OP is capable of working part time, there is a very good chance that despite being terminal, he may not be disabled.

Please, everyone, get your life insurance outside of work and, if possible (often it isn't), try to do the same with DI.

One of the things that the OP said was something along the lines of "If I knew that I was going to die in 30 days (or 60 or 90 or whatever), I would quit and spend all of my time with my family." We all feel that way. Having coverage through work may very well take away this option.

While I do disagree with the most of post.. my two cents

Long Term Disability
In Group policy you typically don't have option to change B) or C).
Some employer allows changes in A)
Moreover OP yearly renewal is done . So he has to wait for next annual enrollment.

STD
1) Sometimes state covers STD like in NJ

If you lose job you should be able to use COBRA to continue coverage


ggmon, if you could comment more, I would appreciate it. Disagreements can help everybody learn. Quite frankly, I enjoy being able to understand multiple sides of an issue, but with what I wrote, I'm struggling to even see a different side, let alone understand it.

OP give a ketogenic diet a shot. Not sure if your tumor will respond but certain cancer cells are very glucose dependent and a super low carb diet can help turn the tide. Best luck to you.

Is there any way to give fatwallet cash directly?

jaytrader said:   chocula said:   OP, I am very sorry for your health situation. I will pray for you and your family.

Your therapy goes through April 19, which is my birthday. It may seem like a regular day, but search Google and you can see that some crazy stuff has happened on April 19 and right around. Not just my birthday, but I fell it is a special time of the year and I pray it works well for you.

I did not see it mentioned, but I am curious... How old are you?

I am practically in tears for you and your family and will donate. What does it mean when it says the donations will be given at a later date? Give it as we donate.
I wish I had some advice or suggestions for you, but prayers are what I will give for you.

Good luck to you and your family OP.


It means that I don't want to flood the OP with donations in varying amounts. I figured I'd let it go for a week, see if it got traction, and then give to the OP in certain amounts. While I do believe the OP, I am still waiting on a name, facebook page, etc. Nothing personal to OP, but I can't just give people's money away to someone without at least seeing a profile, talking to them, etc. OP is reasonable, and I'm sure he'll understand that. In the meanwhile, it sits in a PayPal account and is not going anywhere yet.

Also, OP doesn't *NEED* the money now, so he implies from his posts. This is simply a preemptive measure that I figured would be a good idea for future use. If you disagree with my idea, then you don't have to donate to me. You can donate directly to the OP, I'm sure he'll give his information for you to send a donation to. Why do you care how it's done? All that matters is 100% of the donations (less paypal fees) are going to the OP at some point or another. I am not touching a single cent of the money. I donated $75 ($100 less domain name and privatization of my information on the WHOIS record) initially to get the ball rolling (and I even paid the paypal fee), and will donate a bit more later on depending on the performance of this whole deal.

Not trying to sound combative, but you have to see it from my position. I'm trying to do a good thing here and I'm getting a complaint..."no good deed goes unpunished" rings a bell.


I clearly see it from your position, but you are not seeing it from our position.

I donated, then asked the question. It is not about trusting your or the OP, but was more of a curiosity. I had never come across a donation site that held the money until later, so I was curious why it would be done that way.

My question is partially based on how trusting I am. It never dawned on me that OP may be frauding (which I do not think he is), so I was just wondering why the money would be held. I gave based on OP being truthful and I really appreciate you setting up the donation site and service.

There are bonds available with a death option in which they can be redeemed at a full value upon death of the owner. This is valuable when the bonds is at a discount. In today's interest rate environment I don't know how many are now at discounts, but it may be worth looking for them. (AIG is an obvious candidate).

A link in the previous thread, provides a place to start:
http://online.wsj.com/article/SB10001424052748704784904575112081...

This threat has implications beyond the unfortunate person who raised the question.

Many may have powers of attorney for elderly parents, whose life expectancy is short. The variable annuity idea I pointed out is one. It works best not when death is very close but when there is still time enough for markets to fluctuate. One can often predict such a medium term probability of death just from age (most in their late eighties or nineties) will not live long. Standard annuity contracts cover themselves by a maximum age (such as 93), but there are many who are elderly, but below that age. Very often one will had additional information on the life expectancy from what one knows of a relative (co they have cancer, etc.).

In discussing this with agents who I have bought annuities from and my own experience, the old often have trouble understanding such investments and it is hard to convince them to use them. Those with powers of attorney are hesitant to do anything they do not fully understand. For instance, in the case of my late father, he was a candidate for such a strategy (and I do understand such things), the relative who had the power of attorney did not want to take advantage of this, and limited her actions to keeping his bills paid, and continuing with his previous conservative investment strategies in CDs and bonds.

Some contracts have complex options built into them that may be valuable. At least one lets me put up to another million into it without their approval.

In a Variable Annuity contract my wife has within an IRA, most of the money is being moved to Merrill Edge for their bonus (and lower fees and other advantages), but it a few hundred is being left. The contract was issued when interest rates were much higher, has a interest rate that varies, but it cannot go below 3%. Under certain circumstances this could be valuable, since safe 3% investments are rare today. While her life expectancy is high, there could be circumstances where having something that pays off the money put in on her death (for her children obviously) and otherwise what ever had been earned, could be valuable.

ProfessorEd said:   This threat has implications beyond the unfortunate person who raised the question.

Many may have powers of attorney for elderly parents, whose life expectancy is short. The variable annuity idea I pointed out is one. It works best not when death is very close but when there is still time enough for markets to fluctuate. One can often predict such a medium term probability of death just from age (most in their late eighties or nineties) will not live long. Standard annuity contracts cover themselves by a maximum age (such as 93), but there are many who are elderly, but below that age. Very often one will had additional information on the life expectancy from what one knows of a relative (co they have cancer, etc.).

In discussing this with agents who I have bought annuities from and my own experience, the old often have trouble understanding such investments and it is hard to convince them to use them. Those with powers of attorney are hesitant to do anything they do not fully understand. For instance, in the case of my late father, he was a candidate for such a strategy (and I do understand such things), the relative who had the power of attorney did ;not want to take advantage of this, and her actions to keeping his bills paid, and continuing with his previous conservative investment strategies in CDs and bonds.

Some contracts have complex options built into them that may be valuable. At least one lets me put up to another million into it without their approval.

In a Variable Annuity contract my wife has within an IRA, most of the money is being moved to Merrill Edge for their bonus (and lower fees and other advantages), but it a few hundred is being left. The contract was issued when interest rates were much higher, has a interest rate that varies, but it cannot go below 3%. Under certain circumstances this could be valuable, since safe 3% investments are rare today. While her life expectancy is high, there could be circumstances where having something that pays off the money put in on her death (for her children obviously) and otherwise what ever had been earned, could be valuable.


If the length of time between now and the estimated time of death is too long than the worse tax treatment becomes a bigger factor and it is no longer smart to do something like this. The ideal time frame to have your estimated time of life is probably around 1 year to 6 years. Anything beyond 6 years and estimated market performance becomes increasingly predictable(i.e. it's extremely likely it will be higher than it is today and all you have succeeded in doing is turning an asset that is differed and subject to capital gains taxes to one that is deferred and subject to ordinary income--which isn't good). But if they are predicting 1 year to ~6 years than there is a strong chance the market could be down and you pass away with no loss or that they are way higher than than what a stock/bond mix would have produced for you if you invested without this death benefit safety net.

ProfessorEd, I like how you are thinking, but I'll show you an example of why, usually, this isn't a good idea.

"Jim" doesn't follow this strategy. He invests $100,000 for the purpose of leaving money to his son. It grows at 8%. When he dies in 8 years, his son gets $185,000.

"John" does follow the strategy. Because of the added annuity expenses, he only gets a 6% return. When he dies in 8 years, his son get $159,385.

When we factor in taxes, Jim's son will get a step up in basis so will end up with $185,000. John's son will end up paying income tax on the gain. If he is paying a combined 30% state and federal, he will end up with $141,569.

You can play around with the numbers, but it can be a pretty sizable difference. The annuity only comes out ahead if the investments lose money, so in most cases, this will hurt and not help.

BrodyInsurance said:   ProfessorEd, I like how you are thinking, but I'll show you an example of why, usually, this isn't a good idea.

"Jim" doesn't follow this strategy. He invests $100,000 for the purpose of leaving money to his son. It grows at 8%. When he dies in 8 years, his son gets $185,000.

"John" does follow the strategy. Because of the added annuity expenses, he only gets a 6% return. When he dies in 8 years, his son get $159,385.

When we factor in taxes, Jim's son will get a step up in basis so will end up with $185,000. John's son will end up paying income tax on the gain. If he is paying a combined 30% state and federal, he will end up with $141,569.

You can play around with the numbers, but it can be a pretty sizable difference. The annuity only comes out ahead if the investments lose money, so in most cases, this will hurt and not help.


Agree with everything you shared, but you're forgetting one very important piece and that is the behavior change for having an insurance carrier assume my risk. Essentially I'm going to invest as recklessly and concentrated as I can. Where as had I invested outside of this without anybody assuming my downside risk I would invest more conservatively.

What you end up by doing this is a very, very fat bell curve. The middle 1/3 of probability might represent a spread of +5% return to +10% return. The next 1/3 might represent -10% to +20%. The next 1/3 minus the last few last percent of the tails might represent -30% to +40% in annual return. Now you then lop off all of the negative percentages because the death benefit guarantees the floor and you have a pretty attractive risk profile to throw caution into the wind.

Now on the flip side some well diversified portfolio of bonds and stocks would have a much thinner bell curve. The first 1/3 of probability might represent +4% to +6%. The next 1/3 might represent +2% to +8%. The next 1/3(minus a few percent in the extreme tails) might represent -10% to +20%.

Now under a short enough span of time the risk vs. return profile of engaging in the Variable annuity strategy might offer a substantially better estimated yield than than diversified mix of stocks and bonds when they both probably hold the same risk(because the VA is providing the death benefit). This better risk vs. return profile with the Variable annuity could potentially more than make up the difference in tax treatment.

So I don't think you can use the same interest assumption for both given what I just highlighted.

but you're forgetting one very important piece and that is the behavior change for having an insurance carrier assume my risk.

I agree with you 100%. I used to sell lots of variable annuities. (I don't any longer.) The products made sense in many cases precisely for that reason.

In general, what has changed is that the cost to do this is now much higher and the carriers have taken away the ability to invest the money in an aggressive manner to really take advantage of it.

That leaves us with really just the ability to do it with the death benefit. I have often seen how the living benefits influence investor behavior. It is much less likely that the death benefit would have this same impact. It is much easier to not care about the possibility of investment losses when those losses don't impact the individual. An 80 year old who is financially comfortable probably isn't going to panic because he son is going to inherit $100,000 in her VA instead of $110,000.

IMO, it would just take a very atypical fact pattern for this truly to impact investor behavior when it is being done to leave money behind.

Edit: Let me add that some of the older enhanced death benefits absolutely did influence investor behavior. I've seen situations in which the death benefit was $100,000+ over the contract value and this was without the contract itself being underwater.

BrodyInsurance said:   but you're forgetting one very important piece and that is the behavior change for having an insurance carrier assume my risk.

I agree with you 100%. I used to sell lots of variable annuities. (I don't any longer.) The products made sense in many cases precisely for that reason.

In general, what has changed is that the cost to do this is now much higher and the carriers have taken away the ability to invest the money in an aggressive manner to really take advantage of it.

That leaves us with really just the ability to do it with the death benefit. I have often seen how the living benefits influence investor behavior. It is much less likely that the death benefit would have this same impact. It is much easier to not care about the possibility of investment losses when those losses don't impact the individual. An 80 year old who is financially comfortable probably isn't going to panic because he son is going to inherit $100,000 in her VA instead of $110,000.

IMO, it would just take a very atypical fact pattern for this truly to impact investor behavior when it is being done to leave money behind.

Edit: Let me add that some of the older enhanced death benefits absolutely did influence investor behavior. I've seen situations in which the death benefit was $100,000+ over the contract value and this was without the contract itself being underwater.


Bold: I agree that it has become substantially harder to find good profiles since they're started cracking down on these strategies, but I do believe that if you can reasonably predict life span within a pretty tight range there is still value in looking at this.

alamo11 said:   First off, OP, I offer up my deepest condolences and second off, this is just a suggestion, but would it be viable to sell the current home and build a smaller one in the same area? Maybe a 2,000 square foot home? How much would you save by doing so?

It's a thought - I doubt after all of the fees, down payment and everything else that we'd come out ahead. I guess another way to put it would be, if we (she) can't make this house work, I'm not sure that anything close to it in terms of cost would work either. My wife and I feel like our position is somewhat better than we originally thought. We didn't even know about the Social Security death benefits. We're already saving a solid chunk of our income each month. She's going to redo our budget six-ways-from-Sunday to see how things would shake out.

webdeveloper said:   OP what is the name of your medical condition and how old are you?

Seems that you are pretty young, therefore might be considered a prime subject for some of the clinical trials.
Please take a look at possible clinical trials PRIOR to starting chemo, since a lot of them might not be applied for if you are in the middle of your treatment.

My dad is currently battling Glioblastoma so I know way too much about it than I would ever want to. If it's the same condition let me know and I will write up a treatment timeline of my dad.


I apologize for the delay in my reply - I've been pulling Mr. Mom duty since I got off of work yesterday.

The condition is "a diffuse brain steam glioma, focal point in the medulla." I'm 30 years-old. I'm sorry to hear about your father - I've heard that the Glioblastomas are a very tough road themselves. We've been told that the diffuse brain stem gliomas are rare in adults - they only account for about 1% of brain tumors in adults. As far as we know (and our neuro-oncologist knows) there are no clinical trials available. I didn't realize that about the pre/post chemo, though - I'll get my Google on again tonight to make sure we've exhausted all means.

Kashisti said:   alamo11 said:   First off, OP, I offer up my deepest condolences and second off, this is just a suggestion, but would it be viable to sell the current home and build a smaller one in the same area? Maybe a 2,000 square foot home? How much would you save by doing so?

It's a thought - I doubt after all of the fees, down payment and everything else that we'd come out ahead. I guess another way to put it would be, if we (she) can't make this house work, I'm not sure that anything close to it in terms of cost would work either. My wife and I feel like our position is somewhat better than we originally thought. We didn't even know about the Social Security death benefits. We're already saving a solid chunk of our income each month. She's going to redo our budget six-ways-from-Sunday to see how things would shake out.


Hopefully there'll be a nice chunk to add as a line-item once we get some substantial donations, too.



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