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rated:
Stolen and condensed from someone's wealth management adviser (who does NOT sell insurance):

There are three buckets to keep your money: 1) taxable accounts (banks, brokerage acct, etc); 2) tax deferred accounts (traditional IRA, traditional 401K, etc); 3) tax free accounts* (municipal bonds, Roth IRA or Roth 401k, permanent insurance policies).

*Tax Free accounts: Those three are the ONLY common vehicles that you can put money into them and later withdraw money TAX FREE. Permanent insurance policies include whole life, universal life, etc.

Most would agree that the Tax Free accounts are the best to hold long term investments because when you take profits decades from now all the fund withdraws are TAX FREE. But for those who have maxed out the Roth IRA and Roth 401K and still have money left over to invest, then something like whole life will provide a sure monetary value at your death for your heirs, will grow in cash value which can be used while you are alive, without the stock market risk*, liquidity risk*, and is also TAX FREE.

*stock market risk is the risk of not knowing what return you will have in stocks and most other investments. There is no guarantee of return with stocks.
*liquidity risk is the risk you have for having stocks, real estate, or investments that go up and down. They could be down a lot when you need to liquidate some of them and that is the wrong time to have to liquidate. That is liquidity risk.

I agree that whole life (and similar products) is NOT for the person who is just making ends meet. But it is clearly for those who have accumulated a particular size net worth of assets. In particular, if the assets are not very liquid such as real estate. The accumulated net worth I'm talking about is (for single person) about >$1 miilion at age 40, >$2 million at age 50, >$4 million at age 60.

Here is the reason: CURRENTLY (you have to watch for changes in laws every year), the estate tax upon your death (for single person) is about $5.5 million dollars. Every $1 above that threshold you pay about 40% to the IRS as an estate tax. If you have over $1 million at age 40, chances are that will double every 10 years (That is about 7.2% growth per year. Maybe it doubles sooner if you are good at your business or investing). That means by age 70 your net value is $8 million. You are now going to pay a lot of estate taxes upon your death. Remember, although funds growing in a Roth IRA or Roth 401k can be withdrawn without any income tax while you are alive, upon your death the entire value is subject to estate taxes. Even if you assume the threshold for estate tax goes up to $7 million*, you have $1 million more so you will pay $400,000 in estate tax. What if the estate does not have $400,000 in cash? Then assets may need to be sold to raise the cash to pay the taxes. Similar predicament for the other age examples.

*A mere few years ago estate taxes threshold was only $1 million. With USA debt so high and going higher, there is a lot of pressure to change the estate tax threshold back to a lower level so that taxes from the wealthy can be collected to offset the national debt. Can you imagine if your net worth doubles again in 10 years to age 80 (ie. $16 million net assets) and the estate tax threshold does NOT go up, or worse goes down because of changes in the law!?! All that blood, sweat, and tears (or at least 40% above the then current threshold) will be taken by the IRS! For a married couple, the threshold for estate taxes is $5.5 million for each spouse. So you have about $11 million as the threshold. So, for a married couple at age 80 your $16 million would be about $5 million over the current threshold. Still a lot of estate taxes to be paid!.
What can a wealthy person do to protect such accumulated assets for their heirs?!?!

There are many estate planning steps to consider: Setting up irrevocable trusts, foundations, limited partnerships, gifting, etc. But we are discussing the role of permanent life insurance. Let's use whole life as an example.

There are three factors to guess that help determine how much life insurance death benefit you many need.
1) What age do you guess you will be at death?
2) What is the net asset worth at the age of death?
3) What is the government estate tax threshold at the time of death?

Let's use 80 as age of death.
Let's use $16 million as net worth at age of death.
Let's use $10 million as the then current estate tax threshold. But if you believe as I do, you should use a MUCH LOWER estate tax threshold. The government needs to either tax the massive numbers of working living people more or tax the few rich dead corpses more. Which do you think is the low hanging fruit?

With the above estimates, you have $6 million over the then current threshold. You have to pay 40% or $2.4 million dollars in estate taxes.
If you had a life insurance policy with a death benefit of $2.4 million then you have money via the insurance policy to pay those estate taxes.
You could buy term insurance to cover you to age 80, but what if you live past 80? Term insurance rockets higher in premiums each and every year once your term insurance ends at age 80. Even buying term insurance that ends beyond 80 still has the anxiety of "what if I out live my term insurance?" What if you have health issues at a time to buy more life insurance?

That is why whole life has a role instead of term. Term insurance is great for the vast majority of people with net worth that does not come close to triggering the estate taxes. But for those who have high net worth, would like to preserve it from being subject to estate taxes, and want to be assured of being covered with a death benefit regardless of later health, then permanent life insurance can accomplish that goal. The whole life policy has the benefit of a growing cash value which can be withdrawn while you are alive if you need it. The death benefit can increase too with time once the dividends paid to your cash value increases sufficiently.

If you are able to afford paying for a whole life $1 million death benefit in your mid-40s while in great health, the payments can be fixed for specific number of years.. Some policies have annual payments of 10 years and done. That means after 10 annual payments the cash value will grow to continue paying for all future costs of the initial $1 million policy. Most such policies grow cash value year after year such that the death benefit INCREASES as the years pass. You could end up with about $2.4 million in death benefit at age 80. That would cover your estate taxes.

But what if you don't end up having an estate of $16 million? What if your business or investments go sour? What if the net worth is way under the estate tax threshold? Well, your heirs get the $2.5 million death benefit, TAX FREE.

Of course you can have lower whole life death policy for lower cost, and supplement with term life insurance to age 80, etc. There are combinations to meet your ultimate financial needs.

So, instead of thinking of whole life (or any insurance product) as an insurance policy you hope you don't use (ie. fire insurance for your house, or car insurance), think of it as an investment strategy you will ultimately use to counter either estate taxes or business/investments that go sour over your life time. Whole life is counter measure Plan A if your net worth is well above the then current estate tax threshold or it is Plan B if your business/investments go sour over your life time.

Either way, whole life is there to play a significant financial role.
++++++++++++++++++++++++++++++++++++++++++++++++++

OK rich Fatwalleteers, chime in.



 

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FWjunkie2 (Dec. 26, 2016 @ 1:26a) |

It should be "What are pretty straightforward estate planning steps to prevent having to sell illiquid assets for estate... (more)

BostonOne (Dec. 26, 2016 @ 6:24a) |

And do we really care if you have to sell the illiquid assets?

What asset and why would the heirs want/need to keep it?

Fa... (more)

jerosen (Dec. 26, 2016 @ 12:15p) |

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What was the question?

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So what you are saying is whatever is in the whole life cash balance, it's not taxed as part of estate taxes (if you are over the limit) when you cash in while you are alive?

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Absolutely horrible idea and you will find that if you do link who this was “stolen and condensed” from that they are insurance associated. Almost nobody recommends WL who isn’t associated with the industry. Please use the search button. This has been discussed millions of times here at FW.

2nd let me clear up some of your misrepresentations. WL is NOT tax free. It is tax deferred and if you ever lapse or surrender (which happens almost all the time), any gains are taxed at INCOME rates and not the better long term capital gains rates.

WL has a very long history of decreasing dividends over the last 30 years. The guaranteed return on WL from a policy purchased today is below inflation on even the death benefit if the person dies an age reasonably close to their health rating (like 2% or lower). The cash value is even lower using the guaranteed column. Guaranty is as good as the company’s ability to pay. The illustrated is a death benefit in the mid 5% at this point but that assumes dividends don’t continue to go down. Guess what every WL company but 1 actually decreased dividends for 2017 as well. The 1 company just held the same as last year. So if you want to decrease your purchasing power then go for it.

WL is part of the estate so it too is subject to estate taxes even if held until death. You need to place it into an irrevocable trust to avoid this. Guess what anything placed into an irrevocable trust avoids estate taxes. So its very easy to do this instead of purchasing a very expensive WL policy.

You should also know that Trump’s plan (I doubt it will happen but since you used the ridiculous attempt of tax scare tactic) is to remove even the tax deferred nature of permanent insurance. So changes in tax laws will not necessarily benefit WL.

I also got news for you, stocks in a taxable account ALSO get a step up in basis at death. They are very likely to yield a much superior result over those multiple decades of your life. Those percentage points will compound and make a huge difference. Insurance companies primarily invest in bonds/treasuries, have huge costs and commissions and pass the rest on to the very few people who keep a WL in force until. (You do realize WL has been around for over a 100 years and the data from LIMRA, society of Actuaries, and others is that less than 20% actually even keep it in force until death?).

So WL has no financial role unless you need or want a permanent death benefit. Almost nobody needs it. If you want it, then you should realize that unless you die significantly premature to your health rating then you will very likely leave LESS money to your heirs. Also if you or your heirs want the money sooner, with WL you will have to take a loan. Guess what ALL LOANS in the US are tax free. WL loans can be very expensive as well and if you take too much and the policy lapses then you even pay income tax on the phantom gains. Again please use the search button.

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OP's advisor has very similar wording to this book - The Power of Zero: How to Get to the 0% Tax Bracket and Transform Your Retirement, by David McKnight

Thanks for posting, I'm interested in the opinions on this!

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unrivalled said:   So what you are saying is whatever is in the whole life cash balance, it's not taxed as part of estate taxes (if you are over the limit) when you cash in while you are alive?
  I left out the part about instructions to hold the ownership of the insurance policy in an irrevocable living trust to get the death benefit and cash value out of the estate.  Or you can have trusted adult offspring be the owner and beneficiary of the insurance policy instead of yourself.  As long as you don't own the policy, then the cash value and death benefits are outside of your estate. If the insurance policy is out of your estate then you do not have the right to withdraw from the cash value. The owner of the policy, or the trustee upon direction of from the beneficiaries may be able to withdraw the cash value.   But you are right, this is a an important aspect of structuring the ownership of a life insurance policy.  You cannot remove the IRAs and 401Ks from your estate, but you can structure a life insurance policy to be outside of your estate.  I'm picturing a life insurance policy outside of my estate is like giving away my money to someone (beneficiary) in a Roth-like product (cash value withdraws are tax free) in an amount of my choosing without limits (unlike the annual gift allowance of $14,000 per person per year), with the ultimate monetary feature of a death benefit payout too (also tax free)!! 

I'm not a lawyer or financial planner, so I have to defer to those who are.  

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dhodson said:   Absolutely horrible idea and you will find that if you do link who this was “stolen and condensed” from that they are insurance associated. Almost nobody recommends WL who isn’t associated with the industry. Please use the search button. This has been discussed millions of times here at FW.

2nd let me clear up some of your misrepresentations. WL is NOT tax free.  It is tax deferred and if you ever lapse or surrender (which happens almost all the time), any gains are taxed at INCOME rates and not the better long term capital gains rates.  REPLY:  Death benefit IS Tax Free. ex. $1 million dollar death benefit pays the beneficiaries $1 milliong dollars upon death, TAX FREE.   Cash Value is withdrawn as a loan thus is Tax Free. And actually, traditional IRA and 401K is tax deferred and all withdraws are taxed at INCOME tax rates and not the better long term capital gains rates!!  Think about that fact!  There are payment plans such as a fixed annual premium for 10 years and done so that you can plan for those payments properly and not let the policy lapse or surrender it.

WL has a very long history of decreasing dividends over the last 30 years. The guaranteed return on WL from a policy purchased today is below inflation on even the death benefit if the person dies an age reasonably close to their health rating (like 2% or lower). The cash value is even lower using the guaranteed column. Guaranty is as good as the company’s ability to pay. The illustrated is a death benefit in the mid 5% at this point but that assumes dividends don’t continue to go down. Guess what every WL company but 1 actually decreased dividends for 2017 as well. The 1 company just held the same as last year. So if you want to decrease your purchasing power then go for it.  REPLY:  Insurance companies invest in government treasuries.  Those bonds have paid very low rates lately, thus dividends have been low.  But interest rates are on the rise, thus dividends will ultimately rise.  Whether or not ANY investment beats inflation is always a concern.

WL is part of the estate so it too is subject to estate taxes even if held until death. You need to place it into an irrevocable trust to avoid this. Guess what anything placed into an irrevocable trust avoids estate taxes. So its very easy to do this instead of purchasing a very expensive WL policy.  REPLY:  Yes, an irrevocable trust is the best way to have your insurance policy so that the value is outside of your estate.  You can gift the irrevocable trust enough money to pay the insurance premiums.   But placing anything else you own in an irrevocable trust that exceeds the $14,000/year gift threshold will cause a dollar for dollar decrease in your estate tax threshold for future use.  Ex. if you put a rental property worth $2 million into an irrevocable trust or gift it to a family member outside of your estate, you have to decrease your estate tax threshold by $1,986,000. 

You should also know that Trump’s plan (I doubt it will happen but since you used the ridiculous attempt of tax scare tactic) is to remove even the tax deferred nature of permanent insurance. So changes in tax laws will not necessarily benefit WL.  REPLY: Agree.  Changes in tax laws will not necessarily benefit ANYONE.  Ex. Do you really think lowering corporate taxes will result in a worker getting paid more?  CEOs will take those profits to increase productivity (and pay themselves more).  That is double-speak for buying more machines so they can hire less benefit-expensive people.

I also got news for you, stocks in a taxable account ALSO get a step up in basis at death. They are very likely to yield a much superior result over those multiple decades of your life. Those percentage points will compound and make a huge difference. Insurance companies primarily invest in bonds/treasuries, have huge costs and commissions and pass the rest on to the very few people who keep a WL in force until. (You do realize WL has been around for over a 100 years and the data from LIMRA, society of Actuaries, and others is that less than 20% actually even keep it in force until death?).  REPLY: Stock and real estate DO get a step up in cost basis at death.  You are talking about the benefit of no capital gains taxes on the sale of the stock or real estate upon death because of the step up in cost basis at death.  BUT that step up cost basis value is the value used to calculate the estate taxes !!  If your stocks or real estate went up from $1 million initial cost basis to $16 million at age 80, you still have to pay estate taxes if you are above the estate taxes threshold.  If you don't have cash (or a life insurance policy that pays cash upon death), then your heirs will have to SELL those stocks or real estate to raise the cash to pay those estate taxes.  Thankfully, they can sell those stocks and real estate without having to pay capital gains tax... Gee, isn't the IRS government generous to not burden you with capital gains taxes to pay the estate taxes upon the death of a loved one? 

So WL has no financial role unless you need or want a permanent death benefit. Almost nobody needs it.  REPLY:  Agree.  Almost nobody needs it.  Only those with very high net worth, those who are concerned they will not qualify for life insurance due to poorer health when significantly older, and/or have maxed out on the other vehicles of tax free investing.   If you want it, then you should realize that unless you die significantly premature to your health rating then you will very likely leave LESS money to your heirs. Also if you or your heirs want the money sooner, with WL you will have to take a loan. Guess what ALL LOANS in the US are tax free. WL loans can be very expensive as well and if you take too much and the policy lapses then you even pay income tax on the phantom gains. Again please use the search button.   REPLY:  Agree. Those who embark on whole life, etc should not let the policy lapse.  There are policies that structure payment for a fixed number of years so that you can devote the proper amount of funds in your overall planning. I gave the example of a fixed 10 year and done plan.  It is pricey for some, but for others.... well, it is all relative. 

  

rated:
slappycakes said:   OP's advisor has very similar wording to this book - The Power of Zero: How to Get to the 0% Tax Bracket and Transform Your Retirement, by David McKnight

Thanks for posting, I'm interested in the opinions on this!

  Thanks for mentioning this book. I am converting traditional IRA and 401K to Roth IRA while my income tax rate is low.  I rather pay taxes on the seeds of investment than the harvest of investment.  It is likely similar in idea as that of Ed Slott, CPA.  Mr. Slott is a PBS TV speaker about using permanent life insurance product to manage your wealth.  He has some free YouTube videos that address the use of insurance.  He is a tax planning CPA and does NOT sell insurance.

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My only issue is how do I become a high net worth person?!!  BTW, Ed Slott, CPA, video clearly states life insurance death benefit is TAX FREE to beneficiaries.

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Hey, Jane Bryant Quinn even says life insurance products plays a role for high net worth people...

http://janebryantquinn.com/2009/11/when-to-buy-or-not-buy-life-i...

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Obviously you dont actually have a question and are here just to pump up WL.

WL is tax deferred. Just open up a policy and after 30 years when you have some small gains (but lost money due to inflation), surrender it and you will see that all gains are taxed as INCOME. The death benefit is INCOME tax free just like the step up basis on other items. ALL LOANS ARE TAX FREE. With WL what you are doing is getting a loan from the insurance company using the CSV as collateral. It is a mediocre to bad deal for you and great for them. Companies have poor loan provisions. If they have better loan provisions then guess what they also have lower dividends. They dont loan you an amount against the death benefit but just the current CSV so its zero risk to them. If you dont pay it back then hopefully you die before the loan collapses the policy and they just take it and the interest out of the death benefit.

You do realize that even a standard WL overfunded with out illustrate a 10 pay currently? You do realize you will get a lot less death benefit on the 10 pay and it can still collapse from loans if not paid back? You do realize that WL lags by many years when and if interest rates go up? You do realize that ULs came into existence because WL didnt keep pace with raising rates and people were getting crushed compared to other "fixed like" vehicles. The insurance industry decided to reinvest itself. When that didnt work they tried VULS and now IULs. You should google unmet promises life insurance.


Its substantially better to just put whatever fixed you want into tax protected. Buy stocks in taxable for the step up in basis at death, better returns, ability to tax loss harvest, no need for loans, and greatly better return that compounds over 5-6 decades of life. Your loved ones also dont have to wish for your death in order to get the money without loans.

Since you dont actually have a question, Please give us all a christmas present and take your WL sales pitch with you. Please make your new years resolution on how to use the search button.

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FWjunkie2 said:   Hey, Jane Bryant Quinn even says life insurance products plays a role for high net worth people...

http://janebryantquinn.com/2009/11/when-to-buy-or-not-buy-life-i...

Yes, she says you need life insurance. She does not say you need whole life insurance.

There are so many logical errors and misrepresentations in your post that it's not even worth my time pointing them out. The only time perm life insurance makes sense is you want or need a permanent death benefit. Most high net worth folks do not need a permanent death benefit because they already have enough money to support themselves and their heirs. They may need term life insurance to protect their human capital while they are in their prime earning years.

You are right that someone with a very illiquid estate subject to state or federal estate taxes may want a permanent death benefit. That would be a relatively rare case but for instance, think about someone who (somehow) owns exactly one asset: a $20 million apartment building with no debt and no other assets to speak of: no cash, no stock investments, no retirement accounts. And he has a child he wants to leave the apartment building to. When he dies, he will owe estate tax on the $20 million minus his exemption. Without cash to pay the tax bill, he could be forced to liquidate the building. A permanent death benefit could be useful in this case. But you can see this is an unusual case. And furthermore, it's very possible that a qualified estate attorney could propose a more cost-effective way to achieve the same result: transfer of the apartment building to his heir. If I were in this position, I certainly wouldn't go out and buy whole life insurance without talking with my estate planning attorney first (not an insurance salesperson).

For those of us in the 'mass affluent' category, say $1-$10 million net worth (assuming married, so no federal estate taxes), with a typical mix of real estate, taxable liquid investments, retirement accounts, etc, there is typically no need for permanent life insurance. I have term life insurance (3 policies in fact) to protect my human capital for my family's benefit; and my wife has 2 policies to protect hers; but neither of us relies on whole life insurance.

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This should be entertaining

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I am in the "mass affluent" group that psychtobe references, and not only do not have whole life, but I decided a couple of years ago (age roughly 60), and decided I no longer need term insurance

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OP, since most of your rationale for whole life insurance and its ilk concerns the estate tax, let's examine that.  

First, about 9,500 Federal estate tax returns were filed for people who died in 2011, of which only 4,400 were taxable.  This is less than 1 in 500 of the 2.5 million people who died in that year.  (Note that less than half of them were taxable - this is partly because for some it makes sense to file a Federal estate tax form to handle certain expenses that could be placed on either the decedent's final income tax return OR the estate tax return, filing an estate tax return gives one a choice - to some degree - of estate valuation dates, and a few other reasons.)  

For decedents in 2015 (with an exemption of $5.43 million), the Tax Policy Center estimated there will be only about 10,800 estate tax returns filed, of which 5,300 will be taxable.  I can't imagine that if the laws remain the same, figures for 2016 and later will be much different.  So, very few taxpayers are affected.

But second, the chances that the Federal estate tax will actually be eliminated is in fact greater than it has been in many years - =11.0pthttp://www.wsj.com/articles/the-estate-tax-is-at-deaths-door-with-trump-presidency-1481294198 From this article, "Both President-elect Donald Trump and Republicans in the House of Representatives have issued proposals to end the tax, and Senate Finance Committee Chairman Orrin Hatch (R., Utah) has opposed it as well. ... ".  That's not a certainty, of course, but it is the highest probability of elimination in some time.

Of course some states have an estate or inheritance tax as well, but several of these are keyed to the federal tax.  Also, the trend in recent years has been for states to reduce or eliminate these - New Jersey is the most recent.  With Republicans controlling a majority of state legislatures and of governorships, that trend seems unlikely to change.  (Don't mistake this for a political statement on my part - it's merely a recognition that Republicans "tend" to do certain things and not others, and they happen to currently be in control in more states than not.)

So in whole life insurance you have a very flawed, expensive and illiquid "solution", for not much of a problem.  

Even if it turns out that the Federal estate tax remains, or if you live in a state that has an estate or inheritance tax not keyed to the Federal one - there are many other solutions for avoiding it if you're truly in danger.  There are GRAT trusts, various kinds of TERM life insurance placed in irrevocable trusts, etc., etc.  Too many to list.  Please do some research, unless you are just some salesman - in that case, please just go away.

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I don't want to die the richest man in the grave yard. Spend the money and don't worry about estate taxes.

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The ass-hats (AlwaysWrite, MrKlick, psychtobe) that "red" marked this thread to keep it hidden are doing FWF a disservice.

Not too long ago, FWF was a often a source for both cutting-edge and sometimes foolish ideas for financial improvement. Several years ago, people started wondering why those deals stopped showing up as often and why some of the posters responsible for those deals left FWF.

Red voting topics that you don't understand is why.

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Uh no this thread deserves red

It isn't a good deal and I understand the product very well.

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OK. I concede. There is no evidence of anyone saying the permanent life insurance product has worked for them through personal experience. Nothing more to see here folks, move along.

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psychtobe said:   
FWjunkie2 said:   Hey, Jane Bryant Quinn even says life insurance products plays a role for high net worth people...

http://janebryantquinn.com/2009/11/when-to-buy-or-not-buy-life-i...

Yes, she says you need life insurance. She does not say you need whole life insurance. REPLY: She does say "cash value" insurance, so that does not mean term insurance. So does author and tax specialist Ed Slott, CPA.  So does author David McKight. 
There are so many logical errors and misrepresentations in your post that it's not even worth my time pointing them out. The only time perm life insurance makes sense is you want or need a permanent death benefit. Most high net worth folks do not need a permanent death benefit because they already have enough money to support themselves and their heirs. They may need term life insurance to protect their human capital while they are in their prime earning years.

You are right that someone with a very illiquid estate subject to state or federal estate taxes may want a permanent death benefit. That would be a relatively rare case but for instance, think about someone who (somehow) owns exactly one asset: a $20 million apartment building with no debt and no other assets to speak of: no cash, no stock investments, no retirement accounts. And he has a child he wants to leave the apartment building to. When he dies, he will owe estate tax on the $20 million minus his exemption. Without cash to pay the tax bill, he could be forced to liquidate the building. A permanent death benefit could be useful in this case. But you can see this is an unusual case. And furthermore, it's very possible that a qualified estate attorney could propose a more cost-effective way to achieve the same result: transfer of the apartment building to his heir. If I were in this position, I certainly wouldn't go out and buy whole life insurance without talking with my estate planning attorney first (not an insurance salesperson).

For those of us in the 'mass affluent' category, say $1-$10 million net worth (assuming married, so no federal estate taxes), with a typical mix of real estate, taxable liquid investments, retirement accounts, etc, there is typically no need for permanent life insurance. I have term life insurance (3 policies in fact) to protect my human capital for my family's benefit; and my wife has 2 policies to protect hers; but neither of us relies on whole life insurance.

  

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At least 2 of those people are industry associated. I didn't look up the other. Of course they are going to recommend it. The overwhelming evidence is against the purchase unless you need or want a permanent death benefit. Why don't you please use the search button and read the multiple WL threads here. They pretty much answer every question.

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slappycakes said:   Not too long ago, FWF was a often a source for both cutting-edge and sometimes foolish ideas for financial improvement.
Well, this thread is one of those.

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slappycakes said:   The ass-hats (AlwaysWrite, MrKlick, psychtobe) that "red" marked this thread to keep it hidden are doing FWF a disservice.

Not too long ago, FWF was a often a source for both cutting-edge and sometimes foolish ideas for financial improvement. Several years ago, people started wondering why those deals stopped showing up as often and why some of the posters responsible for those deals left FWF.

Red voting topics that you don't understand is why.

  WTF?  How many fails can one put in a single post?

  • They understood it well and pointed out the BS, for that trouble you called them names? 
  • Not to mention this same stuff has been discussed before and there's no new material here.
  • FWF past topic are still good info source, if you know how to search. 
  • Lots reasons people moves on for many reasons.  We got some really knowledgeable folks in different areas.  You are not one of those.

rated:
How about giving others the opportunity to learn? Making a post disappear by redding stops that from happening.

I was interested to see if this worked into a discussion on Life Insurance Retirement Plans, but it won't.

The OP gave up and stopped posting about it and so will I.

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Negatively rated threads are only removed from view if you set up the filter to do so.  I think the default is "normal".  I don't filter by rating because I don't want to miss out on a good train wreck thread.

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slappycakes said:   How about giving others the opportunity to learn? Making a post disappear by redding stops that from happening.

I was interested to see if this worked into a discussion on Life Insurance Retirement Plans, but it won't.

The OP gave up and stopped posting about it and so will I.


Let me tell you from personal experience WL makes a horrible retirement plan. The poor return is compounded by the costs of the loans.

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Agree with Dhodson that WL makes a horrible retirement plan... Using the cash value could put you on the path of an imploding policy. But I'm going to give this topic one more stab at the benefits of permanent life insurance for the purpose of estate planning... again, for those people with high net worth that will be subject to estate taxes upon death. These are not people that plan to tap the cash value of the policy. They will not let the annual payments lapse either. They want a death benefit as explained in the following Fidelity article...

https://www.fidelity.com/viewpoints/personal-finance/can-life-insurance-help

I still concede that permanent life insurance is likely not good for 99+% of people. Likely why we don't have any replies that permanent life is any good on this thread. Really rich people don't bother commenting on Fatwallet.

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FWjunkie2 said:   Agree with Dhodson that WL makes a horrible retirement plan... Using the cash value could put you on the path of an imploding policy. But I'm going to give this topic one more stab at the benefits of permanent life insurance for the purpose of estate planning... again, for those people with high net worth that will be subject to estate taxes upon death. These are not people that plan to tap the cash value of the policy. They will not let the annual payments lapse either. They want a death benefit as explained in the following Fidelity article...

https://www.fidelity.com/viewpoints/personal-finance/can-life-insurance-help 

I still concede that permanent life insurance is likely not good for 99+% of people. Likely why we don't have any replies that permanent life is any good on this thread. Really rich people don't bother commenting on Fatwallet.

I have more money than 99+% of people and I still don't think permanent life insurance is good for me. The reasons given in the Fidelity article were very specific (i.e. wanting to make cash payments for taxes on the estate without having to sell assets). Some pretty straightforward estate planning can prevent that for a lot less money with a ton more flexibility.

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Rich people get taken to the cleaners all the time by "financial advisors" just like not rich.

Even for estate planning 99% of the time you are better with term plus investing the difference. There is a very very small window where right after term ends that WL wound do better but it's small.

Most people who are rich will just have less money to use for estate taxes if they use WL. That's just the simple truth. Thus you better hope when you purchase WL that your estate tax bill isn't higher than you predicted when you purchased the policy.

If you want the permanent death benefit then go for it but it is most of the time a poor decision. The best chance you have for a good return is IF the insurance company seriously mis rates you and thinks you are super healthy and will live beyond average and are wrong.

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FWjunkie2 said:   Agree with Dhodson that WL makes a horrible retirement plan... Using the cash value could put you on the path of an imploding policy. But I'm going to give this topic one more stab at the benefits of permanent life insurance for the purpose of estate planning... again, for those people with high net worth that will be subject to estate taxes upon death. These are not people that plan to tap the cash value of the policy. They will not let the annual payments lapse either. They want a death benefit as explained in the following Fidelity article...

https://www.fidelity.com/viewpoints/personal-finance/can-life-insurance-help 

I still concede that permanent life insurance is likely not good for 99+% of people. Likely why we don't have any replies that permanent life is any good on this thread. Really rich people don't bother commenting on Fatwallet.

  I'm subject to (state) estate taxes and do not have a permanent life insurance policy. When I die, my executor will use the liquid assets in my estate to pay any estate taxes. My net worth is >95% liquid. There will not be any need for life insurance proceeds to pay the taxes.

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You will also have more money available but I'd recommend giving away while alive.

This way you can get some joy from your actions. Hard to feel joy from the grave.

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 I have more money than 99+% of people and I still don't think permanent life insurance is good for me. The reasons given in the Fidelity article were very specific (i.e. wanting to make cash payments for taxes on the estate without having to sell assets). Some pretty straightforward estate planning can prevent that for a lot less money with a ton more flexibility.

That is the thread I should have started:  "What are pretty straight forward estate planning steps to prevent having to sell assets for estate taxes?"  This cuts to the chase for solutions other than permanent life insurance.

Ok. Ok.  I'll just google it.  

    

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FWjunkie2 said:   
 I have more money than 99+% of people and I still don't think permanent life insurance is good for me. The reasons given in the Fidelity article were very specific (i.e. wanting to make cash payments for taxes on the estate without having to sell assets). Some pretty straightforward estate planning can prevent that for a lot less money with a ton more flexibility.

That is the thread I should have started:  "What are pretty straight forward estate planning steps to prevent having to sell assets for estate taxes?"  This cuts to the chase for solutions other than permanent life insurance.

Ok. Ok.  I'll just google it.  

    

It should be "What are pretty straightforward estate planning steps to prevent having to sell illiquid assets for estate taxes?" I don't care if my executor has to sell my liquid investments to pay estate taxes.

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BostonOne said:   
FWjunkie2 said:   
 I have more money than 99+% of people and I still don't think permanent life insurance is good for me. The reasons given in the Fidelity article were very specific (i.e. wanting to make cash payments for taxes on the estate without having to sell assets). Some pretty straightforward estate planning can prevent that for a lot less money with a ton more flexibility.

That is the thread I should have started:  "What are pretty straight forward estate planning steps to prevent having to sell assets for estate taxes?"  This cuts to the chase for solutions other than permanent life insurance.

Ok. Ok.  I'll just google it.  

    

It should be "What are pretty straightforward estate planning steps to prevent having to sell illiquid assets for estate taxes?" I don't care if my executor has to sell my liquid investments to pay estate taxes.

  
And do we really care if you have to sell the illiquid assets?

What asset and why would the heirs want/need to keep it?

Family farms already have protections and I don't think heirs often keep the farm intact anyway in reality.  
Small businesses?  I think they have some protections too and "small" is relative.   
 

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