@@shayl0tus hard to say, it's different every where you go. Nothing simple about the insurance game. You have to do your due diligence and get quotes, figure out what debt you have that will be left to family, figure out the cost of living month to month for your family after you pass away figure out cost for schooling for your childs education like colleges how much that would be for a 4 year thing figure how much it'll costs to bury or burn you figure the cost of the get together with food services things like that, figure out your monthly spending habits as a whole family with you included and take an average from the year and then make sure when you die that can be replaced. My situation I am the sole provider I need to make sure my wife and children are set
@@shayl0tus the rating is based on your lifestyle, medical history or what kind of life insurance you have and for how long you are paying for. I teach all kinds.
Lately, I've been contemplating retirement, uncertain whether my 401(k) and IRA will ensure a secure future. I've also invested $800K in the stock market, experiencing fluctuations without substantial gains.
Using a 401(k) or IRA is a valuable strategy for retirement planning, providing potential savings growth and tax advantages. While the stock market is promising, expert guidance is essential for effective portfOlio management
Opting for an invest-ment advisr is currently the optimal approach for navigating the stock market, particularly for those nearing retirement. I've been consulting with a coach for a while, and my portfOlio has surged by 45% since Q2.
I Researched her credentials and found she possesses over a decade of experience and serves as a value through different resource for individuals seeking guidance in navigating the financial market.
I think investors should always put their cash to work, especially In 2025, we'll start to see more market diversification. I'm hoping to invest about $350k of my savings in stocks against next year. Hope to make millions in 2025
Since risk is at an all-time high right now, perhaps you should be a little more patient and return when it has decreased. Alternatively, you can consult a trained financial expert for strategy.
Yes true, I have been in touch with a brokerage Advisor. With an initial starting reserve of $80k, my advisor chooses the entry and exit commands for my portfolio, which has grown to approximately $550k.
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Chris Invests - Personal Finance Videos I didn’t know that. I learned that today. I only have 250k and my husband earns 150 a year so it’s not much I guess in comparison.
The modality of your voice and the speed made this video much comprehendible, i could follow you along the way round of the video... I received a message from a recruiting manager of an insurance company so searched on to have more knowledge with regards to it, kudos for the clear content 🙏
I took a class for life insurance to be primerica agent. Class was so fast and I couldn’t catch all so search for it and found you. Thank you for making it clear in 10 mins.
I went with 35years term with living benefits at 38$ a month & 20$ a month for 200k Accidental D&D. I’m turning 27 and I got it when I was 25. The way I look at it is JUST IN CASE since I have a daughter and son to worry about.
From where I’m from our whole life plans are limited pay (which means you pay for a limited number of years 10,15,20) and still get covered for life compared to a term in which yes you do choose your term (10,20 years) however it doesn’t cover u for life. In which is akin to renting a house vs buying a house. Now worse case scenario is when ur term plans comes to end (your renewal obviously sky rockets ) and the very worst..is you don’t renew and something happens.. So i always believe its best to have both to complement each other ...my humble opinion that is. Cheers
What a horrible example you gave. Whole Life cost at least 20 times more in premiums than term. Plus, when you die, the insurance company KEEPS the cash value that you've been paying in all these years and only pays the death benefit. Sorry, scammer. Try again.
You are better off financially getting term life for 30 years until about your expected retirement age. Invest the rest (difference in what you would have paid for whole) and by the time the term life expires, you will be "self insured" and will no longer need life insurance.
Probably smart to get Term life when you hit 40-45 and get a 35 year .. if that’s in the 20-40 dollar range it’s worth every penny.. and now eat whatever you want if you make it past 80 god bless 😂 but then I would also look into a cheap whole life to at least leave something behind
During a bear market, the headlines will focus on negative news, whether it's declining economic growth, geopolitical upheaval, cultural and legal turmoil, or some combination of all three. I listened to a podcast of someone that grew his reserve from $120k to almost $460k during this Red season, can you share tips on how to make such aggressive proceeds in short periods?
I like how you explained the term vs whole life insurance . At the begging I thought you were one of the whole life sales guys who try to paint the on how whole life is good but I am glad I listened to you. It was very clear and honest. Thank you. We need more people like you that will tell it like it is .
You are correct - he's not biased toward whole life. He is, in fact, biased toward term. Just as bad, but just in the other direction. Sounds like you're on the term life team - good for you. If you want an unbiased point of view, let me know.
This guy is so wrong its not even funny he should have his licensed taken. You will pay less for a 20 pay whole life than you will for a 30 year term and you still get to keep the coverage.
The problem is there's no hidden information with these types of policies you just have to ask. Whole life builds cash value whether you want to use it or not. The biggest value is that it's permanent and it locks in your age and health. If you never touch the cash value your coverage is worth the full value from the day you are approved to the day you die
MAN, glad when you said "sponsored video" you didn't follow it up with a life insurance company pitch 😂 Do your thing man, make that ad revenue money!!
Good presentation. But let me clear here for general public in layman language that term policy is for specific purpose which vanish every year like for death coverage or hospitalization cost and premium is an expense here not saving, which increase as age grows. This policy usually cover in group insurance by employers for employees. When employee leave job this policy closed. While whole life policy is for family financial protection and investment. Its benefits enjoy during life time and on death for example children's higher education or marriage, retirement, hospitalization, buying property, jobless period in addition to family financial protection in case of disease, disability or death. Here premium is constant and is long term saving with good return. SO WHOLE LIFE POLICY IS NECESSARY FOR EVERY WISE FAMILY AND FAMILY BUSINESS PERSON. Note My above explanation is on Pakistan perspective not USA. I suggest all Pakistani Americans to get efu Takaful Plan from Pakistan to enjoy multiple benefits.
I sell big Whole Life policies to a small segment of the economy. It's a very niche product which adds huge value to people who use it properly. If purchased under false pretenses -or- if used inappropriately, it can easily be a terrible waste of money. It depends on how it's positioned. Transparently: there isn't any vehicle in the US tax code that is efficient for everything. Otherwise, everyone would only use that hypothetical vehicle. Does my rationale make sense?
👌I hit the subscribe button right after watching this video. I'm 46. I think that I will go with the "term life insurance" I will save the video so that I could watch it a few more times before making that decision. Thanks a lot!🙏❤
Marko, I can’t thank you enough. I have 3 kids and been thinking a lot about something happening to me and leaving my kids with a financial burden, it’s not cheap to die. With that being said thank you for providing this education to people like myself I appreciate you, you are making a difference.
This video was amazing. It’s explained everything that I needed to know beautifully. Simple, non-bias , and straight to the point. I definitely need to rethink my policies. Thank you so much for this.
ive been looking at dropping our whole life insurance policy for a term policy and then invest the left over into my current IRA and this has helped make the decision clear. very well done and thank you!
while whole life truly does suck, I wouldn't cancel it until your term life policy is fully active because the application process can take a few weeks depending on the company you go with. It's not very likely to happen, but you'd be hating yourself if something (heaven forbid) tragic happened to you or your family.
Permanent insurance is great product until you have the cash flow and the income to do it. First, make sure that you're contributing to everything that you can where you're going to have tax advantages like maximizing a Roth IRA and if your employer offers matched 401k, max that out and if you have a death benefit need, go with term. Then after all that and you still have cash flow left to invest for the long term and want to grow your tax-deferred and safe dollar segment then you go whole life.
Ryan Burt - What are your thoughts on TAX FREE WEALTH & LIFE INSURANCE ?!💰🧠💸 •CASH VALUE - (E.I.U.L.) & (M.F.T.A.) ARE SACRED FINANCIAL COWS; THAT ARE PROTECTED, BY THE IRS TAX CODE CITATIONS: * The Tefra Act of 1982 - 72(e) , * The Defra Act of 1984 - (7702) , * & The Tamra Act of 1988 - 101(a) . These acts; allow one to ACCUMULATE, ACCESS, & TRANSFER their money TAX FREE. 😉🤙🙂 . As ADVANCED MARKET & SOPHISTICATED life insurance agents; we are suppose to help show people, how to Make, Protect and Move their money from UNSAFE places, such as (401k's, 403b's, TSP’s, Pensions, Stocks, Mutual Funds, Cd's, IRA's, Social Security, etc..) Which are all exposed to the volatility risks of the stock market, inflation and Taxes. 😬 . And Help place them Into SAFE places, such as Life Insurance; giving you protection from the stock market & a guaranteed Compounding Interest rate of return on your money! (TAX FREE!!!)😉 with, the 0-3% GUARANTEED MINIMUM as a floor protecting you from financial devastation! (COVID-19) . So, when the stock market corrects itself again (Crashes) as it does on average, every 7-10 years. (the last one being, the 2008 housing bubble burst.) Your money and assets, along with your family, will all be protected in the event of that crash; due to the Guarantee Protection of the 0-3% as a floor, Preventing you from losing your money! . LIFE INSURANCE = SAVINGS ACCOUNT?! . With banks giving (1%) interest back and inflation being at (3.5%) plus, taxes at (1.5%) = a total of (5%) against your $ By Default, your losing (4%) of your money every year just by having it in the bank! . HOW MUCH LIFE INSURANCE DO WE NEED?! 🤔😀 (EXAMPLE): (apply the D.I.M.E. Method in order to help calculate, exactly how much Insurance is needed.) . Debts (all debts, Credit cards, etc..) Income x(10) or x(20) years Mortgage Education x(# of children) $60k per child . Add up the total and that's your Life Insurance necessity. . 💥THE POWER OF LIFE INSURANCE💥 Did you know?! After the Collapse of the 2008 housing market bubble, a total of $5 TRILLION DOLLARS in Pension funds, 401k’s, Real Estate Values, & Bonds, just up and Disappeared?!😳🤬🤯 Can you imagine that?! . Just how bad was this collapse?! 8.8 MILLION people lost their jobs; and 6 MILLION people lost their homes, and that’s just in the UNITED STATES!” 🤭😱 ($19.2 TRILLION DOLLARS 🌎 WORLD WIDE!) . THINK 2008 WAS BAD; WAIT UNTIL, YOU SEE WHATS COMING?! THE EVERYTHING BUBBLE?!!😶 If these crashes / collapses / Market corrections, happen so often; this means, we may be facing another one here in the near future, right?! . 🔥THE PENSION CRISIS🔥🏦 . If you think you can still retire with a pension plan; then, you may just be in for a rude awakening. 👀 Allow me to share with you why you should begin to rely on yourself & not the government. . Most Americans are now concerned; that company pension plans & Social Security, will not be adequate in providing them with enough income in their retirement years. Their concerns are warranted; and rightfully, so! . According to an article on barrons.com; Social Security benefits, will start to exceed the programs cost in 2020, & the program will deplete it’s $2.9 Trillion reserve fund in 2035. . The reserves will run out a little later than what the trustees of Social Security & Medicare projected last year; however, the bottom line is still the same. The programs deficits appear vast; making it clear, that the public should expect smaller benefits, higher taxes or more than likely, “both!” 😲 . Over the past 40 years, Congress has approved increasingly beneficial retirement options, designed to encourage Americans to save on their own, for their golden years. . Meanwhile; no congressmen, will dare utter the fact that with mine blowing numbers of TRILLIONS & TRILLIONS of unfunded obligations; such as, Social Security & Medicare, which have now become described by many as a Ponzi scheme, that can never be fixed. . Congress has covered itself w/ retirement legislation. So, much so, that sometime in the near future; 10 to 20 years from now, when the government system inevitably breaks; congress, The institution will be able to shake it’s finger at the American people, and point the finger back to 401(k)s, IRAs, Roth IRA‘s, & the similar in between of products they have created. . The message will be, that the benevolent Congress gave the masses a way to save for their own retirement, years ago! 😯😶 . What will not be addressed, is why did the government continue to take 15.3% in PAYROLL TAXES from workers & businesses for a failed system; However, that will be an issue between you & the ballot box. . The point here is; that to provide for your own retirement is prudent, as it is in all facets of life, to rely on yourself & not the government. . I hope I was able to help.. Much Love ❤. (Instagram) 💪🏼@TheFinancial_FitGuy . Remember; He who forgets the past, is bound to repeat it!” 😳
@@danielkicksable That entire last 3rd seems like a scare tactic to sell life insurance. None of this explained to me how life insurance will protect people from the incoming pension crisis. I mean unless if the stress of the pension crisis and your other account failing end up kill you from a heart attack. but seriously where and how do life insurance companies insure 0-3% interest on the cash value. maybe I misunderstood this part or one of the acts/bills/laws you cited protect or forcibly guarantee the"Guarantee Protection of the 0-3% as a floor" you mention. But then you mention the government system will inevitably break so again, what makes life insurance such a glorious shield to protect your wealth, what exactly protects life insurance from what will kill everything else? I'm honestly asking to become informed as I don't know if I should keep my Whole life or not but you're defensive comment as a sales rep does not feel very informative
Eric Arosemena - firstly; I am not a salesman, I am a state appointed field underwriter. Big difference. If you’d like; I’d be more than happy to educate you. Unfortunately, 9 out of 10 people, will not know this information. In which, I can understand your lack of knowledge in this field. After all, it’s not your fault, school does not teach this subjects or financial strategies I’m referring to.
There are a couple problems. First is that it is marketed as an investment product as well as an insurance product. The second, and more important to remember, is that it does a lousy job at both. I was unfortunate to buy into a whole life policy but fortunate enough to get out after eight years. In those eight years, my return was around NEGATIVE 13%. Investing the premiums in a term life policy and the difference in a Roth IRA will do your beneficiaries far more good. Your "financial advisor" loves whole life because the commissions and fees are so lucrative for them and their firm.
Thank you so much! I've listened to a few videos on this topic and I was starting to think am dumb for not understanding but after your video, it all became clear. Am subscribed!
Damn recently got my whole life policy they say i have 10 days to cancel. Now its all here on paper it doesn't seem as good as i thought. Thank you for the video explantaion. They caught me on a happy day
Whole Life Insurance is the payday loan business targeted towards the middle class. Awful financial product, stay away from whole life, universal life and variable life insurance. All of these are legally allowed to be sold, and are designed to make the insurance companies lots of profit. I used to work in accounting for a big insurance company, and whole/universal/variable were our most profitable. Term life is the way to go! You should get a Term Life insurance policy if you need life insurance. Be blessed!
❤❤ Even here in Kenya I still don't understand why you don't get back your money on term life insurance policy at it's maturity instead you are told to renew your premium by extending and buying another premium,in other words on top of what you paid for nothing, you add another amount
@@astroman30 - I’m sorry your brain can not comprehend this so called “ Boring Thesis” If money & Tax free wealth is boring to you; then, I guess I’m bored in an abundance of wealth. 😉 which makes me concerned for you and your demising financial future eroding away. I really do hope you change your horrible mindset; because, it is definitely skewed in the wrong direction, for your sake anyway. 👌
You did a great jobs explaining the difference. If you get to 60 and you have to renew your Term insurance policy, that means for the past 30 years you didn't make any money off of your investments, which is almosts crazy to think of, because all you had to do was put in the maximum amount for a roth IRA for 30 years and you would be a millionaire.
@@khy7672 Then my wife will be well off, because my current Term policy will pay her exactly $500,000. I think she'll be well off along with our real estate investments, Roth IRA's and 3 pensions. If I were to die after 60, then she'd be well off also. So not sure what your question is?
classic dont judge a book by its cover, u are in image last person I expect to teach me about life insurance, an yet u wer super efficient an education thanku
Sold insurance, whole life commissions were nice to sell. There are different life insurance policies that tie into the market to give you a better return. More complex for people to understand so they’re not as popular. I myself have a term life policy. And some companies will let you buy another term policy at the same rate. Good stuff though!
Yea, I believe you can buy 2 life insurance policies in 1 yr, so you can have multiple, but like the guy said in the video, I guess it just gets more expensive to get term life the older you get, due to higher possibility of death
No I completely understand life insurance. But to sell someone an expensive cash value policy when you own term and invest the difference yourself? That should tell you everything you need to know right there. Cash value policies "sound good" and conceptionally make sense, but they are a nightmare contractionally. Clients always end up under insured and over charged! But hey at least the agent made a fat commission instead of doing what is right for the consumer
@@JeremyMcTaggart That's right - whole life insurance is a complete ripoff. You could buy a 25 year term life policy and with the savings compared to whole life insurance invest in an SP500 index fund. For a $500,000 whole life insurance policy on average the insurance company is making $2,500,000 by investing all your premiums over 30 to 40 years before you die. Sure some people will die earlier than average and the insurance company will lose a little but for those that live to average or above average, the insurance company will be only paying out about 20% of what they made by investing the money. Also, with super high premiums with whole life policies if you can't make the monthly payment at any time for example due to losing your job, you will lose the policy. Every dollar invested in an SP500 index fund will grow to about $30 after 30 years. Most people don't realize how this makes such an impact. Also, if somehow everyone died early (far less than average life expectancy) and the insurance company did not have enough money to pay out claims, they could just declare bankruptcy.
Thank you for explaining.i got my whole life (guaranteed) from my friend.I'd been paying my premium for almost 12 yrs.now.i didn't understand much about this term but now that you explain very well the difference,i now realize i've wasted my money for my whole life insurance.
The only reason you should get a guaranteed issue whole life policy is if your health rating is too poor to get a good dividend paying one. If that was the case, you probably wouldn’t have qualified for term insurance anyway. If you have good health, I would consider doing an exchange to a mutual company that pays good dividends. Not even all mutual companies have the same dividend structure. Shop around.
This video was extremely helpful! 😊 It's great to finally understand the differences between term and whole life insurance. Thank you for breaking it down so clearly! 🙌
He made a lot of statements not correct. Like term pay out never had to be lump sum and it can set how to be payout like you hitting the lottery. The reason for this is that can collect interest from the insurance while the beneficiary is alive. It is never about term vs whole life. It really depends on what client need and want. Can they fit to them
Marko - The amount of financial advice you lend for free is phenomenal! I've learnt so much from you and I feel its still tip of the iceberg.. In next life, please become my brother! :D :D
My boss was a very wealthy & financially successful man. He told me : " Anyone who comes to you to sell you something is there for THEIR benefit, not yours."
Would your boss, who's very wealthy, say there are any examples where you're sold something and it's to the benefit of the buyer and seller? If not, seems like an odd, cynical statement.
How’d it go? I am in the industry now, and always trying to hop on here to get the pros and cons people are looking at it from UA-camrs versus financial planners.
@@Funnymike1026 happy to say I passed my exam on the 3rd try. (>70% pass it on the first try so don’t beat yourself up). I’ve been working in my office for about 3 weeks now and I’m a part time student so the hours are pretty lenient. I work under an agent and it’s definitely one of those careers where you get what you give. (The more effort and dedication the better results). I’ve actually recommended this career to many people since. Good luck
@@paulstutsman Hard to say, I’d say it’s about a quarter of the types of polices mixed together. Honestly my test had a lot on health insurance more than anything
I have a friend trying to convince me to get whole life. I've now been researching for about a week and all signs point to no. I think this video best described why it's not the "steal" they try to convince you it is. Big Thanks!
I had a whole life for $45 monthly for 3years, I met a primeamerica and he was arguing that the term was better but he was offering me the same coverage for $109 per month!! No brainer!!!
Because they don't believe any other life insurance aside from what they offer. Chances are, the company is happier because it's 1 out of 400 chance a person will die. They keep the premium as long as you're paying for it. They believe in what they call buy term and invest the difference. People only buy term if they see it fits what they need and for people who can only afford to buy cheap policies but it becomes expensive over time.
Marco great video!! Just got myself a 30 year "return of premium" term policy. Cheaper than whole life have 3 options in 30 years. Was able to get more coverage for less money and I don't feel like Im losing it since technically my premiums can be returned to me if I choose. 1. Take the cash back "return of premiums" I have paid 2. Convert it in to a whole lofe policy 3. Add an additional 11 years to my term policy. Just wanted to share my recent experience shopping for life insurance. Thanks for your content, recently found you and am enjoying your perspective!
Correct you got term ,but until when? 20 or 30 yrs. After that your insurance lapsed. When you get older you need insurance because we get sick like stroke, cancer etc. He explained about whole life with fixed interest, Now we have IUL, Indexed universal life. You can maximize it. There is option A and option B. In option A you beneficiary will get the face amount only not the cash value, but in option B your beneficiary will get cash value plus face amount. Not only that. IUL, you dont need to die, if you get sick like Terminal illness, critical, and chronic you can use your insurance. That's what we call life insurance with living benefits. If you want to know more about it ask ne how?
Rose Dilla yes term ends but depending on the age you can convert to whole life if needed or requalify for another term up to 20-30yrs again at a lower death benefit if you still healthy & still pay way less than the CV. Choosing option B means guess what, higher monthly premium. Why do all that when you can just invest that money yourself & it’s yours & become self insured, granted with discipline & if agents do their job we can help the client reach that goal. Why save for that money to only go back to the insurance company when your family can have both, term insurance also has living benefits also, most of the companies I write for have living benefits on their term critical/chronic illness up to 90% of the death benefit death does not have to be in the picture, terminal illness up to 100%.
If you have a finance degree you should talk about "net present value" of money. Simple interest vs. Compound interest. Mortgage acceleration through lump sum payments to reduce principle. I'm just trying to help you clarify terms and ideas for you viewers. You should really come out with an additional video on equity based "modified premium whole life products" I get the notion of buying term and investing the difference. I was doing that since 1979. The problem is most people do not invest the difference. People who make a lot of money can use life insurance in creative ways to protect large amounts of cash value on a tax-deferred status. BTW you are on track with most of advice. the 'four corners' are also called the 'Ben Franklin' close or comparison. Example: "Whole Life = my policy pays weather you live, die, or quit. Buying Term insurance is like flushing money down the toilet" I have heard all the arguments. "Dividends" on a whole life insurance policy are NOT "dividends" but rather a refund of an over payment on your life insurance policy. Look it up. FTC and IRS ruling in the 1970s.
Thanks Richard. I'm in the works of a NPV video but I honestly don't think people care about that subject. I'll still end up making it though. Thanks for your comment
Richard Surckla Or you could prepay the mortgage with the thousands you saved ny not buying whole life and save even more thousands in mortgage interest.
@@mirandaquinnn the insurance companies make it confusing on purpose hoping that the smoke and mirrors will make you confused enough to buy what you don't need. Just ask for the amount of coverage and the term you want and don't listen to the sales pitch.
The other point to make is if someone dies if they have term insurance and has 30 or 40 or $50,000 in the market, their family gets both of them. Cash value life insurance as you said is absolutely the worst Financial product ever created. I really enjoyed the video, there's just some finer points that I think could be pointed out to make this not even a debate.
@@icanmanifest not true if you had $1M in a professionally managed fund how much would you pay in fees my guess is well over $10,000/yr if the money manager is any good charging 1-2% in fees not including market losses
There is some inaccurate information in this video. The biggest one is at minute 12:10 - 12:53. A loan against your cash value isn't a loan on "your" money. Instead, it is a loan from the insurance company against your cash value policy. There is no need to run your credit for this loan because the insurance company is letting you borrow the money based on the collateral in your policy. In other words, you're good for the money because it's in the policy already. The upside to this is that your cash stays in the policy uninterrupted from compound growth (long term spread is more in line with 4%), and unlike a traditional bank loan, instead of making a structured loan repayment (i.e. set monthly payments, term length of loan etc...) to a local bank, you can repay your loan to your insurance carrier in an unstructured way. Any amount, anytime. If you don't repay your policy loan, at death, the loan is deducted from your death benefit. For example, if you have a loan of $30,000 against your policy with a death benefit of $500,000, and the loan was never repaid, the loan will be paid by reducing your death benefit to $470,000. It is important to note that a properly structured Custom Whole Life Insurance policy with paid-up additions will grow exponentially, something Marko doesn't even mention. The paid-up additions come from the dividends of the insurance company's financial growth. This type of policy is used by the ultra-rich. If whole life insurance is so bad, why does the FDIC website show the financial reports of every major bank with life insurance policies? One last note, life insurance is not an investment. I repeat life insurance is not an investment. That is why the government introduced the Modified Endowment Contract (MEC rule) in life insurance. This was put in place so that life insurance isn't used as an investment vehicle. Because of this, life insurance remains one of the few financial vehicles where your cash policy is protected from further taxation. See IRS 7702 for more information. And lastly, your cash value is not only growing in a properly structured whole life policy but so is your death benefit. As your cash value increases over the long term of the policy, your death benefit will too. In the end, you will benefit 3-4 times more funds what you put into the policy. Want to learn more? Read "The And Asset: the secret way to save and use your money at the same time" by Caleb Guilliams.
Only 2% of term insurance ever pays out. I'm an agent this was a very bad and misleading explanation of whole life. I sale term and whole and its based on the clients needs. Walt Disney borrowed from his whole life to start Disney
I have whole life insurance which has a cash benefit that is not contingent on how the market is doing. Not sure if it was a good choice, but this video is informative. I may withdraw the cash benefit and then go for term life insurance later on. I am in my 40s. The video was really valuable. I had no idea that if cash benefit is not withdrawn, it is absorbed by the insurance company
If your students listen to you, they will have a tough life. Does your statement apply to the "salesPERSON" that sells college education? If not, why not?
Thanks Marko. I'm a life insurance agent, and I cannot in good conscience sell permanent policies. I get a lot of trust from my prospects when I tell them that I only do term.
Andrew I'm thinking about getting into the insurance industry but I also cannot find it in myself to sell whole life policies. Is there good income potential for an agent who won't sell whole life?
My husband and I are considering getting life insurance but are you not able to invest from doing term? When people say do term and invest the difference what exactly are they even talking about? the difference of what? Lol
Whole life just seems like a scam to me. If you’re smart with your investing you won’t need life insurance past 60 since you should have a solid nest egg to take care of anyone you leave behind, so the con of renewal doesn’t matter.
If you want a guaranteed estate and guaranteed tax free growth it makes a lot of sense. Also, it is not a binary option of either whole life or stocks/real estate. It can be all of the above. You can see a further explanation of whole life here: drive.google.com/file/d/120VJ8S4fZMG4jEtCmrvbKdsIPHQafxPa/view?usp=sharing
That's the goal is to have yourself self insured. Unfortunately that won't be the case for many many people. Plus when you retire it will be nice to get some money back. Generally if you get whole life while you are younger you will most likely have a 49-50% return on your cost basis, in cash value, before retirement. and if you want to, you can cancel the policy and take the cash value. It's yours.
You're freaking awesome Marko! I learned a few years ago that whole life insurance sucked through Dave Ramsey, but I never really understood how badly it sucked until I watched this video!
Try getting Term after your 20 or 30 year policy is up. You'll rethink what you did. For a death benefit, Term is clearly the winner. However for the length of your life, Whole makes more sense. Whole Life is used more for a LIRP (Life Insurance Retirement Plan) as an alternate asset that isn't correlated to the stock market with a 5-6% dividend that is TAX FREE and builds cash value which can be used at any time, Term is renting. You should actually have both. Term to insure you through your younger years at the lowest premium for the greatest death benefit and Whole after that 20-30 year Term policy expires, the Whole Life policy covers you until your 120 years old! The cash value if started early on at the lowest rate you can afford will be in hundreds of thousands or millions of dollars that has cash value and liquid.
@@c0wboys4life Either/or , you can get term and whole life with the same insurance company or separate companies. You have to shop the rates and coverage just like you do with home and auto policies. Some are better than others. Hope this helps
@@Achilles5937 Another quick question if you don't mind, I'm considering getting life insurance and just learning as much as I can....does life insurance help cover any sudden health issues like say if you got cancer or got a real bad life changing injury and such?
So what happens if you have term life insurance policy for 20-30 years and the time is up and you live beyond the 30 years. Do you still continue with your coverage? How does it work past the 30 years?
@@theresavisser6100 I think he said that you can renew it but the payment will be higher because you are more older. That’s I am thinking too. I may go with term limit.
A life insurance policy's cash value is separate from the death benefit, so your beneficiaries would not receive the cash value if you passed away. Cash value that's left in your life insurance policy when you die is kept by the insurer. Insurer is a person or company that underwrites an insurance risk; the party in an insurance contract undertaking to pay compensation.
Thank you for this. I’m currently enrolled in insurance classes for licensure and I understood more in your way of explaining that this class that I feel totally lost in. Keep up the awesome work
So the cash value on a "Whole" life ins.plan is you just donating the difference to the company with nothing to show for it on your end.That's a racket.Very well made and informative video.
@Clark yes most people out live term policies when they are cheap... try getting a term policy when your 60 or 80.. supper expensice.. morenthen what whole life will cost..
@@Rshen11 yeah but that’s just the thing with insurance. Hoping you never have to use it. Pay a lower premium and more than likely a higher payout so just in case if something happens it’ll be ok in terms of financial aspect for your family. By time someone retires hopefully they have everything paid off money saved up and a retirement nest egg to where they don’t need that.
Big 4 whole life companies allow you to go cash value heavy... 10% to premium and 90% to cash value. Potential to break even with CV by years 2-4. Positives I’d think are the CV you could use to buy rental units, pay off other debt, etc. you technically borrow from yourself and break even since the policy earns a rate “almost” equivalent to your loan rate. It’s all about leverage. Friends have used one of the big 4 and most have quit their day jobs and living off their rentals. The tax free part is a plus. The death benefit is another plus but you almost don’t want to live too long as you basically paid the entire amount from your cash value. Biggest plus might be the fact that if you ever have a lawsuit filed against you or your company then no one can touch your whole life policy. Great video! Glad I’ve subbed you. Keep up the great work!
Even if you go heavy into your cash value savings you said it yourself...you're borrowing that money you've saved that builds interest if not paid back right away. It's just an overall scam product for that very reason. Why would you borrow your own money and have to pay back with interest on top of it. That's insane.
P.s. going 90% of a 100 policy or $90 savings a month is not a lot to consider borrowing from..even if it was growing at a 1-2% rate in which most of these big 4 companies won't even match bank's rate. Never buy whole life if you care about your family
Sorry but to me it seems that they’re always pushing term life rather than whole. What he’s not saying is that when that term runs out you get nothing. Term is like Paying rent versus whole life is owning a house.
I usually refrain from commenting on videos like these, because everyone jumps to the “you’re an evil insurance guy” conclusion. But in the interest of discussion, I’d like to add some thoughts. First of all, I’m not someone that thinks Whole Life is the answer to everything. I sell a lot of term, but when I do design WL policies, I do so in a way that’s better for the policyholder and substantially reduces my commission. For example, on a $10,000 premium, typically an agent makes about 40-50% of that $10,000 for the first year and then 1-5% in renewals after that. In most cases, the way I would design it would reduce the base premium to $1000 with a PUA rider of $9000. The base premium is what the commission is based on, so instead of getting paid on $10,000, I’m getting paid based on $1000. I believe there is a balance to be struck between investments and insurance that creates more efficient retirement income options. It’s not just about rate of return. You can’t compare Whole Life to a mutual fund, they’re entirely different animals. It’s not an either/or choice, it’s understanding the relationship between investments and Actuarial Science. This is essentially how pension plans are built, and it can be done individually. Don’t take my word for it, just read Dr. Wade Pfau’s whitepapers on retirement income. Here’s one: www.onefpa.org/journal/Pages/FEB19-Investigating-the-Role-of-Whole-Life-Insurance-in-a-Lifetime-Financial-Plan.aspx A few clarifications on your video: 1) Whole Life can be very flexible when designed properly. For example, if your premium is $10,000/year, you can have $1000 as the base premium and $9000 going straight to the CV via a PUA rider. That $9000 is optional and can be decreased, dropped, paused, and even increased in certain situations, without creating a MEC. This enhances the earlier cash values and gets you to that break even point much faster (year 4/5 instead of year 10-13). 2) The cash value is the policyholder’s share of the reserves, it’s related to the death benefit. This is similar to the equity someone has in their home. When you eventually sell your home, you don’t get the market value of the house PLUS the equity you had in it. 3) Accessing your cash values via a policy loan is NOT borrowing your own money. The insurance company is loaning you that money and using your policy values as collateral. This is why you can’t borrow more than 90-95% of your cash value amount. There is also an arbitrage happening. For example, if your cash values are growing at 4% at that point, and the loan interest rate is 5%, you’re essentially borrowing money at 1%. On top of this, your cash value is still compounding. For example, if you had $100,000 in cash value and borrow $50,000, your cash value is not $50,000. It’s still $100,000 and compounding. For this reason, depending on when a policy loan is taken, you may have the option to never pay it back (the outstanding loan will simply be subtracted from the death benefit upon death). There is also no credit check or effect on your credit report, and no amortization (you can pay it back at will). Policy loans can be an effective option when done properly and for the right reasons. All this being said, Life Insurance is life insurance, so you should never sacrifice the right amount of death benefit. Start with term. You can always convert later if you want. There are many agents out there who don’t know what they’re doing or that aren’t doing the best thing for the client, and this goes for investment advisors as well. Do your homework, it’s your decision and your money. Respectfully, Bryan
If people really knew how whole life or cash value types of policies work they would NEVER BUY or NEVER OWN these types of policies. It is a very poor way of investing money, you only truly have access to death benefit or cash component, to access cash a loan must be requested then paid back or the loan amount plus interest will be taken out of death benefit and the cost of cash value insurance is always going to cost more for the policy owner initially and over the life of the policy.
Sylvia Greenlee On the contrary, once people understand how they work and how to design them properly, they usually want to buy more than they should. Just because you don’t understand that it’s NOT an investment (it’s insurance) doesn’t mean that other people shouldn’t buy it. Lol. You made a couple misstatements about WL, so it’s obvious you don’t understand it. Is WL for everyone? NO. Is it a good asset if you already invest and have more money to put away? In many cases, yes. Actuarial Science + Investments in the right balance creates the most optimal/efficient retirement income. This has been studied academically.
*Get Term Life Insurance HERE:* whiteboardfinance.com/go/havenlife
I am 27 and paying 132 dollars a month for a 100,000 policy I feel like I am being ripped off. Am I?
@@shayl0tus hard to say, it's different every where you go. Nothing simple about the insurance game. You have to do your due diligence and get quotes, figure out what debt you have that will be left to family, figure out the cost of living month to month for your family after you pass away figure out cost for schooling for your childs education like colleges how much that would be for a 4 year thing figure how much it'll costs to bury or burn you figure the cost of the get together with food services things like that, figure out your monthly spending habits as a whole family with you included and take an average from the year and then make sure when you die that can be replaced. My situation I am the sole provider I need to make sure my wife and children are set
@@ML-ks2lj such a big help!
Thanks!
@@shayl0tus the rating is based on your lifestyle, medical history or what kind of life insurance you have and for how long you are paying for. I teach all kinds.
How do you feel about endowments policies?
I'm 35 and just recently told my husband (41) to look into ins. After watching this my mind is Blown!!! Thank you for posting this!!!
I sell 100% term and we have 35 level term and insurable age to 95!! Let me know . Let's run some quotes !! GODBLESS you all
Lately, I've been contemplating retirement, uncertain whether my 401(k) and IRA will ensure a secure future. I've also invested $800K in the stock market, experiencing fluctuations without substantial gains.
Using a 401(k) or IRA is a valuable strategy for retirement planning, providing potential savings growth and tax advantages. While the stock market is promising, expert guidance is essential for effective portfOlio management
Opting for an invest-ment advisr is currently the optimal approach for navigating the stock market, particularly for those nearing retirement. I've been consulting with a coach for a while, and my portfOlio has surged by 45% since Q2.
Market behavior can be complex and unpredictable. Mind if I ask you to recommend this particular coach to whom you have used their services?
Google Sonya Lee Mitchell and do your own research. She has portfolio management down to a science.
I Researched her credentials and found she possesses over a decade of experience and serves as a value through different resource for individuals seeking guidance in navigating the financial market.
570 dislike came from whole life insurance agents lol
Nope. The dislikes came from ppl who actually understands how this works and knows his information is incorrect.
Lol 😂
@@abcdefghijk2073 You can actually withdraw the cas savings before you die and still keep the policy.
Buy term and invest
😂
I think investors should always put their cash to work, especially In 2025, we'll start to see more market diversification. I'm hoping to invest about $350k of my savings in stocks against next year. Hope to make millions in 2025
Since risk is at an all-time high right now, perhaps you should be a little more patient and return when it has decreased. Alternatively, you can consult a trained financial expert for strategy.
Yes true, I have been in touch with a brokerage Advisor. With an initial starting reserve of $80k, my advisor chooses the entry and exit commands for my portfolio, which has grown to approximately $550k.
I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
I searched for her full name online, found her page, and sent an email to schedule a meeting. Hopefully, she responds soon. Thank you
Yo... this is the first commercial/sponsored ad from a UA-camr that I actually literally enjoyed.
Great information! I have seen Whole Life policies that self terminate because the fees consume the cash value and increase the payment. Horrible
Sounds more like a UL product than whole life. Stay away from those. And Whole life PUA riders that involve annually renewing term.
Many people make the mistake of not taking out enough of a policy to replace their income !
Chris Invests - Personal Finance Videos I didn’t know that. I learned that today. I only have 250k and my husband earns 150 a year so it’s not much I guess in comparison.
@@mizzmuhree9297 Also take into consideration your investments. If he has a substantial nest egg it might not be necessary.
The modality of your voice and the speed made this video much comprehendible, i could follow you along the way round of the video... I received a message from a recruiting manager of an insurance company so searched on to have more knowledge with regards to it, kudos for the clear content 🙏
I took a class for life insurance to be primerica agent. Class was so fast and I couldn’t catch all so search for it and found you. Thank you for making it clear in 10 mins.
Primerica is a scam
I went with 35years term with living benefits at 38$ a month & 20$ a month for 200k Accidental D&D. I’m turning 27 and I got it when I was 25. The way I look at it is JUST IN CASE since I have a daughter and son to worry about.
What company? I’m looking to sign up for one
Company?
A coworker sells insurance as his side hustle. He likes to talk a good game. After watching your video I am more informed. THANK YOU!
Exactly.
I’m intrigued about your coworker because I’m about to be on the same boat (Selling policies as a side hustle). How’s everything looking for him?
From where I’m from our whole life plans are limited pay (which means you pay for a limited number of years 10,15,20) and still get covered for life compared to a term in which yes you do choose your term (10,20 years) however it doesn’t cover u for life. In which is akin to renting a house vs buying a house. Now worse case scenario is when ur term plans comes to end (your renewal obviously sky rockets ) and the very worst..is you don’t renew and something happens..
So i always believe its best to have both to complement each other ...my humble opinion that is. Cheers
So where are you from that this makes sense to you?
What a horrible example you gave. Whole Life cost at least 20 times more in premiums than term. Plus, when you die, the insurance company KEEPS the cash value that you've been paying in all these years and only pays the death benefit. Sorry, scammer. Try again.
You are better off financially getting term life for 30 years until about your expected retirement age. Invest the rest (difference in what you would have paid for whole) and by the time the term life expires, you will be "self insured" and will no longer need life insurance.
Probably smart to get Term life when you hit 40-45 and get a 35 year .. if that’s in the 20-40 dollar range it’s worth every penny.. and now eat whatever you want if you make it past 80 god bless 😂 but then I would also look into a cheap whole life to at least leave something behind
😂😂😂@@FuegoBravo1
During a bear market, the headlines will focus on negative news, whether it's declining economic growth, geopolitical upheaval, cultural and legal turmoil, or some combination of all three. I listened to a podcast of someone that grew his reserve from $120k to almost $460k during this Red season, can you share tips on how to make such aggressive proceeds in short periods?
ETFs
I like how you explained the term vs whole life insurance . At the begging I thought you were one of the whole life sales guys who try to paint the on how whole life is good but I am glad I listened to you. It was very clear and honest. Thank you. We need more people like you that will tell it like it is .
He didn't tell you the entire story!
You are correct - he's not biased toward whole life. He is, in fact, biased toward term. Just as bad, but just in the other direction. Sounds like you're on the term life team - good for you. If you want an unbiased point of view, let me know.
@@dads4514 interested in your perspective sir.
This guy is so wrong its not even funny he should have his licensed taken. You will pay less for a 20 pay whole life than you will for a 30 year term and you still get to keep the coverage.
The problem is there's no hidden information with these types of policies you just have to ask. Whole life builds cash value whether you want to use it or not. The biggest value is that it's permanent and it locks in your age and health. If you never touch the cash value your coverage is worth the full value from the day you are approved to the day you die
MAN, glad when you said "sponsored video" you didn't follow it up with a life insurance company pitch 😂
Do your thing man, make that ad revenue money!!
He literally put a pinned comment to buy Term Life Insurance 🤣
Thats a huge difference and a big eye opener for not buying a whole life. Thanks Marco for that simple but accurate presentation.
Good presentation.
But let me clear here for general public in layman language that term policy is for specific purpose which vanish every year like for death coverage or hospitalization cost and premium is an expense here not saving, which increase as age grows. This policy usually cover in group insurance by employers for employees. When employee leave job this policy closed.
While whole life policy is for family financial protection and investment. Its benefits enjoy during life time and on death for example children's higher education or marriage, retirement, hospitalization, buying property, jobless period in addition to family financial protection in case of disease, disability or death. Here premium is constant and is long term saving with good return.
SO WHOLE LIFE POLICY IS NECESSARY FOR EVERY WISE FAMILY AND FAMILY BUSINESS PERSON.
Note
My above explanation is on Pakistan perspective not USA. I suggest all Pakistani Americans to get efu Takaful Plan from Pakistan to enjoy multiple benefits.
Thank you so much for your videos, I failed my LifeInsurance test so many times but once I sow your videos I passed. Thank you for your help.
Does the Death Benefit means my beneficiaries will get $500K when I die.
Whole life agents disliking and commenting on how bad whole life was presented here
thats one of their duties as agents. Might do the same if i am one.
I sell big Whole Life policies to a small segment of the economy. It's a very niche product which adds huge value to people who use it properly. If purchased under false pretenses -or- if used inappropriately, it can easily be a terrible waste of money. It depends on how it's positioned. Transparently: there isn't any vehicle in the US tax code that is efficient for everything. Otherwise, everyone would only use that hypothetical vehicle. Does my rationale make sense?
Because it is. It is one thing to misunderstand a product. It is anonther to spread that misinformation as if you are an authority on the issue.
Not everyone needs whole life
So if you have a nest egg and you are decent at investing life insurance is a scam 🤔
The most important take away from this video is to be careful when crossing the street.
Dude i crashed my bike really bad the DAY after I made this video. Be careful what you put out in the universe
@@WhiteBoardFinance Wow, that's not good. Are you OK?
@@WhiteBoardFinance 😱😱😱
And never buy a whole life policy!
Remember: you cannot eliminate the risk, you can only reduce it.
👌I hit the subscribe button right after watching this video. I'm 46. I think that I will go with the "term life insurance" I will save the video so that I could watch it a few more times before making that decision.
Thanks a lot!🙏❤
Definitely get TERM ASAP, with or without family, it helps your parents, friends, whomever, that will help with funeral costs and fees
jup1828 whole life helps pay funeral cost and fees as well
Less than 2% of term insurance policies pay out. Have fun.
@@SilentNecrosis exactly
@@SilentNecrosis why do they not pay out are you saying they don't pay out because the people don't die or they screw you over at the end?
hi Jup, can I buy your policy for you, you are STUNNING
Marko, I can’t thank you enough. I have 3 kids and been thinking a lot about something happening to me and leaving my kids with a financial burden, it’s not cheap to die. With that being said thank you for providing this education to people like myself I appreciate you, you are making a difference.
This video was amazing. It’s explained everything that I needed to know beautifully. Simple, non-bias , and straight to the point. I definitely need to rethink my policies. Thank you so much for this.
I love how you're geeking out during this video. It's all a bit savage
ive been looking at dropping our whole life insurance policy for a term policy and then invest the left over into my current IRA and this has helped make the decision clear. very well done and thank you!
while whole life truly does suck, I wouldn't cancel it until your term life policy is fully active because the application process can take a few weeks depending on the company you go with. It's not very likely to happen, but you'd be hating yourself if something (heaven forbid) tragic happened to you or your family.
Permanent insurance is great product until you have the cash flow and the income to do it. First, make sure that you're contributing to everything that you can where you're going to have tax advantages like maximizing a Roth IRA and if your employer offers matched 401k, max that out and if you have a death benefit need, go with term. Then after all that and you still have cash flow left to invest for the long term and want to grow your tax-deferred and safe dollar segment then you go whole life.
Ryan Burt - What are your thoughts on TAX FREE WEALTH & LIFE INSURANCE ?!💰🧠💸 •CASH VALUE - (E.I.U.L.) & (M.F.T.A.) ARE SACRED FINANCIAL COWS; THAT ARE PROTECTED, BY THE IRS TAX CODE CITATIONS: * The Tefra Act of 1982 - 72(e) ,
* The Defra Act of 1984 - (7702) ,
* & The Tamra Act of 1988 - 101(a)
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These acts; allow one to ACCUMULATE, ACCESS, & TRANSFER their money TAX FREE. 😉🤙🙂
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As ADVANCED MARKET & SOPHISTICATED life insurance agents; we are suppose to help show people, how to Make, Protect and Move their money from UNSAFE places, such as (401k's, 403b's, TSP’s, Pensions, Stocks, Mutual Funds, Cd's, IRA's, Social Security, etc..) Which are all exposed to the volatility risks of the stock market, inflation and Taxes. 😬
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And Help place them Into SAFE places, such as Life Insurance; giving you protection from the stock market & a guaranteed Compounding Interest rate of return on your money! (TAX FREE!!!)😉 with, the 0-3% GUARANTEED MINIMUM as a floor protecting you from financial devastation! (COVID-19)
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So, when the stock market corrects itself again (Crashes) as it does on average, every 7-10 years. (the last one being, the 2008 housing bubble burst.) Your money and assets, along with your family, will all be protected in the event of that crash; due to the Guarantee Protection of the 0-3% as a floor, Preventing you from losing your money!
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LIFE INSURANCE = SAVINGS ACCOUNT?! .
With banks giving (1%) interest back and inflation being at (3.5%) plus, taxes at (1.5%) = a total of (5%) against your $ By Default, your losing (4%) of your money every year just by having it in the bank!
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HOW MUCH LIFE INSURANCE DO WE NEED?! 🤔😀
(EXAMPLE): (apply the D.I.M.E. Method in order to help calculate, exactly how much Insurance is needed.)
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Debts (all debts, Credit cards, etc..)
Income x(10) or x(20) years
Mortgage
Education x(# of children) $60k per child
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Add up the total and that's your Life Insurance necessity.
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💥THE POWER OF LIFE INSURANCE💥
Did you know?! After the Collapse of the 2008 housing market bubble, a total of $5 TRILLION DOLLARS in Pension funds, 401k’s, Real Estate Values, & Bonds, just up and Disappeared?!😳🤬🤯 Can you imagine that?!
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Just how bad was this collapse?! 8.8 MILLION people lost their jobs; and 6 MILLION people lost their homes, and that’s just in the UNITED STATES!” 🤭😱 ($19.2 TRILLION DOLLARS 🌎 WORLD WIDE!)
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THINK 2008 WAS BAD; WAIT UNTIL, YOU SEE WHATS COMING?!
THE EVERYTHING BUBBLE?!!😶
If these crashes / collapses / Market corrections, happen so often; this means, we may be facing another one here in the near future, right?!
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🔥THE PENSION CRISIS🔥🏦 .
If you think you can still retire with a pension plan; then, you may just be in for a rude awakening. 👀
Allow me to share with you why you should begin to rely on yourself & not the government.
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Most Americans are now concerned; that company pension plans & Social Security, will not be adequate in providing them with enough income in their retirement years. Their concerns are warranted; and rightfully, so!
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According to an article on barrons.com; Social Security benefits, will start to exceed the programs cost in 2020, & the program will deplete it’s $2.9 Trillion reserve fund in 2035.
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The reserves will run out a little later than what the trustees of Social Security & Medicare projected last year; however, the bottom line is still the same. The programs deficits appear vast; making it clear, that the public should expect smaller benefits, higher taxes or more than likely, “both!” 😲
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Over the past 40 years, Congress has approved increasingly beneficial retirement options, designed to encourage Americans to save on their own, for their golden years.
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Meanwhile; no congressmen, will dare utter the fact that with mine blowing numbers of TRILLIONS & TRILLIONS of unfunded obligations; such as, Social Security & Medicare, which have now become described by many as a Ponzi scheme, that can never be fixed.
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Congress has covered itself w/ retirement legislation. So, much so, that sometime in the near future; 10 to 20 years from now, when the government system inevitably breaks; congress, The institution will be able to shake it’s finger at the American people, and point the finger back to 401(k)s, IRAs, Roth IRA‘s, & the similar in between of products they have created.
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The message will be, that the benevolent Congress gave the masses a way to save for their own retirement, years ago! 😯😶
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What will not be addressed, is why did the government continue to take 15.3% in PAYROLL TAXES from workers & businesses for a failed system; However, that will be an issue between you & the ballot box.
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The point here is; that to provide for your own retirement is prudent, as it is in all facets of life, to rely on yourself & not the government.
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I hope I was able to help.. Much Love ❤. (Instagram) 💪🏼@TheFinancial_FitGuy
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Remember; He who forgets the past, is bound to repeat it!” 😳
@@danielkicksable That entire last 3rd seems like a scare tactic to sell life insurance. None of this explained to me how life insurance will protect people from the incoming pension crisis. I mean unless if the stress of the pension crisis and your other account failing end up kill you from a heart attack. but seriously where and how do life insurance companies insure 0-3% interest on the cash value. maybe I misunderstood this part or one of the acts/bills/laws you cited protect or forcibly guarantee the"Guarantee Protection of the 0-3% as a floor" you mention. But then you mention the government system will inevitably break so again, what makes life insurance such a glorious shield to protect your wealth, what exactly protects life insurance from what will kill everything else? I'm honestly asking to become informed as I don't know if I should keep my Whole life or not but you're defensive comment as a sales rep does not feel very informative
Eric Arosemena - firstly; I am not a salesman, I am a state appointed field underwriter. Big difference. If you’d like; I’d be more than happy to educate you.
Unfortunately, 9 out of 10 people, will not know this information. In which, I can understand your lack of knowledge in this field. After all, it’s not your fault, school does not teach this subjects or financial strategies I’m referring to.
My husband and I are closing on a home soon and we'll definitely check out the simply safe recommendation. Thanks
I've heard that whole life is bad but I had no idea it was this bad! Thanks for this informative video.
There are a couple problems. First is that it is marketed as an investment product as well as an insurance product. The second, and more important to remember, is that it does a lousy job at both. I was unfortunate to buy into a whole life policy but fortunate enough to get out after eight years. In those eight years, my return was around NEGATIVE 13%. Investing the premiums in a term life policy and the difference in a Roth IRA will do your beneficiaries far more good. Your "financial advisor" loves whole life because the commissions and fees are so lucrative for them and their firm.
Better late than never my friend!
@Evan Panowicz Nah dude, Whole Life is garbage for anybody buying it.
@Evan Panowicz Go ahead princess, please elaborate. What makes WL insurance so great?
@Evan Panowicz what’s makes WL so great princess?
My friend you just saved me a lot more headaches. Thank You this video was informative
You are very welcome
Thank you so much. I was about to take whole life insurance, as an investment vehicle. After this video, I have second thoughts.
Thank you so much! I've listened to a few videos on this topic and I was starting to think am dumb for not understanding but after your video, it all became clear. Am subscribed!
Damn recently got my whole life policy they say i have 10 days to cancel. Now its all here on paper it doesn't seem as good as i thought. Thank you for the video explantaion. They caught me on a happy day
Like he said you can take your money out. You can get back some of the premiums you paid.
Was pitched today about the whole life and FA kept on bragging about 5% return. Sounded fishy, now I know why! Thank you!!!!!!!
Whole Life Insurance is the payday loan business targeted towards the middle class. Awful financial product, stay away from whole life, universal life and variable life insurance. All of these are legally allowed to be sold, and are designed to make the insurance companies lots of profit. I used to work in accounting for a big insurance company, and whole/universal/variable were our most profitable. Term life is the way to go! You should get a Term Life insurance policy if you need life insurance. Be blessed!
❤❤ Even here in Kenya I still don't understand why you don't get back your money on term life insurance policy at it's maturity instead you are told to renew your premium by extending and buying another premium,in other words on top of what you paid for nothing, you add another amount
Thank you so much! This is exactly what I needed to know.
This is why I have term insurance and a investment account.
Dislikes? I see some whole life agents have found the video already! Great job Marko.
genglebretson lol
genglebretson *cough* snake farm
Some? It looks like an infestation. Lol.
@@danielkicksable Writing a thesis about life insurance is boring and doesn't validate your point.
@@astroman30 - I’m sorry your brain can not comprehend this so called “ Boring Thesis” If money & Tax free wealth is boring to you; then, I guess I’m bored in an abundance of wealth. 😉 which makes me concerned for you and your demising financial future eroding away.
I really do hope you change your horrible mindset; because, it is definitely skewed in the wrong direction, for your sake anyway. 👌
You did a great jobs explaining the difference. If you get to 60 and you have to renew your Term insurance policy, that means for the past 30 years you didn't make any money off of your investments, which is almosts crazy to think of, because all you had to do was put in the maximum amount for a roth IRA for 30 years and you would be a millionaire.
Please, explain
It what if you don’t live to 60
@@khy7672 Then my wife will be well off, because my current Term policy will pay her exactly $500,000. I think she'll be well off along with our real estate investments, Roth IRA's and 3 pensions. If I were to die after 60, then she'd be well off also. So not sure what your question is?
@@marcusjohnson5391Did you put all 100% on your wife's or do you also have kids?
Wow, wish I found you a long time ago! Thank you for sharing, I will be sure to share with my children.
I been an insurance agent for a few years now. You are spot on brother! Buy term and invest the difference!
Hello, how do you invest the difference?
When you say invest the difference what do you mean?!
I really knew nothing about life insurance until just know.. Thanks Marko.
thanks!
classic dont judge a book by its cover, u are in image last person I expect to teach me about life insurance, an yet u wer super efficient an education thanku
Sold insurance, whole life commissions were nice to sell. There are different life insurance policies that tie into the market to give you a better return. More complex for people to understand so they’re not as popular.
I myself have a term life policy. And some companies will let you buy another term policy at the same rate. Good stuff though!
Thanks for sharing
Yea, I believe you can buy 2 life insurance policies in 1 yr, so you can have multiple, but like the guy said in the video, I guess it just gets more expensive to get term life the older you get, due to higher possibility of death
So you sold whole life but you own term?? Hmm
No I completely understand life insurance. But to sell someone an expensive cash value policy when you own term and invest the difference yourself? That should tell you everything you need to know right there. Cash value policies "sound good" and conceptionally make sense, but they are a nightmare contractionally. Clients always end up under insured and over charged! But hey at least the agent made a fat commission instead of doing what is right for the consumer
@@JeremyMcTaggart That's right - whole life insurance is a complete ripoff. You could buy a 25 year term life policy and with the savings compared to whole life insurance invest in an SP500 index fund. For a $500,000 whole life insurance policy on average the insurance company is making $2,500,000 by investing all your premiums over 30 to 40 years before you die. Sure some people will die earlier than average and the insurance company will lose a little but for those that live to average or above average, the insurance company will be only paying out about 20% of what they made by investing the money. Also, with super high premiums with whole life policies if you can't make the monthly payment at any time for example due to losing your job, you will lose the policy.
Every dollar invested in an SP500 index fund will grow to about $30 after 30 years. Most people don't realize how this makes such an impact. Also, if somehow everyone died early (far less than average life expectancy) and the insurance company did not have enough money to pay out claims, they could just declare bankruptcy.
I’m actually glad you showed the security system. I want to get one!
Lol thanks. I genuinely love it otherwise I wouldn't have sponsored the video with it :)
Thank you for taking the time to make this video. Simple and easy to understand!
Thank you for explaining.i got my whole life (guaranteed) from my friend.I'd been paying my premium for almost 12 yrs.now.i didn't understand much about this term but now that you explain very well the difference,i now realize i've wasted my money for my whole life insurance.
That's the way these low life salesmen operate. They prey on family and friends, first.
The only reason you should get a guaranteed issue whole life policy is if your health rating is too poor to get a good dividend paying one. If that was the case, you probably wouldn’t have qualified for term insurance anyway. If you have good health, I would consider doing an exchange to a mutual company that pays good dividends. Not even all mutual companies have the same dividend structure. Shop around.
This video was extremely helpful! 😊 It's great to finally understand the differences between term and whole life insurance. Thank you for breaking it down so clearly! 🙌
He made a lot of statements not correct. Like term pay out never had to be lump sum and it can set how to be payout like you hitting the lottery. The reason for this is that can collect interest from the insurance while the beneficiary is alive. It is never about term vs whole life. It really depends on what client need and want. Can they fit to them
He is terrible explaining this
Marko - The amount of financial advice you lend for free is phenomenal! I've learnt so much from you and I feel its still tip of the iceberg.. In next life, please become my brother! :D :D
I have been looking for a clear explanation between the 2 policies. Thank you for making this super easy to understand!
A kindergartener could understand. Yessss, thank you Sir!
Take a look at “Wealth Nation” channel. Just as awesome♥️
@Frank Sabotka so rude and disrespectful I feel sorry for u Frank
@@melissaosman3780 Unfortunately, it was researched using kindergarten methods with a ton of misinformation and disinformation.
Me too! Glad this video popped up in my thread
Your place is gorgeous love the aesthetics!
one of the best explanation about Term vs Whole life, Marko has made it so simple to understand, will ask more friends to subscribe to your channel
My boss was a very wealthy & financially successful man. He told me : " Anyone who comes to you to sell you something is there for THEIR benefit, not yours."
Tell your boss, it could be mutual benefit
@@gpds4932 It is Possible, but not Probable.
Lol, your boss never gave you a win-win-win deal? Or just a win-win? It doesn’t always have to be one sided.
All business everywhere is in sales. It's all about education. The more informed you are you can make the best decisions for you and your family ❤️
Would your boss, who's very wealthy, say there are any examples where you're sold something and it's to the benefit of the buyer and seller? If not, seems like an odd, cynical statement.
I'm studying for my life insurance license and this is really helpful, thank you so much!
How’d it go? I am in the industry now, and always trying to hop on here to get the pros and cons people are looking at it from UA-camrs versus financial planners.
@@Funnymike1026 happy to say I passed my exam on the 3rd try. (>70% pass it on the first try so don’t beat yourself up). I’ve been working in my office for about 3 weeks now and I’m a part time student so the hours are pretty lenient. I work under an agent and it’s definitely one of those careers where you get what you give. (The more effort and dedication the better results). I’ve actually recommended this career to many people since. Good luck
This isn't helpful if you are in the industry, because it's an incredibly flawed attempt at explaining whole life insurance.
@@miamysteryburns How much of your exam centered around whole life?
@@paulstutsman Hard to say, I’d say it’s about a quarter of the types of polices mixed together. Honestly my test had a lot on health insurance more than anything
By far the simplest explanation I seen. With thruth and unbiased comments. Thank You for that! It cleared so many questions I had.
Now I know why I see a State Farm and GEICO commercial every 5 minutes
Love the way you explained everything Brother !!! Short and simple and Funny too lol , Blessings !
I have a friend trying to convince me to get whole life. I've now been researching for about a week and all signs point to no. I think this video best described why it's not the "steal" they try to convince you it is. Big Thanks!
When you teach and laughing 😂 I really like that .
From all the videos I've watched on this subject you have explained it the clearest and best, like a teacher should. New subscriber.
I had a whole life for $45 monthly for 3years, I met a primeamerica and he was arguing that the term was better but he was offering me the same coverage for $109 per month!! No brainer!!!
@azu'car Weber, who are you insured with?
Because they don't believe any other life insurance aside from what they offer. Chances are, the company is happier because it's 1 out of 400 chance a person will die. They keep the premium as long as you're paying for it. They believe in what they call buy term and invest the difference. People only buy term if they see it fits what they need and for people who can only afford to buy cheap policies but it becomes expensive over time.
Marco great video!! Just got myself a 30 year "return of premium" term policy. Cheaper than whole life have 3 options in 30 years. Was able to get more coverage for less money and I don't feel like Im losing it since technically my premiums can be returned to me if I choose.
1. Take the cash back "return of premiums" I have paid
2. Convert it in to a whole lofe policy
3. Add an additional 11 years to my term policy.
Just wanted to share my recent experience shopping for life insurance. Thanks for your content, recently found you and am enjoying your perspective!
nice
I’m so glad that I got Term. Great video!
Correct you got term ,but until when? 20 or 30 yrs. After that your insurance lapsed. When you get older you need insurance because we get sick like stroke, cancer etc. He explained about whole life with fixed interest, Now we have IUL, Indexed universal life. You can maximize it. There is option A and option B. In option A you beneficiary will get the face amount only not the cash value, but in option B your beneficiary will get cash value plus face amount. Not only that. IUL, you dont need to die, if you get sick like Terminal illness, critical, and chronic you can use your insurance. That's what we call life insurance with living benefits. If you want to know more about it ask ne how?
Rose Dilla yes term ends but depending on the age you can convert to whole life if needed or requalify for another term up to 20-30yrs again at a lower death benefit if you still healthy & still pay way less than the CV. Choosing option B means guess what, higher monthly premium. Why do all that when you can just invest that money yourself & it’s yours & become self insured, granted with discipline & if agents do their job we can help the client reach that goal. Why save for that money to only go back to the insurance company when your family can have both, term insurance also has living benefits also, most of the companies I write for have living benefits on their term critical/chronic illness up to 90% of the death benefit death does not have to be in the picture, terminal illness up to 100%.
Can you do a video on indexed universal life please thx.
This was more clearly explained than the Dave Ramsey version I just watched. Thanks!
Definitely!
I can't stand Dave Ramsey hes a ttpical big headed millionaire giving mid class ppl half ass advice
@@l.300 hes pretty straight forward. People like you are so hard headed and want everything spoon fed to them
Dave Ramsey is a fast talking tennesee biased snake oil salesman.....cookie cutter salesman....
L.L. yes
If you have a finance degree you should talk about "net present value" of money. Simple interest vs. Compound interest. Mortgage acceleration through lump sum payments to reduce principle. I'm just trying to help you clarify terms and ideas for you viewers. You should really come out with an additional video on equity based "modified premium whole life products" I get the notion of buying term and investing the difference. I was doing that since 1979. The problem is most people do not invest the difference. People who make a lot of money can use life insurance in creative ways to protect large amounts of cash value on a tax-deferred status. BTW you are on track with most of advice. the 'four corners' are also called the 'Ben Franklin' close or comparison. Example: "Whole Life = my policy pays weather you live, die, or quit. Buying Term insurance is like flushing money down the toilet" I have heard all the arguments. "Dividends" on a whole life insurance policy are NOT "dividends" but rather a refund of an over payment on your life insurance policy. Look it up. FTC and IRS ruling in the 1970s.
Thanks Richard. I'm in the works of a NPV video but I honestly don't think people care about that subject. I'll still end up making it though. Thanks for your comment
Richard Surckla that’s why you buy term and invest the difference
Richard Surckla Or you could prepay the mortgage with the thousands you saved ny not buying whole life and save even more thousands in mortgage interest.
This is probably one of the most confusing topics out here so glad to see a video done on this certain topic man. 👍
Oscar Martinez please do further research and see my comment
Yes, thank you for helping us out! You're a good man going good work!
This is my 1st time learning about life insurance, and I am still super confused.
@@mirandaquinnn the insurance companies make it confusing on purpose hoping that the smoke and mirrors will make you confused enough to buy what you don't need. Just ask for the amount of coverage and the term you want and don't listen to the sales pitch.
@@travis1240 so much to learn
Maaaann, you have made this soooooo simple to understand. THANK YOU!!
Thank you for this. It sounds like the whole life insurance policy is more of a benefit to the insurance company than it is to the individual.
Wow! Lots information I didn't know about whole life insurance. Thanks Marko
my pleasure shane thanks for watching buddy
3:25 To get to the topic, long as sponsor advertising at the beginning
^ the real hero.
You the real MVP!
The other point to make is if someone dies if they have term insurance and has 30 or 40 or $50,000 in the market, their family gets both of them. Cash value life insurance as you said is absolutely the worst Financial product ever created. I really enjoyed the video, there's just some finer points that I think could be pointed out to make this not even a debate.
with IUL the beneficiaries can receive both the DB and savings
@@429mas at a ridiculously high cost compared to investing outside of an IUL.
@@icanmanifest not true if you had $1M in a professionally managed fund how much would you pay in fees my guess is well over $10,000/yr if the money manager is any good charging 1-2% in fees not including market losses
@@429mas whats the annual fee of an index fund?
@@429mas how much does the cost of the ART insurance inside the IUL go up annually?
I like your "to the point" concept in your videos - thanks!
Thank you for explaining this.
I was transferred to a new account and now on training.
I figured out now how it works. Thank you so much..
Thanks. This saved me from a big mistake.
Finally someone did a video on this!!!!!!
There is some inaccurate information in this video. The biggest one is at minute 12:10 - 12:53. A loan against your cash value isn't a loan on "your" money. Instead, it is a loan from the insurance company against your cash value policy. There is no need to run your credit for this loan because the insurance company is letting you borrow the money based on the collateral in your policy. In other words, you're good for the money because it's in the policy already. The upside to this is that your cash stays in the policy uninterrupted from compound growth (long term spread is more in line with 4%), and unlike a traditional bank loan, instead of making a structured loan repayment (i.e. set monthly payments, term length of loan etc...) to a local bank, you can repay your loan to your insurance carrier in an unstructured way. Any amount, anytime. If you don't repay your policy loan, at death, the loan is deducted from your death benefit. For example, if you have a loan of $30,000 against your policy with a death benefit of $500,000, and the loan was never repaid, the loan will be paid by reducing your death benefit to $470,000. It is important to note that a properly structured Custom Whole Life Insurance policy with paid-up additions will grow exponentially, something Marko doesn't even mention. The paid-up additions come from the dividends of the insurance company's financial growth. This type of policy is used by the ultra-rich. If whole life insurance is so bad, why does the FDIC website show the financial reports of every major bank with life insurance policies? One last note, life insurance is not an investment. I repeat life insurance is not an investment. That is why the government introduced the Modified Endowment Contract (MEC rule) in life insurance. This was put in place so that life insurance isn't used as an investment vehicle. Because of this, life insurance remains one of the few financial vehicles where your cash policy is protected from further taxation. See IRS 7702 for more information. And lastly, your cash value is not only growing in a properly structured whole life policy but so is your death benefit. As your cash value increases over the long term of the policy, your death benefit will too. In the end, you will benefit 3-4 times more funds what you put into the policy. Want to learn more? Read "The And Asset: the secret way to save and use your money at the same time" by Caleb Guilliams.
Great video man with awesome breakdown. I’m keeping my term life!
Thanks!
Thanks for the video!!! Was told not to mess with Term, but now that you explained it well I’m going to stick with Term.
Only 2% of term insurance ever pays out. I'm an agent this was a very bad and misleading explanation of whole life. I sale term and whole and its based on the clients needs. Walt Disney borrowed from his whole life to start Disney
Thanks!
Thank You. It was clear and simple to understand without any hidden objective. Thank you again.
Thank you for an honest discussion of Whole Life Insurance. It all makes sense.
I have whole life insurance which has a cash benefit that is not contingent on how the market is doing. Not sure if it was a good choice, but this video is informative. I may withdraw the cash benefit and then go for term life insurance later on. I am in my 40s. The video was really valuable. I had no idea that if cash benefit is not withdrawn, it is absorbed by the insurance company
Correct
What I tell my college students, "anything the salesman really wants you to buy is probably a great deal for him!" This is why they push whole life.
If your students listen to you, they will have a tough life. Does your statement apply to the "salesPERSON" that sells college education? If not, why not?
@@rlyle5804 I've never seen a university salesman. Please provide an example of one.
@@corybryant6244 What is a "university salesMAN"? I have never heard the expression.
R Lyle you literally were the first to use the generalized term in your statement. I just wanted an example since I’ve never encountered one.
@@cory.bryant Read my statement again. I used the term "sells college education". Since words matter, clearly it isnt the same.
Thanks Marko. I'm a life insurance agent, and I cannot in good conscience sell permanent policies. I get a lot of trust from my prospects when I tell them that I only do term.
who do you work for?
@@rlyle5804 I'm an independent agent and broker of many carriers. You can contact me from my website atidconsulting.com
Andrew I'm thinking about getting into the insurance industry but I also cannot find it in myself to sell whole life policies. Is there good income potential for an agent who won't sell whole life?
My husband and I are considering getting life insurance but are you not able to invest from doing term? When people say do term and invest the difference what exactly are they even talking about? the difference of what? Lol
This is why I’m subscribed 💪 Preciate you bro
Whole life just seems like a scam to me. If you’re smart with your investing you won’t need life insurance past 60 since you should have a solid nest egg to take care of anyone you leave behind, so the con of renewal doesn’t matter.
Whole life is guaranteed. Thats why the rich and corporations use it to transfer wealth tax free
If you want a guaranteed estate and guaranteed tax free growth it makes a lot of sense. Also, it is not a binary option of either whole life or stocks/real estate. It can be all of the above. You can see a further explanation of whole life here: drive.google.com/file/d/120VJ8S4fZMG4jEtCmrvbKdsIPHQafxPa/view?usp=sharing
That's the goal is to have yourself self insured. Unfortunately that won't be the case for many many people. Plus when you retire it will be nice to get some money back. Generally if you get whole life while you are younger you will most likely have a 49-50% return on your cost basis, in cash value, before retirement. and if you want to, you can cancel the policy and take the cash value. It's yours.
@@mikerad7424 Simple Question: What happens to the cash value when the person dies?
It is a scam buy term and become self insured by investing
Thank you, Marko. You made me understand this insurance stuff and now I also understand that term insurance is a better option.
Suscribed and studying to get my LLQP test in Calgary Canada, I really enjoyed the way you facilitate the info
Great work Marko! You made this super easy to follow
Thanks Musa please share :)
You're freaking awesome Marko! I learned a few years ago that whole life insurance sucked through Dave Ramsey, but I never really understood how badly it sucked until I watched this video!
Thanks Mike!
Any idea why Dave likes term?
@@WhiteBoardFinance you are fricking not awesome, because youwant people to buy insurance after their policy gets lapse.
He didn't mention that you can maximize the incone in IUL
Lol…you really hurt my feeling @ 12:36 mark😂….I’m laughing right with you! Awww man.
This is an eye opener and made me take the right decision at the right time. Term life it is! Thank you!
Try getting Term after your 20 or 30 year policy is up. You'll rethink what you did. For a death benefit, Term is clearly the winner. However for the length of your life, Whole makes more sense. Whole Life is used more for a LIRP (Life Insurance Retirement Plan) as an alternate asset that isn't correlated to the stock market with a 5-6% dividend that is TAX FREE and builds cash value which can be used at any time, Term is renting. You should actually have both. Term to insure you through your younger years at the lowest premium for the greatest death benefit and Whole after that 20-30 year Term policy expires, the Whole Life policy covers you until your 120 years old! The cash value if started early on at the lowest rate you can afford will be in hundreds of thousands or millions of dollars that has cash value and liquid.
@@Achilles5937 Can you get both through the same life insurance company or it has to be two different ones
@@c0wboys4life Either/or , you can get term and whole life with the same insurance company or separate companies. You have to shop the rates and coverage just like you do with home and auto policies. Some are better than others. Hope this helps
@@Achilles5937 It does appreciate it
@@Achilles5937 Another quick question if you don't mind, I'm considering getting life insurance and just learning as much as I can....does life insurance help cover any sudden health issues like say if you got cancer or got a real bad life changing injury and such?
Favorite line: "It's very expensive...if this were a restaurant I'd give it 4 dollar signs."
So what happens if you have term life insurance policy for 20-30 years and the time is up and you live beyond the 30 years. Do you still continue with your coverage? How does it work past the 30 years?
@@theresavisser6100 I think he said that you can renew it but the payment will be higher because you are more older. That’s I am thinking too. I may go with term limit.
this was the best explanation. Thank you
A life insurance policy's cash value is separate from the death benefit, so your beneficiaries would not receive the cash value if you passed away. Cash value that's left in your life insurance policy when you die is kept by the insurer.
Insurer is a person or company that underwrites an insurance risk; the party in an insurance contract undertaking to pay compensation.
Thank you for this. I’m currently enrolled in insurance classes for licensure and I understood more in your way of explaining that this class that I feel totally lost in. Keep up the awesome work
Jen, stay away with whole life
Why
thank you so much. Finally I can understand what is term not life insurance. great job.
So the cash value on a "Whole" life ins.plan is you just donating the difference to the company with nothing to show for it on your end.That's a racket.Very well made and informative video.
In term insurance you're doing the same thing you're. You're paying cash which has a cash value for 20 40 60 years and 90% don't pay out
@@Rshen11 they don’t pay out because u outlive the term right?
@Clark yes most people out live term policies when they are cheap... try getting a term policy when your 60 or 80.. supper expensice.. morenthen what whole life will cost..
@@vi3tboitai yes you outlive the term.. you lose all the cash you put in..
@@Rshen11 yeah but that’s just the thing with insurance. Hoping you never have to use it. Pay a lower premium and more than likely a higher payout so just in case if something happens it’ll be ok in terms of financial aspect for your family. By time someone retires hopefully they have everything paid off money saved up and a retirement nest egg to where they don’t need that.
Big 4 whole life companies allow you to go cash value heavy... 10% to premium and 90% to cash value. Potential to break even with CV by years 2-4. Positives I’d think are the CV you could use to buy rental units, pay off other debt, etc. you technically borrow from yourself and break even since the policy earns a rate “almost” equivalent to your loan rate. It’s all about leverage. Friends have used one of the big 4 and most have quit their day jobs and living off their rentals. The tax free part is a plus. The death benefit is another plus but you almost don’t want to live too long as you basically paid the entire amount from your cash value. Biggest plus might be the fact that if you ever have a lawsuit filed against you or your company then no one can touch your whole life policy. Great video! Glad I’ve subbed you. Keep up the great work!
Manny Lidie who do you consider to be the big 4?
The companies with their names on top of the skyscrapers in most downtowns of the USA :)
MassMutual, NW, New York Life, Guardian
Even if you go heavy into your cash value savings you said it yourself...you're borrowing that money you've saved that builds interest if not paid back right away. It's just an overall scam product for that very reason. Why would you borrow your own money and have to pay back with interest on top of it. That's insane.
P.s. going 90% of a 100 policy or $90 savings a month is not a lot to consider borrowing from..even if it was growing at a 1-2% rate in which most of these big 4 companies won't even match bank's rate. Never buy whole life if you care about your family
Sorry but to me it seems that they’re always pushing term life rather than whole. What he’s not saying is that when that term runs out you get nothing. Term is like Paying rent versus whole life is owning a house.
I usually refrain from commenting on videos like these, because everyone jumps to the “you’re an evil insurance guy” conclusion. But in the interest of discussion, I’d like to add some thoughts. First of all, I’m not someone that thinks Whole Life is the answer to everything. I sell a lot of term, but when I do design WL policies, I do so in a way that’s better for the policyholder and substantially reduces my commission. For example, on a $10,000 premium, typically an agent makes about 40-50% of that $10,000 for the first year and then 1-5% in renewals after that. In most cases, the way I would design it would reduce the base premium to $1000 with a PUA rider of $9000. The base premium is what the commission is based on, so instead of getting paid on $10,000, I’m getting paid based on $1000. I believe there is a balance to be struck between investments and insurance that creates more efficient retirement income options. It’s not just about rate of return. You can’t compare Whole Life to a mutual fund, they’re entirely different animals. It’s not an either/or choice, it’s understanding the relationship between investments and Actuarial Science. This is essentially how pension plans are built, and it can be done individually. Don’t take my word for it, just read Dr. Wade Pfau’s whitepapers on retirement income. Here’s one: www.onefpa.org/journal/Pages/FEB19-Investigating-the-Role-of-Whole-Life-Insurance-in-a-Lifetime-Financial-Plan.aspx
A few clarifications on your video:
1) Whole Life can be very flexible when designed properly. For example, if your premium is $10,000/year, you can have $1000 as the base premium and $9000 going straight to the CV via a PUA rider. That $9000 is optional and can be decreased, dropped, paused, and even increased in certain situations, without creating a MEC. This enhances the earlier cash values and gets you to that break even point much faster (year 4/5 instead of year 10-13).
2) The cash value is the policyholder’s share of the reserves, it’s related to the death benefit. This is similar to the equity someone has in their home. When you eventually sell your home, you don’t get the market value of the house PLUS the equity you had in it.
3) Accessing your cash values via a policy loan is NOT borrowing your own money. The insurance company is loaning you that money and using your policy values as collateral. This is why you can’t borrow more than 90-95% of your cash value amount. There is also an arbitrage happening. For example, if your cash values are growing at 4% at that point, and the loan interest rate is 5%, you’re essentially borrowing money at 1%. On top of this, your cash value is still compounding. For example, if you had $100,000 in cash value and borrow $50,000, your cash value is not $50,000. It’s still $100,000 and compounding. For this reason, depending on when a policy loan is taken, you may have the option to never pay it back (the outstanding loan will simply be subtracted from the death benefit upon death). There is also no credit check or effect on your credit report, and no amortization (you can pay it back at will). Policy loans can be an effective option when done properly and for the right reasons.
All this being said, Life Insurance is life insurance, so you should never sacrifice the right amount of death benefit. Start with term. You can always convert later if you want. There are many agents out there who don’t know what they’re doing or that aren’t doing the best thing for the client, and this goes for investment advisors as well. Do your homework, it’s your decision and your money.
Respectfully,
Bryan
Not to mention policy loans aren’t reported income....
If people really knew how whole life or cash value types of policies work they would NEVER BUY or NEVER OWN these types of policies. It is a very poor way of investing money, you only truly have access to death benefit or cash component, to access cash a loan must be requested then paid back or the loan amount plus interest will be taken out of death benefit and the cost of cash value insurance is always going to cost more for the policy owner initially and over the life of the policy.
Sylvia Greenlee On the contrary, once people understand how they work and how to design them properly, they usually want to buy more than they should. Just because you don’t understand that it’s NOT an investment (it’s insurance) doesn’t mean that other people shouldn’t buy it. Lol. You made a couple misstatements about WL, so it’s obvious you don’t understand it. Is WL for everyone? NO. Is it a good asset if you already invest and have more money to put away? In many cases, yes. Actuarial Science + Investments in the right balance creates the most optimal/efficient retirement income. This has been studied academically.
B Buff B Buff I understand clearly. If life insurance is not an investment then what is the reason or purpose for attaching a cash component?
Sylvia Greenlee This is a good article on the subject. theinsuranceproblog.com/cash-value-life-insurance-general-design-the-reserve/