Thanks for watching everyone! If you found this video helpful, then consider giving it a LIKE to support my channel! Also check out my video on "Should You Buy an Annuity?" here: ua-cam.com/video/Mq9vtiAGvCI/v-deo.html
I;m 29 and finanacial advisor tried to sell whole life insurance with $1400 monthly premium. I signed up and took all health checkup and this week I cancled right before it starts. thank god
I've been watching you for about two years on stocks and options. Suddenly, my wife wanted a whole life policy and I watched this video and it blew me away. Again, great content. You the man!
Spot on! I got term insurance some years ago to protect my family if something were to happen to me. I invested the rest. The last year of that policy coincides with my retirement date and all my kids will have graduated college and hopefully be gainfully employed at that time.
This is a great video. I went into a First Command financial advisor one time and all he wanted to do was sign me up for whole life insurance! Now I know why. Video on point, Jake!
Former life insurance agent here so I've seen all the fancy products up close and I went with Term with an extended conversion period (ECP) just in case something were to happen like I became disabled or super sick and now uninsurable I can convert to whole life to keep the life insurance for forever but outside the massive commission jump whole life is kind of pointless unless you have a super complex situation
Jake, you have answers to all my questions. 2 years ago I was messing around with options - there’s your videos. The war starts, I’m Ukrainian, I have family in Ukraine, I need updates for the war - there’s your videos. I get into life insurance - there you are again 😂😂
You are a God send ! I had a "friend" talk me into signing up for Whold Life Insurance. I had "real friends" talk me into canceling this policy before that window expired. Always wondered who was right. Funny how the friend who sold me the policy is no longer and the other friends are still.
On point as always. I'm in year 7 of my 30 year term life insurance and the only reason I have it is for my wife and kids, if i pass. Whole life is a total scam, imo.
@@akin242002 I mean you pay 15-20 x more for a savings plan/cash value. When you die with a 100k face and about 50k cash value that you paid an extra 15-20x more. Your beneficiary receives only 100k. It’s not a scam because it’s clear as day, but it baffles me how this shit is so prevalent
Kris Krohn says other wise... Most companies are insensitivized to doop customers so they don't get ALL the benefits. ua-cam.com/video/tqtTqtEEP0o/v-deo.html
absolute gold video.. one thing I would like to point out "buy term and invest the diff"... in reality people buy term and invest in penny stocks, crypto, ARKK.... and come out -25% after 30 years
There's a third type - Universal life. It's a whole life policy with a small premium (mine is $350 or so per year right now) with a premium, death benefit, and cash value that all grow slowly over time. My parents first got it for me when I was about 8, and while it's not a huge policy it is guaranteed to have cash value grow at no less than 4.5% per year over and above your premium payments. Not stock market rates of return but certainly a decent deal for something guaranteed, and certainly won't break the bank.
Good job. I remember an old Woody Allen movie where a guy was being punished by having to spend 3 days in a hole in the ground with a cover over it. The guy says he can do 3 days no problem and then they tell him he will be accompanied by an insurance salesman,
Thank you. That's how I've looked at it for years. Life insurance is important; it's a necessary part of an overall financial plan but it's not meant to do everything. It's there in case you die too soon but at some point you should have substantial retirement savings, home equity, no debt and even credits to leave Social Security survivors benefits to your spouse. Putting hundreds of dollars a month into whole life really takes away your ability to build these things and ends up hurting you and your beneficiaries in the end.
good! what to do if you are like 10 years into it: still reasons to kill it or look at the past at sunk cost and continue with it (1-2 years away from "break even")
am glad i saw this video. i was on the fence about getting whole life insurance or not. after watching you entire video is safe to say i am not going that route. thank you for making this video
Thank you so much for your video explanation. I've watched others and they were not as clear as you were with the visuals and comparisons,it was very helpful
Term all the way. I also advise not having the sgli either since it’s a group policy that costs more for less coverage than you can get from say pacific life or whoever outside of the military.
I wish you talked about getting whole life younger because the premiums are a lot cheaper than 560. And if it doesn’t change this would be a good way to decide
No, it doesn't matter. If you are younger, then your premiums for term are also lower and you can just invest the difference. You'll have WAY MORE money if you just invest that money yourself and not pay outrageous fees to the insurance companies.
Jake, I made many mistakes over my 35 years of investing and I still have a boat load of money in my retirement accounts. Disability insurance is important for young bread-winners. I have a policy I got when I was 25 that pays $4,000 per month until I am 65. If I got disabled back then, that would have paid out almost $2 million. Whole life is mostly a scam, but it is better than doing nothing. I think I like VOE better than VOO at current valuations.
Thank you for your expertise and time in making this vid. I would like to ask you about the health exam. I am 56 and in good shape. I don't have diabetes or high blood pressure or any pre-existing conditions. Do I still need the exam. If I get a Ins. company without an exam is that bad. I have no clue. But I want to get my spouse 46 and myself life ins. in the unfortunate event happens.
Awesome video jake! Quick question on how you mentioned borrowing against your own accounts, in general. I have $150,000 in my 401k, and I want to do a renovation on my house and I can borrow up to $50,000 against my 401k. Obviously I am borrowing against myself and paying interest to myself, but you mentioned this could be a bad idea in general. But I don't see a downside in this situation where I can borrow my own money and pay myself the interest less any account fees where it adds up to roughly $50 a year. What are your thoughts? Possible video idea?
Without watching the video all the way which I will . I figured out I can do a cheap term life insurance and invest the rest and get a better return. Also only doing the term life insurance until I pay off a little bit of debt I have left. Once I pay it off, I'm cancelling it.
The fees colected by the companies is from the premiums in the wholelife contract. Any over funding of the policy is not subject to those fees. The strategie is to select a coverage ammount that is reasonable; making the payment premiums lower. That way more of your payment goes to the savings portion and, if you overfund it within the standards permited, the savings compound will show. Have your investments, business, real estate, IRAs or 401; and on the side, have life insurance. Worry about dying young... use term; if want to have a ultra high yield savings account while insured for the long tem, go for the wholelife. And look for the living benefits or riders that they provide (the ones included on the policy). An insurance policy is not intended for investing... But if you play it correctly it works like one.
Few nit picks. Loans on permanent policies will generally be "wash loans" because the insurance company will credit the interest back. Loans aren't subject to tax under IRS rules. You can take out loans on the policy during retirement and never pay them back since the death benefit will cover the outstanding loan balance assuming the policy doesn't lapse. I agree that permanent policies don't make sense without a significant (10K+/yr or 6-figure lump sums) amount of cash that you want to pass estate tax free to your beneficiary.
All personal loans are non-taxable... They are not considered income by the IRS. This is not a special "benefit" of permanent policies. In fact, it's not a benefit at all. This is a BS marketing trick.
Is there any opinion on let’s say…buyin a policy at 30 yrs old paying $100/month for 1 mil…you outlive that policy and at 60, should/shouldn’t you renew, if so what is typical premium for let’s say a 20 yr policy
I have Veterans Group Life Insurance. I think I am getting good value. I have compared it to other offers. There are definitely many low quality life insurance offers out there. I don't have a wife or children but I do have others I would like to help out should something happen to me. Thank you for another intelligent, informative video.
Hey! Great video. Was just wondering why you didn't bring up the fact that for universal life insurance, after a certain number of years, you have "paid up" and no longer have to pay any monthly premium? The cash can then be withdrawn tax free after it has grown (which is the tax advantage part of this). I am in the process of purchasing life insurance and just learning about the options. Advice would be great!
That's not accurate.....ULs are worse than whole life. The fees/commissions eat up the cash value leaving the client/victim to pay out of pocket to cover the ever increasing DB. Just another part of the trash value insurance.
Hello Jake. What would you say is one of the most effective ways in understanding the basic fundamentals on mutual funds, stock markets and how to enroll in a full break down step by step instruction, considering I am new to these types of investment and have no experience whatsoever.
Whole Life is awful. Just get term and invest the difference. If you die before the term contract expires, your family has financial protection. If you live beyond the term contract, the invested difference should be a sizable account which, if properly invested, could easily be worth more than any whole life benefit.
policy loans are not "borrowing your own money". They are a loan from the life insurance company so that your entire cash value can continue to grow. let me guess, you think the cash value is a separate savings account?? yep, you do. do you sell your house and expect a check for the asking price AND the equity? no?
"They are a loan from the life insurance company." Either you're lying or stupid. Cash Value comes from the customer putting money in the CV. Thus you can only borrow (up to 90%) of the money YOU PUT IN.
Clear explanation, but life isn’t as simple as just numbers. As we get older, things get more complex. Death definitely doesn’t come with scheduled date.
how dare someone make a higher commission on a product that does more than just a term insurance. Its like being surprised a bicycle salesman not making as much as a realtor.
Somebody tried to sell me a life insurance policy. My assets exceed my debts (no debts), can't afford a "real" home where I live, and no dependents or wife. Why life insurance??
Yes!! Exactly this. I've had many friends try and sell me Index Universal Life (IUL) or other forms of whole life and I always try to counter argue their sales pitch with these same points in this video. For 99% of people, term life insurance is what they should get!!
6:13 the cash value is invested by the insurance company with a 1.5% return on avg. -You must take out a loan to access that money and pay the insurance company back with interest.
Isnt the life insurance models all tax free where investments are not. Would you not have to hack off ~30% off the investment modeling to truly compare?
Depends what company you go with. Life insurance is a great loop hole for retirement because it's tax-deferred. Many people have 401k's but when it comes time to pull your money out you loose 30-40% of it to taxes, which is a huge chunk. After 59 you can pull from your life insurance without penalty or low penalty fees which vary based on the company you go with and the policy you agree too. This allows you to fund yourself after you retire. Pensions are becoming rare and will eventually fade altogether, and we all know that no one can survive on SSI alone. So over all it provides a safety net for your family when you're young, and a safety net of financially surviving retirement. And yes, everything needs to make profit and that includes any business, but what's being done is your money is being invested into stocks, the annual profit of that is returned to you at the interest rate agreed on and the company keeps the rest. There's fees for all services. You're paying people to help grow your money! If you can grow your money on your own then great! You don't need to pay others to do it for you. Just do your own research on what's best for you. I know nothing about the stock markets or how to invest so I'd rather pay someone to do it for me.
What part of "The insurance company keeps your cash value" do you not understand? Your other statements are not even close. 401ks also grow tax deferred. ROTH IRAs grow tax free. Also, you can pull money out of your CV at anytime. There would be very little taxes as that the fees/commissions eat up most of the gains. Do your homework.
Quick question @Jake, I have a tsp and a Roth IRA from M1 finance and I’m getting out of the military. Should I consolidate both into a better broker, consolidate into m1 or leave the tsp. It’s in the C Fund
You’re making an investment to either get the cash value or death benefit. I don’t see the problem. And you’re missing out that the it’s after tax money compared to just putting into SP500.
The info is good but it’s lacking a lot. I just want to say that I’m not a life insurance agent. However, considering this is a very critical subject for ppl you should do further research and provide more info. You did not mention what happens when somebody gets disabled and the importance of choosing correct policy. You also did not talk about the idea of emergency fund that instead is being in your bank account it can actually grow in interest. This is very individual and I get the feeling many people may get the wrong impression here. I invite to do further research and deliver another in depth video about this. It’s not black and white and very very specific to the individual. Anyway, love your work.
@@astroman30, the CV goes to the insurance company to cover their service expenses while the very DB goes to the beneficiaries tax free minus any balances of CV Loans if any are active.
@@astroman30, I know. Whatever their business expenses is covering be brick/mortars, commissions, investments and etc… At the end of the day, Insurance companies are businesses.😬
Hi Jake I'm a sub to your channel and I'm totally confused with your breakdown, comparison and how does this help a single mother who buys whole life for her child? If I cancel and take the premium for whole life and invest it for 30 years...then what happens if my child dies within 20 years of that investment then I would have to take monies out of investment to pay fees , taxes and cost of burial. In my world it would be best to have a whole life for very minimum like $10k And use additional money for investing? So confused bc low income folk need money for burials, we hardly have enough to save or invest. So, $500 investment monthly is unquestionable. Whose your audience? Rich, poor or middle class? Somewhere else?
Life Insurance should only be purchased in regards of replacing someone's income (aka the bread winner) or to bury a person. NEVER buy life insurance on a baby, waste of money.
Depending on which insurance company you are talking about this is either dead accurate or way off. The Mutual companies (NorthWestern and MassMutual) pay out larger dividends and are more reliable with paying out the benefits. But, should never own a whole life unless you already have term and a retirement plan already in place.
I will however stare my bias. I work for MassMutual. One of my best friends works for Northwestern Mutual and my mother worked for New York Life. And I’ll be honest here and say that all 3 of those companies range between 40% and 50% commissions on the first year premium for all products with a 5% renewal commission. For MassMutual specifically this renewal is not charged as a fee to the client, the 5% comes from MassMutuals profit.
What's your take on SGLI? I don't have it because I have no dependents and would rather invest that difference but it is certainly much cheaper than any private life insurance out there.
If you don't have any dependents who are financially dependent on you, then I don't see the reason to have it. I personally chose to get it even though I don't have a wife or kids because I named my dad as a beneficiary. I figured if I died, then I could at least help him finally retire.
But, what if you used a whole life insurance policy to take a loan in order to buy a multi unit rental property because you don't have the $50-100k you need for the down payment. Then, that multi unit rental property nets you $600/month. You don't have to take out a traditional loan or sell off your stock portfolio in order to get the down payment.
Do things change if we're talking about a 70+ person with a terminal illness? My MIL's term life insurance is about to expire, and she's not sure what to do. Would it just be a matter of choosing which monthly premium is lower and keep on extending on a yearly basis if she survives past 12 months?
Generally, life insurance companies won't let people extend their life insurance if they are 70+ or terminally ill. Maybe they don't know? Sorry, I can't really speculate as to the specifics of your situation.
Thanks for watching everyone! If you found this video helpful, then consider giving it a LIKE to support my channel! Also check out my video on "Should You Buy an Annuity?" here: ua-cam.com/video/Mq9vtiAGvCI/v-deo.html
I;m 29 and finanacial advisor tried to sell whole life insurance with $1400 monthly premium. I signed up and took all health checkup and this week I cancled right before it starts. thank god
I've been watching you for about two years on stocks and options. Suddenly, my wife wanted a whole life policy and I watched this video and it blew me away. Again, great content. You the man!
You've got impeccable timing, Jake. I literally just had a video call with an insurance representative today lol. Appreciate the insight as always!
Spot on! I got term insurance some years ago to protect my family if something were to happen to me. I invested the rest. The last year of that policy coincides with my retirement date and all my kids will have graduated college and hopefully be gainfully employed at that time.
There was one of the best explanation I’ve heard fantastic man you know what it takes
Thanks Lucky Lou! I appreciate that!
This is a great video. I went into a First Command financial advisor one time and all he wanted to do was sign me up for whole life insurance! Now I know why. Video on point, Jake!
EXCELLENT video. This is why one should NEVER be conned into buy a whole life or permanent life policy. Buy term, invest the rest.
Former life insurance agent here so I've seen all the fancy products up close and I went with Term with an extended conversion period (ECP) just in case something were to happen like I became disabled or super sick and now uninsurable I can convert to whole life to keep the life insurance for forever but outside the massive commission jump whole life is kind of pointless unless you have a super complex situation
I have multiple health issues. Glad I kept my whole life. Not happy with it. But glad I have life insurance.
Jake, you have answers to all my questions. 2 years ago I was messing around with options - there’s your videos. The war starts, I’m Ukrainian, I have family in Ukraine, I need updates for the war - there’s your videos. I get into life insurance - there you are again 😂😂
You are a God send ! I had a "friend" talk me into signing up for Whold Life Insurance. I had "real friends" talk me into canceling this policy before that window expired. Always wondered who was right. Funny how the friend who sold me the policy is no longer and the other friends are still.
You dodged a bullet on that one William! Whole Life is a terrible product. Cheers!
@@JakeBroe wonder why 2/3 of all US banks have Billions in BOLI ( bank owned life insurance)
Jake you really do your homework. Thanks for the hard work you put in to teach us this information.
On point as always. I'm in year 7 of my 30 year term life insurance and the only reason I have it is for my wife and kids, if i pass. Whole life is a total scam, imo.
Sounds like you got it right long! Cheers!
I wouldn't call it a scam. A scam doesn't provide the services the seller claimed. Overrated. Extremely overrated!
@@akin242002 I mean you pay 15-20 x more for a savings plan/cash value. When you die with a 100k face and about 50k cash value that you paid an extra 15-20x more. Your beneficiary receives only 100k. It’s not a scam because it’s clear as day, but it baffles me how this shit is so prevalent
Ignorant response when you and Jake have no clue how whole life really works. That's why your the 99%
Kris Krohn says other wise... Most companies are insensitivized to doop customers so they don't get ALL the benefits.
ua-cam.com/video/tqtTqtEEP0o/v-deo.html
Just got engaged last week, so all of the sudden I'm incredibly interested in life insurance policies... Fantastic breakdown. Thank you so much for it
absolute gold video.. one thing I would like to point out "buy term and invest the diff"... in reality people buy term and invest in penny stocks, crypto, ARKK.... and come out -25% after 30 years
Don't forget one thing that is insurance payout is tax-free VS investing in index funds you gotta take that into consideration.
I rather have 1m in index that to have 250k tax free
Thank you so much for this thorough explanation! This topic has been on my mind recently. Your video was very helpful!
Thanks for watching jordan! I appreciate the support.
Thank you. I recently tried explaining this in a Facebook group, and I was lambasted.
There's a third type - Universal life. It's a whole life policy with a small premium (mine is $350 or so per year right now) with a premium, death benefit, and cash value that all grow slowly over time. My parents first got it for me when I was about 8, and while it's not a huge policy it is guaranteed to have cash value grow at no less than 4.5% per year over and above your premium payments. Not stock market rates of return but certainly a decent deal for something guaranteed, and certainly won't break the bank.
Howz performance so far?.
Doing the hard math so we don't have to! Thanks!
Thanks for the video topic idea and the request!
Good job. I remember an old Woody Allen movie where a guy was being punished by having to spend 3 days in a hole in the ground with a cover over it. The guy says he can do 3 days no problem and then they tell him he will be accompanied by an insurance salesman,
Term is the way to go. the goal is to build wealth but at the same time have protection. I am an independent agent for the states NY, FL, and PA 😁😁😁😁
Solid advice Travis! Cheers!
@@JakeBroe Thank you Jake, I really enjoy your videos and the information you provid. You help me make a decision to go with Charles schwab lol.
Thank you. That's how I've looked at it for years. Life insurance is important; it's a necessary part of an overall financial plan but it's not meant to do everything. It's there in case you die too soon but at some point you should have substantial retirement savings, home equity, no debt and even credits to leave Social Security survivors benefits to your spouse. Putting hundreds of dollars a month into whole life really takes away your ability to build these things and ends up hurting you and your beneficiaries in the end.
Thank you Jake for simplifying Life insurance for us!
You can get both, but it's more expensive, I believe you need a certain rider, and not all insurances offer it.
You can purchase a PUA for a raised death benefit, but your beneficiaries don't get both.
good! what to do if you are like 10 years into it: still reasons to kill it or look at the past at sunk cost and continue with it (1-2 years away from "break even")
am glad i saw this video. i was on the fence about getting whole life insurance or not. after watching you entire video is safe to say i am not going that route. thank you for making this video
Thank you so much for your video explanation. I've watched others and they were not as clear as you were with the visuals and comparisons,it was very helpful
Im glad i came across your blog. If i go with term where can i get info on ivesting the rest as shown on your video?.
Contact a Charles Schwab agent. They are very reasonable setting up a ROTH IRA. You can also download their app.
Great video! I was researching term life insurance just a couple of days ago ha ha. That’s probably why UA-cam recommended this video.
Term all the way. I also advise not having the sgli either since it’s a group policy that costs more for less coverage than you can get from say pacific life or whoever outside of the military.
Thanks Jake, your channel always comes to mind when I'm looking to get informed about anything finance related!
I wish you talked about getting whole life younger because the premiums are a lot cheaper than 560. And if it doesn’t change this would be a good way to decide
No, it doesn't matter. If you are younger, then your premiums for term are also lower and you can just invest the difference. You'll have WAY MORE money if you just invest that money yourself and not pay outrageous fees to the insurance companies.
@@JakeBroe ooo you’re right! thank you for clarifying
@4:00 student loan debt is cancelled when you die so you don't need life insurance to cover that
Very true! But if payments are being made it is still a drag on your household finances preventing other debt from being paid down. Cheers Matthew!
the insurance company invest your money in stocks, bonds etc, so why don’t you invest em yourself
Thanks for explaining the difference in simplest terms. Extremely helpful video.
You are very welcome Jose! Cheers!
Term life is definitely better..Thank you!! Is it better to invest in an index fund ? And are the risk?
Hey Nikki! I definitely think just investing in an ordinary brokerage account is better than buying whole life insurance. Cheers!
Jake, I made many mistakes over my 35 years of investing and I still have a boat load of money in my retirement accounts. Disability insurance is important for young bread-winners. I have a policy I got when I was 25 that pays $4,000 per month until I am 65. If I got disabled back then, that would have paid out almost $2 million. Whole life is mostly a scam, but it is better than doing nothing. I think I like VOE better than VOO at current valuations.
Jake you nailed it in explaining and answering all my questions. I liked the if invested “ comparison. Thanx!
Thank you for your expertise and time in making this vid.
I would like to ask you about the health exam. I am 56 and in good shape. I don't have diabetes or high blood pressure or any pre-existing conditions. Do I still need the exam. If I get a Ins. company without an exam is that bad. I have no clue. But I want to get my spouse 46 and myself life ins. in the unfortunate event happens.
I’ve got term via the sgli in the military, will not get a policy once I get out
Awesome video jake! Quick question on how you mentioned borrowing against your own accounts, in general. I have $150,000 in my 401k, and I want to do a renovation on my house and I can borrow up to $50,000 against my 401k. Obviously I am borrowing against myself and paying interest to myself, but you mentioned this could be a bad idea in general. But I don't see a downside in this situation where I can borrow my own money and pay myself the interest less any account fees where it adds up to roughly $50 a year. What are your thoughts? Possible video idea?
Without watching the video all the way which I will . I figured out I can do a cheap term life insurance and invest the rest and get a better return. Also only doing the term life insurance until I pay off a little bit of debt I have left. Once I pay it off, I'm cancelling it.
The fees colected by the companies is from the premiums in the wholelife contract. Any over funding of the policy is not subject to those fees. The strategie is to select a coverage ammount that is reasonable; making the payment premiums lower. That way more of your payment goes to the savings portion and, if you overfund it within the standards permited, the savings compound will show. Have your investments, business, real estate, IRAs or 401; and on the side, have life insurance. Worry about dying young... use term; if want to have a ultra high yield savings account while insured for the long tem, go for the wholelife. And look for the living benefits or riders that they provide (the ones included on the policy). An insurance policy is not intended for investing... But if you play it correctly it works like one.
What part of "the insurance company KEEPS your cash value" do you not understand. Cash value insurance is a scam.
Few nit picks. Loans on permanent policies will generally be "wash loans" because the insurance company will credit the interest back. Loans aren't subject to tax under IRS rules. You can take out loans on the policy during retirement and never pay them back since the death benefit will cover the outstanding loan balance assuming the policy doesn't lapse. I agree that permanent policies don't make sense without a significant (10K+/yr or 6-figure lump sums) amount of cash that you want to pass estate tax free to your beneficiary.
The estate tax exemption is over 11 million. You'd need that much money in your estate to get a tax benefit.
All personal loans are non-taxable... They are not considered income by the IRS. This is not a special "benefit" of permanent policies. In fact, it's not a benefit at all. This is a BS marketing trick.
Is there any opinion on let’s say…buyin a policy at 30 yrs old paying $100/month for 1 mil…you outlive that policy and at 60, should/shouldn’t you renew, if so what is typical premium for let’s say a 20 yr policy
I have Veterans Group Life Insurance. I think I am getting good value. I have compared it to other offers. There are definitely many low quality life insurance offers out there.
I don't have a wife or children but I do have others I would like to help out should something happen to me. Thank you for another intelligent, informative video.
Hi Jake, I appreciate how you explain financial information. You do it very well. Thank you.
Thanks so much Keisha! I appreciate you watching these videos!
Hey! Great video. Was just wondering why you didn't bring up the fact that for universal life insurance, after a certain number of years, you have "paid up" and no longer have to pay any monthly premium? The cash can then be withdrawn tax free after it has grown (which is the tax advantage part of this). I am in the process of purchasing life insurance and just learning about the options. Advice would be great!
That's not accurate.....ULs are worse than whole life. The fees/commissions eat up the cash value leaving the client/victim to pay out of pocket to cover the ever increasing DB. Just another part of the trash value insurance.
Your withdrawals of cash value are tax free only up to the amount of the premiums you paid.
@@jreitsema Any loan is "tax free." Yippeee
Hello Jake. What would you say is one of the most effective ways in understanding the basic fundamentals on mutual funds, stock markets and how to enroll in a full break down step by step instruction, considering I am new to these types of investment and have no experience whatsoever.
I made my decision after watching this; very clear and helpful!
Jake, thank you! I'm new in the US and all your videos are very useful for me!
Whole Life is awful. Just get term and invest the difference. If you die before the term contract expires, your family has financial protection. If you live beyond the term contract, the invested difference should be a sizable account which, if properly invested, could easily be worth more than any whole life benefit.
Wow, I did not know the insurance company will keep the cash value after the death of the insured. That is really a scam!
policy loans are not "borrowing your own money". They are a loan from the life insurance company so that your entire cash value can continue to grow. let me guess, you think the cash value is a separate savings account?? yep, you do. do you sell your house and expect a check for the asking price AND the equity? no?
"They are a loan from the life insurance company." Either you're lying or stupid. Cash Value comes from the customer putting money in the CV. Thus you can only borrow (up to 90%) of the money YOU PUT IN.
Awesome; can you do a comparison between whole life and indexed universal life?
Definitely would want to see this one. I have indexed universal life and seems to be a great option
Wow, great video!
Wow, never thought of it that way. As always, thanks for the excellent insight Jake.
Clear explanation, but life isn’t as simple as just numbers. As we get older, things get more complex. Death definitely doesn’t come with scheduled date.
Awesome info as always, Jake. Hope all the work you've been putting into the channel is paying off.
how dare someone make a higher commission on a product that does more than just a term insurance. Its like being surprised a bicycle salesman not making as much as a realtor.
What part of "The insurance company keeps the cash value" do you not understand?
it all depends on the needs to be served and how the policy is designed and structured, not all agents are crooks
Yes, as in I have the need not to give away my money to a trash value policy.
@@astroman30 whatever you decide, it's your money anyways :-)
Isn't whole life insurance like a Roth in that it is tax free? This is a BIG reason to reconsider your opinion
What part of “The insurance company keeps your value” do you not understand? Tax free? Any loan is tax free. Try harder
Somebody tried to sell me a life insurance policy. My assets exceed my debts (no debts), can't afford a "real" home where I live, and no dependents or wife. Why life insurance??
Thank you for defining the two. This has been on my mind and this video helped with a decision I will be making.
i would'nt base your decision on this video.
Yes!! Exactly this. I've had many friends try and sell me Index Universal Life (IUL) or other forms of whole life and I always try to counter argue their sales pitch with these same points in this video.
For 99% of people, term life insurance is what they should get!!
100%
The only thing with whole life insurance is that it will not crash
IUL isnt whole life.
How much will my insurance premium go up once my term ends?
- Life insurance premiums increase 8-10% per year beyond the fixed rate that you pay.
4:15
6:13 the cash value is invested by the insurance company with a 1.5% return on avg.
-You must take out a loan to access that money and pay the insurance company back with interest.
Isnt the life insurance models all tax free where investments are not. Would you not have to hack off ~30% off the investment modeling to truly compare?
Great video with such good examples to make people understand it in simple terms. 😊👍 Thanks.
Thanks Tenzin! Glad you found the video informative! Cheers!
Depends what company you go with. Life insurance is a great loop hole for retirement because it's tax-deferred. Many people have 401k's but when it comes time to pull your money out you loose 30-40% of it to taxes, which is a huge chunk. After 59 you can pull from your life insurance without penalty or low penalty fees which vary based on the company you go with and the policy you agree too. This allows you to fund yourself after you retire. Pensions are becoming rare and will eventually fade altogether, and we all know that no one can survive on SSI alone. So over all it provides a safety net for your family when you're young, and a safety net of financially surviving retirement. And yes, everything needs to make profit and that includes any business, but what's being done is your money is being invested into stocks, the annual profit of that is returned to you at the interest rate agreed on and the company keeps the rest. There's fees for all services. You're paying people to help grow your money! If you can grow your money on your own then great! You don't need to pay others to do it for you. Just do your own research on what's best for you. I know nothing about the stock markets or how to invest so I'd rather pay someone to do it for me.
What part of "The insurance company keeps your cash value" do you not understand? Your other statements are not even close. 401ks also grow tax deferred. ROTH IRAs grow tax free. Also, you can pull money out of your CV at anytime. There would be very little taxes as that the fees/commissions eat up most of the gains. Do your homework.
@@astroman30 what part of the cash value is not a separate savings account do you not understand??
@@firecraig "Cash value is a source of funds used for any purpose through borrowing." - Mass Mutual website
Quick question @Jake, I have a tsp and a Roth IRA from M1 finance and I’m getting out of the military. Should I consolidate both into a better broker, consolidate into m1 or leave the tsp. It’s in the C Fund
yah! this was my suggestion!
I got you covered Tiger! Thanks for the suggestion!
You’re making an investment to either get the cash value or death benefit. I don’t see the problem. And you’re missing out that the it’s after tax money compared to just putting into SP500.
What part of "The insurance company keeps the cash value" do you not understand?
The info is good but it’s lacking a lot. I just want to say that I’m not a life insurance agent. However, considering this is a very critical subject for ppl you should do further research and provide more info. You did not mention what happens when somebody gets disabled and the importance of choosing correct policy. You also did not talk about the idea of emergency fund that instead is being in your bank account it can actually grow in interest. This is very individual and I get the feeling many people may get the wrong impression here. I invite to do further research and deliver another in depth video about this. It’s not black and white and very very specific to the individual. Anyway, love your work.
Simple Question, what happens to the cash value when the person dies?
@@astroman30, the CV goes to the insurance company to cover their service expenses while the very DB goes to the beneficiaries tax free minus any balances of CV Loans if any are active.
@@antonioreyes2692 "Service expenses?" That's a new one.
@@astroman30, I know. Whatever their business expenses is covering be brick/mortars, commissions, investments and etc…
At the end of the day, Insurance companies are businesses.😬
Great video, whole life is generally terrible!
This channell is highly underated.
Haha, I agree Ali!
Nicely done explaining the two policies.
Good stuff Jake. Would love a Dead Hand update 🧟♂️
This is a great video, super informative!
You left out the tax implications. I agree the numbers are spread but it’s not 3:1.
Thank you so much for the information really appreciate it
So helpful and neutral, thanks!
Hi Jake I'm a sub to your channel and I'm totally confused with your breakdown, comparison and how does this help a single mother who buys whole life for her child? If I cancel and take the premium for whole life and invest it for 30 years...then what happens if my child dies within 20 years of that investment then I would have to take monies out of investment to pay fees , taxes and cost of burial. In my world it would be best to have a whole life for very minimum like $10k And use additional money for investing? So confused bc low income folk need money for burials, we hardly have enough to save or invest. So, $500 investment monthly is unquestionable. Whose your audience? Rich, poor or middle class? Somewhere else?
Life Insurance should only be purchased in regards of replacing someone's income (aka the bread winner) or to bury a person. NEVER buy life insurance on a baby, waste of money.
Brilliantly explained, Sir. Bravo!!
Thanks astroman! Cheers!
Depending on which insurance company you are talking about this is either dead accurate or way off. The Mutual companies (NorthWestern and MassMutual) pay out larger dividends and are more reliable with paying out the benefits. But, should never own a whole life unless you already have term and a retirement plan already in place.
I will however stare my bias. I work for MassMutual. One of my best friends works for Northwestern Mutual and my mother worked for New York Life. And I’ll be honest here and say that all 3 of those companies range between 40% and 50% commissions on the first year premium for all products with a 5% renewal commission. For MassMutual specifically this renewal is not charged as a fee to the client, the 5% comes from MassMutuals profit.
Finally someone who breaks it down simply. I finally understand it now.
Thanks for watching Bert! Cheers!
What are your thoughts on universal life insurance 🤔?
Garbage....worse than whole life.
What's your take on SGLI? I don't have it because I have no dependents and would rather invest that difference but it is certainly much cheaper than any private life insurance out there.
If you don't have any dependents who are financially dependent on you, then I don't see the reason to have it. I personally chose to get it even though I don't have a wife or kids because I named my dad as a beneficiary. I figured if I died, then I could at least help him finally retire.
I appreciate this. Great stuff
Nice breakdown. 👍💯
Yet another fantastic explanation and video👍🏽👍🏽
Thank you so much jake❤
We appreciate u Jake.
But, what if you used a whole life insurance policy to take a loan in order to buy a multi unit rental property because you don't have the $50-100k you need for the down payment. Then, that multi unit rental property nets you $600/month. You don't have to take out a traditional loan or sell off your stock portfolio in order to get the down payment.
BORROWING against your own money....AAANNNDD, paying them interest to BORROW against your own money, and you think this is a good idea?
This is an excellent video. Thanks for making it.
Do things change if we're talking about a 70+ person with a terminal illness? My MIL's term life insurance is about to expire, and she's not sure what to do. Would it just be a matter of choosing which monthly premium is lower and keep on extending on a yearly basis if she survives past 12 months?
Generally, life insurance companies won't let people extend their life insurance if they are 70+ or terminally ill. Maybe they don't know? Sorry, I can't really speculate as to the specifics of your situation.
I wish I had seen this video last year. We got conned into VUL life insurance. At least I cut it off and stopped paying after a few months.
Well, that's good you got out of it!
a VUL can be a great financial tool. Who was it with?
AWESOME VIDEO !
Thank you.
Great video!
Thanks Raitis! Cheers!