High Cash Value Whole Life Insurance
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- Опубліковано 4 жов 2024
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high cash value whole life insurance has been around forever! It important to understand the pros and cons of cash value whole life insurance.
High cash value whole life is also going to be referred to ask dividend paying whole life insurance.
The thing that sets it apart from other life insurance policies are the guarantees.
these policies come with three guarantees.
1. cash value guarantee
2. Premium guarantee
3. Death benefit guarantee
As always, the devil is in the details. These benefits sound great, but at what cost?
Can u share the report? Nice
This is really great content. Some of the best explanations I’ve seen. Watching all your videos. Thank you! Michael
What about the fact that the premium isn't level with an IUL? Doesn't the cost go up over the years anyway?
Northwestern mutual has high cost of loans which is 8% per year. They are charging you more than you are making. Dividends are not guaranteed
And what happens to the "cash savings" when the person dies?
Love your videos i am getting an IUL for myself and not a whole life policy but a question for you since you are an authority on this subject..Why are banks parking their cash in Whole life policies and not IUL policies? Do you see them shifting to IUL policies anytime in the newr future?
Here is link to study: www.thewpi.org/pdf_files/NU.WL.Charts.2010.cwpp.newsletter.pdf
Very educational and well put. Well done.
If a WL is designed correctly, you will break even between years 3-7.. after that point there is no cost.. that's not expensive imo.
If a mutual company has historically paid an average dividend of 7.10% over 100+ years, that's a safe bet. And to compare these policies to CDs, or any other account that will be interrupted if you withdrawal is unfortunate. Apples and oranges.
What do you mean by average dividend? Who cares what the dividend is. I want to know what the IRR is. Nowhere near 7.1%. No cost? c'mon.
@@CashValueLifeInsuranceReviews average over the last 50 or so years.. this includes the high rates from the 80's so that has to be factored in ( rates may not be that high again, who knows). You can see what these mutual companies have paid out since the early 1900's.
I'm with you on the IRR.. to an extent, single digit differences aren't the end all be all. Especially when you can achieve high double, or triple digit returns with the arbitrage.. say I borrow 20k with a policy loan rate of 5%, my cost is 1k, and if I get 10% on an outside investment that's 2k. Ive turned 1k into 2k, 100% return and I didn't use my money, I used the ins companies money.
And the no cost thing.. yes, after so many years of growth, there is essentially no cost. You put in so much money, and have access to so much more, and withdrawal, or loan against the increased value to the point that the policy is growing beyond what you're taking out, yes thats no cost imo.
@@6040adam You didn't answer the question. What is the IRR of your 7.1% div? And is it higher or lower than your loan rate?
Essentially no cost? How can you say that when the fees aren't published?
@@CashValueLifeInsuranceReviews whats your email.. ill send my WL ledger.. the IRR is different from year to year.. how far out do you want to go out... yeah, its garbage in the early years.. the IRR is probably the least relevant number to me.
I am leary of ANYTHING that is tied to the stock market. And also leary of products thst have only been around for 30 years. To me those haven't been proven. IUL and Variable life fall into that category.. can they preform as illustrated over a 30-60 year time frame? I don't know, do you?
Don’t worry, I opened up TWO $1,000/mo policies. One was whole life with PUA with term ending after 7 years as a 90/10 split, other policy is an IUL funded to max of TEFRA DEFRA option B (swap to A once funding is done) both policies are 1 year in. I’m willing to bet in 20 years the IUL will outperform the whole life, and once it hits 30+ it’s going to be an astronomical difference. I wanted to diversify and learn from these policies. Either way I’m happy to have both ;-) earned 31% in my IUL so far, 6.2% with dividends. However due to surrender, the whole life currently has more cash since there’s no surrender, but loan rate is 5% on whole life 2.85% on IUL. Have not taken loans out on either policy won’t do it until year 3+. When I pull a loan, it will the exact same amount of both, if there’s a repayment I’ll make sure to make It equal on both.
great video, it is unfortunate that only 995 people have seen it, this should have millions of views
These explanations make it seem like 401ks and iras are dead and I should be putting my expendable cash flow into a policy… is that the jist?
It really depends on lots of different factors. I would not suggest this route to just anyone. If you would like some guidance on whether you might be a good fit for this route, book a free discovery call with me and my team!
Thanks for watching!
calendly.com/leveragedwealth/lwm-yt
Great video, but I'm pretty sure there is an annual limit of how much you can put into a policy because of the MEC limit. might want to reword that so you don't mislead anyone. Thanks for the video though
@apc123 The MEC limit is relative to the policy.
@@CashValueLifeInsuranceReviews yes exactly! which still means there's a limit and it's not an unlimited contribution. That's all
Love the review, but boy oh boy, you were not the most objective when doing so lol you have a vast understanding of cash value life insurance, I’ll give you that, but there’s companies that have a loan rate currently at 4.5% with a cap rate at 6%. I’m team IUL all day, but a properly funded 90/10 PUA policy with the right company can do well too. Don’t have to worry about the bull pucky of the cap rates getting lowered on you, I have BOTH policies. Both started on the same day, funded with the same $$. If I take loans it will be the same. Only time will tell ;-) whole life is with Foresters Financial advantage II and the IUL is with FG pathsetter. Both $1k/monthly I’m excited to learn from this. I’m 1 year and 2 months in
Are you sure there's no limit to how much you can put in? I thought there were net worth restrictions, IE cant insure yourself for more than youre worth or something
That's not true I just bought me a $600,000 term policy I ain't no where near worth $600,000 😂
NWM has two loan options: a fixed rate loan at 8% per year or a variable rate loan at a minimum of 5% per year (rate changes every year based on the Moody's AAA corporate bond yield). With historically low bond rates, NWM variable loan rate for 2020 is 5%. If you borrow from your policy this will reduce your yearly dividend since NMW is a direct recognition company. We are nearing the bottom of the 40 year AAA bond market, and it is likely in the next 20 years the IRR will equal or exceed the projected values. Even the dividend payouts on participating PWLI have bottomed. I love your vids, good stuff.
I don't see the place for Whole Life in a rising interest rate environment. IUL only gets better as rate increase. Thanks for the comment.
Cash Value Life Insurance Reviews NWM says they have a min guarantee on dividends of 4%
Roth income limits and contribution limits
Say you're 40 years old now would Whole Life be the better choice to keep your premium low whereas IUL would increase each year you age?
What's the best way to decide a whole life is better for a client than a IUL?
What do you think about Penn Mutual's Whole Life Product that has an option to use an indexed-linked crediting method?
I think there are far better options out there.
Great video by the way. Quick questions, for the WholeLife is the guaranteed interest rate always stays level throughout the life of the policy or does the insurance company declares different rate at the beginning of each year? And, for the IUL fixed rate does it ever go to zero if the market is in the negative? Like in 2008.
Excellent information. I am on the fence with Whole life and had concerns about this cost of borrowing vs rate if return. Would basically have to take out a loan and invest at a higher rate of return in the future just to benefit from the cash appreciation. otherwise take a hit to the death benefit. I will check out IUL next before i make s decision.
I can't find the 20 year historical performance report online. Would you be able to either point me in the right direction or email it to me? Thanks
You wrote the #3 three times, haha.
More guarantees more expenses
Wow. Great explanation. Thank you sir.
Thank you!
Whole life Is expensive. Use IUL to get faster cash value accumulation. Dividends are not guaranteed. 0.5-1.5% is average dividend return.people buy whole life for projected dividends
Is it possible for you to email me the historical performance chart please?
But doesn't your cost for insurance continue to grow as you get older?
Not with WL
6040adam AE right it’ll be fixed with Whole Life policies. I was referring to Universal Life policies, I believe they are renewed each year and recalculated based up your age. I guess my only concern is that as you get older that cost will continually grow as with the Whole it’s fixed.
@@zachcarroll4779 yes, the 1 year term increases every year.. the longer its in force, the more risk is on you. Terrible product for long term stability and growth.. short term, if you time things right with the market (good luck) it can be good.
@@6040adam right so the idea, would be to start with higher term and as you grow older gradually decrease by 100k per 10 years or whatever the ratio may be.
For Example:
1-10 : 300k
11-21 : 200k
21-100: 100k
I've done a video in this. Cost is based on net amount at risk * COI factor.
I would love for a whole life peddler to show me an illustration that outlines the costs. I'll wait.....
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