Do's and Don'ts of Finances......

[Nashville Fan]

Be careful. Do not confuse Whole Life with Variable Universal Life. Two very different products.

[Section B]

I would start with a simple index fund.  The fees are typically very low.  Also, in your retirement accounts I'm a fan of the target date funds.  They adjust over time to less risk investments as you reach your retirement age so you will not have to manage that portion.  The trick is to let your money work for you.

^^^^^^What he said.^^^^^^^^^

S&P 400 index typically returns around 10-14% a year.

S&P 600 index a little more, but is more prone to swings.

S&P 500 and Dow 30 average around 5-7%.

NASDAQ Composite and/or NASDAQ 100 somewhere between 7 to 20% but as you can see by the range is quite volatile.

S&P 400 is the middle of the road.  Dreyfus has a fund that tracks this index.  No load.  Very low fees.  Not a lot of intermittent capital gain action either because of very little turnover.

[mao]

I was reading the Bankruptcy thread earlier and thought we should have a thread for everyone to post about their experiences with finances both good and bad.

With it being early summer a lot of new college grads will be getting their first jobs and jumping into real life, so I think a list of everyone previous experiences could help us all.

First off I am 27, my wife 25, and pregnant with our first child. My first bit of advice to anyone in a situation close to mine is to get a Variable Universal Life Insurance Policy on yourself and your spouse.

It can serve as both a life insurance policy if something were to happen to you or your spouse, and a retirement/college fund too. With all dispersements at retirement age not taxable.

Also, USE YOUR 401K. Atleast put in what your company will match. That is a minimum, it adds up quick, remember I am only 27 and it has added up very quickly.

Thanks for all of ya'll post in advance.

Much better off with a Term Life policy and invest the premium savings into your 401k or Roth IRA. A Universal Life policy can become a deathtrap in your later years.

[mao]

A VUL is very similar to a  mutual fund just open ended meaning you can make additional investments at anytime.

The way a VUL differs is that you have a monthly amount you pay. A percentage is taken out to cover the cost of insurance (COI) or your benefit amount. The percentage I pay is 3%.

Like a mutual fund you have deductions for management of the fund, administrative, etc.

So out of the $165 a month I pay. Roughly $5 bucks is for the Insurance($500,000 to my family if I were to pass)
and then the administrative deductions which are around $25.

So between $130 and $135 a month is invested into a fund that I have control over through my financial advisor to invest accordingly.

We have two of these for Identical amounts, her's is cheaper b/c she is a younger and female.

All that is true, but as you age, the cost of insurance will increase and the amount that is invested will become less and less.

[Masshog]

Realize that all starting points in stocks aren't the same.  Forward returns when investing with PEs at current levels aren't good at all.  This isn't the conventional wisdom, but the numbers don't lie.  One of the best books about long equity cycles is at the Crestmont Research website (spend a few bucks and order their book)...  Also, turn off CNBC (and that ass Kramer) and find a way other than a typical broker or brokerage advice (after all look at how many sell recs Wall Street had on in 2003 and again last year) to get advice.  Remember that both Wall Street and their representatives have a vested interest in making sure the myth of the long term investor is perpetrated.  Don't get me wrong, there are many good brokers, but most that I have met over the last thirty years (including some of the best wealth managers in the country) couldn't find their ass with both hands.  Good luck finding one of the two or three out of ten that is actually good. 

[The Marmot]

When it comes to investing, theres only one word to remember.... RESEARCH.

[J.A.Y.]

Much better off with a Term Life policy and invest the premium savings into your 401k or Roth IRA. A Universal Life policy can become a deathtrap in your later years.

My Roth is set to the yearly max already.

And I currently contribute 11% to my 401k and it is set on a steady incline to cap at 15% in the coming years.

My wife contributes 10% to hers.

Our VUL is a backup plan if something were to happen to either of us, so we are not caught with our pants down with a newborn and being a single parent.

[Eddie Piggard]

My Roth is set to the yearly max already.

And I currently contribute 11% to my 401k and it is set on a steady incline to cap at 15% in the coming years.

My wife contributes 10% to hers.

Our VUL is a backup plan if something were to happen to either of us, so we are not caught with our pants down with a newborn and being a single parent.

but again, do some comparison shopping.  The VUL can be a Term for 1/10 the cost and 10x the coverage.  If you are maxed out on the investment area, refi your mortgage to a 15yr and pay it off early.  Seems that most mortgage companies got smart and really won't allow you paying ever 2wks anymore, without paying some sort of fee.  Reducing a mortgage by half does not double your pmts either.  I remember doing the same thing back in 2001, and my original pmt was in the low $900, after refi and keeping the same rate, it went to just under $1100.  But I saved 15yrs of interest in return.

if you don't have a mortgage, keep that info in mind for when you get one.

[J.A.Y.]

but again, do some comparison shopping.  The VUL can be a Term for 1/10 the cost and 10x the coverage.  If you are maxed out on the investment area, refi your mortgage to a 15yr and pay it off early.  Seems that most mortgage companies got smart and really won't allow you paying ever 2wks anymore, without paying some sort of fee.  Reducing a mortgage by half does not double your pmts either.  I remember doing the same thing back in 2001, and my original pmt was in the low $900, after refi and keeping the same rate, it went to just under $1100.  But I saved 15yrs of interest in return.

if you don't have a mortgage, keep that info in mind for when you get one.

Housing situation is already taken care of I built it myself.

We moved in with a buttload of equity, and are planning to sell in about 5 years, when this first child is ready to start school.

[cdhogfan]

My Roth is set to the yearly max already.

And I currently contribute 11% to my 401k and it is set on a steady incline to cap at 15% in the coming years.

My wife contributes 10% to hers.

Our VUL is a backup plan if something were to happen to either of us, so we are not caught with our pants down with a newborn and being a single parent.

I would dump the VUL and have my wife max her 401k.  Do both you and your wife have a Roth?  Also, you could open just a regular brokerage account.  You don't get any tax advantages with this, but it is still better than the VUL.  I know you probably trust you tax advisor, but he sold you a bad product.  Also, Piggard has a good idea about paying your mortgage off early instead of putting that money into a VUL. 

[cdhogfan]

primerica is a big term insurance company that also sells mutual funds.  they may have been the ones that coined the phrase "buy term and invest the rest"

I don't think J.A.Y. is going to take our advice.  I believe his "financial advisor" got him hook, line, and sinker.

[hog.goblin]

I don't think J.A.Y. is going to take our advice.  I believe his "financial advisor" got him hook, line, and sinker.

He shouldn't take our advice...he doesn't know us from Adam.  However, the opinions have been pretty consistent.  So he should take our advice into consideration and meet with a new financial advisor for a second opinion (one who sells his time and expertise...not products).

I think he'll find a better solution than his VUL.

[J.A.Y.]

I don't think J.A.Y. is going to take our advice.  I believe his "financial advisor" got him hook, line, and sinker.

No, I have taken in a lot of what has been said in this thread, and will continue to examine and research my investments like I have always planned.

What I will not do is blindly dive out of one plan into another.

I will research my options and make my decisions based on how they reflect my goals. If I feel that my current situation with insurance is unnacceptable then I will make a change.

[Eddie Piggard]

if you do decide to drop your VUL, make sure your new term policy is issued BEFORE you drop your VUL.

God forbid if something is wrong with you, you'd rather have a crappy VUL than no life insurance.

WERD!!

[hogdave]

Do: research investment options and find something that is comfortable to you and the level of risk you want to take.

Do: buy when the market is selling and sell when the market is buying.  Don't buy all at once either, acquire your position at planned increments and sell (take profit) at planned increments.  For example buy BAC at 31 and keep buying until it reaches 34, sell it above 40 and make 7.7% on the dividends in the mean time.

Do: dump the VUL - you got ripped

Do: have term policy for you and your wife and invest the rest, by the time you retire your investments will be worth more than you insurance coverage and you won't need the insurance any longer.

Don't: take advice from a bunch of people you can't see on a sports messag board

Someone bashed Jim Cramer earlier, now I don't follow what he says but watching him did give me the courage to make my own decisions and beat the returns I was getting on my mutual funds.  I am more secure knowing that I can invest in a few really good companies instead of having my money in a mutual fund that has all of the SP 500.  Because of him I am up over 30% this year while the market and my old mutual funds have crumbled.

[hog.goblin]

I believe you pay on whole plans for 10 years and then there's no more premium.

Incorrect.  It can be structured that way but that is not a default.  Insurance cost goes up every year while your investment allocation goes down.

You can have a policy that pays up, or has sufficient dividends to cover the premiums for a period of time.

It might be wise to convert the VUL to term using the cash value to fund a single premium term policy (if you have enough cash value).

The point is you have options and are smart enough to ask questions.

[Eddie Piggard]

That's definately something to think about if you go term.  If you lock in for 10 years and your health changes, you could be uninsurable. 

I believe you pay on whole plans for 10 years and then there's no more premium.

there is no reason to settle for a "10yr" term....they are out there for 10, 15, 20 guaranteed renewable.  if you are healthy you can get those and not have to worry anymore.  me?  I got a 20yr, but not guaranteed renewable because I had a previous health issue.  if you smoke, it might get a little more costly, but still bucket loads cheaper than a VUL.

[Eddie Piggard]

Dave Ramsey recommends on investments.....25% growth, 25% rapid growth, 25% international, and 25% growth and income.

[Bugscuffle]

The Motley Fool is a pretty good website for beginner investors. You can pay for their premium services, but there is a wealth of free information as well if you are willing to research. In my opinion they are pretty straight shooters.

http://www.fool.com/

[Mo_Better_Hogs]

Don't speculate, just look at the numbers.  If someone has $150 a month to spend on a VUL policy they are much better off paying about $15 on a term policy and investing the rest in an investing tool without so many fees.  This is assuming they actually invested the difference and didn't spend it.

This is what I need to look into (a term policy). I bought a Universal Life policy years ago...then I'd hear that b!tch Suzie Somebody saying how wrong that is (not that I attempt to listen to her). But it sounds like she has a point, mainly because of the high fees.

Thanks for all the tips y'all.

[Eddie Piggard]

This is what I need to look into (a term policy). I bought a Universal Life policy years ago...then I'd hear that b!tch Suzie Somebody saying how wrong that is (not that I attempt to listen to her). But it sounds like she has a point, mainly because of the high fees.

Thanks for all the tips y'all.

I don't know to speak for anyone else here, but we are not experts.  But as you can see, the majority of us agree, VUL's are worthless vehicles for life insurance.

[hog.goblin]

This is what I need to look into (a term policy). I bought a Universal Life policy years ago...then I'd hear that b!tch Suzie Somebody saying how wrong that is (not that I attempt to listen to her). But it sounds like she has a point, mainly because of the high fees.

Thanks for all the tips y'all.

Yes, Suzie is crazy and annoying...but usually spot on.  She bashes permanent life insurance.  It has it's place, thoses places are just few and far between.

[Eddie Piggard]

Yes, Suzie is crazy and annoying...but usually spot on.  She bashes permanent life insurance.  It has it's place, thoses places are just few and far between.

she may be right, but not all of our financial issues were because of mommy or daddy not loving each other enough....

[hog.goblin]

she may be right, but not all of our financial issues were because of mommy or daddy not loving each other enough....

Yes...that's the crazy and annoying part...plus she needs to get some off-white paint for those teeth.  They blind me.

[HogSophist]

nm

[kingofdequeen]

Talk about buying what someone is selling...

The "buy term/invest the rest" works wonderfully if you are lucky.  Lucky in that you don't outlive your "renewable term"

FACT - over half the people posting on this board will live past 78.  more than half of those will live to be 90.

If VUL's and whole life's were a bad idea, estate planners/CFP's wouldn't look to those first. 

If you can get a VUL or Whole Life at a decent rate, stick with it.  you will never have to prove insurability again (which kills the buy term logic...stuff happens). Fact of the matter is, medical advancements have made a vast majority of one-time fatal afflictions (heart attacks, cancer, etc) no longer fatal. They do, however, make you completely uninsurable.  What happens if you have a by pass in year 9 of your 10 year term?  SOL on renewal.  What about year 29 of your 30.  SOL again. If you want the additional protection, buy term to supplement the permanent policies for the short term.  But, when you get to be 55, those VUL's and Terms will look pretty damn affordable.

ALSO,  I don't remember AL Williams or Primerica's business model in Grad School when taking "Insurance and Investments".  I guess PhD's mismanaged their finances as well. Hell, what do they know.

J.A.Y.  - STICK WITH YOUR PERMANENT POLICIES. 

[Eddie Piggard]

Talk about buying what someone is selling...

The "buy term/invest the rest" works wonderfully if you are lucky.  Lucky in that you don't outlive your "renewable term"

FACT - over half the people posting on this board will live past 78.  more than half of those will live to be 90.

If VUL's and whole life's were a bad idea, estate planners/CFP's wouldn't look to those first. 

If you can get a VUL or Whole Life at a decent rate, stick with it.  you will never have to prove insurability again (which kills the buy term logic...stuff happens). Fact of the matter is, medical advancements have made a vast majority of one-time fatal afflictions (heart attacks, cancer, etc) no longer fatal. They do, however, make you completely uninsurable.  What happens if you have a by pass in year 9 of your 10 year term?  SOL on renewal.  What about year 29 of your 30.  SOL again. If you want the additional protection, buy term to supplement the permanent policies for the short term.  But, when you get to be 55, those VUL's and Terms will look pretty damn affordable.

ALSO,  I don't remember AL Williams or Primerica's business model in Grad School when taking "Insurance and Investments".  I guess PhD's mismanaged their finances as well. Hell, what do they know.

J.A.Y.  - STICK WITH YOUR PERMANENT POLICIES. 

sorry, can't agree with that.  it has been proven to be a horrendous investment vehicle, and that is one of the reasons he purchased it in the first place.  Your life insurance policy should not be considered until death.  Only short term to take care of things in the event of an early death.  Of course, you can outlive your life insurance term, but if you are debt free and have invested wisely, it doesn't matter.  You will have a helluva lot more in mutual funds than you could probably afford in life insurance.

[hog.goblin]

If VUL's and whole life's were a bad idea, estate planners/CFP's wouldn't look to those first. 

What happens if you have a by pass in year 9 of your 10 year term?  SOL on renewal.  What about year 29 of your 30. 

Estate planners use permanent insurance as a wealth replacement vehicle to help offset estate taxes.  It has nothing to do with the insurance or the investment vehicles of the policy, but the policy's ability to keep the estate liquid.  Even then, about 1/2 the policies fail to deliver on the desired results and my clients have to dump them.

Regarding getting sick at the end of a 10 year or 30 year term, doesn't matter.  Your term should expire at the date you expect to be retired and financially secure.  At that point insurance is not needed.

Do you really want to know the truth?  Ask insurance agents whether they have term or permanent insurance?  I spoke at a conference to insurance agents about 5 years ago and out of 45 agents 2 had permenant insurance and all the rest had term.  The 2 with permanent policies admitted they had more term coverage and small permanent policies.

[kingofdequeen]

do you want to know why insurance companies can afford to sell $1M term policies?

because 94% of all term policies sold will never pay out.

the client will either a) out live the term;  b) drop the policy; or c) quit paying and the policy cancels.

Permanent policies are the only way you can guarantee yourself that you will have insurance from here on out.

[cdhogfan]

do you want to know why insurance companies can afford to sell $1M term policies?

because 94% of all term policies sold will never pay out.

the client will either a) out live the term;  b) drop the policy; or c) quit paying and the policy cancels.

Permanent policies are the only way you can guarantee yourself that you will have insurance from here on out.

If you invested the difference in what you would pay between term and a VUL you will not need insurance later in life.  You would have way more money in your investements then what the VUL would pay you.

[kingofdequeen]

quote author=hog.goblin link=topic=228844.msg3439185#msg3439185 date=1212848322]
Estate planners use permanent insurance as a wealth replacement vehicle to help offset estate taxes.  It has nothing to do with the insurance or the investment vehicles of the policy, but the policy's ability to keep the estate liquid.  Even then, about 1/2 the policies fail to deliver on the desired results and my clients have to dump them.

Regarding getting sick at the end of a 10 year or 30 year term, doesn't matter.  Your term should expire at the date you expect to be retired and financially secure.  At that point insurance is not needed.

Do you really want to know the truth?  Ask insurance agents whether they have term or permanent insurance?  I spoke at a conference to insurance agents about 5 years ago and out of 45 agents 2 had permenant insurance and all the rest had term.  The 2 with permanent policies admitted they had more term coverage and small permanent policies.

Why would you not want to have insurance past retirement age? 

Again, its not for the investment vehicle.  It's permanent INSURANCE.  Some have great options that can perform well if paid for properly.

you can invest all the money you want into MF's and brokerage accounts (please do so with me !)  To privately supplement your 401k is the only way to guarantee yourself that you will have $ that is absolutely yours.  Max out that 401 at work up to the company match, then take your money elsewhere and find another basket.  As far as which one's?  depends completely on your age.

if you're my age (26), balls to the WALL in international funds with concentrations in India and China.  If your right up on retirement age, some bluechip equity and high grade bond funds (or laddering high grade bonds themselves).  No matter which way, its dependent on your age and expectations.

BEST ADVICE EVER - consult someone you trust.  consult with a dozen people.  mind your p's and q's.  GET HELP.

[kingofdequeen]

If you invested the difference in what you would pay between term and a VUL you will not need insurance later in life.  You would have way more money in your investements then what the VUL would pay you.

if you think you won't NEED insurance, i'd like to know how.

[Eddie Piggard]

if you think you won't NEED insurance, i'd like to know how.

Life insurance.  Once you are debt free, have a million + in a mutual fund or retirement vehicle, why would you need insurance?

[cdhogfan]

if you think you won't NEED insurance, i'd like to know how.

If you had the option of havning 200,000 in a life insurance policy or having 500,000 in a mutual fund which would you choose?

[Eddie Piggard]

Life insurance is not meant to be your "nest egg".  If you think you should carry it until you past at the ripe old age of 89 or older.....you will have spent your real "nest egg" on the premiums.  As you should know, those premiums will get more expensive as the older you get.

[kingofdequeen]

both.

Again, stuff happens.  BUT, if you have enough money to put into a joint IRA (say its a two-person - 10K per year).  20 years.  Average return after fees MUST be around 9%.  not totally undoable.  how are you purchasing these?  through a broker?  Give him his 1% wrapfee (annual).  Privately?  Fee me, please.

Again...9% no undoable. So then yeah, maybe, just maybe, you could live off or your money and leave your heirs and legacy squat.  Unless you require home - hospice (oh no, you're one of the 50% of people who will need long-term care?  who could have guessed).  Then you will eat your next egg to know where, be left with nothing, and dependent on the government.

not everyone can agree...but to not prudently look at what the insurance is for, the cost vs. the benefit for your heirs, estate, and legacy to simply say "I'll have money i don't need this" is egocentric at best, ego maniacal at point.  It's not for you.

[kingofdequeen]

Life insurance is not meant to be your "nest egg".  If you think you should carry it until you past at the ripe old age of 89 or older.....you will have spent your real "nest egg" on the premiums.  As you should know, those premiums will get more expensive as the older you get.

unless you buy a permanent policy now.  Premium same at issue age as it is at 90, but the equity in the account will most likely pay the premium, so that premium no longer comes out of your pocket.
the key is to not have to rate for insurance at 65.

[kingofdequeen]

another note worth taking...

in my day to day work, i'm fondly reminded of Suze Orman and Dave Ramsey and their financial wizardry when it comes to investments and insurance.  Term only, no annuities, save and invest, you'll be better off.

Huh...both selling books on financial responsibility after having BOTH been bankrupt.  Huh.

Yet, when I use Alan Greenspan and his documented investments in Annuities as well as his reported life insurance holdings, I get blank stares.

[Eddie Piggard]

unless you buy a permanent policy now.  Premium same at issue age as it is at 90, but the equity in the account will most likely pay the premium, so that premium no longer comes out of your pocket.
the key is to not have to rate for insurance at 65.

you are considering that a permanent policy holds up in value.  the idea is not to leave your great grandchildren money, but to have something to live on when you are uninsurable.  the rate of return on this VUL is barely keeping up with inflation.  so the cash out option is worthless.  again, if I can only afford $100,000 in VUL based on the astronomical premiums, why would I not just purchase the term at 1/10 the cost, 10x the coverage and invest the rest.  history shows, most people can fall out of a boat and land on mutual funds that will make them 12% on average.  if you have planned it correctly, you can live off of 10% of your now million +  and do whatever you want with the rest....ie. pay for long term medical help, give to charities, give to family, or whatever.
either you need to read up more, or you sell this crap stuff.

[Eddie Piggard]

another note worth taking...

in my day to day work, i'm fondly reminded of Suze Orman and Dave Ramsey and their financial wizardry when it comes to investments and insurance.  Term only, no annuities, save and invest, you'll be better off.

Huh...both selling books on financial responsibility after having BOTH been bankrupt.  Huh.

Yet, when I use Alan Greenspan and his documented investments in Annuities as well as his reported life insurance holdings, I get blank stares.

so, Dave Ramsey who over extended himself during a "buy buy" phase in his life, now does not have the smarts to inform you on the best ways to invest.  Seems to me, he figured it out.  He didn't get rich selling his books, he's not Stephen King.  He didn't get rich running a radio program, he's not Howard Stern.  You do remember that Thomas Edison failed hundreds of times before he finally got it right.  What a crazy bunch of people we were to allow him to invent stuff.

[kingofdequeen]

my reading, i assure you, it up to date.  I did plenty in grad school, my friend, as well as daily in my work as a financial rep.

and what VUL's are you looking at that don't keep up with Inflation?  there are VUL's out there that have GUARANTEES that lock in 5 and 6% interest at a minimum.  And yes, I do sell this, as well as a number of other insurance and investment options that I tailor to the client and his/her situation (health, experience, age, goals, worth, etc, etc,).

And those folks got rich selling you books.  Sorry.  The "Learn from me, i had it all and lost it b/c i was leveraged to the hilt in hyper high risk/high reward investments, but now I have it back again b/c i'm telling you about it" does not hold water for me.  Maybe it does for you (and millions of others, i'm sure).  Orman getting hit with a class action suit by the credit federalli for untrue credit statements and practices also tends to hurt credibility.

Have a lot of time to read books living with mom, do ya?

[Eddie Piggard]

my reading, i assure you, it up to date.  I did plenty in grad school, my friend, as well as daily in my work as a financial rep.

and what VUL's are you looking at that don't keep up with Inflation?  there are VUL's out there that have GUARANTEES that lock in 5 and 6% interest at a minimum.  And yes, I do sell this, as well as a number of other insurance and investment options that I tailor to the client and his/her situation (health, experience, age, goals, worth, etc, etc,).

And those folks got rich selling you books.  Sorry.  The "Learn from me, i had it all and lost it b/c i was leveraged to the hilt in hyper high risk/high reward investments, but now I have it back again b/c i'm telling you about it" does not hold water for me.  Maybe it does for you (and millions of others, i'm sure).  Orman getting hit with a class action suit by the credit federalli for untrue credit statements and practices also tends to hurt credibility.

Have a lot of time to read books living with mom, do ya?

don't need to, and if inflation is hovering at 4%+, how do you plan on living on the 2%?  I figured you must sell the junk.  But you keep it up, there are plenty of suckers out there that listen to people like you. 

[kingofdequeen]

and there are plenty of people like you who's well-laid plans fall short of their goals that provide me with marketing opportunities as well as opportunities to help people.

and i will keep it up.  i promise

[hog.goblin]

and there are plenty of people like you who's well-laid plans fall short of their goals that provide me with marketing opportunities as well as opportunities to help people.

and i will keep it up.  i promise

So do you have a permanent policy?

[hog.goblin]

Again...9% no undoable. So then yeah, maybe, just maybe, you could live off or your money and leave your heirs and legacy squat.  Unless you require home - hospice (oh no, you're one of the 50% of people who will need long-term care?  who could have guessed).  Then you will eat your next egg to know where, be left with nothing, and dependent on the government.

You just changed the subject, apples to oranges.  No one said you shouldn't have disability or long-term care insurance.  We are talking about permanent life policies, specifically VULs.

[Eddie Piggard]

and there are plenty of people like you who's well-laid plans fall short of their goals that provide me with marketing opportunities as well as opportunities to help people.

and i will keep it up.  i promise

lets just agree to disagree.  I might concede that the only time VUL's or Whole life policies are warranted is when the client can't get term due to medical issues.  then, they need something.  but other than that, they are a worthless product for investment purposes, and that is how they are sold.

[kingofdequeen]

So do you have a permanent policy?

yep.  250k Phoenix Life VUL on me and the wife, a 100k Whole on the baby, and 500k 30 yr terms on me and the wife again. 

pretty good bill every month, so i don't get to drive a new car or get a bunch of new golf clubs.  but i believe in it.

[kingofdequeen]

You just changed the subject, apples to oranges.  No one said you shouldn't have disability or long-term care insurance.  We are talking about permanent life policies, specifically VULs.

this gentleman and i are having a (rather public) squabble over financial planning.  If you only have one pot of money (i.e., retirement accounts), then that's what you draw from.  so you either draw to pay yourself through retirement, draw to pay medical/hospice bills, or try to skimp and skim and hopefully leave something to the kids and the estate.

anyone who gets that lucky to never have anything pop up is either incredibly wealthy (and we ain't talking about a million...better have a couple).  Plus, if you wait till retirement to buy LTC or DI, you again run into the exhorbant costs associated with medically or mortally insuring an individual at retirement age, defeating one of the purposes of the buy term/invest rest strategies, which is avoid "expensive" (relative term) insurance.

[kingofdequeen]

lets just agree to disagree.  I might concede that the only time VUL's or Whole life policies are warranted is when the client can't get term due to medical issues.  then, they need something.  but other than that, they are a worthless product for investment purposes, and that is how they are sold.

and i will concede that point to you as well...as INVESTMENT Vehicles, they will not achieve many of the goals that a moderate to aggresive investor would pursue.  It is also illegal/unethical to sell permanent policies as investment vehicles.  The "separate account/variable account" are there to grow so as to control life insurance costs later in the policy.  The fact that they MAY have the POTENTIAL to be sources of equity later in life is icing on the cake, and should be treated as such

i'd be happy to sit down with any of you fine gentleman.  we could sit down and do some planning for your and your families. PM me and i'd be happy to schedule appointments with you all.

[hog.goblin]

a 100k Whole on the baby

And what is the purpose/benefit of this?