November 22, 2016

2016 Whole Life Insurance Dividend Analysis

Whole Life Analysis 2016

 

Since 2013, we have published the only public analysis on variation in dividends for major participating whole life insurance products.  This analysis is a better gauge on product dividend performance than traditional reporting that focuses on the absolute declared dividend announced by each company. Read More…

November 18, 2016

BREAKING NEWS: Guardian Life Announces 2017 Dividend

Insurance NewsThe Guardian Life Insurance Company of American has announced its plans to pay $847 million in dividends to its participating policy holders. This represents the highest gross dividend payout in the company's history and a gross increase from last year of Read More…

November 17, 2016

IPB 051: Who Should and Shouldn’t Buy Whole Life Insurance?

angel-and-devil

 

One question that we seem to get repeatedly is, “Should I put all of my emergency fund into a whole life policy?” The first few times we got this question we figured maybe it was just coincidence?

But, after having been around ye olde interwebs for over five years now, and talking to over 1000 people who've actively engaged us in conversations specifically around using whole life insurance as an asset, we discovered there are multiple sources of this “advice”.

Or at least multiple sources that are responsible for planting the seed.

There's also the corollary which suggests to people that using whole life insurance as an asset is a great idea for everyone!

On the surface, it doesn't seem like a bad idea. But as usual we've got an opinion that probably doesn't align with the proprietors of this over-simplified advice. Shocker right?

So…

When is it appropriate to use whole life insurance as an asset? Who is it appropriate for? What scenarios represent a “best use” case?

Ahh…you'll have to listen to find out!

November 10, 2016

IPB 050: Dividend Season 2016

 

It's that time of year again…time for companies that offer participating whole life insurance policies to make their dividend announcements for the coming year. (And yes, we realize these are technically the 2017 dividend announcements but since they're made in 2016 we refer to it as the 2016 season.)

So far, we've heard from Northwestern Mutual and Mass Mutual.

You can read our posts about those announcements here and here.

This year the “trend is not your friend” as both of the two companies that have made their announcements public have lowered their dividend scale by 45 and 40 bps respectively. So…what does that mean for the rest of the companies yet to announce?

Well, my crystal ball says that if they hold their dividend that will be great. But we're leaning more toward more lowering announcements. It's unlikely that we'll see any increases.

But…I'll be happy to plate up some cold crow if the announcements improve.

We'll do our best to keep you posted as the announcements roll in.

November 8, 2016

BREAKING NEWS: MassMutual Life Announces 2017 Dividend

Insurance News

The Massachusetts Mutual Life Insurance Company announced its intentions to pay $1.6 billion in dividends to policyholders in 2017. This represents a decrease from 2016 of Read More…

November 3, 2016

IPB 049: Why 10 Pay Whole Life Is Not So Great

 

We are often asked about 10 Pay Whole life policies as a strategy to accumulate cash value at a more rapid rate. So, today were getting into why this might not be the best idea.

As a quick review a true 10 Pay Whole Life Insurance requires just 10 premium payments.  After those 10 payments it is contractually paid up requiring no further premiums. Agents and brokers often use this product for its higher than average cash accumulation capabilities and for the very short time period of premium commitment.

 

October 27, 2016

BREAKING NEWS: Northwestern Mutual Announces 2017 Dividend

Insurance News

The Northwestern Mutual Life Insurance Company has announced its intentions to pay $5.2 billion in dividends to policyholders in 2017. This represents a decrease from the 2016 dividend payout of $400 million. Read More…

October 20, 2016

IPB 048: When a Modified Endowment Contract Makes Sense

surprise-xs

 


Most people think that creating a Modified Endowment Contract (MEC) is a bad thing. We discussed that at some length in last week's episode.

That's mainly because the tax advantages of using life insurance are pretty widely known and discussed my agents…ourselves included. So, why in the world would anyone want to intentionally make the cash value taxable by using a MEC?

Good question. Losing the tax benefits can be a negative thing…especially if creating a MEC was not your intention. Read More…

October 13, 2016

IPB 047: The Modified Endowment Contract

 

mec

 

Note: The podcast is fresh and new but the written post below is a re-post of information that Brandon wrote a few years back on modified endowment contracts:

Anyone who has looked into cash value life insurance has probably come across the term Modified Endowment Contract (MEC). Those with flexible premium policies may have noticed a portion of their statements that stipulate whether or not the contract is a Modified Endowment Contract.

You may have even seen numbers indicating the amount of money that can go into a policy before it turns into an MEC. What does it mean, and why do we care? We’ll explain that and more today as we cover MECs in their entirety. Read More…

October 6, 2016

IPB 046: Life Insurance Has Never Caused a Financial Meltdown

pirate-day

 

In light of the recent developments with Wells Fargo opening accounts for people without consent and their CEO, John Stumpf, being skewered by Senator Elizabeth Warren…

We decided it would be a great day to point out how many times a life insurance company CEO has been trotted out to testify in front of Senate or House investigative panel.

Do you remember how many life insurance companies made big news for causing or playing a role in the last financial crisis?

Let me skip the suspense…zero.

In fact, the United States Governmental Accountability Office (GAO) published a report in 2013 titled, Insurance Markets: Impacts of and Regulatory Response to the 2007-2009 Financial Crisis

If you'd like to read it I've linked to the pdf here:

GAO Report of Insurance Markets–http://www.gao.gov/assets/660/655612.pdf

To get our take on why the life insurance industry in particular hasn't had these problems, go listen to the full episode.

Enjoy!

P.S.  I know some of you are thinking…”but what about AIG?” Listen to the episode to hear the truth about the role AIG played in the last financial crisis. 

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