Something we hear and/or read repeatedly is that a life insurance contract is simply too complicated for any mere mortal to understand. The complexity is just too great. How could ever understand what you're actually buying?
We don't disagree that if you were to sit down and ready your policy from cover to cover it would prove to be a bit confusing. However, is it any more confusing than a mutual fund prospectus? Or complete financial reports for a publicly traded company?
We think not.
If you understand the basics, have a properly designed policy and an adept agent to help you navigate it, a cash value life insurance policy will be the most simple part of your savings strategy and it's likely to be one of the most stable.
Last week we discussed how sequence of returns affects wealth accumulation. It was the first time we discussed the notion of sequence of returns risk in the light of accumulation rather than spend down (i.e. when one uses assets to generate income). There was a subtle, but important point Read More…
We’ve discussed “Sequence of Returns Risk” numerous times in the past, but most of those discussions focused on how this phenomenon affects your assets in a draw down period (i.e. a time when you are spending the money you saved to cover expenses and/or generate income).
Today we want to talk about sequence of returns in a slightly different light and note a problem it poses for all savers while they are attempting to accumulate more value in their portfolios. Read More…
The Pennsylvania Mutual Life Insurance Company announced its plans to pay participating policy holders a total of $58 million in dividends for 2017. This represents an increase over last year of Read More…
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…
The 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…
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?
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!
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.
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.
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…
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.