How Easy is it to Create a Modified Endowment Contract?

How Easy is it to Create a Modified Endowment Contract?

The Modified Endowment Contract is mostly an unfavorable reclassification of a life insurance contract that strips it from most of the tax preferential features cash value life insurance enjoys. This includes: FIFO distributions Tax-free loans Tax-free collateral assignments There are several subtle but important tax consequences of owning a MEC.  A big and often overlooked …

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Is Life Insurance Worth Getting?

Is Life Insurance Worth Getting?

Life insurance is worth getting if you have a family to protect or if you have some financial obligation you need to cover if you die.  For a large number of people, protecting family members from financial hardship is easily done with term life insurance.  Term policies are the cheapest type of life insurance available …

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How are Whole Life Insurance Dividends Calculated?

How are Whole Life Insurance Dividends Calculated?

Reversing the process for calculating the payable dividend on a whole life insurance policy is nearly impossible given the proprietary nature of life insurers.  This said we can use several pieces of information to at least create an approximation on the correctness of the dividend earned on a whole life policy in any given policy …

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2021 Whole Life Insurance Dividend Roundup

2021 Whole Life Insurance Dividend Roundup

With all the major whole life dividend announcements now public (for the most part), we wanted to take some time to review each company and how they plan to enter 2021.  Dividends paid on participating whole life insurance play a crucial role in our everyday life because they are the key driver behind cash-rich whole …

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Can I Borrow Against my Life Insurance?

Can I Borrow Against my Life Insurance?

If you are looking to borrow against your life insurance you have to ensure that you have the correct type of policy and that your policy has cash surrender value.  Once you determine that you have a type of life insurance that permits borrowing and that you have cash value against which you can borrow, …

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Does Whole Life Insurance Rate of Return Matter?

Does Whole Life Insurance Rate of Return Matter?

There are some insurance agents who suggest the rate of return of a whole life insurance policy doesn’t matter.  This curious claim is pervasive within the self-banking (e.g. Infinite Banking®, Bank on Yourself®, etc.) circles.  So with piqued interest, exploring this notion seems appropriate. Does the rate of return not matter?  Is it all a …

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Whole Life Long Term Cash Value

Whole Life Insurance Long Term Cash Value

When buying whole life insurance for its cash value, we generally have a very long term view on the strategy.  Even though someone might want access to the money in the life insurance policy within a few years, we still want to maximize the lifetime value of the dollars committed to whole life insurance. To …

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Everything you Ever wanted to Know about Life Insurance Underwriting

Life Insurance Underwriting

The life insurance underwriting process can appear intimidating.  There's a lengthy application where you'll disclose a lot of deeply personal information, and then you have to wait to find out if the insurance company even wants to do business with you.

Much like applying for a mortgage, the process can be a little nerve-wracking.  But probably the most intimidating part of the entire process is simply not knowing what to expect.  That's exactly why we put together this guide to help you understand the process.  With this, you can face the life insurance underwriting process head on and limit surprises in the process.

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Term Life Insurance to Age 100

Term Life Insurance to Age 100

Term to 100, as people commonly refer to it, isn’t term life insurance at all.  It’s actually a form of universal life insurance known most commonly as Guaranteed Universal Life Insurance.  While this life insurance product is technically a form of permanent cash value life insurance, it functions much more like term life insurance, and …

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What Rate of Return Beats Whole Life Insurance?

What Rate of Return Beats Whole Life Insurance?

Whole life insurance works well as a retirement income tool because it offers a very stable year-over-year return.  This feature minimizes the effects of sequence-of-returns risk that causes other assets to (at times) turn fewer saved dollars into income because it needs a bigger cushion to protect against potential asset declines. But how strong is …

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