What is a Life Insurance Dividend?

What is a Life Insurance Dividend?

A life insurance dividend is a non-guaranteed payment from the insurance company to the policy owner representing profits the company earned during the policy year.  Insurance companies often view dividends as a sharing of the surplus created by their insurance activities among policyholders whose insurance contracts generate profits beyond the insurer’s expectations. A dividend also …

Keep Reading

Whole Life Insurance vs. Bonds (Updated for 2021)

Whole Life Insurance vs. Bonds (Updated for 2021)

Back in 2015 we published this blog post detailing a scenario looking at whole life insurance as an alternative option to buying bonds.  The details for the individual who approached us included a desire to invest a sum of $500,000 into bonds, so we looked at how we could best deploy that cash into a …

Keep Reading

What is Imputed Income on Life Insurance?

What is Imputed Income on Life Insurance?

Imputed income is the recognization of a benefit received for which the recipient did not pay. When it comes to life insurance, imputed income occurs when someone receives coverage through his/her employer where the individual does not pay for the coverage. Internal Revenue Code 61 stipulates most of the rules for imputed income. Imputed income …

Keep Reading

Is IUL Good for Retirement?

Is IUL Good for Retirement?

Indexed universal life insurance (or IUL) can be good for retirement because it protects your savings from stock market crashes. It also has the potential to earn more than a whole life insurance policy. IUL is able to accomplish this slightly higher return potential because it uses index accounts that are linked to the movement …

Keep Reading

Can You Convert Your 401k to Whole Life Insurance?

Should you consider converting a portion of your 401k to whole life insurance?

Most people that are asking about converting funds in their 401k over to a whole life insurance policy are looking for one thing—to convert money that will be taxable at some point (tax-deferred) over to dollars that are tax-free. You can make the conversion but not directly and not without paying taxes. For decades, it …

Keep Reading

Should you Hire a Fee-Only Insurance Advisor?

Should you Hire a Fee-Only Insurance Advisor?

Fee-only insurance advisors provide advice on insurance-buying decisions free of the potential conflicts posed by commissions.  Fee-only advisors receive compensation through a fee you agree to pay them for their work.  In exchange for their fee, these advisors will review the facts of your specific buying situation, insurance proposals you received from agents, and make …

Keep Reading

Premium Finance Life Insurance Problems

Premium Finance Life Insurance Problems

Premium finance life insurance requires the policy owner to get a loan from a bank to pay the premiums on his/her policy.  The strategy works to reduce the net cost of buying an extremely large life insurance policy, and wealthy Americans use premium financing for this very purpose.  There are, however, times when unscrupulous insurance …

Keep Reading

How Does the Guaranteed Insurability Rider Work?

How Does the Guaranteed Insurability Rider Work?

The guaranteed insurability riders, also known as the future purchase option, future increase option, guaranteed purchase option, or guaranteed increase option rider, allows the insured of a life or disability insurance policy to purchase additional coverage without going through a new medical exam. This rider can help an insured purchase additional amounts of insurance when …

Keep Reading

What Happens to Your Life Insurance When You Retire?

Do you still need life insurance after you retire?

When you retire, you have the option to continue paying for the life insurance you had while you were working or buying your own policy that is not connected to your employer at all. For most people, the type of group life insurance  (offered at work) that costs almost nothing while working becomes very expensive …

Keep Reading

Sure We’re All Investors Now

Sure We're All Investors Now

The GameStop Reddit short squeeze shows us that it’s possible for a crowd of retail investors to perpetrate stock market manipulation similar to the allegations levied for years against hedge funds.  It’s yet another example of the volatility stocks can possess that makes little practical sense and turns the capital markets from a funding source …

Keep Reading