Last time I talked about designing cash value life insurance as an asset class using whole life insurance, today we'll dive into how it works for universal life insurance.
Universal life insurance is often used by agents as a lower premium permanent life insurance option as compared to whole life insurance, huge mistake. As a product that seeks to establish a permanent death benefit, it needs adequate incoming money to build an appropriate reserve to ensure the policy's sustainability.
The Guardian Life Insurance Company of America has announced its dividend for 2013 on all participating policy holders. Guardian will pay out a total of $803 million in dividends to its policy holders, the largest dividend payout in the Guardian's history.
Many of the people who reach out to us hope to use cash value life insurance to create retirement income. They’ve heard about this possibility, maybe read a book or two that talked about it, and, in some cases, even talked to a “certified” advisor.
But, they’re still scratching their heads as to how it all works, and they’re often convinced they haven’t seen the best representation of the strategy.
In the last few years particularly, this strategy has gained significant momentum, and it’s not surprising with the sagging long-term rates of fixed income investment vehicles (treasury bonds, corporate bonds, and CDs) and the volatility of the stock market since 2008.
It occurred to me somewhat recently that all my praise for cash value life insurance has left some unanswered questions regarding execution. This is purely a function of precious little time and the needs for a more diverse range of topics. This week I'll be rolling out a two part series on the subject (two so that we can spend ample time sorting out how it's done with whole life and universal life insurance). And since whole life is way trickier, we'll start there.
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The election is over…finally. What does that mean for your taxes?
OccupyWall Street becomes Occupy Debt?
401k balances soar…kind of.
We dive off the fiscal cliff along with everyone else.
This week we had two rather surprising announcements when Penn Mutual and Jackson National Life both announced limitations on new money to their annuity products due to annual capacity attainment.
This news comes at a time when several major carriers have announced roll backs and limitations on new premium for their products.
In a world where almost every talking head and financial pundit (think Suze Orman and Dave Ramsey) is telling you that cash value life insurance and particularly whole life insurance are terrible, we stand atop the shining city on the hill and declare them wrong. As a matter of fact, it’s great up here, and we recommend you check out the view!
Alas, so far, most of our cries have gone unheard.
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The Chairman of the CFP Board resigns under the cloud of an ethics violation
We love our cars and the payments that come along with them
Hartford would like to buy back your annuity
A listener asks us for some help with Math
The Northwestern Mutual Life Insurance Company of Milwaukee, WI has announced its 2013 dividend. Northwestern Mutual will pay $5 billion in policy holder dividends, the largest payout in the company's history. To put a little perspective on that, Northwestern Mutual will pay its policy holders a sum larger than Lafayette Life (the highly promoted whole life insurer for the Bank on Yourself certified advisors) by a factor of two plus a little more. When I say larger than, I mean Lafayette's entire general account.
Piggybacking on the advice for finding a good insurance agent, I figured I’d take some soap box time this week to roll out a few additional thoughts on the industry. I’ve also thoughtfully provided pointers to assist consumers with avoiding certain pitfalls, meanwhile hopefully inspiring some agents out there to renounce the dark side and get up in the morning ready to work for nobler causes.
