Insurance Pro Blog Podcast

IPB 100: The 2018 Ultimate Guide to Paid Up Additions

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We love paid-up additions and if you’ve listened to us at all, you’re not all that surprised. But we’ve made a little misstep in terms of being so broad in our discussion about them. And we’re always adding new people to our audience. So it bears repeating… Not all paid-up additions are created equal. While …

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Life Insurance Guarantees: A Big Misinterpretation

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Few aspects of life insurance are more misunderstood than the guarantees of a permanent life insurance contract (particularly whole life insurance).  You wouldn't believe many of the claims we've heard concerning life insurance guarantees, and we continue to be astonished at the perpetuation of inaccurate statements that surround discussions of guarantees.

Some of my personal favorites include:

  • The guarantee of whole life is 4% so that means you'll receive 4% on your money
  • The guaranteed column shows you losing money in the first year so you're guaranteed to lose money
  • You're highly unlikely to achieve much better results than the guaranteed depiction
  • It's best to go with the contract that shows better guarantees because you can be guaranteed a better result
  • Pay close attention to the guaranteed ledger because your insurance agent can use another ledger to showing you pretty much whatever he/she wants to overstate how good the contract is
  • If the guaranteed ledger shows the policy lapsing, that means it most likely will at some point

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How Does Life Insurance Create Retirement Income?

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We all understand that life insurance provides a death benefit, but its ability to offer additional financial resources are spectacular and often understated.  If you've researched the topic of life insurance at all, you've likely run into mention of using life insurance to create income.  Many time the discussion revolves around retirement income and this has likely raised a few questions in your mind.

How does an insurance policy provide me with income while I'm still alive?  I thought this was something that only paid when I die?

We want to answer those questions today.  We also want to discuss some nuanced but remarkable benefits of life insurance when used to create income.

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Is Whole Life Insurance Worth It?

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With so much conflicting information about whole life insurance, many people wonder if it's worth it?

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If you have extra cash, time, and an open mind, whole life insurance is worth it. Over the long term, you can expect to earn returns similar to bonds and secure lifetime death benefit coverage that your beneficiaries will receive tax-free.

On the other hand, if you're young, just getting started in your career, and only have a couple of thousand bucks a year to make premium payments, you should buy term insurance for now while you still have excellent health.

The best life insurance companies will allow you to convert your term insurance policy to whole life later when you have a larger budget without a medical exam. Locking in the premiums for an affordable term life insurance policy is a good move. When you do that, you are also locking in a guarantee that you have some life insurance coverage that can later be converted to permanent coverage.

If you've been doing a lot of research about the different types of life insurance products (universal life insurance policy, term insurance, variable universal life) and whole life insurance policies, in particular, you're wrestling with a lot of conflicting information.

Whether or not whole life is worth it for you, will depend on your circumstances and where it may fit into your portfolio as part of your future financial plans. It depends on what you want to accomplish.

But if you choose to purchase a whole life policy or any type of permanent life insurance, remember that there is a “right way” to set up your policy if your primary goal is to buy a policy that builds cash value.

We help our clients maximize the policy's cash value accumulation with whole life insurance and occasionally an indexed universal life policy as well. We help hundreds of people do this every year and coach life insurance agents, financial advisors, and other financial professionals to do the same.

But at least a few times a week we're faced with questions like, “does it really work?”, “is it worth it?”, or our all-time favorite “can you send m

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IPB 095: When a Lower Rate of Return Gives You More Money

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“Whole life insurance/universal life insurance is a terrible investment because the rate of return is horrible.”  We've heard that before.  You don't have to wander the interwebs far to find someone peddling this bologna.  If you don't believe me, see here, here, here, and here.  None of those four authors hold a license to sell life insurance, but I digress.

Though we’ve addressed this statement a few times on the Insurance Pro Blog, I wanted to distill the point many people miss into one simple notion that should be approachable by just about anyone.

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IPB 094: The Ticking 401k TimeBomb

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The Center for Retirement Research at Boston College has released their latest report which compiles information from the Federal Reserve’s: Survey of Consumer Finances (SCF) which provides a glimpse into 401k balances etc. However, what’s really important is the information lurking just below the surface. You’ve gotta read between the lines a bit to see …

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IPB 093: Indexed Universal Life In-Force Review

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  Well, it’s the end of the year once again. As we typically do at this point, we’re conducting policy reviews for our clients, evaluating how we’ve all faired in 2017 and making plans for the new year. In the past, we’ve had some critics who’ve come along to point out what they deem are …

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IPB 91: 2017 Dividend Season

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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 2018 dividend announcements but since they’re made in 2017 we refer to it as the 2017 season.) This year the “trend is not …

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