Retirement income planning is a complicated and–for many–an elusive task. Industries that exist to help everyday Americans prepare for retirement spend millions of dollars every year trying to craft flashier and fancier marketing hooks to convince would-be retirement preppers to entrust them with their hard-saved dollars. And well-meaning reporters churn out thousands of articles every …
The end of 2020 brought a major change to the life insurance industry. A last-minute change to legislation established a new–lower–guaranteed interest rate for cash value life insurance policies. The exact rules vary a bit depending on the insurance product, but the most notable change affected whole life policies because they would need an overhaul …
In 2020, something a bit unusual happened. Life insurers faced a huge expense that far exceeded expectations had you asked any stakeholder for his/her projection from the vantage point of 2019. This huge expense? A dramatic rise in death benefit claims. Yup, it’s true. 2020 saw a sharp–15.4% year-over-year increase to be exact–rise in death …
The rate of return one achieves on a cash value life insurance policy is sometimes hotly debated. This is especially true when opining on the adequacy of the rate of return. On the one hand, we have a crowd of people who think it’s paltry and represents a foolish financial move because–allegedly–you can do so …
A lot of people buy whole life insurance policies with the intention of one day stopping the premium payment. In some cases, these are guaranteed paid-up policies like a 10-Pay whole life product. In other cases, the policyholder uses non-guaranteed features of the policy to cover the premium. In others, a nonforfeiture option comes into …
Universal life insurance is in no short supply of anecdotes and claims that rising fees will destroy the product. Much of this discussion is skewed “data” used for self-interest pushing some alternative agenda. And while these stories exist in the 10’s of incidences–which should cause any reasonable person to question the validity of any claim …
Diversification is a term so deeply intertwined with traditional financial/investment advice that we often think of it as infallible. If you want to sound intelligent, or at least appear reasonably knowledgeable, make the recommendation that one carefully work to diversify his/her portfolio and there’s a good chance your advice is impervious to criticism. For the …
There’s no secret that continuously low interest rates cause a struggle for life insurers and this can have a negative impact on insurance products that accumulate cash value. However, lower market interest rates negatively impact all financial tools that use fixed interest rates as a savings mechanism–think certificates of deposit, bonds, and money market accounts. …
When purchasing whole life insurance, the buyer makes a long-term commitment to a strategy and–to a slightly lesser degree–an insurance company. This notion appears very simple on its face. It makes sense and we can follow the logic pretty easily, or at least assume we can. But a lot of people struggle with the inter-temporal …
Last week, we discussed the results one could get from indexed universal life insurance from 2001 to 2010. We also looked at how this type of policy performed if the market returns from this time period were repeated over and over again every 10 years. We wanted to evaluate how IUL behaved during a sustained …
