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 …
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 …
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 …
Life insurance loan interest causes a lot of misunderstanding. The interest is a charge assessed by the insurance company on any outstanding loan balance a policyholder has against an insurance policy’s cash value. That seems simple enough, but why does the insurance company charge interest? How much interest do you have to pay on a …
As the proverbial clock marched towards midnight in 2020 Congress fought over how to deliver a second round of stimulus in the U.S. The end result was a watered-down version of the legislation passed earlier in the year in terms of cash payments to certain Americans, but the bill contained numerous provisions that, like most …
Indexed universal life insurance policies use a stock market index to set the interest payable on the policy’s cash value. This feature has a limit (the industry official calls it a cap) above which the market index returns will not affect the interest payable by the insurance company. This indexing feature plays a crucial role …
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 …
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 …
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 …
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 …
