Whole Life Blending, Does Cash Value Life Insurance Design Really Matter?

Whole life blending, as we've discussed before, is a process for designing cash value life insurance to maximize cash value available to the policyholder/client and income potential.

Still, there are those who like to suggest it doesn't matter. Those who would spend time arguing against a policy that is designed to maximize paid-up additions when it comes to your annual outlay.

We recently realized that we made a big mistake when it comes to how we talk about this. And today, we'll fix that mistake.

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Cash Value Life Insurance as an Asset Class – How it Works: Part 2 Universal Life Insurance

Cash Value Life Insurance as an Asset Class

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.

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Invest in Real Estate? Why not Modified Endowment Contracts?

Why not Modified Endowment Contracts

Sometimes I just feel like being edgy, and throwing the words invest and Modified Endowment Contract about seems like a good way to be edgy. Of course this so called “edginess” is more a testament of my dork-dom–analogous to my saying, “I know my AGI is >$33,750 but screw form 6251.”

If you got that joke, I think I love you.

But in all seriousness a few recent events played out that gave way to this post. You see, It's been a long time since I thought real estate was a good place to invest. When I was in college I had a professor point out that the 30 year CAGR on real-estate in the United States was under 4%. Yikes! That was before the bubble popped, and let's not forget that real-estate can be super volatile.

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The Financial Planners are Turning to Alternative Investments and Life Insurance is on their List

The Financial Planners are Turning to Alternative Investments and Life Insurance is on their List

We've been hammering the alternative investments point pretty hard lately, and this is because the financial services industry is abuzz about what to do with its tarnished image for cuddling up with the main stream stock market for so long and and now being accountable for it's general lack of reliability to the average investor.

So, what are money managers and general financial planners (the certified kind) doing to restore faith and peace of mind among their clientèle?  The answer is quite interesting.

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4-6% Historical Return with very Limited Risk: The Idea Par Excellence in Alternative Investments

The Idea Par Excellence in Alternative Investments

Alternative Investments? You say…hear us out.

I'll admit it, I have a certain penchant for the unusual and I have a huge tendency to buck the trend. According to certain personality tests circulating the internet, I share personality traits with only roughly 5% of the U.S. population. Bad for social gatherings, great for dissecting conventional wisdom and avoiding common pitfalls.

I've been a finance geek for a long time (I like numbers). I was an online investor back when stock quotes were delayed more by my dial-up internet connection then by the speed of the ticker tape. And I've always been amazed at the crazy ideals we dogmatically hold onto in the personal finance world.

So imagine how I attacked the notion of using cash value life insurance as an asset class when the idea was first presented to me.

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7702 Plan: Always a Bad Idea or Simply Misunderstood?

what is a 7702 plan?

Several years ago (the details as to exactly when are a little hazy), someone somewhere within the insurance industry made a fascinating discovery, which gave way to something referred to as a 7702 plan.

What might this fascinating discovery be? A tax loophole? The introduction to a new financial product that would bring salvation to us all?

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Prudential Joins the Indexed Universal Life World

Prudential Joins the Indexed Universal Life World

Indexed Universal Life has hit the financial world in a big way over the past decade.  It's been loved by many agents and clients, and loathed by stock brokers and insurance companies that didn't have a product.  FINRA has attempted a power grab by making indexed products subject to securities regulation, and lost the fight somewhat badly a few years ago.  Now, the 2nd largest life insurer in the United States Prudential Financial has joined the indexed UL world by introducing PruLife Index Advantage UL.

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Can Cash Value Life Insurance be a Substantial Retirement Vehicle?

Can Cash Value Life Insurance be a Substantial Retirement Vehicle

Following up on the Cash Value Life Insurance as an Asset Class post, I wanted to spend some time talking about how Cash Value Life Insurance  get's used for retirement and wealth accumulation.

Believe it or not, there's not a lot oversight when it comes to the financial services industry when it comes to what you can and cannot reasonably recommend as long as you don't violate the really big rules.  Like a real estate agent who suddenly turns into a financial and business adviser in order to convince a client to take a 10% haircut on their selling price because he or she wants to close the deal, financial advice can often be driven by someone's need to pay a mortgage, pay down a credit card debt, afford a vacation, etc.  And for the most part, sadly, no one cares.  It's not until someone kills a sacred cow that problems begin to arise.  Put a 65 year old's entire portfolio into midcap stocks, spread that sale around into different funds so as to avoid the sales load breakpoint, and do it all a few days before the dividend date and you'll really upset some people.  Those are concrete examples of big no-no's any compliance officer should be more than capable of thwarting.  These examples are a violation of suitability.  On the topic of cash value life insurance, and its place as a retirement vehicle, the question is one of suitability.  Is it suitable?

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