Whole Life Insurance Pros and Cons

First, I feel the need to provide context for this post. 99% of our clients want to use cash value life insurance as an asset class. Which means people need to distinguish whole life insurance from indexed universal life insurance.

Yes, there are other products.

But none that we feel are worthy of consideration.

Which is better?

What are the pros and cons of each? Why would a person use one versus the other?

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Breaking News: New York Life Announces 2014 Dividend Rate

MetLife Announces 2014 Dividend Rates

New York Life has announced its plans to pay $1.43 billion in dividends to its participating policy holders. This dividend payout is an increase of $109 million over last year.

In a very quiet announcement, the company reported on a number of positive sales results of various products–including 10% sales growth of its whole life product through Q3.

What does this mean for the dividend interest rate?

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How Does Whole Life Insurance Work

How do Whole Life Insurance Dividends Work

Whole life insurance dividends have long mystified both consumers and agents. We know that once per year, the mutuals and other companies that issue participating whole life insurance release press releases to announce the dividend payout for the following year. And usually (but not always…New York Life…) the companies will typically release what this payout means to the dividend interest rate.

And it's this dividend interest rate that causes so much confusion across parties. So how does it work, and what does it mean? When a company pays a 6% dividend, what is it paying 6% on?

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012 Why U No Pay More Dividends?

In this Broadcast of the Financial Procast:

Participating Dividends and their legality

Americans really do stink at retirement planning

Stocks are still scary

Whole life policy blending explained NOTE: towards the end of this episode Brandon makes a comment about the expected cash surrender value found in a “properly” blended policy.  This was a rule of thumb based off old policies that are no longer available.  Generally speaking, we know find that a first year cash value between 60 and 70% to be the most optimal and a good indicator of correct design.

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Why We Still Beat the Cash Value Life Insurance Drum

Why We Still Beat the Cash Value Life Insurance Drum

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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