Nobody dies, collect the face amount, and then retire. Permanent life insurance agents do not discuss with clients that when the insured dies - their family only gets the FACE amount. The cash reserve STAYS WITH THE COMPANY. Buy term and invest the difference and when you die - your family gets BOTH face amount plus cash.
Great to be able to hear it from a familiar voice.My son uses Khan Academy and Sal's videos have helped him through many a math problems.Now , today, he has helped me get an understanding of Life insurance! Thanks Sal!
Everyone's situation is different. Just from personal experience: my grandparents bought very inexpensive premium-wise insurance on my mom at birth (in 1930s); when they died and she discovered policy, it was paid up and worth much more than ever paid in. I made the phone calls as company had changed hands many times - and my parents split the money with me. Worked out well for all. Alternatively, I have an autoimmune disorder - not very insurance but am single no kids. By buying small amount of whole insurance through company vetted by AAA - I have insurance no health questions (started after age 50 but before age 55), have cash value, if become terminal - can access one half in last year and still my niece gets the other half. Not bad for an otherwise uninsurable individual. TALK TO A FINANCIAL ADVISOR NOT SELLING A PRODUCT - IT IS WORTH $150-300 (or more depending on your needs). IT IS COMPLEX STUFF. I do think the $1/month my grandparents paid can't be beat! And AAA is great.
another thing to consider from my experience is that investing the difference means there is risk involved, with whole life insurance you have certain guarantees that may be more suitable for risk-averse clients
It totally depends which kind of insurance company you get your policy from. If the insurance company is publicly traded, what you said is true. However, if the insurance company is a mutual company (ie not publicity trades) you own the whole life, or cash value, insurance policy. What is the difference? I’m glad you asked, here are the basics: I’ll Publicly traded insurance companies are concerned with the stock holders getting paid. Like you said, the insurance company gets all the growth from your money that you, the customer or policy “holder”, has paid into the policy, whole or term. With a mutual company on a whole life policy, the policy “owner” (the person paying the premium) gets the dividend added to their whole life policy. What is a dividend? That is the money that the company makes after investing the premiums on all policies and makes it grow. So, take the money earned, subtract all the costs of running the business (the insurance company is a business) and the money left over is the dividend. It is often shown as a percentage of what you have paid into the policy. Dividends are not guaranteed, that is just bad business if you guarantee something that isn’t a sure thing. Dividends do change. . However, with some companies, they have always paid a dividend, even during hard times when the market has had a correction. So, to summarize, not all companies whole life policies are a ripoff. Some are, but it depends on the company. If the company has the best interest of the policy owner in mind, it is not a rip-off.
Thanks so much!! This help sooooo much I never understood life insurance but now I do! In my opinion it’s way better just to save money yourself 🤷🏻♀️ either way they don’t have your best interest in mind even though youre PAYING them
Term, Whole and Universal life insurance, which all have subsections. State policies also vary which is why talking to multiple insurance agents to weigh your options is probably a good step to take before deciding on your insurance needs
7/7/15 topic of the day it is written in the book that (WHOLE LIFE) that Whole life is often called (PERMANENT INSURANCE) because the maturity date is (BEYOND) the life (EXPECTANCY) of most individuals. However, a close look at the policy (COMPONENTS REVEALS) that a whole life policy actually consist of a (COMBINATION) of (SAVINGS ELEMENT) (THE ADVANCING CASH VALUE) and (DECREASING) amount of (NET) insurance (WHICH IS DIFFERENCE BETWEEN THE CASH VALUE AND THE FACE AMOUNT OF NET INSURANCE PROTECTION WOULD HAVE DECLINED (ZERO) so many names for cash value (cash value) is money from money you pay taken by insurance company which they invest and give you a small % of earning of your own money put in what they call "savings" or cash value why not invest it yourself and keep all profit not just portion.
+HGB Bautista Because most people can't invest the money themselves, mostly because they don't know how to. Other's fall prey to failed schemes like Primericas buy term invest the difference (this is also what Dave Ramsey says, but he used to an agent for Primerica and uses their philosophy. The problem the 12% rate of return both Primerica and Dave says you get is pretty much a myth. They are using the average annual rate of return spread across 124 years, most people to have an invest life of 124 years , hell most people don't have an investing life of 30 years. The real rate of return is about 1% and even lower. Yes you can get less than 1% rate of return, like in 2008 when thousands of retirees lost trillions of dollars in their investments.
I doubt you can still buy a policy where the cash value would be more than the death benefit. Maybe that was true ten years ago? It should be pointed out that if you take the cash value, you will be taxed on it and then it may be further taxed 40% estate tax depending on the estate size. Insurance death benefit is not taxed.
First of all I love Kahn and 2 of my kids went thru college with support from many of Kahn Academy videos. Having said that, the whole life explanation is not entirely accurate. I bought my whole life policy the year I got married in 1989. Premium was just a tad over $1000/yearly (so first things first they are not THAT much higher than term by 10X as he portrays). Secondly, I only paid those premiums for about 9 years. Around late 1990s the additional paid-up insurance and cash value spit out enough dividends that I never had to pay another premium for almost 20 years. That changed only recently when, due to low interest rates in 2019 and 20 (unlike this year where they spiked higher) I had to contribute a few hundred dollars. So my policy was only paid for 9 years and then for 20 years it paid for itself. I'm now contemplating rolling into fixed index annuity as I'm at the point where my savings/holdings are worth more than my policies were and no longer need the death benefit as my kids are financially affluent on their own.
Question: what happens if you are 65. You have stopped working, you decide to take out some money from your cash payout and use 5k from there to continue to pay for your insurance premium? Can you do that? Would you need to pay taxes on your cash payout?
Ria Banerjee depends on your policy. If taken out early according to your policy there could be a fee from irs and the insurance company aswell. A lot allow you to take out money after a time frame like after age 65 without fees but it really goes on depending on your particular policy bc insurance companies have different rules/regulations and state laws also vary
You can, after the 3rd or 4th year, depending on your policy. However you have to pay back with interest averaging between 4-6% also depending on your policy. Conclusion, you pay interest on your money.
Please be encouraged Mr Sam! Unfortunately this fellow lacks understanding of the complexities of Life Insurance. Dan Thompson, Gannon, Nelson Nash, Janet Yellon , James Neathery and others do it MUCH MORE justice on other videos.
Samuel, I'm glad you are being exposed to the truth of "cash value" insurance. Hence a client 20 times more in whole life insurance than term insurance because of this magical "cash savings." Thus, the only way to get money out of MY cash savings would be to BORROW against MY OWN MONEY (paying it back plus interest) or cancel the policy paying a huge "surrender" fee. Plus, when I die, the insurance company KEEPS the cash savings or they deduct it from the death benefit. Whole life insurance is one of the most expensive policies to buy while paying out high commissions to salesmen. It's garbage. I'm glad you have morals not to want to rip-off people like the low-lives in these posts.
New York Life is #1 in the country ,they pay dividends (even though its not guarantee)for the past 170 years they have been paying dividends to policy holders, have a cash value, if become terminal have access to the cash last half of the year,also their is the disability rider and Chronic Care Rider. You pay few dollars for a whole life policy but its worth it at the end. Prepare today enjoy tomorrow. for more info www.newyorklife.com
Primerica has been around since the 70's and they only sell term life insurance. Who cares if they are multi level marketing - you don't have to work for them! Their products are great and I have a very knowledgeable agent who really fixed my finances.
Meh, you can decide for yourself whether you want to get involved making a business, I just like what they did for my financial situation and to me, that is all that matters is that they did the right thing for me.
+FortNikitaBullion I know you were being sarcastic, but there is an answer to that question. It annuitizes, so lets say you live to 121 years of age and you have a $500,000 paidup whole life insurance policy. The insurance company simply gives you the $500,000. Now, you would never have a $500,000 term insurance policy, because there comes an age where insurance companies will never sell you a term insurance policy.
I know this is 3 years later but I just passed the PA Life Insurance Exam so i feel i'm a little more qualified to answer you. You get a payout of your entire face value at 100. Whole life is calculated through a lot of factors but one of them is your age until 100. If you live to be 100 your premiums will equal the face amount of the policy and the Insurance provider will send you a check for the full face amount (lets say 30k-200k). After 80 you become uninsurable (at least at my specific agency). www.kitces.com/blog/outliving-the-end-of-life-insurance-mortality-tables-the-age-100-tax-problem-when-life-insurance-expires/ I can't post my study materials because they're copyrighted but this should suffice:)
What about taxes though? Don't you lose the tax advantage if you take the payout while you're still alive? Is there a way to "reinvest" this payout into a new life insurance policy?
Yes, it is possible for a policyowner to take a policy loan for more than the basis of the policy, up to 80-90% of the cash value in some instances with certain carriers. That money could be used to buy more coverage if healthy. .. A policyowner could also convert the policy into a paid up policy. Depending on the timing, you'd stop paying premiums and take a guaranteed lifetime benefit, usually lower than the original benefit since you've only paid partway,
If the company pays a valid dividend, you get the cash value of the product, which includes the compounded earnings on the company’s dividend. I can show you how it works if you’re interested. It’s a very lucrative investment.
Wrong- as the cash value increases in the Whole Life policy so does the tax-free death benefit.Therefore the beneficiaries would receive $600,000 not $500,000. This a fact and not up for unwarranted false opinions.
60403tnw I'm an agent for Primerica and I can tell you that we have a Living benefits rider in your policy, where you can receive up to 70% of your death benefit if you were diagnosed to be terminally ill and 6 months or less to live I think it is. For example, if you had a $500,000 death benefit, you can get up to 70% of that to policy to do whatever it is that you wanted. Hope this helped 🙏🙏🙏
I`m not sure you understand whole life as well to make a video on that, I'm novice in whole life but I can tell you: whole life do have A term. the term is so high you a little chance to reach it. usually its not a period, it until you reach some age. mostly 121 years olds. and you make mistake, and you should have a sham make it in Video. never in whole life the face amount can not be lower than the cash value. because the policy is supposed to be done as it will mature when you reach 121 years old. that mean the face amount equal to the cash value. '' I don't know what happen at this time. i think you cash out but you have to paid tax on that''. with paid up addition on most policy, most you put money in most the face amount increase so you cannot have 500000 face amount and 600000 cash value. every year as you close to you face amount it will increase until you get the term age where face amount equal to the cash value. next time make more rechearch before make video.
From what I learned in this video, that really depends on how much of that premium is going towards saving, what the ROI is on that savings compared to market returns, and how much they charge in fees. The fact that it's tax free is one benefit because without taxes every year, there's more of profits left to compound. But it probably is most of the time a scam, just gotta crunch the numbers.
I agree that this video is not accurate and should be pulled down. At one point the narrator states that the whole life cash value has grown beyond the amount of the death benefit. This literally cannot happen due to "cash value corridor" regulations. What's not mentioned is that a whole life death benefit funded with "paid up additions" which would yield a GROWING death benefit, so the cash value would be included in the death benefit. In universal life that is known as option b - Increaasing Death Benefit. What was the point of this video? All it did was show misunderstanding of permanent life insurance, unfortunately one of the most misunderstood financial products in the marketplace, and one of the best if suitable to the clients needs.
I can always tell when the explanation of Permanent Life Ins is given by a "Securities" person. Yes, there are policies that work exactly like this, but there are policies paying 3 or 4 times what the person actually pays into it and pay the insured amount, plus the remaining cash value all TAX FREE if you should die early. If you live to retirement age, the cash value turns into a Tax Free Retirement that never runs out of cash irregardless of how long you live. Securities people want you to buy term (that is OK) and invest the difference in their stock market items. Did you know only 3% of the term owners actually invest that difference? 97% just spend the difference and end up non insurable by age 65 or 70; and many end up living past 90 with only SS retirement to live on; think broke and maybe homeless or living with the kids. (yes, I sell insurance, but not any securities)
i'd like to see a comparison of your buy term and invest the difference strategy versus an overfunded whole life or vul. Your strategy will not hold up past 5 years
Statistically speaking, a very, very small percentage of people "saved that money". A lot of people like to convince themselves into believing this. I believe, for men particularly, it's another out as to why not to invest in a life policy for your loved ones. Those who count on you for their safety, security, and peace of mind...especially after we are gone.
This is a terrible explanation of whole life. While 90% of it isnt effective, there are two maybe three MUTUAL insurance companies where a case could be made for it.
@@TheTrue32 do you sell NWM or just have the policy. How do you like it and why do you like it? Or is it that you see now how much you overpay and would be better of term and Invest the difference. At what rate does it grow? Thanks.
Hey! Nice video you have there! By the way; have you heard the talk about " Your Insurance Guy Group Insurance Singapore " (search on google)? My boss had some dealings with them and was impressed by their amazing knowledge and experience on group insurance in Singapore!
You missed the plot on this. 1. if you buy participating whole life there are dividends which, if reinvested, serve to buy 'paid up additions' which increase the face amount of the insurance. alternatively the dividends could reduce your premiums. 2. Term does not go on forever. if you are 35 years old a d buy a 30 year term, if you hit age 65 and want to renew you are dependent on your insurability. some people pay term roulette and go with shorter cheaper term periods, but they run the risk of a medical or lifestyle factor that impacts their insurability.3. Life insurance proceeds are generally income tax free. If you buy term and invest the difference and die there are tax consequences when beneficiaries ell the investments (although there would be a step up in basis at death)
I'm 22 years in this industry and have many happy clients with either whole life, universal life or term life or a combination thereof. These type of "either/or" videos perpetuate ignorance about permanent insurance products. And didn't really make a case for either product. I liked the white board presentation, thank you for that. But consider posting more accurate videos in the future, and pull this down. It is negligent.
The problem with this video is that it makes a blanket statement that you pay on whole life your entire life. Although that is true for many whole life policies, it doesn't have have to be that way. There are whole life policies out there that you pay on for 10 years, 20 years or to a certain age and then you never pay on them again. They're called paid up policies, or you might hear them referred to as 10 pay life, 20 pay life, or life paid up at 72. Then there's what are called single premium whole life. In a single premium whole life you pay one premium and then your insured for the rest of your life.
Oh hey! Nice video you have there! By the way; have you heard about " Your Insurance Guy Group Insurance Singapore " (do a search on google)? My sisters boss had some dealings with them and was impressed by their extraordinary knowledge and experience on group insurance in Singapore!
Khan Academy does not understand whole life, was incorrect in his explanation and should not teach anyone about it. Given this, you should not mirror the video as it contains falsehoods. Just a thought.
I agree that this video is not accurate and should be pulled down. There's no way an insurance company compliance department would approve this video, and Khan Academy is in violation IMO. At one point the narrator states that the whole life cash value has grown beyond the amount of the death benefit. This literally cannot happen due to "cash value corridor" regulations. What's not mentioned is a whole life death benefit funded with "paid up additions" which would yield a GROWING death benefit, so the cash value would be included in the death benefit. In universal life that is known as option b - Increaasing Death Benefit. What was the point of this video? All it did was show misunderstanding of permanent life insurance, unfortunately one of the most misunderstood financial products in the marketplace, and one of the best if suitable to the clients needs.
@@kevinwile4707 AMEN Mr. Kevin! Thank you for telling the TRUTH!!! As I was listening and watching this video, my toes were curling in pain....lol....nothing like listening to a misrepresentation of an important life matter, that's made public and spoken as fact.
Too bad there are so many inaccuracies to this video. The concept is partially there, but, this is what happens when someone wants to use emotion over fact.
You need to go back to insurance school and learn what Whole Life Insurance is really about. You need to realize that the death benefit is guaranteed to grow every year that premiums are paid. Your example suggests that the death benefit is level in a whole life. FAKE NEWS! Also, the cash value does not grow tax deferred, it grows TAX FREE. Mutual Insurance companies pay dividends into their whole life products that (if directed to paid up additions) increase the death benefit further through the purchase of paid up additions. You also failed to mention that the cash value within a whole life policy may be used to supplement college education, home improvements, retirement, etc. The loan process is friendly because you are borrowing from yourself. FACT: Less than 2% of all term policies are ever claimed upon! The cash value within a policy could also be considered as a partial return of premium, making whole life less expensive than term insurance in the long run. You have no business giving a weak explanation of insurance products. I don't even want to think what you would do if explaining Universal Life and Variable Life products. A disservice to your viewers.
Your response is inadequate at best and misleading becuse you don't explain the additional fees for riders or the high cost of permanent life insurance or the fact that any unpaid loans at the time of death reduce the death benefit by the loan plus accrued interest. To state that whole life would be less expensive than term life insurance is a profound misunderstanding of life insurance. Read "What's Wrong With Yor Life Insurance" by Norman Dacey if you wish to educate yourself.
Nobody dies, collect the face amount, and then retire. Permanent life insurance agents do not discuss with clients that when the insured dies - their family only gets the FACE amount. The cash reserve STAYS WITH THE COMPANY. Buy term and invest the difference and when you die - your family gets BOTH face amount plus cash.
Great to be able to hear it from a familiar voice.My son uses Khan Academy and Sal's videos have helped him through many a math problems.Now , today, he has helped me get an understanding of Life insurance! Thanks Sal!
same
Everyone's situation is different. Just from personal experience: my grandparents bought very inexpensive premium-wise insurance on my mom at birth (in 1930s); when they died and she discovered policy, it was paid up and worth much more than ever paid in. I made the phone calls as company had changed hands many times - and my parents split the money with me. Worked out well for all. Alternatively, I have an autoimmune disorder - not very insurance but am single no kids. By buying small amount of whole insurance through company vetted by AAA - I have insurance no health questions (started after age 50 but before age 55), have cash value, if become terminal - can access one half in last year and still my niece gets the other half. Not bad for an otherwise uninsurable individual. TALK TO A FINANCIAL ADVISOR NOT SELLING A PRODUCT - IT IS WORTH $150-300 (or more depending on your needs). IT IS COMPLEX STUFF. I do think the $1/month my grandparents paid can't be beat! And AAA is great.
another thing to consider from my experience is that investing the difference means there is risk involved, with whole life insurance you have certain guarantees that may be more suitable for risk-averse clients
It totally depends which kind of insurance company you get your policy from. If the insurance company is publicly traded, what you said is true. However, if the insurance company is a mutual company (ie not publicity trades) you own the whole life, or cash value, insurance policy.
What is the difference? I’m glad you asked, here are the basics:
I’ll Publicly traded insurance companies are concerned with the stock holders getting paid. Like you said, the insurance company gets all the growth from your money that you, the customer or policy “holder”, has paid into the policy, whole or term.
With a mutual company on a whole life policy, the policy “owner” (the person paying the premium) gets the dividend added to their whole life policy. What is a dividend? That is the money that the company makes after investing the premiums on all policies and makes it grow. So, take the money earned, subtract all the costs of running the business (the insurance company is a business) and the money left over is the dividend. It is often shown as a percentage of what you have paid into the policy. Dividends are not guaranteed, that is just bad business if you guarantee something that isn’t a sure thing. Dividends do change. . However, with some companies, they have always paid a dividend, even during hard times when the market has had a correction.
So, to summarize, not all companies whole life policies are a ripoff. Some are, but it depends on the company. If the company has the best interest of the policy owner in mind, it is not a rip-off.
Thanks so much!! This help sooooo much I never understood life insurance but now I do! In my opinion it’s way better just to save money yourself 🤷🏻♀️ either way they don’t have your best interest in mind even though youre PAYING them
The problem is...most people don't "save".
Term, Whole and Universal life insurance, which all have subsections. State policies also vary which is why talking to multiple insurance agents to weigh your options is probably a good step to take before deciding on your insurance needs
7/7/15 topic of the day it is written in the book that (WHOLE LIFE) that
Whole life is often called (PERMANENT INSURANCE) because the maturity date is (BEYOND) the life (EXPECTANCY) of most individuals. However, a close look at the policy (COMPONENTS REVEALS) that a whole life policy actually consist of a (COMBINATION) of (SAVINGS ELEMENT) (THE ADVANCING CASH VALUE) and (DECREASING) amount of (NET) insurance (WHICH IS DIFFERENCE BETWEEN THE CASH VALUE AND THE FACE AMOUNT OF NET INSURANCE PROTECTION WOULD HAVE DECLINED (ZERO) so many names for cash value (cash value) is money from money you pay taken by insurance company which they invest and give you a small % of earning of your own money put in what they call "savings" or cash value why not invest it yourself and keep all profit not just portion.
oh ok
+HGB Bautista Because most people can't invest the money themselves, mostly because they don't know how to.
Other's fall prey to failed schemes like Primericas buy term invest the difference (this is also what Dave Ramsey says, but he used to an agent for Primerica and uses their philosophy.
The problem the 12% rate of return both Primerica and Dave says you get is pretty much a myth. They are using the average annual rate of return spread across 124 years, most people to have an invest life of 124 years , hell most people don't have an investing life of 30 years. The real rate of return is about 1% and even lower. Yes you can get less than 1% rate of return, like in 2008 when thousands of retirees lost trillions of dollars in their investments.
???
Good teaching & Nice explanation
Whole life insurance can be also paid in 20 years, correct information is very crucial but otherwise explained nicely.
I doubt you can still buy a policy where the cash value would be more than the death benefit. Maybe that was true ten years ago?
It should be pointed out that if you take the cash value, you will be taxed on it and then it may be further taxed 40% estate tax depending on the estate size. Insurance death benefit is not taxed.
Whole Life Cash Value (Savings portion) doesn't begin to accumulate until the third or fourth policy year.
Amazing video
First of all I love Kahn and 2 of my kids went thru college with support from many of Kahn Academy videos. Having said that, the whole life explanation is not entirely accurate. I bought my whole life policy the year I got married in 1989. Premium was just a tad over $1000/yearly (so first things first they are not THAT much higher than term by 10X as he portrays). Secondly, I only paid those premiums for about 9 years. Around late 1990s the additional paid-up insurance and cash value spit out enough dividends that I never had to pay another premium for almost 20 years. That changed only recently when, due to low interest rates in 2019 and 20 (unlike this year where they spiked higher) I had to contribute a few hundred dollars. So my policy was only paid for 9 years and then for 20 years it paid for itself. I'm now contemplating rolling into fixed index annuity as I'm at the point where my savings/holdings are worth more than my policies were and no longer need the death benefit as my kids are financially affluent on their own.
better invest your money in mutual funds where you pay less expense ratio, less fees, and less restrictions
Good explanation thanks.
Nice video thank you
Well explained
Absolutely nice
Good video
Technically term life can be renewed after the term, just at a much higher premium.
Nice video
whats a good term life insurance
Very informative! Thanks
Actually, that $500k would increase in value in real life along with the cash value. I know that for sure.
Question: what happens if you are 65. You have stopped working, you decide to take out some money from your cash payout and use 5k from there to continue to pay for your insurance premium? Can you do that? Would you need to pay taxes on your cash payout?
Ria Banerjee depends on your policy. If taken out early according to your policy there could be a fee from irs and the insurance company aswell. A lot allow you to take out money after a time frame like after age 65 without fees but it really goes on depending on your particular policy bc insurance companies have different rules/regulations and state laws also vary
You can, after the 3rd or 4th year, depending on your policy. However you have to pay back with interest averaging between 4-6% also depending on your policy. Conclusion, you pay interest on your money.
dear lord i am a new agent and this video really discourages me.its like slap to the face
Which company are you working with
Please be encouraged Mr Sam! Unfortunately this fellow lacks understanding of the complexities of Life Insurance. Dan Thompson, Gannon, Nelson Nash, Janet Yellon , James Neathery and others do it MUCH MORE justice on other videos.
Samuel, I'm glad you are being exposed to the truth of "cash value" insurance. Hence a client 20 times more in whole life insurance than term insurance because of this magical "cash savings." Thus, the only way to get money out of MY cash savings would be to BORROW against MY OWN MONEY (paying it back plus interest) or cancel the policy paying a huge "surrender" fee. Plus, when I die, the insurance company KEEPS the cash savings or they deduct it from the death benefit. Whole life insurance is one of the most expensive policies to buy while paying out high commissions to salesmen. It's garbage. I'm glad you have morals not to want to rip-off people like the low-lives in these posts.
nice explanation
New York Life is #1 in the country ,they pay dividends (even though its not guarantee)for the past 170 years they have been paying dividends to policy holders, have a cash value, if become terminal have access to the cash last half of the year,also their is the disability rider and Chronic Care Rider. You pay few dollars for a whole life policy but its worth it at the end. Prepare today enjoy tomorrow. for more info www.newyorklife.com
Good
so if u pay the premium of the whole life policy, how much money get to the cash saving??
Is it Globe Life and accident Insurance a solid company ???
Absolutely
Any good policies/companies recommended for term life insurance?
Sure! I recommend Primerica term insurance! It`s A+ superior rated company. Been in business for 39 years. I proudly sell it!.
Never buy insurance from a stock company. Stick with mutual companies with the lowest operating expense ratios to get the best prices.
apiitg Primerica is who I have. I'm very happy with what they do
Primerica has been around since the 70's and they only sell term life insurance. Who cares if they are multi level marketing - you don't have to work for them! Their products are great and I have a very knowledgeable agent who really fixed my finances.
Meh, you can decide for yourself whether you want to get involved making a business, I just like what they did for my financial situation and to me, that is all that matters is that they did the right thing for me.
What happens to your whole life policy if you do discover the secret to living forever?
+FortNikitaBullion I know you were being sarcastic, but there is an answer to that question. It annuitizes, so lets say you live to 121 years of age and you have a $500,000 paidup whole life insurance policy. The insurance company simply gives you the $500,000. Now, you would never have a $500,000 term insurance policy, because there comes an age where insurance companies will never sell you a term insurance policy.
I know this is 3 years later but I just passed the PA Life Insurance Exam so i feel i'm a little more qualified to answer you. You get a payout of your entire face value at 100. Whole life is calculated through a lot of factors but one of them is your age until 100. If you live to be 100 your premiums will equal the face amount of the policy and the Insurance provider will send you a check for the full face amount (lets say 30k-200k). After 80 you become uninsurable (at least at my specific agency). www.kitces.com/blog/outliving-the-end-of-life-insurance-mortality-tables-the-age-100-tax-problem-when-life-insurance-expires/ I can't post my study materials because they're copyrighted but this should suffice:)
What about taxes though? Don't you lose the tax advantage if you take the payout while you're still alive? Is there a way to "reinvest" this payout into a new life insurance policy?
Yes, it is possible for a policyowner to take a policy loan for more than the basis of the policy, up to 80-90% of the cash value in some instances with certain carriers. That money could be used to buy more coverage if healthy. .. A policyowner could also convert the policy into a paid up policy. Depending on the timing, you'd stop paying premiums and take a guaranteed lifetime benefit, usually lower than the original benefit since you've only paid partway,
If the company pays a valid dividend, you get the cash value of the product, which includes the compounded earnings on the company’s dividend. I can show you how it works if you’re interested. It’s a very lucrative investment.
Return of premium term life....refunds the premium.....
Wrong- as the cash value increases in the Whole Life policy so does the tax-free death benefit.Therefore the beneficiaries would receive $600,000 not $500,000. This a fact and not up for unwarranted false opinions.
I prefer invest the difference 4500 dollars ....
Saving different and whole life is different?
then what is maturity term?
so what happens in a term if you develop cancer or some other disease?
60403tnw I'm an agent for Primerica and I can tell you that we have a Living benefits rider in your policy, where you can receive up to 70% of your death benefit if you were diagnosed to be terminally ill and 6 months or less to live I think it is.
For example, if you had a $500,000 death benefit, you can get up to 70% of that to policy to do whatever it is that you wanted.
Hope this helped 🙏🙏🙏
I`m not sure you understand whole life as well to make a video on that, I'm novice in whole life but I can tell you: whole life do have A term.
the term is so high you a little chance to reach it.
usually its not a period, it until you reach some age. mostly 121 years olds.
and you make mistake, and you should have a sham make it in Video.
never in whole life the face amount can not be lower than the cash value. because the policy is supposed to be done as it will mature when you reach 121 years old. that mean the face amount equal to the cash value. '' I don't know what happen at this time. i think you cash out but you have to paid tax on that''.
with paid up addition on most policy, most you put money in most the face amount increase so you cannot have 500000 face amount and 600000 cash value. every year as you close to you face amount it will increase until you get the term age where face amount equal to the cash value.
next time make more rechearch before make video.
Whole life insurance is a scam.
FortNikitaBullion total rip off! 💯
False. If used properly, I assure you, it is not.
From what I learned in this video, that really depends on how much of that premium is going towards saving, what the ROI is on that savings compared to market returns, and how much they charge in fees. The fact that it's tax free is one benefit because without taxes every year, there's more of profits left to compound. But it probably is most of the time a scam, just gotta crunch the numbers.
@@danielfarrell9161 never
I agree that this video is not accurate and should be pulled down. At one point the narrator states that the whole life cash value has grown beyond the amount of the death benefit. This literally cannot happen due to "cash value corridor" regulations. What's not mentioned is that a whole life death benefit funded with "paid up additions" which would yield a GROWING death benefit, so the cash value would be included in the death benefit. In universal life that is known as option b - Increaasing Death Benefit. What was the point of this video? All it did was show misunderstanding of permanent life insurance, unfortunately one of the most misunderstood financial products in the marketplace, and one of the best if suitable to the clients needs.
Read "What's Wrong With Your Life Insurance" by Norman Dacey. Your information is inadequate at best.
Can you get the cash out if it were 100-200k and still pay the premium for incase you die, your beneficiary can get the death benefit
If you take the cash payout, you won't die
I can always tell when the explanation of Permanent Life Ins is given by a "Securities" person. Yes, there are policies that work exactly like this, but there are policies paying 3 or 4 times what the person actually pays into it and pay the insured amount, plus the remaining cash value all TAX FREE if you should die early. If you live to retirement age, the cash value turns into a Tax Free Retirement that never runs out of cash irregardless of how long you live. Securities people want you to buy term (that is OK) and invest the difference in their stock market items. Did you know only 3% of the term owners actually invest that difference? 97% just spend the difference and end up non insurable by age 65 or 70; and many end up living past 90 with only SS retirement to live on; think broke and maybe homeless or living with the kids. (yes, I sell insurance, but not any securities)
i'd like to see a comparison of your buy term and invest the difference strategy versus an overfunded whole life or vul. Your strategy will not hold up past 5 years
Check out PAL Network!
Consult with a professional financial advisor, agent.....no amateur snake oil salesman....
🤷🏾♀️I'm paying an arm and a leg for a 30 yr term policy. I could have saved that money 🤦🏾♀️ it was pointless 😔
no it was not! its a death benefit...not everyone could say that...
Statistically speaking, a very, very small percentage of people "saved that money". A lot of people like to convince themselves into believing this. I believe, for men particularly, it's another out as to why not to invest in a life policy for your loved ones. Those who count on you for their safety, security, and peace of mind...especially after we are gone.
This is a terrible explanation of whole life. While 90% of it isnt effective, there are two maybe three MUTUAL insurance companies where a case could be made for it.
Nathan Smart Why? I have Northwestern Mutual, and I don't see how it's any different than this RUclips explanation.... ?
@@TheTrue32 do you sell NWM or just have the policy. How do you like it and why do you like it? Or is it that you see now how much you overpay and would be better of term and Invest the difference. At what rate does it grow? Thanks.
Tell that to people who just lost in the market....Dow down 6000 points...
Hey! Nice video you have there! By the way; have you heard the talk about " Your Insurance Guy Group Insurance Singapore " (search on google)? My boss had some dealings with them and was impressed by their amazing knowledge and experience on group insurance in Singapore!
You missed the plot on this. 1. if you buy participating whole life there are dividends which, if reinvested, serve to buy 'paid up additions' which increase the face amount of the insurance. alternatively the dividends could reduce your premiums. 2. Term does not go on forever. if you are 35 years old a d buy a 30 year term, if you hit age 65 and want to renew you are dependent on your insurability. some people pay term roulette and go with shorter cheaper term periods, but they run the risk of a medical or lifestyle factor that impacts their insurability.3. Life insurance proceeds are generally income tax free. If you buy term and invest the difference and die there are tax consequences when beneficiaries ell the investments (although there would be a step up in basis at death)
n no
People have lost $thousands in the market crash.....
I'm 22 years in this industry and have many happy clients with either whole life, universal life or term life or a combination thereof. These type of "either/or" videos perpetuate ignorance about permanent insurance products. And didn't really make a case for either product. I liked the white board presentation, thank you for that. But consider posting more accurate videos in the future, and pull this down. It is negligent.
The problem with this video is that it makes a blanket statement that you pay on whole life your entire life.
Although that is true for many whole life policies, it doesn't have have to be that way.
There are whole life policies out there that you pay on for 10 years, 20 years or to a certain age and then you never pay on them again. They're called paid up policies, or you might hear them referred to as 10 pay life, 20 pay life, or life paid up at 72. Then there's what are called single premium whole life. In a single premium whole life you pay one premium and then your insured for the rest of your life.
kindly use few real example for better explanation
Oh hey! Nice video you have there! By the way; have you heard about " Your Insurance Guy Group Insurance Singapore " (do a search on google)? My sisters boss had some dealings with them and was impressed by their extraordinary knowledge and experience on group insurance in Singapore!
Khan Academy does not understand whole life, was incorrect in his explanation and should not teach anyone about it.
Given this, you should not mirror the video as it contains falsehoods.
Just a thought.
I agree that this video is not accurate and should be pulled down. There's no way an insurance company compliance department would approve this video, and Khan Academy is in violation IMO. At one point the narrator states that the whole life cash value has grown beyond the amount of the death benefit. This literally cannot happen due to "cash value corridor" regulations. What's not mentioned is a whole life death benefit funded with "paid up additions" which would yield a GROWING death benefit, so the cash value would be included in the death benefit. In universal life that is known as option b - Increaasing Death Benefit. What was the point of this video? All it did was show misunderstanding of permanent life insurance, unfortunately one of the most misunderstood financial products in the marketplace, and one of the best if suitable to the clients needs.
@@kevinwile4707 AMEN Mr. Kevin! Thank you for telling the TRUTH!!! As I was listening and watching this video, my toes were curling in pain....lol....nothing like listening to a misrepresentation of an important life matter, that's made public and spoken as fact.
Too bad there are so many inaccuracies to this video. The concept is partially there, but, this is what happens when someone wants to use emotion over fact.
what ?
Primerica term life rates are very high.....many other Co's beat them....
Wrong....you can choose the Option to receive both....death benefit + cash value.....
You need to go back to insurance school and learn what Whole Life Insurance is really about. You need to realize that the death benefit is guaranteed to grow every year that premiums are paid. Your example suggests that the death benefit is level in a whole life. FAKE NEWS! Also, the cash value does not grow tax deferred, it grows TAX FREE. Mutual Insurance companies pay dividends into their whole life products that (if directed to paid up additions) increase the death benefit further through the purchase of paid up additions. You also failed to mention that the cash value within a whole life policy may be used to supplement college education, home improvements, retirement, etc. The loan process is friendly because you are borrowing from yourself. FACT: Less than 2% of all term policies are ever claimed upon! The cash value within a policy could also be considered as a partial return of premium, making whole life less expensive than term insurance in the long run. You have no business giving a weak explanation of insurance products. I don't even want to think what you would do if explaining Universal Life and Variable Life products. A disservice to your viewers.
Your response is inadequate at best and misleading becuse you don't explain the additional fees for riders or the high cost of permanent life insurance or the fact that any unpaid loans at the time of death reduce the death benefit by the loan plus accrued interest. To state that whole life would be less expensive than term life insurance is a profound misunderstanding of life insurance. Read "What's Wrong With Yor Life Insurance" by Norman Dacey if you wish to educate yourself.
Amazing video
Nice video