Except that the growth on life insurance is terrible against market investments or even high yield savings accounts where you still have access to your funds at any point in time
Yeah, I wouldn't compare it to an investment. It's like saying an orange provides more vitamin C than an apple; while that is true, an apple has many other benefits compared to an orange. They are both great and are used for different purposes. When you really understand finance, you learn when it is suitable for who, and do not just look at one bucket of growth and say one is better because of that. A life insurance policy will outperform a high-yield savings long-term. This year's interest rates are the highest they have been in decades, which boosts high yield savings accounts.
This video is very helpful. One question: is it possible to change the allocation of death benefit and cash value if a whole life policy is 3 years old?
That is a great question, it would depend on the insurance company. ( I would ask the carrier you are with, or the the agent who sold it to you) But 3 years in majority of the time I would say not probable but depending on how it was designed you may be able to salvage it by putting more money in or 1035 exchange ( roll Cash value into a new one with a new company.) Even if it isn't optimized for cash sometimes after a few years they still perform well.
Not exactly, but usually they are really close in value. Cash value is the amount you have available to borrow or the amount that is being compounded, surrender value is the amount you would get if you cancelled your policy. They are different because there could be rebates, or you have a loan balance, or some insurance products have surrender charges.
Except that the growth on life insurance is terrible against market investments or even high yield savings accounts where you still have access to your funds at any point in time
Yeah, I wouldn't compare it to an investment. It's like saying an orange provides more vitamin C than an apple; while that is true, an apple has many other benefits compared to an orange. They are both great and are used for different purposes.
When you really understand finance, you learn when it is suitable for who, and do not just look at one bucket of growth and say one is better because of that.
A life insurance policy will outperform a high-yield savings long-term. This year's interest rates are the highest they have been in decades, which boosts high yield savings accounts.
This video is very helpful. One question: is it possible to change the allocation of death benefit and cash value if a whole life policy is 3 years old?
That is a great question, it would depend on the insurance company. ( I would ask the carrier you are with, or the the agent who sold it to you) But 3 years in majority of the time I would say not probable but depending on how it was designed you may be able to salvage it by putting more money in or 1035 exchange ( roll Cash value into a new one with a new company.) Even if it isn't optimized for cash sometimes after a few years they still perform well.
Does the surrender value equal the cash value?
Not exactly, but usually they are really close in value. Cash value is the amount you have available to borrow or the amount that is being compounded, surrender value is the amount you would get if you cancelled your policy. They are different because there could be rebates, or you have a loan balance, or some insurance products have surrender charges.
@@AndAsset thanks for the clarification!
Amazing glad I could help!@@BenFreedmanRacing
What other questions do you want me to answer about whole life insurance?