Late bloomer here. I bought my policy after 40, so permanent insurance was way too expensive. I bought a term policy that was a third of the cost of permanent. My wife bought a permanent policy in her early 20s, so she's paying very little and getting so much more. Listen to Rose, kids. Jump on this ASAP!
This product has so many cons it's ridiculous. Very controversial whether young kids even need to buy that themselves... You can achieve much more by just maximizing your retirement accounts. And you can even borrow against them, so I don't really understand the appeal of life insurance at this point.
@@alexvig2369life insurance has been taken from its purpose unfortunately, it’s supposed to be for when you die but unfortunately many life agents sell to people as an Investment to get money , can’t blame them that’s were they get the money
Hi Rose, Great Vid. Just a couple of things. 1. In an IUL policy, if you take a policy WITHDRAWAL from your Cash Value account, depending on the amount, that is a TAXABLE event. Therefore, to take advantage of life insurances' tax advantages pertaining to IRS rule 7702, ALWAYS take away from your Cash Value Account as a POLICY LOAN, not a withdrawal. 2. in an IUL, the money is NOT INVESTED directly into the STOCK MARKET. It is invested into INDEX OPTIONS that TRACK a market like the S&P 500, Hang Seng, Credit Suisse, etc.. VARIABLE LIFE Insurance products would be an insurance product that uses the separate account to INVEST DIRECTLY into the stock market. Hope this helps. 😁😁
Good information, Rose. Here is a tip from my personal experience: Many people rely on the term insurance that they receive through their jobs. That's fine as long as you are employed. If you lose your job, you lose your insurance. At that point, if you have had health issues, you may find yourself to be uninsurable or the cost to be prohibitive. I recommend that you purchase life insurance (either whole life or term) OUTSIDE OF YOUR EMPLOYMENT SITUATION in your young healthy years.
Im life licensed and financial securities licensed. Permanent life insurance with a cash value is always a rip off-stay clear of those money pits. Term is the way to go. It works when you have proper investments set up. Can check out what Dave Ramsey and Suze Orman have to say about these things-they are for term and 100% against permanent/cash value.
Very informative and I definitely learned a lot. So getting life insurance as an investment vehicle is worthwhile only after the following considerations: 401k company match Max out Roth IRA Max out HSA Minimal to no debt Stable Income Reasonable nest egg It'll probably be a while before I meet all of those but it's something I'll keep in mind.
Yeah, its frustrating to see all the Whole Life praise in this video. Whole life is opening a savings account with the bank, the first three years the bank keeps all your deposits, then after those three years you get awful rates of return, you can't withdraw the money from the account without taking out a loan against it and paying the bank the interest, then when you die they keep all the money you spent years trying to grow. They front load the fees because they know most people won't be able to keep up with the huge monthly payments and when they cancel they get absolutely nothing from it since they haven't yet earned any cash value in the account.
You are so good at explaining all these different investment vehicles! I can't tell you how many videos I watched on IUL insurance because someone was trying to sell me on it but I still did not understand at all how it worked till I came across your video that has explained it the best! Thank you Rose!
In my opinion you'll be better off with a term policy and investing the money in a taxable brokerage account. The fees, penalties, restrictions on whole life policies are crazy
i have a variable universal life - fees are high but the mutual funds investment with this life is a rate of return that is high -- it will help you grow higher rate of return if stock market is well or if crashed came back up-- then you can use this cash value for lifetime income - only companies that have living benefits can also have lifetime income
Very informative video! I am new to this topic, so I am failing to see the benefits of permanent life insurance. Maybe someone can clarify. How I understand it: The cash value that is accumulated in the policy is only available only to you, and it disappears when you pass away. If you pull out the cash value, you surrender your policy, which surrenders the life insurance amount you signed up for. If you are investing in life insurance just to pull it out at a later age, you will not have to pay tax on the money now, but you will need to pay tax on the earnings. So in the example, if you had put in $400k, and the policy was worth $1M, you would have to pay tax on the difference. In addition, there are fees/commissions associated with these policies, and the growth rate is likely lower than if you invested your money elsewhere.
This is such an important topic people don't think about enough. My best friend's dad dropped dead of a heart attack at 46... while he was riding his bicycle, which he did daily. Thankfully, he had a very good life insurance policy that took care of my friend, her sister, and his wife (their step-mom). Also, while no one wants to think about dying, or their loved ones dying, anyone who has had to deal with those situations know death is EXPENSIVE. It's not just your burial, what your remains are kept in, but also the time and resources it takes to get rid of the belongings of someone who has passed on. Those all cost thousands of dollars. And the last kind thing you can do for your loved ones is not leave that financial burden on them when they're already grieving your loss.
Helpful video...thank you. 🙏🏽Initially had IUL and years later switched to WL. IUL have exponently increasingly COI (Cost Of Insurance) which kills the Compounding effect.
I have sold insurance and managed insurance sales teams. I only have term cover and will never buy any form of permanent insurance. I recommend that you do the math VERY carefully before committing to permanent cover.
Yes! It is a wealth maintenance plan if an income earner has kids or family members (spouses, siblings, and neices/newphews). It might not make them rich, but it helps them out in the worst case scenario.
Thanks for the detailed video. Can you do a comparison between you investing in a permanent insurance policy vs. investing in S&P 500 Index fund on your own? I ran quick numbers and if you invested $12,000 per year for 34 years (from age 31 to 65), you would have $2.8M with a 9% yearly return. This clearly beats the $1M return you are estimated to get even after having to pay taxes. Am I missing something here?
Hey Farham! It’s true that your money would grow more in an S&P500 index fund (without factoring in taxes obviously). Something I didn’t get into in this video is that some policies (or at least mine does) place a cap/floor on your gains/losses between 0-10%. They do this with S&P500 index options. So it’s a more conservative, less volatile investment than a pure S&P500 fund... hence lower returns. That being said, the numbers I gave were pretty conservative projections, and what you’d actually get could be a lot higher too (depending on market performance).
S&P 500 (outside Roth) doesn’t offer tax free income in retirement, doesn’t have a death benefit and doesn’t come with ACB for long term care. So it’s apples and oranges.
I'd rather spend 500 a year on a term policy, max out my Roth and use what's left of that 12 thousand to trade a self directed account instead. You'll have the same coverage for the term of the policy (while locking down your premium over two decades, savings on its own), same tax free treatment for half of that capital, and opportunities for outperformance through your own account. Just frankly don't see any benefits otherwise. Options (insurance) tend to expire worthless, doesn't mean they're not valuable tools and a very capital efficient way to buy peace of mind.
Hi Rose, this is a timely video for me! Thank you for covering this! Can you do a video how exactly to take loans (process, what to be careful of as to interests etc.) out of it, and what you would do with the loan to build your wealth. I love your down to earth and real person perspective, and relatable advices! Thank you!!
If you had put the same 12k p.a into a taxable Index fund instead of Universal index life insurance, you would have around 2.7 million instead of the projected 1 million.I would rather prefer a term insurance and invest the balance into a regular Index fund.
Rose, with your knowledge of the stock market and the guidance you provide I am really surprised you are advocating for permanent life insurance. People need to understand the fees associated with those loans against their "cash values" because that could harm your growth over time. Term life insurance should always be explained with and investment portfolio as well. Look at the schedules for whole life or index policies and it has the possibility to "eat" itself with the monthly premiums as a certain point.
I am a licensed agent and senior advisor in this industry. Rose is 100% correct. Having coverage and savings as an IUL is the smarter way to go. National Life is the best in this industry. Their living benefits is so invested and beneficial in the members, the policy holders. If anyone is interested please feel free to reach out. Our purpose is to teach and show people about these types of policies, not force anyone to purchase.
Permanent Life insurance is a controversial topic. I have heard different things/have different recommendations. The cash value portion/living benefits portion is nice to have for emergencies from experience having my own and seeing a family member use it. It grows separately from the death benefit and you can borrow it to pay for anything like medical treatments etc. You can add an accelerated death benefit rider and it would subtract anything you owe for cash value from the death benefit. IULs allows dependents to keep that cash value portion when the insured dies. For whole life insurance the cash value goes to the company. There's so many different types of insurance out there and it confuses people.
I like many things you said about lofe insurance, but there’s something that needs to be clarified: the insurance company does NOT invest your cash value in the stock market in an IUL. They use the earnings from their General Account Portfolio to buy options in the market. So even if the stock market crashes, your worst case scenario is you don’t lose anything, while also not gaining anything. *Cost of insurance and policy expenses are still deducted, so you may experience a decrease in cash value
I'm 63. I've just learned more about insurance, from you in 23 minutes; than I have learned in my whole life. Thank you! I'll pass this info on to my kids & grandkiddos.
Actuary and licensed life and health insurance broker here. DO NOT talk to an insurance broker to figure out whether you need an insurance, the same way you wouldn't ask a used car salesman whether you need a used car. Find a friend who can do basic math with compounding interest instead. I don't want to entirely write off the usefulness of permanent life policies, but in the majority of cases it's cheaper to buy term life (if you need it at all... chances are you have some form of group term life insurance through your employer already), which has a lower premium, and invest the difference. Rose's example gave $400k in cumulative premiums over 30 years to net $1M - that's not great at all. If you invest $400k over 30 years in S&P500 you'd end up with closer to $2M, which is much better than $1M even after factoring in taxes.
Hi Rose, I was really enjoying your videos until I watched this one. The only life insurance people need is inexpensive term insurance. Permanent insurance is a financial scam perpetrated on people for decades. The only winner on permanent insurance is the insurance company and the person who sold to you as they collect huge commissions. Please do a full cash flow analysis comparing "Term Insurance/Invest the difference" versus a "Permanent life" policy. Remember, if you pass away during your Permanent policy your dependent will only receive your death proceeds and WILL NOT receive the monies you were setting aside as the cash value. Ask yourself, why wouldn't your dependents get the cash value plus the death penalty when you pass away? Just as you stated: "you have to pay into it a long time" Ask yourself, why? What is is the cost benefit? Also, rent versus own your home is a terrible analogy to use and is very misleading to the average person. Again, do a full cash flow analysis over 20 or 30 years and compare Term vs Permanent. The money you will save with Term insurance will do much better in a true investment. Also, your using Insurance Industry talking points over and over again and telling your viewers to trust any insurance agent is very concerning. Good luck to your viewers!
Exactly, this comment is spot on. I plan on doing this same analysis for term/invest the difference vs whole insurance (I’ll take a look at their market investment options to make it a fair fight) for myself. I generally do not like to mix insurance and investing anyway, but I need to do my own due diligence. Term insurance, however, is almost always the best for most people.
It really depends on what your needs and wants are. Some people actually want to have whole life insurance (permanent insurance for those trying to understand the lingo still) because of the features an benefits of it. In term insurance, you can't cash out but it will when you die so that beneficiary receives it. With whole life, yes you are paying for life however you can take money out at after a certain point which isn't long btw. You may want to have access to that cash... It sounds like for you Nick, that isn't the fit which is fine but let's be clear you vs other folks needs. Whole life wouldn't exist if it didn't serve a purpose to the customer's benefit and I'm saying that as someone who's going to help families out there with deciding their own policies for life insurance this month.
Agree completely. I think it's a bad idea to combine insurance and investing. It would be much more responsible to perform a cash flow analysis. I may do this for my viewers.
Idk if life insurance is for me at the moment yet. I would rather invest that premium into my portfolio and leave my investments instead. The investment is guaranteed vs the premium going to waste if I live a long life.
Agreed, she makes it sound good but when comparing her strategies she will make out significantly better off of her other investments. Maxing out her 401k from her age to 65 will have $4-5million in comparison to the $1million she gets with life insurance. And the Roth will most likely be double her life insurance as well, making the insurance look like a terrible investment in comparison. If you can max out all of it and have plenty leftover then great but you’re already financially well off. If you can’t afford to max them all out then thinking of your life insurance as a good investment is a terrible idea.
The life insurance policy is a good way to help your beneficiaries inherit a large IRA. You can spend the money now and convert to Roth IRA, or leave an insurance policy to your love ones to cover the tax due on the IRA. The life insurance is more of a State planning vehicle, not an alternative to investing strategy. She did mentioned that her IRA and 401 were max'd.
I really appreciate this video. You explain it extremely well. The term life insurance is affordable, but the permanent life insurance sounds really great too. I will take some information from your video and use in my decision making process about taking out an insurance policy. Thanks again for this great video. Great job, and well done.
IUL does not have a guaranteed death benefit and if you are not max funding the policy it really isn't an investment that should be considered. The cost of insurance rises with your age which will eat away the cash value when you get older. Only whole life is the cost of insurance fixed.
Thank you for your time and expertise in making this vid. I'm married and if on the hope not ever unlikelihood we divorce, can I just change the beneficiary and keep the equity and everything I put into it. Just change the payout person. Also, can't I just be my own agent and do my own research. Or, is life INS. like car INS where the agents only work for the INS holders, and they don't try to find you cheaper rates. They only add on their own fees in the face of the company.
What's the prices of each of these Life Insurances? Why are you worried about the policy growing through investment the life insurance is for the benefincy not so much for the insurer. If you decide to pick a term life insurance policy after 20 years you can renew your policy for another 20 years. Whole life allows you to invest but they are looking out for the shareholders not for the insurer! If you have Millions of dollars there is no need for Life Insurance all you need is a Will and living revocable Trust. Life insurance is for people who have little money, so you have to be careful in choosing a life insurance that you really don't need.
Good basic information. However, for those who are considered WLI, most policies are written in a way that you cannot receive the cash value at maturity, which is unfortunate, but that's the way the industry is run. For growth, there are likely better ways to invest than paying the high premiums and receiving a fixed dividend.
Thank you for sharing this information. It was extremely helpful in understanding life insurance. I’ve been researching for weeks and you’re video was more helpful than all the others I watched COMBINED! And I watched a lot of ‘em smh.
Hi Rose, great content, I have IUL,but want to point out that IUL didn’t invest in stock market, it buys options for the floor and cap, in general account. VUL invest in securities.
Your videos rock and I've watched a ton. But I'm not sure about this one. A lot of big players, including Clark Howard and Dave Ramsay, for example, speak of the horrors of this type of insurance. As Nick Fong stated below, it's an investment vehicle where the person collecting commissions wins. In almost EVERY case, you're better off using your cash towards the stock market and getting a simple term insurance policy. Thanks for all you do!
Thank you! Very helpful n good. Ur presentation n explanation are great. You convinced me n assuaged my fears about Whole Life (Dave ramsey says they're scams) I'm getting my Whole Life Insurance today!!
The index universal life insurance was very interesting and attractive especially for young people, however when I looked into it I realize that the premium/fee for the insurance part will continue to increase even if it is exact same fee every month or not, so the amount that goes to the investment will decrease in time? could you please explain that because if that’s the case it’s really not beneficial?
I didn't know it was tax free, thank you! I'm saving for a house right now so I'll probably get this soon after and reach out to your agent in the future. So glad I know this info now. If or when I have kids I will definitely get them life insurance as soon as they're born. Things I wish were taught in school lol Thanks sis, love ya ❤️😃
You can use your cash value within your life insurance policy to put as downpayment for a home! At the same time you don’t have to pay it back or you can at any time. When you borrow from your cash values savings to put for a downpayment on a home, your money never leaves. The great about this is that it keeps growing and compounding earning interest. What they do is that the insurance company will give your their money and use your cash value as collateral. Here’s two ways to pay it back. 1) You can cash out refinance your home and put the downpayment amount back into the cash value policy when you’re done paying it off. Or 2) when you prematurely pass away it will automated deduct from the death benefit face amount. It is called unstructured loans because your cash value is used as collateral. 401k and IRA cannot do this. If any loan taken from a 401k or IRA is not paid back within 5 years it will be considered early withdrawal penalty of 10% and ordinary income taxes. You can also structure this for your child’s college education within a life insurance policy and it will not count on their financial aid. If you’d like to learn more my contact is tongyang@ffsmail.com Facebook @ Tong Yang FFS Instagram @ tongyanginvest
ALWAYS term life insurance, never whole life AKA permanent life insurance. It is not a tax advantaged account and will end up costing you money (source: I am a tax CPA). Much better to invest inyour money in a Roth or Traditional IRA. Or if you're at the cap on those, it would be better to invest with a brokerage account. NEVER pay to use your own money with a permanent life policy. Term life, yes recommend 100%.
Loved loved loved the video. Very clear and easy to follow! I scheduled a 30min call with Yair but I hope you can do a follow up video explaining other details (i.e. fees involved, tax advantages, penalties for early withdrawal, more details on flexibility of accessing your money, are premiums fixed for life for IUL policy? why would anyone get a brokerage account at this point??). Thank you!
Thank you, I have had a IUL for many years now but I got one not really understanding why. But to see I can put a large amount in changes my outlook on things. But I will be booking a meeting because I want to know more about making sure the family has one or should I just have one large policy very tuff. Thanks Rose 🙌
If you have children you need life insurance since how would they get on without you. The best bargain then is term. Other forms of insurance underperform in comparison with standard investments. If you're children are all grown or you don't have any then you don't need life insurance. The tax advantages generally are not sufficient.
Rose, you are awesome! So helpful. I’m literally binging all your vids and taking notes along the way. I have 2 questions about life insurance. 1) didn’t you say the premium would decrease over the years? Or did I misunderstand that? I ask bc you have an example where you pay the same amount every year so I wasn’t sure which one was correct. 2) If Life Insurance gets more expensive the longer you wait and if there’s a higher cap on what you can invest, why should I max out my Roth IRA before this? Thanks again Rose!
thank you for this video! But I have a question when you gave an example in (15:25), how can you contributed less if you started at 0 versus if you started at 31? don't you contributed more money if you started earlier?? maybe i'm missing something here?!
When you buy an IUL you’re buying an ART (Annual Renewable Term) policy. Where the insurance component cost goes UP EVERY YEAR. You probably didn’t know that, or if you knew, you are terrible as a financial person.
@@jermaineholmes3531 “whole life” is a type of permanent life insurance. You get a guaranteed interest rate plus non-guaranteed dividends. Going with a long standing and reputable company, there’s about 0% risk. However, they are VERY front loaded with fees. Because they are secure and tend to grow at a 3-5% rate over the long term… I look at them as similar to bonds.
There is also something called Perm Term which has no cash accumulation but will have a death benefit til the day you die This is really helpful for those who don't like/understand/want a permanent policy with the cash account component.
What happens if I can’t invest in a permanent one right now but want to later and when I do, it’s still during my 20 year life insurance period? Will I be paying for two life insurance policies?
One of your best videos by far. I think your channel really hits it's stride when you are explaining investing vehicles outside of the mainstream RUclips finance.
Hey Rose, thank you for your videos and knowledge I know you are mostly under stable investing traditions. I want to know your opinion on the recent market craze. Have you done a video on the recent AMC and GME stock and the potentials for short squeezes? Maybe i missed a video or comment. That is why i am writing to you on this one. Thank You
@@RepliédbyMattKohrs-k5c here we gone. Rose has a checkmark ✔️ near her name if she leaves a comment. She never replies to my comments. Rose with an apostrophe above the e. Question? Why are you targeting me? Do I look like a fool to you. F#ck off. And I hope she sees this
That perfectly sums up life insurance , Great job Rose . I am an independently Insurance person in Canada I follow those principles that you laid out .
can the monthly investment you make in IUL insurance be with pre-tax dollars? or it'll have be with post-tax dollars just like a Roth IRA, and only the growth is tax-free?
ALWAYS get term guys. 99% of people are not at the point to even be thinking about using insurance as an investment plus so many people get burned with mixing insurance and investing. Term is all you need guys, cheaper simple and will cover you. Plus its not smart paying for life insurance if you don't have dependents.
I am inclined to agree with you. While I don't pretend to understand the tax regimes in all jurisdictions and practices of every insurance company, in every case that I have seen the fees charged outweigh the benefits. In addition, most of us reach a point where we no need as much or any life insurance. Once you are financially secure and have no dependents, why do you need life insurance? I keep my term coverage because it is so cheap as I started it 22 years ago, but I wouldn't buy any more now (and even paying the small premium that I do is probably illogical).
She already explained why you would get term life vs permanent. If you have extra money like her you can get permanent. If you don't have the money, then don't. as simple as that. So if you're poor then just says so XD
I have Life Insurance with Northwestern Mutual but the return is stupid low so I'm guessing it's Whole Life. I'm going to see about changing it to Index Universal Life
So you and I are in the same boat. I’m using my insurance policy currently to continue to grow my wealth. However, I added my parents as my beneficiary on this current policy…are you suggesting not to do that or it doesn’t matter?
Thanks for all the detailed information you have provided in this video. I like your way of explaining every point. Keep sharing such great videos in the future also.
Hi rose, what about doing a video about marriage and finances. A lot of marriages fail due to poor finances, especially with no financial plan. Some individuals get burned after the marriage is done with no estate planning or financial planning. also if you have already made the video someone feel free to link it when replying to my comment
@@itsrosehan, Thanks for your reply Rose also prenuptial or postnuptial agreement(Prenup or postnup) are often portrayed as taboo within a relationship. I have seen it portrayed as a sign of mistrust when it's brought up in the media. if you have any experience and knowledge of prenup and postnup with its pros and cons please share it. If not then no worries this is just a suggestion
Hi Rose. 👋 Wow your video is really wonderful!!!! It helped me understand a bit more about life insurance. I'm almost in my fifties and don't have any life insurance yet, but do plan to do a term life insurance . It's just hard to choose a company. You gave great tips on what to look for in a company.....but do you have any recommendations besides National? I was looking into AAA and Prudential but I'm not sure yet.
Late bloomer here. I bought my policy after 40, so permanent insurance was way too expensive. I bought a term policy that was a third of the cost of permanent. My wife bought a permanent policy in her early 20s, so she's paying very little and getting so much more. Listen to Rose, kids. Jump on this ASAP!
This product has so many cons it's ridiculous. Very controversial whether young kids even need to buy that themselves...
You can achieve much more by just maximizing your retirement accounts. And you can even borrow against them, so I don't really understand the appeal of life insurance at this point.
@@alexvig2369life insurance has been taken from its purpose unfortunately, it’s supposed to be for when you die but unfortunately many life agents sell to people as an Investment to get money , can’t blame them that’s were they get the money
@@alexvig2369 me as well
Hi Rose,
Great Vid. Just a couple of things. 1. In an IUL policy, if you take a policy WITHDRAWAL from your Cash Value account, depending on the amount, that is a TAXABLE event. Therefore, to take advantage of life insurances' tax advantages pertaining to IRS rule 7702, ALWAYS take away from your Cash Value Account as a POLICY LOAN, not a withdrawal.
2. in an IUL, the money is NOT INVESTED directly into the STOCK MARKET. It is invested into INDEX OPTIONS that TRACK a market like the S&P 500, Hang Seng, Credit Suisse, etc.. VARIABLE LIFE Insurance products would be an insurance product that uses the separate account to INVEST DIRECTLY into the stock market. Hope this helps. 😁😁
Good information, Rose. Here is a tip from my personal experience: Many people rely on the term insurance that they receive through their jobs. That's fine as long as you are employed. If you lose your job, you lose your insurance. At that point, if you have had health issues, you may find yourself to be uninsurable or the cost to be prohibitive. I recommend that you purchase life insurance (either whole life or term) OUTSIDE OF YOUR EMPLOYMENT SITUATION in your young healthy years.
Im life licensed and financial securities licensed. Permanent life insurance with a cash value is always a rip off-stay clear of those money pits. Term is the way to go. It works when you have proper investments set up. Can check out what Dave Ramsey and Suze Orman have to say about these things-they are for term and 100% against permanent/cash value.
Jesus... the nonsense you have over there in America 🤦♂
Very informative and I definitely learned a lot.
So getting life insurance as an investment vehicle is worthwhile only after the following considerations:
401k company match
Max out Roth IRA
Max out HSA
Minimal to no debt
Stable Income
Reasonable nest egg
It'll probably be a while before I meet all of those but it's something I'll keep in mind.
This is a good break down. Thank you. Also you got it!
My father worked for an insurance company and told me how badly people got scammed on whole life policies. Please buy term and invest the difference.
Yeah, its frustrating to see all the Whole Life praise in this video.
Whole life is opening a savings account with the bank, the first three years the bank keeps all your deposits, then after those three years you get awful rates of return, you can't withdraw the money from the account without taking out a loan against it and paying the bank the interest, then when you die they keep all the money you spent years trying to grow.
They front load the fees because they know most people won't be able to keep up with the huge monthly payments and when they cancel they get absolutely nothing from it since they haven't yet earned any cash value in the account.
Yes, you are right. Good for you.
You are so good at explaining all these different investment vehicles! I can't tell you how many videos I watched on IUL insurance because someone was trying to sell me on it but I still did not understand at all how it worked till I came across your video that has explained it the best! Thank you Rose!
In my opinion you'll be better off with a term policy and investing the money in a taxable brokerage account. The fees, penalties, restrictions on whole life policies are crazy
i have a variable universal life - fees are high but the mutual funds investment with this life is a rate of return that is high -- it will help you grow higher rate of return if stock market is well or if crashed came back up-- then you can use this cash value for lifetime income - only companies that have living benefits can also have lifetime income
@Jack Ingram Cryptø scammer
I didn’t know about the investment side of life insurance. Thank you Rose for sharing your knowledge with us.
Very informative video! I am new to this topic, so I am failing to see the benefits of permanent life insurance. Maybe someone can clarify.
How I understand it:
The cash value that is accumulated in the policy is only available only to you, and it disappears when you pass away. If you pull out the cash value, you surrender your policy, which surrenders the life insurance amount you signed up for.
If you are investing in life insurance just to pull it out at a later age, you will not have to pay tax on the money now, but you will need to pay tax on the earnings. So in the example, if you had put in $400k, and the policy was worth $1M, you would have to pay tax on the difference. In addition, there are fees/commissions associated with these policies, and the growth rate is likely lower than if you invested your money elsewhere.
This is such an important topic people don't think about enough. My best friend's dad dropped dead of a heart attack at 46... while he was riding his bicycle, which he did daily. Thankfully, he had a very good life insurance policy that took care of my friend, her sister, and his wife (their step-mom). Also, while no one wants to think about dying, or their loved ones dying, anyone who has had to deal with those situations know death is EXPENSIVE. It's not just your burial, what your remains are kept in, but also the time and resources it takes to get rid of the belongings of someone who has passed on. Those all cost thousands of dollars. And the last kind thing you can do for your loved ones is not leave that financial burden on them when they're already grieving your loss.
Helpful video...thank you. 🙏🏽Initially had IUL and years later switched to WL. IUL have exponently increasingly COI (Cost Of Insurance) which kills the Compounding effect.
I have sold insurance and managed insurance sales teams. I only have term cover and will never buy any form of permanent insurance. I recommend that you do the math VERY carefully before committing to permanent cover.
Seriously the best financial youtube account ive found thats straight to the point, explained in a way I understand and very helpful!
Yes! It is a wealth maintenance plan if an income earner has kids or family members (spouses, siblings, and neices/newphews). It might not make them rich, but it helps them out in the worst case scenario.
Thanks for the detailed video. Can you do a comparison between you investing in a permanent insurance policy vs. investing in S&P 500 Index fund on your own?
I ran quick numbers and if you invested $12,000 per year for 34 years (from age 31 to 65), you would have $2.8M with a 9% yearly return. This clearly beats the $1M return you are estimated to get even after having to pay taxes. Am I missing something here?
Hey Farham! It’s true that your money would grow more in an S&P500 index fund (without factoring in taxes obviously). Something I didn’t get into in this video is that some policies (or at least mine does) place a cap/floor on your gains/losses between 0-10%. They do this with S&P500 index options. So it’s a more conservative, less volatile investment than a pure S&P500 fund... hence lower returns. That being said, the numbers I gave were pretty conservative projections, and what you’d actually get could be a lot higher too (depending on market performance).
S&P 500 (outside Roth) doesn’t offer tax free income in retirement, doesn’t have a death benefit and doesn’t come with ACB for long term care. So it’s apples and oranges.
I just love when Rose posts her videos. I look 👀 forward to Rose’s videos every Thursday💖.
I'd rather spend 500 a year on a term policy, max out my Roth and use what's left of that 12 thousand to trade a self directed account instead.
You'll have the same coverage for the term of the policy (while locking down your premium over two decades, savings on its own), same tax free treatment for half of that capital, and opportunities for outperformance through your own account.
Just frankly don't see any benefits otherwise. Options (insurance) tend to expire worthless, doesn't mean they're not valuable tools and a very capital efficient way to buy peace of mind.
Hi Rose, this is a timely video for me! Thank you for covering this! Can you do a video how exactly to take loans (process, what to be careful of as to interests etc.) out of it, and what you would do with the loan to build your wealth. I love your down to earth and real person perspective, and relatable advices! Thank you!!
If you had put the same 12k p.a into a taxable Index fund instead of Universal index life insurance, you would have around 2.7 million instead of the projected 1 million.I would rather prefer a term insurance and invest the balance into a regular Index fund.
Rose, with your knowledge of the stock market and the guidance you provide I am really surprised you are advocating for permanent life insurance. People need to understand the fees associated with those loans against their "cash values" because that could harm your growth over time. Term life insurance should always be explained with and investment portfolio as well. Look at the schedules for whole life or index policies and it has the possibility to "eat" itself with the monthly premiums as a certain point.
I am a licensed agent and senior advisor in this industry. Rose is 100% correct. Having coverage and savings as an IUL is the smarter way to go. National Life is the best in this industry. Their living benefits is so invested and beneficial in the members, the policy holders. If anyone is interested please feel free to reach out. Our purpose is to teach and show people about these types of policies, not force anyone to purchase.
Love the channel!!! Just legally became an adult and your videos have helped me tremendously!
Thank you! So great to hear that my videos are helping you at "adulting" 😊
Hehe love the profile picture Midoriya
@@AntonioInvests Me too. Midoriya. ✔ Bi colors.✔
It is the right time to take insurance for yourself. Go with permanent if it fits and enjoy the ride. Come and watch my channel also
Permanent Life insurance is a controversial topic. I have heard different things/have different recommendations. The cash value portion/living benefits portion is nice to have for emergencies from experience having my own and seeing a family member use it. It grows separately from the death benefit and you can borrow it to pay for anything like medical treatments etc. You can add an accelerated death benefit rider and it would subtract anything you owe for cash value from the death benefit. IULs allows dependents to keep that cash value portion when the insured dies. For whole life insurance the cash value goes to the company. There's so many different types of insurance out there and it confuses people.
It's a horrible financial investment 😆
She probably sells insurance....thats why she didn't mention any cons about it....smh horrible
I like many things you said about lofe insurance, but there’s something that needs to be clarified: the insurance company does NOT invest your cash value in the stock market in an IUL.
They use the earnings from their General Account Portfolio to buy options in the market. So even if the stock market crashes, your worst case scenario is you don’t lose anything, while also not gaining anything.
*Cost of insurance and policy expenses are still deducted, so you may experience a decrease in cash value
Great deep dive video. Very clear! Thank you, Rose.
That was a great explanation of insurance options Rose and how to prioritize it as an investment vehicle. Keep up the great videos!
I'm 63. I've just learned more about insurance, from you in 23 minutes; than I have learned in my whole life. Thank you!
I'll pass this info on to my kids & grandkiddos.
I taught this would be a boring topic but you found a way to make it interesting. Good job
Very interesting! Never knew you could use life insurance as an investment vehicle. Thank you again Rose!
Actuary and licensed life and health insurance broker here. DO NOT talk to an insurance broker to figure out whether you need an insurance, the same way you wouldn't ask a used car salesman whether you need a used car. Find a friend who can do basic math with compounding interest instead.
I don't want to entirely write off the usefulness of permanent life policies, but in the majority of cases it's cheaper to buy term life (if you need it at all... chances are you have some form of group term life insurance through your employer already), which has a lower premium, and invest the difference. Rose's example gave $400k in cumulative premiums over 30 years to net $1M - that's not great at all. If you invest $400k over 30 years in S&P500 you'd end up with closer to $2M, which is much better than $1M even after factoring in taxes.
I am glad that you cover this topic. I will forward this video to my coworkers...
Hi Rose, I was really enjoying your videos until I watched this one. The only life insurance people need is inexpensive term insurance. Permanent insurance is a financial scam perpetrated on people for decades. The only winner on permanent insurance is the insurance company and the person who sold to you as they collect huge commissions. Please do a full cash flow analysis comparing "Term Insurance/Invest the difference" versus a "Permanent life" policy. Remember, if you pass away during your Permanent policy your dependent will only receive your death proceeds and WILL NOT receive the monies you were setting aside as the cash value. Ask yourself, why wouldn't your dependents get the cash value plus the death penalty when you pass away? Just as you stated: "you have to pay into it a long time" Ask yourself, why? What is is the cost benefit? Also, rent versus own your home is a terrible analogy to use and is very misleading to the average person. Again, do a full cash flow analysis over 20 or 30 years and compare Term vs Permanent. The money you will save with Term insurance will do much better in a true investment. Also, your using Insurance Industry talking points over and over again and telling your viewers to trust any insurance agent is very concerning. Good luck to your viewers!
Spot on. Every point. Permanent life insurance is a terrible idea for virtually everybody. Period.
Exactly, this comment is spot on. I plan on doing this same analysis for term/invest the difference vs whole insurance (I’ll take a look at their market investment options to make it a fair fight) for myself. I generally do not like to mix insurance and investing anyway, but I need to do my own due diligence. Term insurance, however, is almost always the best for most people.
All good - you are 100% free to decide what is best for you.
It really depends on what your needs and wants are. Some people actually want to have whole life insurance (permanent insurance for those trying to understand the lingo still) because of the features an benefits of it. In term insurance, you can't cash out but it will when you die so that beneficiary receives it. With whole life, yes you are paying for life however you can take money out at after a certain point which isn't long btw. You may want to have access to that cash...
It sounds like for you Nick, that isn't the fit which is fine but let's be clear you vs other folks needs. Whole life wouldn't exist if it didn't serve a purpose to the customer's benefit and I'm saying that as someone who's going to help families out there with deciding their own policies for life insurance this month.
Agree completely. I think it's a bad idea to combine insurance and investing. It would be much more responsible to perform a cash flow analysis. I may do this for my viewers.
Amazing Rose! I have my policy with PacLife because of the 2.7 multiplier! So thankful you POSTED THIS VIDEO!!
Nice job covering this topic, Rose! Saving to my financial besties playlist!
Idk if life insurance is for me at the moment yet. I would rather invest that premium into my portfolio and leave my investments instead. The investment is guaranteed vs the premium going to waste if I live a long life.
Agreed, she makes it sound good but when comparing her strategies she will make out significantly better off of her other investments. Maxing out her 401k from her age to 65 will have $4-5million in comparison to the $1million she gets with life insurance. And the Roth will most likely be double her life insurance as well, making the insurance look like a terrible investment in comparison. If you can max out all of it and have plenty leftover then great but you’re already financially well off. If you can’t afford to max them all out then thinking of your life insurance as a good investment is a terrible idea.
national life IUL can give you lifetime income by 60 yrs old and 10 years in policy - premiums not wasted
The life insurance policy is a good way to help your beneficiaries inherit a large IRA. You can spend the money now and convert to Roth IRA, or leave an insurance policy to your love ones to cover the tax due on the IRA.
The life insurance is more of a State planning vehicle, not an alternative to investing strategy.
She did mentioned that her IRA and 401 were max'd.
I really appreciate this video. You explain it extremely well. The term life insurance is affordable, but the permanent life insurance sounds really great too. I will take some information from your video and use in my decision making process about taking out an insurance policy. Thanks again for this great video. Great job, and well done.
IUL does not have a guaranteed death benefit and if you are not max funding the policy it really isn't an investment that should be considered. The cost of insurance rises with your age which will eat away the cash value when you get older. Only whole life is the cost of insurance fixed.
Thank you for this video! I’m currently researching what life insurance is and has no idea where to start but you summarized everything so well!!
Thank you for your time and expertise in making this vid.
I'm married and if on the hope not ever unlikelihood we divorce, can I just change the beneficiary and keep the equity and everything I put into it. Just change the payout person.
Also, can't I just be my own agent and do my own research. Or, is life INS. like car INS where the agents only work for the INS holders, and they don't try to find you cheaper rates. They only add on their own fees in the face of the company.
What's the prices of each of these Life Insurances? Why are you worried about the policy growing through investment the life insurance is for the benefincy not so much for the insurer. If you decide to pick a term life insurance policy after 20 years you can renew your policy for another 20 years. Whole life allows you to invest but they are looking out for the shareholders not for the insurer! If you have Millions of dollars there is no need for Life Insurance all you need is a Will and living revocable Trust. Life insurance is for people who have little money, so you have to be careful in choosing a life insurance that you really don't need.
Good basic information.
However, for those who are considered WLI, most policies are written in a way that you cannot receive the cash value at maturity, which is unfortunate, but that's the way the industry is run. For growth, there are likely better ways to invest than paying the high premiums and receiving a fixed dividend.
Thank you for sharing this information. It was extremely helpful in understanding life insurance. I’ve been researching for weeks and you’re video was more helpful than all the others I watched COMBINED! And I watched a lot of ‘em smh.
Hi Rose, great content, I have IUL,but want to point out that IUL didn’t invest in stock market, it buys options for the floor and cap, in general account. VUL invest in securities.
Your videos rock and I've watched a ton. But I'm not sure about this one. A lot of big players, including Clark Howard and Dave Ramsay, for example, speak of the horrors of this type of insurance. As Nick Fong stated below, it's an investment vehicle where the person collecting commissions wins. In almost EVERY case, you're better off using your cash towards the stock market and getting a simple term insurance policy. Thanks for all you do!
Thank you! Very helpful n good. Ur presentation n explanation are great.
You convinced me n assuaged my fears about Whole Life (Dave ramsey says they're scams)
I'm getting my Whole Life Insurance today!!
Rose spitting facts. IUL is best wealth building tool that nobody knows about. 100% tax free
The index universal life insurance was very interesting and attractive especially for young people, however when I looked into it I realize that the premium/fee for the insurance part will continue to increase even if it is exact same fee every month or not, so the amount that goes to the investment will decrease in time? could you please explain that because if that’s the case it’s really not beneficial?
I didn't know it was tax free, thank you! I'm saving for a house right now so I'll probably get this soon after and reach out to your agent in the future. So glad I know this info now. If or when I have kids I will definitely get them life insurance as soon as they're born. Things I wish were taught in school lol Thanks sis, love ya ❤️😃
You can use your cash value within your life insurance policy to put as downpayment for a home! At the same time you don’t have to pay it back or you can at any time.
When you borrow from your cash values savings to put for a downpayment on a home, your money never leaves. The great about this is that it keeps growing and compounding earning interest. What they do is that the insurance company will give your their money and use your cash value as collateral.
Here’s two ways to pay it back. 1) You can cash out refinance your home and put the downpayment amount back into the cash value policy when you’re done paying it off.
Or 2) when you prematurely pass away it will automated deduct from the death benefit face amount.
It is called unstructured loans because your cash value is used as collateral. 401k and IRA cannot do this. If any loan taken from a 401k or IRA is not paid back within 5 years it will be considered early withdrawal penalty of 10% and ordinary income taxes.
You can also structure this for your child’s college education within a life insurance policy and it will not count on their financial aid.
If you’d like to learn more my contact is tongyang@ffsmail.com
Facebook @ Tong Yang FFS
Instagram @ tongyanginvest
Research velocity banking. Using whole life to finance borrowing to fund investments, mortgages, etc.
@@tongtyyang This is really helpful information! Thank you so much!
@@tongtyyang Yeah
I am an independent agent I can help you.
ALWAYS term life insurance, never whole life AKA permanent life insurance. It is not a tax advantaged account and will end up costing you money (source: I am a tax CPA). Much better to invest inyour money in a Roth or Traditional IRA. Or if you're at the cap on those, it would be better to invest with a brokerage account. NEVER pay to use your own money with a permanent life policy. Term life, yes recommend 100%.
Loved loved loved the video. Very clear and easy to follow! I scheduled a 30min call with Yair but I hope you can do a follow up video explaining other details (i.e. fees involved, tax advantages, penalties for early withdrawal, more details on flexibility of accessing your money, are premiums fixed for life for IUL policy? why would anyone get a brokerage account at this point??). Thank you!
These are all questions Yair can explain in great detail for you! Tailored to your specific situation!
For a term policy, at the end of the term, can you renew? and if you can, is it for a lot of money because you are significantly older?
Thank you, I have had a IUL for many years now but I got one not really understanding why. But to see I can put a large amount in changes my outlook on things. But I will be booking a meeting because I want to know more about making sure the family has one or should I just have one large policy very tuff.
Thanks Rose 🙌
This video gave me clarity! 🙌 I appreciate the simple and concise explanation. 💯
If you have children you need life insurance since how would they get on without you. The best bargain then is term.
Other forms of insurance underperform in comparison with standard investments.
If you're children are all grown or you don't have any then you don't need life insurance.
The tax advantages generally are not sufficient.
Rose, you are awesome! So helpful. I’m literally binging all your vids and taking notes along the way. I have 2 questions about life insurance. 1) didn’t you say the premium would decrease over the years? Or did I misunderstand that? I ask bc you have an example where you pay the same amount every year so I wasn’t sure which one was correct. 2) If Life Insurance gets more expensive the longer you wait and if there’s a higher cap on what you can invest, why should I max out my Roth IRA before this?
Thanks again Rose!
Thanks Rose! What makes NLG more powerful and efficient than New York Life?
thank you for this video! But I have a question when you gave an example in (15:25), how can you contributed less if you started at 0 versus if you started at 31? don't you contributed more money if you started earlier?? maybe i'm missing something here?!
The younger you are the cheaper is the premium
When you buy an IUL you’re buying an ART (Annual Renewable Term) policy. Where the insurance component cost goes UP EVERY YEAR. You probably didn’t know that, or if you knew, you are terrible as a financial person.
I am so happy I got permanent life insurance. Every Wednesday I am learning something new, thank you Rose. (:
So surprised to see permanent life get a fair shake! Curious what your participation rate is on the IUL? I went with Whole Life as a bond alternative.
Can you elaborate more on what's whole life As it Is pertains to bond
@@jermaineholmes3531 “whole life” is a type of permanent life insurance. You get a guaranteed interest rate plus non-guaranteed dividends. Going with a long standing and reputable company, there’s about 0% risk. However, they are VERY front loaded with fees. Because they are secure and tend to grow at a 3-5% rate over the long term… I look at them as similar to bonds.
Wouldn’t listing your dependents in your brokerage account effectively accomplish the same thing?
Yes and you'd make more money doing that
But that’s only if you have enough money in the brokerage account to protect your dependents. Most people don’t! Plus brokerage money is taxable
@@itsrosehan but if you assign your Roth IRA contributions, aren’t they tax free?
27 year old a 250k policy is 32/mo. Its got way more expensive since 2021 sadly
There is also something called Perm Term which has no cash accumulation but will have a death benefit til the day you die This is really helpful for those who don't like/understand/want a permanent policy with the cash account component.
Thank you Rose it was eye opening I had insurance but I wasn’t sure what kind it was.
Can you do health insurance?
Second this
Nice informative video...I owe a whole life myself...but yes go with permanent if you can instead of term...👍
Great information, video and channel. Always enjoy the context you provide. Keep up the great job. 💐
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What happens if I can’t invest in a permanent one right now but want to later and when I do, it’s still during my 20 year life insurance period? Will I be paying for two life insurance policies?
Some companies allow you to convert to whole life so just check with your provider to make sure that is an option!
One of your best videos by far. I think your channel really hits it's stride when you are explaining investing vehicles outside of the mainstream RUclips finance.
Thank you!
I love your channel! I always get the info I’m looking for and then some. Thank you!!
You are the best explains this things!! Thank you so much! 😍
Hey Rose, thank you for your videos and knowledge I know you are mostly under stable investing traditions. I want to know your opinion on the recent market craze. Have you done a video on the recent AMC and GME stock and the potentials for short squeezes? Maybe i missed a video or comment. That is why i am writing to you on this one. Thank You
Great information as always. Thank you Rose!
I mean like, what's the typical cost difference between term and whole life for same coverage amount?
Thank you Rose! Your informative, your attractive. Good Lord your a super catch. I've learned so much from this lady. 💪🏿
@@RepliédbyMattKohrs-k5c here we gone. Rose has a checkmark ✔️ near her name if she leaves a comment. She never replies to my comments. Rose with an apostrophe above the e. Question? Why are you targeting me? Do I look like a fool to you. F#ck off. And I hope she sees this
Wow, thank you for educating other viewers about this other Rose. Yes you are right :) Only trust the Rose with CheckmarK!
@@itsrosehan Whoa! It's really you 😃. I admire you so much. I feel so vindicated right now. Thank you for all that you do. Your channel is amazing. ❤️
That perfectly sums up life insurance , Great job Rose . I am an independently Insurance person in Canada I follow those principles that you laid out .
can the monthly investment you make in IUL insurance be with pre-tax dollars? or it'll have be with post-tax dollars just like a Roth IRA, and only the growth is tax-free?
ALWAYS get term guys. 99% of people are not at the point to even be thinking about using insurance as an investment plus so many people get burned with mixing insurance and investing. Term is all you need guys, cheaper simple and will cover you. Plus its not smart paying for life insurance if you don't have dependents.
@Jack Ingram Cryptø scam
@Jack Ingram Cryptø Reported.
I am inclined to agree with you. While I don't pretend to understand the tax regimes in all jurisdictions and practices of every insurance company, in every case that I have seen the fees charged outweigh the benefits. In addition, most of us reach a point where we no need as much or any life insurance. Once you are financially secure and have no dependents, why do you need life insurance? I keep my term coverage because it is so cheap as I started it 22 years ago, but I wouldn't buy any more now (and even paying the small premium that I do is probably illogical).
She already explained why you would get term life vs permanent.
If you have extra money like her you can get permanent. If you don't have the money, then don't. as simple as that. So if you're poor then just says so XD
Good topic. I was just thinking about Life Insurance.
Hi Rose. Do a video with the real numbers and details on your policy? 😉
No, thank you
I have Life Insurance with Northwestern Mutual but the return is stupid low so I'm guessing it's Whole Life. I'm going to see about changing it to Index Universal Life
So much knowledge dropped, thanks
My mom is 72 with diabetes .what company would you recommend for her ??? Thanks
Great video! Very informative 😊👌 It's important to educate ourselves on life insurance options.
So you and I are in the same boat. I’m using my insurance policy currently to continue to grow my wealth. However, I added my parents as my beneficiary on this current policy…are you suggesting not to do that or it doesn’t matter?
That’s fine to add your parents! I did add my parents for now because you do want to list a beneficiary
@@itsrosehan awesome! I appreciate you✨
if you're a certain age, do you have the option to still do term life? I was automatically shifted to whole life when I turned a certain age.
I just booked an online consultation with yayir. Looking to get more knowledgeable on this. Thanks for this informative yet digestable video.
Thanks for all the detailed information you have provided in this video. I like your way of explaining every point. Keep sharing such great videos in the future also.
What’s the order before you look into permanent life insurance?
Very relevant and helpful thank you for all you do and for the excellent editing!
Well, whole life insurance will pay out provided you pay the premiums when they are due.
@@investwithrose7355 looks like a scammer impersonating this channel name.
my IUL has a lot of features and planning to overfund it
What if you buy term and mutual fund investment vs perma insurance? Which is better
Hi, how can I get an IUL policy?
Which company should I go to to get a policy coverage?
Hi rose, what about doing a video about marriage and finances. A lot of marriages fail due to poor finances, especially with no financial plan. Some individuals get burned after the marriage is done with no estate planning or financial planning. also if you have already made the video someone feel free to link it when replying to my comment
That’s a great video idea, thank you and noted!
@@itsrosehan, Thanks for your reply Rose also prenuptial or postnuptial agreement(Prenup or postnup) are often portrayed as taboo within a relationship. I have seen it portrayed as a sign of mistrust when it's brought up in the media. if you have any experience and knowledge of prenup and postnup with its pros and cons please share it. If not then no worries this is just a suggestion
What about the fees that eat at the cash balance?
Hi Rose. 👋 Wow your video is really wonderful!!!! It helped me understand a bit more about life insurance. I'm almost in my fifties and don't have any life insurance yet, but do plan to do a term life insurance . It's just hard to choose a company. You gave great tips on what to look for in a company.....but do you have any recommendations besides National? I was looking into AAA and Prudential but I'm not sure yet.
Any updates about this and why max out Roth IRA first don’t you want to be secured with the life insurance insurance in case you die
start with a term and if you live that far out 30 years in your 28th year plan for a permanent
What are your thoughts on the infinite banking concept?