Great point! The next point that is missing is that term is meant to cover you while you grow your own assets. A lot of people miss that part. If you have term insurance for 30 to 40 years, you should be growing your assets during that time. Once you’ve reached the point where the term ends, the point is that you can self insure for your burial or your family’s needs. Also, keep in mind you can have multiple term policies to start and stop at different times. It doesn’t make sense to pay for an expensive whole life policy with a much smaller payout just to bury yourself and ignore a term policy that will have much greater financial protection for those left behind. It’s missing the forest for the trees.
If you don’t know throughly about whole life insurance. I think term insurance is the way to go. Life insurance is just the protection for early death to insure your love one and all the other expenses from you. If the money can cover until they can make their moneys, it’s good enough. They need to have their own way to fight their life. The main point is teach them financial literacy as soon as possible. It’s good to learn from these smart people or experienced people. It is never too late to learn. Keep up girl!🎉
i dont have alott of money and I have a IUL. the purpose of this was for me to work this with my budget. change your mentality. dont say i cant afford this its how can i afford this. im not even an agent. yes realistically most people can't afford a 300k IUL so just either lower the amount. i have an IUL and planning to get a term just so if anything happens to me it covers the cost of the house primarily
That’s who I think life insurance is really for (me included somewhat). If ur already wealthy, u don’t Need insurance. And I don’t know Who’s paying That much for they’re whole life insurance. If that was the case, I’d just put that amount into an account for specifically that purpose, and move on.
i feel sad reading ur comment. (what u said is same for me too but i don't feel anything for me knowing that but reading ur comment made me emo lol. hope u have a good life ...or more happy n peaceful moments
Actually life insurance is a scam, the value of your money will be depleted by the agent commission every month, so overall you pay a dollar for a cent, theres no value, its just a cliche that pyour love ones will get but in reality your love ones will get more if its invested to a time deposit
@@davidgamez5476 VUL is not commonly sold today. Most agents in the industry only have a life license. But even though it is classified as a security the ART inside the policy eventually consumes all of the cash value and it becomes unsustainable for the client to keep paying the premiums after the cash value is gone. Consumers need to do their research on how money works and avoid cash value life insurance at all costs.
Whole life insurance It’s a money management strategy not an investment! It has helped me take advantage of investments opportunities by me lending myself my own money while it still gaining compound interest. It’s useful to anyone with discipline to grow cash on the side accessible via loans that not increase your taxable income! It’s not an investment, but it’s a great money management tool!
Exactly! We understand it’s not the best “investment” AT FIRST if you’re only considering the death benefit. In years 2 to 3 though, the death benefit highly outperforms that of term life insurance for the rest of the policy life. But if you are looking to utilize this vehicle for other uses such as saving for investments, you can borrow against your money over and over without actually breaking the 4-5% compound interest growth that it receives overtime, so, it is very worth it. Yes, you have to be very disciplined, you have to be a good banker and pay yourself back. In that way, it is an advanced technique, not to be used by people who have not created the habit of saving or who don’t intend to use it this way.
Plus, it does not just depend on the stock market! I guess it depends on who your audience is, but I think it’s very silly to recommend that people put their money in the stock market where they have no control over the fluctuation instead of a policy like this, but of course, as I said, it is a very advanced investment strategy not to be used by people who do not Intend to save money in order to build wealth with it.
You forgot to mention that with term life, every year that you go to renew it the price goes up because your age is higher and if your health has changed at all they could straight up deny you. So you could pay all that money into a term policy for 20 yrs and be left with nothing. Say you decide to keep renewing your term even though it is extremely expensive, once you reach certain age you are no longer eligible. Whole life is more expensive for sure however, the price never increases and your coverage never expires. It is best to get whole life while you are young and healthy so you can keep a low rate for life.
Irene you forgot to mention that with a Whole Life policy the insurance company keeps all your savings when you die and you also forgot to mention that the cost of insurance inside a whole life policy is also based on a term policy. A pure term policy is mathematical superior over Whole Life and even after looking at total cost on renewing a term policy up to age 95 it still beats whole life with less money out of pocket to be covered for the same period of time. And then consumers also need to understand that their need for life insurance should be temporary and NOT forever!
@@jenninemorel7693 Whole Life is just term inside with some added features that benefit the life insurance company. So why buy 2 terms instead of just a single level term policy. The math proves that whole life is a rip off. Consumers need to do their own research before buying. Level term beats the Annual Renewable Term thats inside the WL policy! Just do the math on the increasing cost of insurance. Agents who sell cash value can say what they want but I teach my clients the simple math. Last time I checked Mathematics has not changed for a very long time.
@@habeebahs.2956 The industry does not want to sell term so they don’t offer attractive renewal options at EOT. The industry wants their clients to switch to cash value at EOT for the profit. There is however a company offering a renewable term up to the age of 95 without having to re-qualify medically. This innovation can not be beat mathematically when comparing the total cost of having equal face amount on a whole life or IUL policy. And let’s not forget that it’s all TERM! Whole Life has TERM inside! IUL has TERM inside! It’s funny how people try to put down term when it’s all term when you look under the hood!
Insurance (management of risk) and investments (a return on capital committed) should never be mixed. It is also an overly broad metric of 'people who already have alot of money' may purchase WLI, IUL etc.
It’s unfortunate that you only provide one side of the equation. Whole life insurance is old news and many other permanent policies are available. Lastly, what about the tax burden on the “other” better way to get a higher return! In the long run an IUL is much more cost effective than a taxable investment! 👍
@@astroman30 I agree with you 100%, there are also other issues with it like how the cost of insurance is calculated compared to other policies and your money gets trapped by surrender charges. So it’s both a bad life insurance and a bad savings vehicle
They tend to forget to mention that they get a nice commission on selling whole life insurance to a person. Interesting fact to leave out or not to mention in my opinion
You should do more research on WL insurance Vivian. Ninety percent of life insurance agents don’t know how life insurance really works. It is not only for the wealthy. It can benefit everyone, especially if they understand you can leverage your CV and use $1 twice…(this is info the wealthy would not want the poor to know). Please research these two topics: 1. Net amount at risk. 2. How to max fund a life insurance policy using 90/10 structure. Best wishes and keep up the good work in helping to educate others on finance and investing.
Whole life insurance and IUL etc is not only good for “high network folk” it’s good for small business owners, it’s good for people who have are not living pay check to pay check. Met Life is not the only insurance company. This video speaks to a percentage of people who can only afford a term policy. As an insurance agent I have to find what’s best for my client and there income. But this video makes whole life and iul seem bad when they can actually be your life saver.
Facts!!! NOT ALL COMPANIES HAVE UPFRONT COSTS AND NOT ALL COMPANIES ARE EXPENSIVE. It is a GREAT option to build cash value if you are young then it’s cheap. Not use can use it to retire and it’s NOT TAXABLE WHEN YOU TAKE IT OUT. It can also be used if you are critically, chronically and terminally ill. *she does not have all the facts.
I don’t know me and my other two sibling bought a life insurance for my dad so we split three ways. We thought our dad will live up to 80-90. But he died suddenly on October only 68 years old. We bought it like ten years ago, so I contributed like $25k and got paid out whole chunk. It’s bad to say that my dad is a good investment. And currently thinking buying more insurance on myself my kids and my mom. Every family situation is different so try to find a good wealth management for your family. Happy new years guys. May the best luck for all of 2024 .
@@astroman30Term isn't for everyone. Term is truly a quick fix type of policy. No one really plans to die in 20, 30 or 50 years. Term policies are a good fit for some but a bad fit for most. That's my learned opinion as an experienced Insurance agent 😊
@@shelbybrown2732 And your "learned opinion" is wrong. You're coming from a sales background that pushes trash value insurance for bigger profits/commissions. Insurance is a RISK MANAGEMENT purchase, only. Buying term and investing the difference will not only save you money, but will make you "self insured" as you get older. Numbers don't lie: In a $500G DB example, the premium is $430 a month from age 40. Nick lives to age of 90. So with whole life insurance, Nick pays $430 a month for 600 months (50 years) total $258G. Dividend is $130 a year best case for 50 years on the premium paid, or $6500, for a cash value of $264,500. The alternative is to buy term life insurance with extended duration and invest the rest .. a $500G death benefit policy for a 30 year term would be about $60 a month leaving $370 available to save .. $370 monthly in the market at 7% (stock market lifetime average) in a tax deferred account gives me $432G after 30 years. I won’t need a $500G policy if I’ve got $432G cash in my account, so I cancel it, And for the next 20 years my account keeps growing at the full $430 a month. when I’m 90 the account is worth $1.9 million. Conclusion is clear .:. Do I want $264.5G (whole) or do I want $1.9 M (term and invest) for the same premium output .. I choose term and invest!
" It's bad to say my dad is a good investment." It's the reason I now hate my wife. She took out a policy of life insurance. I'm now worth more dead than alive. Well, I'm going to make the rest of my time with her hell.
This is exactly why I became an insurance broker. I see so many people giving wrong advice I'm all about helping the client out . I love selling term with living benefits
Listen, if you have $ besides your savings account to bury or cremate your loved one when they die, can take time off work to grieve and so much money that you don’t have to have ppl help you or do a go fund me when your terminally, critically or chronically ill. OR you can leave some behind for your kids or grandkids (that’s not taxed as income), then you don’t need life insurance and kudos to you. Know the facts first!!! Pleeease. You’re doing people a disservice.
You may have to speak to a more knowledgeable advisor. They should be able to answer all of your questions. Not saying an IUL or whole life will work for you in particular but it can make sense in some cases.
An IUL is an awesome product. It only goes up with the market. Your covered with your death benefit from day one and as your investment grows you can use that money for whatever you want and not pay interest to a bank. You can choose to pay it back to your cash value or not. If IULs were bad then why do so many wealthy people have them? You need someone that knows how to write them
I think you have to understand the purpose of a whole life insurance policy, it’s a permanent product that accumulates money that you can borrow against if needed, and of course pays your beneficiary upon death whereas term expires and you will have to renew/qualify at your new age and health status. The problem with this video is that it can be taken out of context and come across as a deterrent to whole life insurance when it’s really ideal if obtained early in life or purchase on your children while they’re young and it’s still reasonably priced with a good amount of coverage. To truly educate on life insurance, it would take more than a 30 second snippet because really it should consider the specific persons need.
So is investing 9k a year in property that makes money for my family right now. Its a circular definition. But yes, depends if people intend to invest the money, although life insurance could be seen as a type of investment but far more circumstantial.
Well,I have state farm whole life insurance, pay over $100 a month for 5 years ,I called today and was told I have $259.90 I can use to take out.LMAO I'm canceling today and will invest that money on something with a real return.
Yes, if your term policy is up you will need to renew at whatever age, however, the theory of decreasing responsibility states that as you are younger you need more coverage because your debt is high and your children are young. As you get older, your debts are paid off and your children are now older so you won't need as much coverage. And with all the money people have to pay with those high premiums with whole life they can be saving/investing the difference by purchasing a term policy for way more coverage and way less cost.
@@westwood3286Try looking into an Early Cash Value policy. Guardian Life Insurance or Mass Mutual are 2 companies that offer these. I thought Term insurance was the way to go until stumbling across the IBC (Insurance Business Concepts) channel. Not trying to tell you what to do but this is another tool for educating yourself.
@@westwood3286 you have a really bad policy if that’s the case. Give me a shout and I can show you an illustration of what a good policy could do for you and show you future gains
I stopped at the scam!! Both term an whole can be beneficial depending on the need of the family. We can’t leave out the fact once term expires the client will have to be approved for another policy. Placing the client at risk of not being able to be covered
Ok the $8300 premium can be structured where 10% goes to premium and 90% goes to pua. Pua is paid up addition. 95% of pua payments go into cash value. So a $8300 premium, cash value in year one could be around $7500. This $7500 grows tax free at around 3-5%. You can scale this down to $800 as well. Works with any budget.
ok but again, how many people have an extra 8,000 to put into their life insurance policy? that was one of the points she was making. That's 700 a month.
lol so not much more return with a high yield savings account these days, and the S&P index averages 10% annually over the long term. Just use a HYSA and save the fees
Whole life is not an investment. There’s zero risk involved. It’s guaranteed compound interest. It’s more of a place to story your money safely with predictability
@@astroman30 you have to pay a storage fee ha ha. What a joke WL is and the worst part is they keep your stuff when you die just like a storage unit if you don’t pay the bill or die..
Calling it an "investment" is not legal for starters. Investments are taxed, life insurance is not. Its also NOT only for the wealthy, if your family needs to gofundme to bury a loved one, they NEED life insurance
There is ALOT more insurance than this. IUL variable etc. there are multiple forms of permanent insurance…. Just because you worked on Wall Street doesn’t mean you know shit about insurance… you’re not even licensed…
I’m glad someone said it bc I was about to go in!! She also forgets about the fact that if you put it in a regular brokerage account you’re gonna have to pay taxes on the income that you make and if you put it in an IRA you can’t touch it till you’re 59 1/2. Insurance has its appropriate uses for different things. She clearly doesn’t know what the hell she’s talking about. And I have worked in the securities industry and sold insurance.
I was about to buy her book but when I saw her complete lack of understanding re whole life, I am going to find another rich bff for advice. We’ve got 3 wl policies that we borrow against regularly for other investments. You don’t have to pay back the loan as the insurance will pay it off when you die but not a good idea as the policy won’t pay out as much to your beneficiaries. Talk to a good agent. Mine is awesome at State Farm
Every product is different. You also pay fees in some investment products like 401K. Life policy is Tax Free as long as the person dies with the policy.
This is misleading cause I have an IUL and I love it. The extra premium goes to chronic injury and illness too. Also, I can borrow against my IUL in times of financial trouble @ 4.5% interest which is a lot lower than borrowing from bank. Any loans on my IUL don’t reflect on my credit either. It’s not for high net worth people. Anyone who budgets can afford this. It’s how you prioritize your life.
The thing that the cash value agent never tells you is the that the cost to insure your life goes up every year and is based on either annual renewable term or increasing term. Open your IUL policy and just look for the page that says guaranteed maximum monthly cost of insurance. There is a table there that shows you what happens with the cost of insurance each year you own the policy. Spoiler alert! It goes up! And your premium and cost of insurance are not the same thing…
@@PaulPNewell So if you get Term and it runs out, wouldn’t the cost of insurance be substantially larger due to sheer older age and possible health issues?? Maybe even risk being uninsurable?
I think your partially wrong if you have children it's actually good to get them whole life for 1 it will be much cheaper like i pay 80 a month and by time hes 10 it will be paying it self . and can build up also can use the equity to purchase wealth building assets.
Whole life is ALWAYS a problem. Mathematically it is ALWAYS better to buy a much cheaper term policy and invest the difference in an investment SEPARATE from a policy! The interest rate is VERY low (2-4%), you have to pay interest to the company (6-8%) to borrow your OWN money, the premiums are WAY more expensive than term AND if you die prematurely your survivors have to choose between the face amount and the cash account. Life insurance is intended to replace income in the event of a premature death. Children only need enough to cover final expenses if something were to happen. Term with a child rider is the BEST way to go!
Exactly. It’s not even about the monthly premium but just the fact that you are using the insurance company’s investment. They will charge you investment fees as well. The math is complex behind the scenes and when you co-mingle the death payout and investment it clouds your ability to determine whether it’s worth it
@@amaznngrace Because insurance is intended to protect income while you are young and building a nest egg. It should expire at the time of retirement. At which point one should have money in an investment vehicle like a Roth IRA and a retirement account at work (if accessible). You will ALWAYS have more in the investment account than a low interest whole life policy because of higher interest rates on the market (rule of 72). Also, the first 2-4 years none of your money even goes into the cash account with whole life. Go check your policy. It’s all there. The average consumer just doesn’t know how to read these policies or what to even look for. I’m a financial coach. I educate my clients about all this. I replace whole life then open an investment account. Mathematically one will end up with significantly way more money. If you are 65, kids are grown, house paid off and have a million dollars saved why would you need life insurance? You’ve become self insured at that point. There is NO, I repeat NO financial freedom in whole life. The company profits big time and the consumer loses thousands even millions in compound interest if they had of invested in the market.
You have no idea what you are talking about. What about taxes and volatility-two big factors you are completely leaving out. And I’d watch your labeling insurance agents “scammers”.
If they are selling any form of cash value life insurance then they are scammers. Unfortunately it’s legal though because you didn’t read the contract during the free look period and cancel. The cash valve contract should be outlawed. The SEC went after VUL back in the day because by definition it was a security. IUL skates by being regulated by the SEC because it’s indexed
your 100% right cause the person who is collecting the money can only pick 1 part either life insurance or the investment. so your building money for them to get too
Hi, could you do more content about this? My mom is apart of an MLM and SWEARS by it. It’s for sure legit in the way that you have to be state licensed. But I can’t help but feel this is the only way to diversify assets and invest.
My wife thinks I'm worth more dead than alive now that she has a policy, life insurance, against me. Like some of her friends that have dead husbands and money and a life of fornication.
Also the advantage of whole life is if you borrow it, you're not borrowing YOUR money you're borrowing against it(collateral) so if you borrow against it to buy an asset you are using "the same money" to make money on the asset plus the interest in the policy though it is little interest
I wish people would mention that you have to have a bunch of money to spare monthly for whole life. And then you have to wait YEARS before you can "borrow" from it. Like she said "it only makes sense if you already have a lot of money".
@AirunDevon a bunch not so, ill give ex. If you can afford to straighten off pay for whole life. I think the best way would be to get a company that allows you to do term and with it. After the I think it's up to 5 years or 10 years. You have to transfer it over to whole life. And you're still able to lock in the price point and everything a good company. Or the one that I know is mass mutual. 40 dollars if ya healthy
My policy premium had never increased, and the interest you pay will be paid to yourself , since you are taking a loan from your own account, just like taking a 401k loan, you will pay no tax from your life insurance but will definitely pay tax on your stock earnings or 401k
@@alamgudiel7663 - I’ve been paying $30 a month for almost 40 years. My parents got me to get that policy when I got my 1st job when I was around 20 or 21.
You're clearly not informed on how life insurance works. You don't need to spend $7k a year and nobody does lol. Most people pay $100 per month for their permanent life policy. And it's not an "investment" because there's no risk of loss. Its only being sold as an alternative to savings or bonds. It doesn't replace the market and only supplements what you're putting into bonds. You just showed your hand that you're not educated on insurance and just did your research from googling for a few hours.
I think you’re missing a lot of points here. We’re licensed financial advisors and see IUL’s as an amazing investment opportunity. You do not have to have a lot of money upfront and you do not have to have a high net worth. You simply have to be able to pay the monthly premium which we will NOT sell you until we see through all your monthly budget planning to make sure you can afford it. If for some reason you can not make your monthly payment your contract will just be set on pause, you still don’t lose anything. In the future it’s only going to get more expensive per individual or even unavailable due to various reasons, and there IS a “be your own bank” or “infinite banking” potential even for people who are not earning 6 figures. That said, you’re correct in that life insurance, being term or permanent, is not for everyone that’s why you have to sit down with a GOOD licensed financial advisor to walk you through all the options.
1. Money never enters the market - With an IUL, the money funding the cash value portion of the policy is never actually invested into the market. Instead, the insurer holds your “cash” and pays a return on the annual growth of a specific index. Anyone selling IUL are not required to have a securities lIC. 2. Growth potential is capped - While most policies have a “floor” of 0% which prevents your cash value from dipping below what you put into it, your growth potential is capped, too. For example, if your policy limits growth to 10% on the index and that index out-performs that percentage, you’ll still only receive the value of 10% in your account. The insurer keeps the difference. 3. No dividends - Dividends are completely eliminated in an IUL policy. Not having the chance to reinvest any earned dividends, as you could choose to do with an individual investment, means you could miss out on a great deal of money from dollar-cost averaging over time. 4. Fees, fees and more fees - IUL policies are packed with fees and charges that will eat into any cash value accrued. 5. Rising costs - The internal cost of insurance continues to rise as you age, which can limit the amount of money going toward any potential cash value. All universal life is A.R.T ( annual renewable term) PLUS: Almost all cash value policies have these “features” built in. • You’ll accumulate NOTHING in cash value for the first few years the policy is in force. • The cash value earns a lower rate of return (often just 2%-4%) than the potential return you could achieve if you put your money into a vehicle such as a Roth IRA in the U.S. • If you borrow from the cash value, you’ll pay it back plus interest. • If you die with the policy in force, beneficiaries receive the death benefit (less any outstanding cash value loan balance) while the insurer keeps any accrued cash value. Unless you have the increasing death benefit option (option b) the consumer will pay more for that option. The consumer always gets screwed when investing in these policies. The only winners are the agent and the company. The BS I hear all the time is it has to be "structured properly." I have collected 64 policies in the last year and I haven't I seen one structured properly.
I love your content usually but as a living benefits educator, you're misrepresenting affordable IUL options. Allow me to show you an illustration. Middle America deserves this option and it's available for them too
I also like that my "investment" will never lose value if I just keep paying my premiums. On these last downturn, I just have gotten negative 30% but I got 4% return 🤷
As a life insurance agent, some of the things that you said are incorrect. It’s better to get a whole life policy while you are young since it is cheaper than when you are older. Term policies eventually will expire on you and 9/10 times people out live those policies so all of the money they put into it disappears While on the other hand with whole life policies , as long as you pay, it will always be there for you and your family.
Insurance agent here; pretty much agree. Permanent life is best only if you’ve got the money for it. I might recommend a small whole life policy to a young person in combination with a convertible term policy which sets them up to have something in place even when the term runs out
Term life is better than whole life, absolutely! But you should have a strategy of paying down your debts and investing while paying your monthly term life premium.
As a former financial advisor I totally agree with you, especially as an investment vehicle. I would love to hear your thoughts as an asset protection tool (divorced) I have whole on myself and both my kids.
I believe you are framing this in a misleading way. Whole life or an IUL is not an investment vehicle. It is useful for saving for supplementing retirement while securing a death benefit. Investing directly in the stock market also has more risk as most policies are protected against the downside which means your balance will not lose value during bad years in the market (which is about 1 out of 4 years) and gains are not taxed while stock gains are. The cash value can be borrowed against (accessed tax-free)at very low interest while the entire cash value still gets credited as if you never touched it. The cost basically $0 after 7-10 years since cash value will likely equal or be greater than total premiums paid in. In other words, it is a great product for people for several different reasons.
I can break it down to you for free. A free financial education and also do your financial needs analysis for free. It's my way of giving back to society.
This is why it’s important to do your own research, this isn’t great advice. This is why I became a Life Insurance Agent, I love educating my community about term policies with LIVING benefits (you get a pay out if you ever became seriously ill, critically injured or developed Alzheimer’s.
Your rich BFF? Every well known wealthy family has multiple life insurance policies that they borrow against and leverage money to cash flowing assets. It’s what the banks do too. You’re taking this way out of context sweetheart
It's expensive but not bad if you buy it young . After 13 years many will pay for themselves. I couldn't get term now. I do believe a mix approach is best.
The ONLY case where whole life insurance make sense is to inherit large chunk of money without gift tax. This is what high-net worth people use it for.
One of my old co-workers has term life insurance. It ends when he turns 65. He would literally smoke cigarettes and say he needs to smoke more because he bet his insurance company he would be dead in 3 years....
Whole life insurance may give you a lower IRR than the stock market but the volatility and Risk is also way lower. Better comparison would be mutual funds to whole life insurance.
My credit union has it where all union members have a $5,000 life insurance. I know it's not much but it's enough to send me off. I have other investments.
I love your channel, you're the best. To be honest thank you for sharing such amazing information with us. I hope to apply your advice sooner rather than later. Take care
I'm a whole life policy holder, some of your details is wrong. It's true that the policy can be expensive, like I pay $20k/yr for my 40 yo husband but that's because the death benefit it at $1M in the first year. But you can pay as low as $4k if you start early at 20yo. The investment value is NOT IMPACTED by the market, that means you know your money will continue to grow. There's no negative performance like 401k. You can use it as retirement fund. Best part is: You don't need to report it to the IRS, unless you decided to take a lump sum later when your policy is mature. Also another best part, you can borrow against the cash value with such loooow APR and when you borrow, the value of your account and death benefit do not decrease. Whole life is the best investment so far in my portfolio, I'm actually getting a 2nd policy on my husband. Yes it's a long investment so if you close before 5yrs, you'll lose your money, but that's bc the bank has to generate death benefit for you.
Ooooo there’s something that 90% of all agents and people uneducated miss on the topic. The cost doesn’t have to be that high and you can grow your cash value faster. Also shouldn’t be used as an “investment” imo, should be used as efficient place to store your cash and use for other cash producing assets…. Like investing in stocks, real estate, or starting up a business
I appreciate your tips, but I believe there is some misinformation being shared. Life insurance should not be viewed as an investment; rather, it is a means of providing financial protection for yourself and your family. In the unfortunate event of an accident or tragedy, most people do not have the financial resources readily available to handle the situation. Life insurance plays a crucial role in these times, either by aiding the recovery of the insured individual or by supporting the family financially after the loss of a loved one. I recommend revisiting and clarifying your information to ensure it accurately reflects this purpose.
Whole life insurance is for estate planning, not an investment but it does give you interest. It's a far better savings account and bank for you, your family, and descendants.
that's what i had in mind , if you have a boat load of money you can use let is whole life for tax cover purposes, but like taking 300$'/mo on average for example on an IUL or whole life that's a big chunk you're giving away when you could have done a roth ira with an 50$ term for 250k life insurance, you control your money as far as the roth is concerned and have enough for your family with the insurance.
There are actually more than 2 types of insurance. It’s actually universal life insurance that accumulates money annually. Whole life is just the cash value of the policy so it doesn’t generate any money beyond that. I guess you didn’t know this? 😂😅
I tried it once because I had several million in debt that I wanted covered in the event I died prematurely. What pissed me off was that the thing is automated but the firm would take fees out every month acting like they really did something special.
True, but saving money, idea is becoming your own banker. Insted of using a bank. Use this as a vessel therefore paying yourself back. And into. Plus can borrow against therefore paying yourself interest ontop of your own money. And probably can use as tax advantages as added growth. And cam use as a retirement gift... Your other friend
Unfortunately you are incorrect. Whole Life Policies can be structured in a way where it can benefit everyone. You just need a Life Insurance Agent to go over the strategies. No matter what you cannot hide the fact that BANKS like: Bank of America, Chase, to name a few, have BILLIONS of Dollars in Life Insurance Assets. It all starts with YOU, today!
Girl please stop misleading people this is 1000% all wrong. Unless you are a licensed life insurance agent I wouldn’t suggest you speak on things you have zero clue about.
LIFE INSURANCE IS NOT AN INVESTMENT. IT IS A SAVINGS ALTERNATIVE. Any agent who tells you it’s an investment that gives great returns in just trying to close a sale with you - RUN! An agent who is up front with you about the pros & cons and that the MAIN point of Whole Life is the DEATH BENEFIT & the savings & cash accumulation & dividends is the CHERRY ON TOP has your best interests! It’s a great product but it NEEDS to be designed properly for the individual’s personal needs. It is not the S&P 500!!!!
Great point! The next point that is missing is that term is meant to cover you while you grow your own assets. A lot of people miss that part. If you have term insurance for 30 to 40 years, you should be growing your assets during that time. Once you’ve reached the point where the term ends, the point is that you can self insure for your burial or your family’s needs. Also, keep in mind you can have multiple term policies to start and stop at different times. It doesn’t make sense to pay for an expensive whole life policy with a much smaller payout just to bury yourself and ignore a term policy that will have much greater financial protection for those left behind. It’s missing the forest for the trees.
If you don’t know throughly about whole life insurance. I think term insurance is the way to go. Life insurance is just the protection for early death to insure your love one and all the other expenses from you. If the money can cover until they can make their moneys, it’s good enough. They need to have their own way to fight their life. The main point is teach them financial literacy as soon as possible. It’s good to learn from these smart people or experienced people. It is never too late to learn. Keep up girl!🎉
This girl has no idea what’s she’s talking about lol
i dont have alott of money and I have a IUL. the purpose of this was for me to work this with my budget. change your mentality. dont say i cant afford this its how can i afford this. im not even an agent. yes realistically most people can't afford a 300k IUL so just either lower the amount. i have an IUL and planning to get a term just so if anything happens to me it covers the cost of the house primarily
Im only paying $1300 yearly on my permanent life insurance and will have living benefits and cash value tax free 🤷♂️
Please and thank you
What country are you in? Same for me in Canada.
Sounds like you've been fleeced. Have you even read your policy?
I have life insurance because if I die, my family most likely can’t afford to even put me in the ground.
What a world we live in. Can't afford to live can't afford to die🤣
That’s who I think life insurance is really for (me included somewhat). If ur already wealthy, u don’t Need insurance. And I don’t know Who’s paying That much for they’re whole life insurance. If that was the case, I’d just put that amount into an account for specifically that purpose, and move on.
i feel sad reading ur comment. (what u said is same for me too but i don't feel anything for me knowing that but reading ur comment made me emo lol. hope u have a good life ...or more happy n peaceful moments
Actually life insurance is a scam, the value of your money will be depleted by the agent commission every month, so overall you pay a dollar for a cent, theres no value, its just a cliche that pyour love ones will get but in reality your love ones will get more if its invested to a time deposit
@@kawannahardy2924 exaclty. why put the money in somone else's hands if you can save it yourself? (save the money specifically for that purpose)
Thank you for saying the quiet part out loud. 100% Agree.
IUL and Whole Life are not the same. Also Whole Life are not investments and shouldn’t be sold as one.
Yes exactly, no securities licensed required to sell these products. Are you listening to an agents who is Life Licensed only about investment advice?
@@PaulPNewell there's also VULs which are both.
@@davidgamez5476 VUL is not commonly sold today. Most agents in the industry only have a life license. But even though it is classified as a security the ART inside the policy eventually consumes all of the cash value and it becomes unsustainable for the client to keep paying the premiums after the cash value is gone. Consumers need to do their research on how money works and avoid cash value life insurance at all costs.
Whole life insurance It’s a money management strategy not an investment! It has helped me take advantage of investments opportunities by me lending myself my own money while it still gaining compound interest. It’s useful to anyone with discipline to grow cash on the side accessible via loans that not increase your taxable income! It’s not an investment, but it’s a great money management tool!
Thank you for this explanation! Now I understand how it can be beneficial! Yes I am very disciplined.
It's not an investment but it's helped you take advantage of investment opportunities. Like what opportunities?
Exactly! We understand it’s not the best “investment” AT FIRST if you’re only considering the death benefit. In years 2 to 3 though, the death benefit highly outperforms that of term life insurance for the rest of the policy life. But if you are looking to utilize this vehicle for other uses such as saving for investments, you can borrow against your money over and over without actually breaking the 4-5% compound interest growth that it receives overtime, so, it is very worth it. Yes, you have to be very disciplined, you have to be a good banker and pay yourself back. In that way, it is an advanced technique, not to be used by people who have not created the habit of saving or who don’t intend to use it this way.
Plus, it does not just depend on the stock market! I guess it depends on who your audience is, but I think it’s very silly to recommend that people put their money in the stock market where they have no control over the fluctuation instead of a policy like this, but of course, as I said, it is a very advanced investment strategy not to be used by people who do not Intend to save money in order to build wealth with it.
Whole life is the worst and most expensive of all the Life Insurance available. Consumers need to get the facts and do their own research!
You forgot to mention that with term life, every year that you go to renew it the price goes up because your age is higher and if your health has changed at all they could straight up deny you. So you could pay all that money into a term policy for 20 yrs and be left with nothing. Say you decide to keep renewing your term even though it is extremely expensive, once you reach certain age you are no longer eligible. Whole life is more expensive for sure however, the price never increases and your coverage never expires. It is best to get whole life while you are young and healthy so you can keep a low rate for life.
Irene you forgot to mention that with a Whole Life policy the insurance company keeps all your savings when you die and you also forgot to mention that the cost of insurance inside a whole life policy is also based on a term policy. A pure term policy is mathematical superior over Whole Life and even after looking at total cost on renewing a term policy up to age 95 it still beats whole life with less money out of pocket to be covered for the same period of time. And then consumers also need to understand that their need for life insurance should be temporary and NOT forever!
Exactly...and that's why a whole and term might be considered
@@jenninemorel7693 Whole Life is just term inside with some added features that benefit the life insurance company. So why buy 2 terms instead of just a single level term policy. The math proves that whole life is a rip off. Consumers need to do their own research before buying. Level term beats the Annual Renewable Term thats inside the WL policy! Just do the math on the increasing cost of insurance. Agents who sell cash value can say what they want but I teach my clients the simple math. Last time I checked Mathematics has not changed for a very long time.
And if you have health issues, you may not qualify for a term policy.
@@habeebahs.2956 The industry does not want to sell term so they don’t offer attractive renewal options at EOT. The industry wants their clients to switch to cash value at EOT for the profit. There is however a company offering a renewable term up to the age of 95 without having to re-qualify medically. This innovation can not be beat mathematically when comparing the total cost of having equal face amount on a whole life or IUL policy.
And let’s not forget that it’s all TERM!
Whole Life has TERM inside!
IUL has TERM inside!
It’s funny how people try to put down term when it’s all term when you look under the hood!
Incorrect in so many levels 🤣
Insurance (management of risk) and investments (a return on capital committed) should never be mixed. It is also an overly broad metric of 'people who already have alot of money' may purchase WLI, IUL etc.
It’s unfortunate that you only provide one side of the equation. Whole life insurance is old news and many other permanent policies are available. Lastly, what about the tax burden on the “other” better way to get a higher return! In the long run an IUL is much more cost effective than a taxable investment! 👍
You don’t need a permanent solution to a temporary need!
IULs are garbage with high fees and capped gains.
@@astroman30 I agree with you 100%, there are also other issues with it like how the cost of insurance is calculated compared to other policies and your money gets trapped by surrender charges. So it’s both a bad life insurance and a bad savings vehicle
They tend to forget to mention that they get a nice commission on selling whole life insurance to a person. Interesting fact to leave out or not to mention in my opinion
We actually make the same on both lol
Much less in the long run than your managed money account. Wake up and do the math
Residual > commission
And you work for free
Yeah, those terrible ppl getting paid to do a job… 😂
Whole life nor IUL are sold as investment. Life agents cant even say the word investment unless theyre licensed with series 6/7.
You should do more research on WL insurance Vivian. Ninety percent of life insurance agents don’t know how life insurance really works. It is not only for the wealthy. It can benefit everyone, especially if they understand you can leverage your CV and use $1 twice…(this is info the wealthy would not want the poor to know).
Please research these two topics:
1. Net amount at risk.
2. How to max fund a life insurance policy using 90/10 structure.
Best wishes and keep up the good work in helping to educate others on finance and investing.
That’s because the Wealthy have time to find this stuff out.. Regular people are out making the world SPIN
Research it where
What is CV? Please break it down for a toddler.
@@riifillCash Value
@@riifillCV is cash value that a whole life policy accumulates overtime! You can borrow out this amount at any time for any reason!
Whole life insurance and IUL etc is not only good for “high network folk” it’s good for small business owners, it’s good for people who have are not living pay check to pay check. Met Life is not the only insurance company. This video speaks to a percentage of people who can only afford a term policy. As an insurance agent I have to find what’s best for my client and there income. But this video makes whole life and iul seem bad when they can actually be your life saver.
Facts!!! NOT ALL COMPANIES HAVE UPFRONT COSTS AND NOT ALL COMPANIES ARE EXPENSIVE. It is a GREAT option to build cash value if you are young then it’s cheap. Not use can use it to retire and it’s NOT TAXABLE WHEN YOU TAKE IT OUT. It can also be used if you are critically, chronically and terminally ill.
*she does not have all the facts.
I was gonna say, my policy is only 150 a month and I can make that work in my budget 🤷🏻♂️
you obviously have a conflict of interest being an insurance agent 🤦🏾♀️
@@vulpixelfulno she just has all the facts as an agent! Shouldn't we be experts at our jobs? Are u?
@@shaunimarie730 Always double check the facts of salespeople
I don’t know me and my other two sibling bought a life insurance for my dad so we split three ways. We thought our dad will live up to 80-90. But he died suddenly on October only 68 years old. We bought it like ten years ago, so I contributed like $25k and got paid out whole chunk. It’s bad to say that my dad is a good investment. And currently thinking buying more insurance on myself my kids and my mom. Every family situation is different so try to find a good wealth management for your family. Happy new years guys. May the best luck for all of 2024 .
You could've bought term insurance at a fraction of the cost compared to whole life with a higher death benefit.
@@astroman30Term isn't for everyone. Term is truly a quick fix type of policy. No one really plans to die in 20, 30 or 50 years. Term policies are a good fit for some but a bad fit for most. That's my learned opinion as an experienced Insurance agent 😊
@@shelbybrown2732 And your "learned opinion" is wrong. You're coming from a sales background that pushes trash value insurance for bigger profits/commissions. Insurance is a RISK MANAGEMENT purchase, only. Buying term and investing the difference will not only save you money, but will make you "self insured" as you get older. Numbers don't lie:
In a $500G DB example, the premium is $430 a month from age 40. Nick lives to age of 90. So with whole life insurance, Nick pays $430 a month for 600 months (50 years) total $258G. Dividend is $130 a year best case for 50 years on the premium paid, or $6500, for a cash value of $264,500. The alternative is to buy term life insurance with extended duration and invest the rest .. a $500G death benefit policy for a 30 year term would be about $60 a month leaving $370 available to save .. $370 monthly in the market at 7% (stock market lifetime average) in a tax deferred account gives me $432G after 30 years. I won’t need a $500G policy if I’ve got $432G cash in my account, so I cancel it, And for the next 20 years my account keeps growing at the full $430 a month. when I’m 90 the account is worth $1.9 million. Conclusion is clear .:. Do I want $264.5G (whole) or do I want $1.9 M (term and invest) for the same premium output .. I choose term and invest!
" It's bad to say my dad is a good
investment."
It's the reason I now hate my wife. She took out a policy of life insurance.
I'm now worth more dead than alive.
Well, I'm going to make the rest of my time with her hell.
This is why I love you girl!! Keep it up!!
This is exactly why I became an insurance broker. I see so many people giving wrong advice I'm all about helping the client out . I love selling term with living benefits
Get a better job.!🤣🤡
So true!
@@eb9873 what’s a better job career expert???
i want to know about it. how do i reach you please?
Blood suckers
Agreed. You pay one way or another, but with term, you always pat less.
Listen, if you have $ besides your savings account to bury or cremate your loved one when they die, can take time off work to grieve and so much money that you don’t have to have ppl help you or do a go fund me when your terminally, critically or chronically ill. OR you can leave some behind for your kids or grandkids (that’s not taxed as income), then you don’t need life insurance and kudos to you.
Know the facts first!!! Pleeease. You’re doing people a disservice.
Yeah this video is meant for someone who doesn't understand life insurance at all. Not someone who has an extra couple million just lying around.
Thank you for breaking this down!!!
I love that you give good advice every time I would try to find out about insurance I could never get a straight answer
Same
Thanks for the clear up, only for high net worth people!
You may have to speak to a more knowledgeable advisor. They should be able to answer all of your questions. Not saying an IUL or whole life will work for you in particular but it can make sense in some cases.
Be careful. If there’s no toll over option and you get diagnosed with something that limits your eligibility, you may end up with no insurance.
An IUL is an awesome product. It only goes up with the market. Your covered with your death benefit from day one and as your investment grows you can use that money for whatever you want and not pay interest to a bank. You can choose to pay it back to your cash value or not. If IULs were bad then why do so many wealthy people have them? You need someone that knows how to write them
IUL and Whole life are not the same
Exactly.. if the people who say these things actually had a license to sell any type of insurance maybe they would finally do some real research
Indexed Universal Life is by FAR a better choice than whole life. Far more profitable too.
@@phillipgoolsby5089 you are right.. so much better and terms end..
@@phillipgoolsby5089depending on your age and your health. If you’re unhealthy and old you’re sol for an IUL. Better off getting a WL/FEX
Index Universal life is a WHOLE LIFE product!
I think you have to understand the purpose of a whole life insurance policy, it’s a permanent product that accumulates money that you can borrow against if needed, and of course pays your beneficiary upon death whereas term expires and you will have to renew/qualify at your new age and health status. The problem with this video is that it can be taken out of context and come across as a deterrent to whole life insurance when it’s really ideal if obtained early in life or purchase on your children while they’re young and it’s still reasonably priced with a good amount of coverage. To truly educate on life insurance, it would take more than a 30 second snippet because really it should consider the specific persons need.
So is investing 9k a year in property that makes money for my family right now. Its a circular definition. But yes, depends if people intend to invest the money, although life insurance could be seen as a type of investment but far more circumstantial.
Well,I have state farm whole life insurance, pay over $100 a month for 5 years ,I called today and was told I have $259.90 I can use to take out.LMAO
I'm canceling today and will invest that money on something with a real return.
Yes, if your term policy is up you will need to renew at whatever age, however, the theory of decreasing responsibility states that as you are younger you need more coverage because your debt is high and your children are young. As you get older, your debts are paid off and your children are now older so you won't need as much coverage. And with all the money people have to pay with those high premiums with whole life they can be saving/investing the difference by purchasing a term policy for way more coverage and way less cost.
@@westwood3286Try looking into an Early Cash Value policy. Guardian Life Insurance or Mass Mutual are 2 companies that offer these.
I thought Term insurance was the way to go until stumbling across the IBC (Insurance Business Concepts) channel.
Not trying to tell you what to do but this is another tool for educating yourself.
@@westwood3286 you have a really bad policy if that’s the case. Give me a shout and I can show you an illustration of what a good policy could do for you and show you future gains
Facts , thanks Vivian !
I stopped at the scam!! Both term an whole can be beneficial depending on the need of the family. We can’t leave out the fact once term expires the client will have to be approved for another policy. Placing the client at risk of not being able to be covered
Ok the $8300 premium can be structured where 10% goes to premium and 90% goes to pua. Pua is paid up addition. 95% of pua payments go into cash value. So a $8300 premium, cash value in year one could be around $7500. This $7500 grows tax free at around 3-5%. You can scale this down to $800 as well. Works with any budget.
That's what I've researched, Cher thnx
ok but again, how many people have an extra 8,000 to put into their life insurance policy? that was one of the points she was making. That's 700 a month.
You can also take out policy loans immediately.
3-5 percent just do a high yield and avoid losing 800
Dollars in fees
lol so not much more return with a high yield savings account these days, and the S&P index averages 10% annually over the long term. Just use a HYSA and save the fees
Whole life is not an investment. There’s zero risk involved. It’s guaranteed compound interest.
It’s more of a place to story your money safely with predictability
Great, how do I get this money out of "storage" without having to pay insurance company 8% interest and/or fees or defer it out of my death benefit?
@@astroman30 you have to pay a storage fee ha ha. What a joke WL is and the worst part is they keep your stuff when you die just like a storage unit if you don’t pay the bill or die..
Calling it an "investment" is not legal for starters. Investments are taxed, life insurance is not. Its also NOT only for the wealthy, if your family needs to gofundme to bury a loved one, they NEED life insurance
Exactly ! Agents need a series 6/7 license to even say the word Investment. I don't call it an investment but an asset to have.
There is ALOT more insurance than this. IUL variable etc. there are multiple forms of permanent insurance…. Just because you worked on Wall Street doesn’t mean you know shit about insurance… you’re not even licensed…
THIS PART!
I’m glad someone said it bc I was about to go in!! She also forgets about the fact that if you put it in a regular brokerage account you’re gonna have to pay taxes on the income that you make and if you put it in an IRA you can’t touch it till you’re 59 1/2. Insurance has its appropriate uses for different things. She clearly doesn’t know what the hell she’s talking about. And I have worked in the securities industry and sold insurance.
I was about to buy her book but when I saw her complete lack of understanding re whole life, I am going to find another rich bff for advice.
We’ve got 3 wl policies that we borrow against regularly for other investments. You don’t have to pay back the loan as the insurance will pay it off when you die but not a good idea as the policy won’t pay out as much to your beneficiaries. Talk to a good agent. Mine is awesome at State Farm
Every product is different. You also pay fees in some investment products like 401K. Life policy is Tax Free as long as the person dies with the policy.
This is misleading cause I have an IUL and I love it. The extra premium goes to chronic injury and illness too. Also, I can borrow against my IUL in times of financial trouble @ 4.5% interest which is a lot lower than borrowing from bank. Any loans on my IUL don’t reflect on my credit either. It’s not for high net worth people. Anyone who budgets can afford this. It’s how you prioritize your life.
Extra premium for that, Term you don’t have to pay extra for all of that. Id rather invest money and only pay interest on gains.
Universal Life is NOT Whole Life
I’m an agent and offer IULs and have one myself too. Couldn’t agree more
The thing that the cash value agent never tells you is the that the cost to insure your life goes up every year and is based on either annual renewable term or increasing term. Open your IUL policy and just look for the page that says guaranteed maximum monthly cost of insurance. There is a table there that shows you what happens with the cost of insurance each year you own the policy. Spoiler alert! It goes up!
And your premium and cost of insurance are not the same thing…
@@PaulPNewell So if you get Term and it runs out, wouldn’t the cost of insurance be substantially larger due to sheer older age and possible health issues?? Maybe even risk being uninsurable?
I think your partially wrong if you have children it's actually good to get them whole life for 1 it will be much cheaper like i pay 80 a month and by time hes 10 it will be paying it self . and can build up also can use the equity to purchase wealth building assets.
I forgot to mention the 80 dollar price point is locked in for life.
Whole life is ALWAYS a problem. Mathematically it is ALWAYS better to buy a much cheaper term policy and invest the difference in an investment SEPARATE from a policy! The interest rate is VERY low (2-4%), you have to pay interest to the company (6-8%) to borrow your OWN money, the premiums are WAY more expensive than term AND if you die prematurely your survivors have to choose between the face amount and the cash account. Life insurance is intended to replace income in the event of a premature death. Children only need enough to cover final expenses if something were to happen. Term with a child rider is the BEST way to go!
Exactly. It’s not even about the monthly premium but just the fact that you are using the insurance company’s investment. They will charge you investment fees as well. The math is complex behind the scenes and when you co-mingle the death payout and investment it clouds your ability to determine whether it’s worth it
@@rebeccahasspoken why would u buy term then it expires you've lost all that money
@@amaznngrace Because insurance is intended to protect income while you are young and building a nest egg. It should expire at the time of retirement. At which point one should have money in an investment vehicle like a Roth IRA and a retirement account at work (if accessible). You will ALWAYS have more in the investment account than a low interest whole life policy because of higher interest rates on the market (rule of 72). Also, the first 2-4 years none of your money even goes into the cash account with whole life. Go check your policy. It’s all there. The average consumer just doesn’t know how to read these policies or what to even look for. I’m a financial coach. I educate my clients about all this. I replace whole life then open an investment account. Mathematically one will end up with significantly way more money. If you are 65, kids are grown, house paid off and have a million dollars saved why would you need life insurance? You’ve become self insured at that point. There is NO, I repeat NO financial freedom in whole life. The company profits big time and the consumer loses thousands even millions in compound interest if they had of invested in the market.
You have no idea what you are talking about. What about taxes and volatility-two big factors you are completely leaving out. And I’d watch your labeling insurance agents “scammers”.
If they are selling any form of cash value life insurance then they are scammers. Unfortunately it’s legal though because you didn’t read the contract during the free look period and cancel. The cash valve contract should be outlawed. The SEC went after VUL back in the day because by definition it was a security. IUL skates by being regulated by the SEC because it’s indexed
😂
your 100% right cause the person who is collecting the money can only pick 1 part either life insurance or the investment. so your building money for them to get too
ABSOLUTELY CORRECT
Hi, could you do more content about this? My mom is apart of an MLM and SWEARS by it. It’s for sure legit in the way that you have to be state licensed. But I can’t help but feel this is the only way to diversify assets and invest.
Its insurance. It has to cover the value of something or someone.
Been watching too much crime documentaries and I got to say the main down side is that your "loved ones" may unalive you.
My wife thinks I'm worth more dead than alive now that she has a policy, life insurance, against me.
Like some of her friends that have dead husbands and money and a life of fornication.
Its not an investment. Its a protection for your asset. Not meant for accumulation of wealth.
Also the advantage of whole life is if you borrow it, you're not borrowing YOUR money you're borrowing against it(collateral) so if you borrow against it to buy an asset you are using "the same money" to make money on the asset plus the interest in the policy though it is little interest
I wish people would mention that you have to have a bunch of money to spare monthly for whole life. And then you have to wait YEARS before you can "borrow" from it. Like she said "it only makes sense if you already have a lot of money".
Agreed. It's about structuring your finances to build wealth. Which is something she isn't speaking about at all...
@@AirunDevonthe policy I have let me borrow after 30 days! The paid up additions rider that was added allows for early cash value growth!
@AirunDevon a bunch not so, ill give ex.
If you can afford to straighten off pay for whole life. I think the best way would be to get a company that allows you to do term and with it. After the I think it's up to 5 years or 10 years. You have to transfer it over to whole life. And you're still able to lock in the price point and everything a good company. Or the one that I know is mass mutual. 40 dollars if ya healthy
I’ve been paying $30 a month since the beginning of my whole life policy.
Make sure you read the print because the payment usually increases and also if it has cash value and you want to use it you will have to pay interest
My policy premium had never increased, and the interest you pay will be paid to yourself , since you are taking a loan from your own account, just like taking a 401k loan, you will pay no tax from your life insurance but will definitely pay tax on your stock earnings or 401k
@@alamgudiel7663 - I’ve been paying $30 a month for almost 40 years. My parents got me to get that policy when I got my 1st job when I was around 20 or 21.
That's what I've always thought. Glad I listened to myself🎉🎉🎉
You're clearly not informed on how life insurance works. You don't need to spend $7k a year and nobody does lol. Most people pay $100 per month for their permanent life policy. And it's not an "investment" because there's no risk of loss.
Its only being sold as an alternative to savings or bonds. It doesn't replace the market and only supplements what you're putting into bonds.
You just showed your hand that you're not educated on insurance and just did your research from googling for a few hours.
I think you’re missing a lot of points here. We’re licensed financial advisors and see IUL’s as an amazing investment opportunity. You do not have to have a lot of money upfront and you do not have to have a high net worth. You simply have to be able to pay the monthly premium which we will NOT sell you until we see through all your monthly budget planning to make sure you can afford it. If for some reason you can not make your monthly payment your contract will just be set on pause, you still don’t lose anything. In the future it’s only going to get more expensive per individual or even unavailable due to various reasons, and there IS a “be your own bank” or “infinite banking” potential even for people who are not earning 6 figures. That said, you’re correct in that life insurance, being term or permanent, is not for everyone that’s why you have to sit down with a GOOD licensed financial advisor to walk you through all the options.
Why IULs are garbage (from an actual fiduciary :)
1. Money never enters the market - With an IUL, the money funding the cash value portion of the policy is never actually invested into the market. Instead, the insurer holds your “cash” and pays a return on the annual growth of a specific index. Anyone selling IUL are not required to have a securities lIC.
2. Growth potential is capped - While most policies have a “floor” of 0% which prevents your cash value from dipping below what you put into it, your growth potential is capped, too. For example, if your policy limits growth to 10% on the index and that index out-performs that percentage, you’ll still only receive the value of 10% in your account. The insurer keeps the difference.
3. No dividends - Dividends are completely eliminated in an IUL policy. Not having the chance to reinvest any earned dividends, as you could choose to do with an individual investment, means you could miss out on a great deal of money from dollar-cost averaging over time.
4. Fees, fees and more fees - IUL policies are packed with fees and charges that will eat into any cash value accrued.
5. Rising costs - The internal cost of insurance continues to rise as you age, which can limit the amount of money going toward any potential cash value. All universal life is A.R.T ( annual renewable term) PLUS: Almost all cash value policies have these “features” built in. • You’ll accumulate NOTHING in cash value for the first few years the policy is in force. • The cash value earns a lower rate of return (often just 2%-4%) than the potential return you could achieve if you put your money into a vehicle such as a Roth IRA in the U.S. • If you borrow from the cash value, you’ll pay it back plus interest. • If you die with the policy in force, beneficiaries receive the death benefit (less any outstanding cash value loan balance) while the insurer keeps any accrued cash value. Unless you have the increasing death benefit option (option b) the consumer will pay more for that option. The consumer always gets screwed when investing in these policies. The only winners are the agent and the company. The BS I hear all the time is it has to be "structured properly." I have collected 64 policies in the last year and I haven't I seen one structured properly.
I love your content usually but as a living benefits educator, you're misrepresenting affordable IUL options. Allow me to show you an illustration. Middle America deserves this option and it's available for them too
I also like that my "investment" will never lose value if I just keep paying my premiums. On these last downturn, I just have gotten negative 30% but I got 4% return 🤷
As a life insurance agent, some of the things that you said are incorrect. It’s better to get a whole life policy while you are young since it is cheaper than when you are older. Term policies eventually will expire on you and 9/10 times people out live those policies so all of the money they put into it disappears While on the other hand with whole life policies , as long as you pay, it will always be there for you and your family.
Please do a video about index universal life insurance. Is this a good investment for retirement?
Insurance agent here; pretty much agree. Permanent life is best only if you’ve got the money for it. I might recommend a small whole life policy to a young person in combination with a convertible term policy which sets them up to have something in place even when the term runs out
But can you borrow against to whole life insurance? Take a personal loan against it?
Term life is better than whole life, absolutely! But you should have a strategy of paying down your debts and investing while paying your monthly term life premium.
As a former financial advisor I totally agree with you, especially as an investment vehicle. I would love to hear your thoughts as an asset protection tool (divorced) I have whole on myself and both my kids.
Most “Whole Life” policies have “Riders” attached to them as an option for a retirement account. No early withdrawal penalties & no taxes…Ever!
IUL is permanent life insurance that has death benefits, living benefits and a cash value component. Whole life is more for final expenses
I believe you are framing this in a misleading way. Whole life or an IUL is not an investment vehicle. It is useful for saving for supplementing retirement while securing a death benefit.
Investing directly in the stock market also has more risk as most policies are protected against the downside which means your balance will not lose value during bad years in the market (which is about 1 out of 4 years) and gains are not taxed while stock gains are.
The cash value can be borrowed against (accessed tax-free)at very low interest while the entire cash value still gets credited as if you never touched it.
The cost basically $0 after 7-10 years since cash value will likely equal or be greater than total premiums paid in.
In other words, it is a great product for people for several different reasons.
Uninterrupted Compound Interest Account (Cash value life insurance)
This is great info!!! Perfectly explained 🎉
Really like how you explained this insurance, hope you can have more vids in regards to insurances
I can break it down to you for free.
A free financial education and also do your financial needs analysis for free. It's my way of giving back to society.
Awesome practical points! Thank you very much!
This is why it’s important to do your own research, this isn’t great advice. This is why I became a Life Insurance Agent, I love educating my community about term policies with LIVING benefits (you get a pay out if you ever became seriously ill, critically injured or developed Alzheimer’s.
In general it's TRUE, this type of insurance is not for everyone. Better to separate investments from insurance
Your rich BFF? Every well known wealthy family has multiple life insurance policies that they borrow against and leverage money to cash flowing assets. It’s what the banks do too. You’re taking this way out of context sweetheart
Well, most people that need life insurance aren’t wealthy
@@alamgudiel7663 Not True at all. Sure they don't "need" it by any financial means, doesn't mean its not a useful money tool.
Didn't she say it's only good for wealthy people??
Love the way you see things!
It's expensive but not bad if you buy it young . After 13 years many will pay for themselves. I couldn't get term now. I do believe a mix approach is best.
Can you talk about long term care insurance?
The ONLY case where whole life insurance make sense is to inherit large chunk of money without gift tax. This is what high-net worth people use it for.
Don’t forget about looking into disability insurance short term and long term. Be prepared for life’s unexpected challenges.
Thank you. I needed some to explain this to me.
So happy that you're my Rich BFF!!!
It’s a good investment for the salesperson and beneficiary
One of my old co-workers has term life insurance. It ends when he turns 65. He would literally smoke cigarettes and say he needs to smoke more because he bet his insurance company he would be dead in 3 years....
I appreciate your honesty
Thank you Vivian! Finally, someone who puts some light to this!
True
You're so right. Whole life is not great. However, term life is extremely bad
Whole life insurance may give you a lower IRR than the stock market but the volatility and Risk is also way lower. Better comparison would be mutual funds to whole life insurance.
My credit union has it where all union members have a $5,000 life insurance. I know it's not much but it's enough to send me off. I have other investments.
Thanks for the video. What do you define as having a lot of money, like a doctor/lawyer or celebrity? How much of a financial burden should this be?
Thank you, for breaking it down. Whew.
I got a cheap whole life through work. No networth so, it depends
It’s a fantastic investment if you start at 18, go with a AAA rated insurer, and get a loan rider.
I’m
28 is it too late?
@@TheBold1994 Not if you start with $30K and you’re okay with only $2 million at retirement.
Thanks Rich BFF… For explaining that seriously 👍👏✌️
I love your channel, you're the best. To be honest thank you for sharing such amazing information with us. I hope to apply your advice sooner rather than later. Take care
I'm a whole life policy holder, some of your details is wrong. It's true that the policy can be expensive, like I pay $20k/yr for my 40 yo husband but that's because the death benefit it at $1M in the first year. But you can pay as low as $4k if you start early at 20yo.
The investment value is NOT IMPACTED by the market, that means you know your money will continue to grow. There's no negative performance like 401k. You can use it as retirement fund.
Best part is: You don't need to report it to the IRS, unless you decided to take a lump sum later when your policy is mature.
Also another best part, you can borrow against the cash value with such loooow APR and when you borrow, the value of your account and death benefit do not decrease.
Whole life is the best investment so far in my portfolio, I'm actually getting a 2nd policy on my husband.
Yes it's a long investment so if you close before 5yrs, you'll lose your money, but that's bc the bank has to generate death benefit for you.
Won’t ur policy mature at age 100? and if u want your cash value early you will have to pay interest
Ooooo there’s something that 90% of all agents and people uneducated miss on the topic. The cost doesn’t have to be that high and you can grow your cash value faster. Also shouldn’t be used as an “investment” imo, should be used as efficient place to store your cash and use for other cash producing assets…. Like investing in stocks, real estate, or starting up a business
Love watching you. Could you make a video about the pros and cons of health savings accounts?
I appreciate your tips, but I believe there is some misinformation being shared. Life insurance should not be viewed as an investment; rather, it is a means of providing financial protection for yourself and your family. In the unfortunate event of an accident or tragedy, most people do not have the financial resources readily available to handle the situation. Life insurance plays a crucial role in these times, either by aiding the recovery of the insured individual or by supporting the family financially after the loss of a loved one. I recommend revisiting and clarifying your information to ensure it accurately reflects this purpose.
Whole life insurance is for estate planning, not an investment but it does give you interest. It's a far better savings account and bank for you, your family, and descendants.
That's a big caveat to exclude. I always wondered about this. Thank you
that's what i had in mind , if you have a boat load of money you can use let is whole life for tax cover purposes, but like taking 300$'/mo on average for example on an IUL or whole life that's a big chunk you're giving away when you could have done a roth ira with an 50$ term for 250k life insurance, you control your money as far as the roth is concerned and have enough for your family with the insurance.
There are actually more than 2 types of insurance. It’s actually universal life insurance that accumulates money annually. Whole life is just the cash value of the policy so it doesn’t generate any money beyond that. I guess you didn’t know this? 😂😅
And you pay interest on cash value
ULs, IULs, VULs, Whole Life are all garbage. Anything with "cash value" attached to it is a scam.
I tried it once because I had several million in debt that I wanted covered in the event I died prematurely. What pissed me off was that the thing is automated but the firm would take fees out every month acting like they really did something special.
True, but saving money, idea is becoming your own banker. Insted of using a bank. Use this as a vessel therefore paying yourself back. And into. Plus can borrow against therefore paying yourself interest ontop of your own money. And probably can use as tax advantages as added growth. And cam use as a retirement gift...
Your other friend
Unfortunately you are incorrect.
Whole Life Policies can be structured in a way where it can benefit everyone.
You just need a Life Insurance Agent to go over the strategies.
No matter what you cannot hide the fact that BANKS like: Bank of America, Chase, to name a few, have BILLIONS of Dollars in Life Insurance Assets.
It all starts with YOU, today!
Doesn’t the policy mature at age 100? And you pay interest on cash value?
What if the person needs to live in a senior home? I do believe u can take these funds out of whole life NOT term.
How do you structure a WL policy correctly ? Limited training on this , but lots of debates WL vs. IUL . Please advise
She's pretty 😊
Thank you. Now I don’t feel guilty for avoided my insurance guy.
Thank you for saying this!!
Girl please stop misleading people this is 1000% all wrong. Unless you are a licensed life insurance agent I wouldn’t suggest you speak on things you have zero clue about.
LIFE INSURANCE IS NOT AN INVESTMENT. IT IS A SAVINGS ALTERNATIVE. Any agent who tells you it’s an investment that gives great returns in just trying to close a sale with you - RUN! An agent who is up front with you about the pros & cons and that the MAIN point of Whole Life is the DEATH BENEFIT & the savings & cash accumulation & dividends is the CHERRY ON TOP has your best interests! It’s a great product but it NEEDS to be designed properly for the individual’s personal needs. It is not the S&P 500!!!!