Author Topic: LIFE INSURANCE  (Read 139468 times)

Offline Alexsei

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Re: LIFE INSURANCE
« Reply #1060 on: May 20, 2024, 11:36:04 AM »
I believe this analogy has been mentioned multiple times but again when you are comparing two things it always depends on your goal for example it's your goal is to get from point A to point B you might as well compare a car to a motorcycle but if you are comparing a transportation vehicle to own they might be two different things.
You might want to compare life insurance to another investment to decide which vehicle to invest in however you can still not compare the two products using the same criteria but you should be able to compare the outcomes
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Offline aygart

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Re: LIFE INSURANCE
« Reply #1061 on: May 21, 2024, 09:14:58 AM »
You can compare two different cars. But a car vs a motorcycle is a completely different skill set and experience.

Apples and oranges are also both fruit. But we still don't compare apples and oranges.
Why wouldn't we compare apples and oranges? They are both fruit. They both satiate
Feelings don't care about your facts

Offline ExGingi

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Re: LIFE INSURANCE
« Reply #1062 on: May 21, 2024, 10:07:48 AM »
Why wouldn't we compare apples and oranges? They are both fruit. They both satiate

IDK. It's a common expression.

OK. Replace apples (pomme) with potatoes (pomme de terre).

Do you also compare a savings account to an S&P mutual fund or ETF?

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Offline Alexsei

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Re: LIFE INSURANCE
« Reply #1063 on: May 21, 2024, 10:13:27 AM »
Why wouldn't we compare apples and oranges? They are both fruit. They both satiate
We do, we just need to be aware that we can't compare some specifics because they're two different fruits. Same goes here
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Offline Alexsei

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Re: LIFE INSURANCE
« Reply #1064 on: May 21, 2024, 10:48:44 AM »
GPT 4o:

The phrase "comparing apples and oranges" is a common idiom that highlights the difficulty or impossibility of comparing two things that are fundamentally different in nature. Here are some reasons why this comparison is often seen as impractical:

1. **Different Categories**: Apples and oranges belong to different categories of fruit, with distinct characteristics, flavors, textures, and nutritional values. Comparing them directly is akin to comparing unrelated items.

2. **Subjective Criteria**: The criteria for comparison may vary widely. For instance, if you compare them based on taste, texture, or nutritional content, the results will be highly subjective and context-dependent.

3. **Purpose and Usage**: Apples and oranges are used differently in culinary contexts. Apples might be preferred for pies, while oranges are favored for juice. Their uses and culinary applications differ significantly.

4. **Variety and Species**: Both apples and oranges come in many varieties, each with unique properties. Comparing a Granny Smith apple to a Navel orange is different from comparing a Fuji apple to a Blood orange, further complicating the comparison.

In essence, the idiom suggests that some comparisons are inherently flawed because the items being compared are too different to yield meaningful conclusions.
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Offline Wolf Pack

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Re: LIFE INSURANCE
« Reply #1065 on: May 21, 2024, 11:02:03 AM »
IDK. It's a common expression.

OK. Replace apples (pomme) with potatoes (pomme de terre).

Do you also compare a savings account to an S&P mutual fund or ETF?

I may be wrong, but I imagine most uneducated consumers like myself (prior to spending hours online educating myself) view whole life policies primarily as death insurance with some living benefits in the form of cash value accumulation. Therefore, simply saying it's "apples and oranges" without explaining why, while focusing primarily on the death benefits, is not very helpful. These days, I view the death benefit in whole life policies as the smaller benefit or side benefit, and obviously, Indexed Universal Life and whole life policies are not comparable.

Offline ExGingi

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Re: LIFE INSURANCE
« Reply #1066 on: May 21, 2024, 11:42:37 AM »
I may be wrong, but I imagine most uneducated consumers like myself (prior to spending hours online educating myself) view whole life policies primarily as death insurance with some living benefits in the form of cash value accumulation. Therefore, simply saying it's "apples and oranges" without explaining why, while focusing primarily on the death benefits, is not very helpful. These days, I view the death benefit in whole life policies as the smaller benefit or side benefit, and obviously, Indexed Universal Life and whole life policies are not comparable.

Most people comparing types of life insurance go to the term vs. whole life, for which renting vs buying is a decent analogy (though there are obviously some differences).

You are trying to compare permanent types of life insurance, and with that, you're also trying to compare products that are related to market returns (you initially asked about Variable, not about IUL) to products that have fixed returns and guarantees, which is why I balked.

If you were to compare UL to WL, I'd explain the differences in guarantees, mechanics of the products, etc.

But variable products have no place being compared to fixed products (and don't belong as a (primary, or even secondary) personal protection product IMHO.
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Offline notyettaken

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Re: LIFE INSURANCE
« Reply #1067 on: May 22, 2024, 11:10:33 PM »
Do you also compare a savings account to an S&P mutual fund or ETF?

sure why not.

savings account is for money you may need in the short term but will grow minimally, however it is very safe.

s&p is for longer term savings, less safe (but still pretty safe in the long run) and will grow moderately.

there, I compered them by showing their similarities and differences.

feel free to use this template to compare other things

Offline ExGingi

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Re: LIFE INSURANCE
« Reply #1068 on: May 22, 2024, 11:14:54 PM »
sure why not.

savings account is for money you may need in the short term but will grow minimally, however it is very safe.

s&p is for longer term savings, less safe (but still pretty safe in the long run) and will grow moderately.

there, I compered them by showing their similarities and differences.

feel free to use this template to compare other things

Pretty bad template. I wouldn't even attempt to use it.
I've been waiting over 5 years with bated breath for someone to say that!
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Online yos9694

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Re: LIFE INSURANCE
« Reply #1069 on: May 23, 2024, 03:04:55 PM »
I seeking to compare a WL policy to a product that the cash value growth is pegged to an index fund such as the S&P500, is there no such product?

I would like to compare prior to going to a broker so I do not have an illustration. Is the information available online?

Almost definitely not available online, you're going to need to talk to an insider of some kind. Not many people would be able to make use of the information on their own anyway.

A WL policy has implicit fees, rather than explicit. It would be impossible for you to decompose the illustrated values without access to proprietary information. That's in contrast to VUL or IUL which do show explicit fees, but those may still be hard to properly interpret.

I'd suggest keeping it simple- just focus on the ins/outs under different scenarios. With WL, your premium is always guaranteed as is a portion of the cash value. The non-guaranteed portion of the cash value is variable but not correlated to any market instrument that you could measure, so you'd have to be creative about scenarios. With VUL or IUL, you might be able to come up with scenarios to show how the invested cash value would grow under different market conditions, but the policy fees are not guaranteed so you'll still have the challenge of guessing how to play those out.

If you want more helpful responses, you could try being clearer and more specific about your goal. And if you have a strategy for comparing the two streams of value that you have in mind, explain what that is. Saying that you want to compare WL to "WL but pegged to the S&P" will just get dismissive responses. Not aware of any company offering a product with guaranteed a premium level and guaranteed cash value growth that also has full market exposure.

Offline bsimcha2

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Re: LIFE INSURANCE
« Reply #1070 on: June 13, 2024, 10:36:17 PM »
Any suggestions on what to do if you have an existing condition and don't yet qualify for life insurance?... told to wait another 5 years and would like to implement some sort of back up plan.

Offline ExGingi

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Re: LIFE INSURANCE
« Reply #1071 on: June 14, 2024, 12:30:40 PM »
Any suggestions on what to do if you have an existing condition and don't yet qualify for life insurance?... told to wait another 5 years and would like to implement some sort of back up plan.

Depending on the condition, you might be able to shop it around. Some employer or association group plans will allow signing up upon joining.

I've been waiting over 5 years with bated breath for someone to say that!
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Offline Kobe Bryant

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Re: LIFE INSURANCE
« Reply #1072 on: June 15, 2024, 10:20:51 PM »
No. This is not a discussion. This is a PSA to bring new awareness
So much for this…

Offline bsimcha2

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Re: LIFE INSURANCE
« Reply #1073 on: June 17, 2024, 01:55:48 PM »
Depending on the condition, you might be able to shop it around. Some employer or association group plans will allow signing up upon joining.

I was told from multiple carriers to wait 5-7 years... my employer doesn't offer.

Offline Joel

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Re: LIFE INSURANCE
« Reply #1074 on: June 19, 2024, 09:20:59 PM »
Because @Mordyk talks about upfront costs, 3% earn and loans that carry a cost greater than the earnings.
What I posted has almost no upfront costs, has a tiny premium commitment, over funded so policy won't lapse even if you stop early, you can surrender your deposits with FIFO, and that's besides for the fact that the loan rate is not necessarily more expensive than the earnings
Did you do any additional due diligence on the Pay 8 policy?
Currently looking into getting one.

Offline Alexsei

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Re: LIFE INSURANCE
« Reply #1075 on: June 19, 2024, 11:01:44 PM »
Did you do any additional due diligence on the Pay 8 policy?
Currently looking into getting one.
No, it's certainly a great product for the right application...

What are your goals for the insurance? Does it check off all of them?
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Offline Joel

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Re: LIFE INSURANCE
« Reply #1076 on: June 20, 2024, 07:12:09 PM »
No, it's certainly a great product for the right application...

What are your goals for the insurance? Does it check off all of them?
No, but want to have another type investment vehicle for long term savings and retirement planning.

Offline ExGingi

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Re: LIFE INSURANCE
« Reply #1077 on: June 21, 2024, 12:45:32 PM »
Wow. I wonder what the causes are. @yos9694 any insights?

https://x.com/nfergus/status/1804176943677325499
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Online yos9694

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Re: LIFE INSURANCE
« Reply #1078 on: June 21, 2024, 01:06:53 PM »
Have not seen this. Off the cuff reactions:

1. If we're all soviets, then the information is unreliable
2. For the sake of argument, let's stipulate that the data is reliable. Still seeing mortality improvement trend here, looks like the story is more on the side of russia catching up than US losing its footing
3. Average mortality can be a funny thing when the difference in lifespan between rich and poor is a decade or more. Seeming slowdowns in overall average mortality improvement can be attributed directly to socioeconomic changes- as we start to look more like an oligarchy and cultivate modern aristocracy there come to be fewer people who are in the rich long-life bucket relative to the number who fall in into the poor-reduced life bucket
4. Mortality improvement historically came from improved disease treatment (management of heart disease, cancer, adult diabetes, etc) and after a society has accomplished disease management there is no further improvement. Other societies may follow the same path on a later timeline


Online yos9694

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Re: LIFE INSURANCE
« Reply #1079 on: June 21, 2024, 01:17:55 PM »
No, but want to have another type investment vehicle for long term savings and retirement planning.

I'd be surprised if long term savings/retirement planning made sense as a primary reason for buying life insurance - excluding very rich/wealthy folks who have already maxed out all the ordinary tax-advantaged savings vehicles