LIFE INSURANCE

[aygart]

Not mixing investing and insurance is even more economical than that  (99% of the time)

This is so not necessarily true

[knowitall]

This is so not necessarily true

If you took a random sample of 1000 frum families, and sat them down with a fee-only financial planner that doesn't sell any products, how many of them would be buying permanent life insurance?

[ExGingi]

If you took a random sample of 1000 frum families, and sat them down with a fee-only financial planner that doesn't sell any products, how many of them would be buying permanent life insurance?

I would say 80%-90% of those who understand it and qualify for it would get some.

[ExGingi]

Not mixing investing and insurance is even more economical than that  (99% of the time)

Having proper knowledge and education is the most economical.

For the overwhelming majority of people mixing investing and insurance isn't the right thing (which is why VUL makes sense only in very specific scenarios and only with maximum funding). I would argue that (almost) everyone can see an actual financial lifetime and legacy benefit from having a well-designed permanent policy that is made part of their overall plan.

[ExGingi]

I think late 20s

I would guess that 30-year term wasn't common when you were in your 20s (if at all available), though I might be wrong. You can easily check your policy.

[knowitall]

For the overwhelming majority of people mixing investing and insurance isn't the right thing (which is why VUL makes sense only in very specific scenarios and only with maximum funding). I would argue that (almost) everyone can see an actual financial lifetime and legacy benefit from having a well-designed permanent policy that is made part of their overall plan.

Your second sentence seems to contradict your first sentence.

[ExGingi]

Your second sentence seems to contradict your first sentence.

That can only be said by someone who lacks proper understanding of the products. WL and UL are NOT investment product. VUL is an investment product.

[knowitall]

That can only be said by someone who lacks proper understanding of the products. WL and UL are NOT investment product. VUL is an investment product.

WL and many UL policies have a cash value component that grows, AKA they are investments, albeit poor ones.
Worse, many agents specifically sell these types of products as investments, chasunah savings plans, retirement plans, etc.

I'd love if you can explain your feeling why most lower to middle class frum families should have permanent insurance products as part of their overall financial plan, despite the high fees and costs.

[yuneeq]

WL and many UL policies have a cash value component that grows, AKA they are investments, albeit poor ones.
Worse, many agents specifically sell these types of products as investments, chasunah savings plans, retirement plans, etc.

I'd love if you can explain your feeling why most lower to middle class frum families should have permanent insurance products as part of their overall financial plan, despite the high fees and costs.

I hardly know much about insurance but it’s quite obvious in regards to financial planning that investments and savings plans should not be conflated.

[knowitall]

I hardly know much about insurance but it’s quite obvious in regards to financial planning that investments and savings plans should not be conflated.

Quite the contrary- I hope we’d all agree any  “savings plan” that keeps all the money in cash making 0% is a terrible way to save.

[ExGingi]

Quite the contrary- I hope we’d all agree any  “savings plan” that keeps all the money in cash making 0% is a terrible way to save.

You are still conflating saving and investing.

Saving = putting aside money with the expectation to have at least 100% of the principal saved available at any given time in the future.
Investing = taking a portion of savings (or current earnings) and investing it in something with the hope (but no guarantee) that it will grow or generate income for (or in) the future, but understanding that at certain points it might be worth less than the amount invested.

I'd love it if you could explain why you think WL and UL have high fees and costs given what they offer.
Also, are you familiar with PUAs? Those might be a very effective way of saving. But you can only take advantage if you have a WL policy as a basis for them.

[knowitall]

You are still conflating saving and investing.

Saving = putting aside money with the expectation to have at least 100% of the principal saved available at any given time in the future.
Investing = taking a portion of savings (or current earnings) and investing it in something with the hope (but no guarantee) that it will grow or generate income for (or in) the future, but understanding that at certain points it might be worth less than the amount invested.

Correct, as they should be conflated. A savings plan without an investment component will cause you to lose purchasing power, due to inflation. This is common sense to most, I shouldn't need to spell it out.

[knowitall]

I'd love it if you could explain why you think WL and UL have high fees and costs given what they offer.
Also, are you familiar with PUAs? Those might be a very effective way of saving. But you can only take advantage if you have a WL policy as a basis for them.

CMIIW, but don't you always pay a fee/sales load when doing PUAs?
Is it ever possible to put in $1,000 and have that full $1,000 working for you right away?
I know many agents like to market these as "high cash value", but in 2023, I rarely see a good reason to pay a sales load on any investment.

[ExGingi]

CMIIW, but don't you always pay a fee/sales load when doing PUAs?
Is it ever possible to put in $1,000 and have that full $1,000 working for you right away?
I know many agents like to market these as "high cash value", but in 2023, I rarely see a good reason to pay a sales load on any investment.

Yes. You do pay a fee/sales load for PUAs, and those are in the 5%-10% range. Obviously doesn't make sense for the short term (less than 3-5 years), but extremely effective for longer term.

[knowitall]

Yes. You do pay a fee/sales load for PUAs, and those are in the 5%-10% range. Obviously doesn't make sense for the short term (less than 3-5 years), but extremely effective for longer term.

That’s the part I’d like you to explain. For 95% of families, I don’t see the investment component of WL as lucrative enough to justify paying those (unnecessary) fees.

[knowitall]

https://lifeshare.community/

Has this been discussed yet?

[ExGingi]

https://lifeshare.community/

Has this been discussed yet?

So this is a twist on the Areivim concept.

[knowitall]

So this is a twist on the Areivim concept.

Yeah, seems like it. I think Areivim would be fine if

1) They made it clearer that they are supplemental, not a replacement for life insurance.

2) Every member was promised a payout, not “The rabbanim will decide if they think you really need it.”

3) The payouts were lump sum (soon after verifying death and medical records).

[aygart]

4. It could be sustained without the need for new enrollments

[yuneeq]

4. It could be sustained without the need for new enrollments

Unlike the first 3 listed, this also applies to Lifeshare