Author Topic: LIFE INSURANCE  (Read 140037 times)

Offline Mordyk

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Re: LIFE INSURANCE
« Reply #1040 on: April 05, 2024, 01:15:12 PM »
It's also important to split this thread from life insurance to investments. Because I think we all agree that WL is not a life insurance product
#TYH

Offline farmbochur

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Re: LIFE INSURANCE
« Reply #1041 on: April 05, 2024, 01:17:07 PM »
Gonna preempt Exgingi and tell you to add the value of the underlying coverage to the IRR.
Don't I already have that accounted for? The CV in my spreadsheet is copied from the Total CV in the screenshot. It is the sum of the basic policy and the PUA valuations.
Risk is opportunity

Offline skyguy918

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Re: LIFE INSURANCE
« Reply #1042 on: April 05, 2024, 01:29:52 PM »
Don't I already have that accounted for? The CV in my spreadsheet is copied from the Total CV in the screenshot. It is the sum of the basic policy and the PUA valuations.
How does that account for the value of the additional DB above and beyond the CV at each point? If you were comparing to other assets and their performance, apples to apples would involve some sort of (cheaper) insurance coverage, no?

Offline farmbochur

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Re: LIFE INSURANCE
« Reply #1043 on: April 05, 2024, 01:42:29 PM »
How does that account for the value of the additional DB above and beyond the CV at each point? If you were comparing to other assets and their performance, apples to apples would involve some sort of (cheaper) insurance coverage, no?
My simplifying assumption is that the CV is the difference between the NPV of the future DB and the NPV of future premiums (takes me back to my MLC sitting). I see why that could be inappropriate since that equation doesn't necessarily hold, but is it a reasonable starting point?. What would you propose to use instead?
Risk is opportunity

Offline skyguy918

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Re: LIFE INSURANCE
« Reply #1044 on: April 05, 2024, 01:59:40 PM »
My simplifying assumption is that the CV is the difference between the NPV of the future DB and the NPV of future premiums (takes me back to my MLC sitting). I see why that could be inappropriate since that equation doesn't necessarily hold, but is it a reasonable starting point?. What would you propose to use instead?
I didn't phrase this very well. What I mean is that someone will look at your calcs and say 4% over 15 years? That should be very beatable. But the underlying assets of the alternative portfolio would need to be higher than that to break even, since you'd have to buy term (or whatever coverage) to make it apples to apples.

Offline farmbochur

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Re: LIFE INSURANCE
« Reply #1045 on: April 05, 2024, 02:17:43 PM »
I didn't phrase this very well. What I mean is that someone will look at your calcs and say 4% over 15 years? That should be very beatable. But the underlying assets of the alternative portfolio would need to be higher than that to break even, since you'd have to buy term (or whatever coverage) to make it apples to apples.
I'm accounting for neither the cost of the alternative insurance nor it's actuarial value - which (in a hypothetically frictionless market) should net to $0.
Risk is opportunity

Offline ExGingi

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Re: LIFE INSURANCE
« Reply #1046 on: May 06, 2024, 08:10:48 PM »
https://meanwhile.bm/

Somehow I doubt this will ever fly in the US (definitely not in NY).

I'd love to see GOLD denominated life insurance before I'd see BTC denominated "insurance".
I've been waiting over 5 years with bated breath for someone to say that!
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Offline Wolf Pack

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Re: LIFE INSURANCE
« Reply #1047 on: May 18, 2024, 11:47:46 PM »
Do life insurance companies disclose online all the fees associated with Whole Life and Variable Whole Life? Trying to create an excel spreadsheet where I can compare the two side by side.

Offline ExGingi

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Re: LIFE INSURANCE
« Reply #1048 on: May 19, 2024, 01:04:51 AM »
Do life insurance companies disclose online all the fees associated with Whole Life and Variable Whole Life? Trying to create an excel spreadsheet where I can compare the two side by side.

I'm not sure if any company currently sells Variable Whole Life. I've only seen one such product in my over 20 years in the business. VUL (Variable Universal Life) is how Variable Life Insurance is usually structured. The fees are disclosed in the illustration.

If you're trying to compare WL and VUL you're barking up the wrong tree. Those are two totally different products that serve different needs.

And if you're even asking, then VUL probably isn't right for you.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline Wolf Pack

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Re: LIFE INSURANCE
« Reply #1049 on: May 19, 2024, 02:55:53 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?

Offline ExGingi

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Re: LIFE INSURANCE
« Reply #1050 on: May 19, 2024, 04:20:58 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?

No. And the illustration is meaningless. Past performance is not indicative of future results. There's IUL (Indexed Universal Life) is a fixed product that is related to indexes (such as S&P). VUL is actually invested in a separate account that invests in subaccounts (similar to mutual funds).

One way or the other. These are different products and should not be compared.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline Wolf Pack

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Re: LIFE INSURANCE
« Reply #1051 on: May 19, 2024, 06:36:06 PM »
Would you mind explaining why the two should not be compared? As far as I can see, both have death benefits and cash value benfits, difference is the method of investing the cash value, each has it's on benefits and risks. Why should I not compare the two prior to purchasing?

Offline yr

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Re: LIFE INSURANCE
« Reply #1052 on: May 19, 2024, 10:13:40 PM »
https://mishpacha.com/covered-for-life/



This scenario struck me as a horrible deal.

The guy pays $750,000 over 30 years ($25,000 a year)and end up woth cash value of just $607,000, plus a death benefit of $1M. That's a negative interest rate.

How is that worth it??

Offline ExGingi

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Re: LIFE INSURANCE
« Reply #1053 on: May 19, 2024, 10:22:39 PM »
Would you mind explaining why the two should not be compared? As far as I can see, both have death benefits and cash value benfits, difference is the method of investing the cash value, each has it's on benefits and risks. Why should I not compare the two prior to purchasing?

Why should a car not be compared to a motorcycle. They both have wheels, a motor, and get you from place to place?
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline ExGingi

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Re: LIFE INSURANCE
« Reply #1054 on: May 19, 2024, 10:24:33 PM »
https://mishpacha.com/covered-for-life/



This scenario struck me as a horrible deal.

The guy pays $750,000 over 30 years ($25,000 a year)and end up woth cash value of just $607,000, plus a death benefit of $1M. That's a negative interest rate.

How is that worth it??

Probably missing details. Most likely a premium offset, so he didn't pay for 30 years.

The article is TL;DR, but I skimmed through it, and might have some comments.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline Wolf Pack

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Re: LIFE INSURANCE
« Reply #1055 on: May 19, 2024, 10:25:22 PM »
Why should a car not be compared to a motorcycle. They both have wheels, a motor, and get you from place to place?
Wow. You win. Never mind. Anyone else that can assist me?

Online aygart

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Re: LIFE INSURANCE
« Reply #1056 on: May 19, 2024, 10:28:11 PM »
Why should a car not be compared to a motorcycle. They both have wheels, a motor, and get you from place to place?
A car absolutely should be compared to a motorcycle.
Feelings don't care about your facts

Offline ExGingi

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Re: LIFE INSURANCE
« Reply #1057 on: May 19, 2024, 10:31:03 PM »
A car absolutely should be compared to a motorcycle.

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.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline ExGingi

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Re: LIFE INSURANCE
« Reply #1058 on: May 19, 2024, 10:40:21 PM »
Wow. You win. Never mind. Anyone else that can assist me?

I never realized that I am in an argument or competition. I am actually trying to help you.

Just like savings accounts (or money market accounts) shouldn't be compared to investing in an index fund, so too Whole Life shouldn't be compared to VUL (or even IUL). They are just fundamentally too different.

There's information here (and lots of decent education on their blog): https://theinsuranceproblog.com/variable-universal-life-insurance-a-costly-gamble-that-could-leave-you-empty-handed/
I've been waiting over 5 years with bated breath for someone to say that!
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Offline Yosel

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Re: LIFE INSURANCE
« Reply #1059 on: May 20, 2024, 11:28:47 AM »
Wow. You win. Never mind. Anyone else that can assist me?
looks, sound, feels like you for sure NEED a broker....................