Newborn baby girl in New York life insurance deal!

[EJB]

Knowing agents, that would be my guess

Yup. I think they get around 50% of first year premium and possibly more depending on their relationship with AS.

[Shauly101]

on this girl life insurance an agent (close enough to trust) told me that they make TWENTY BUCKS on it.

[skyguy918]

on this girl life insurance an agent (close enough to trust) told me that they make TWENTY BUCKS on it.

They'll certainly make more than that over the life of the policy. But most commissions are premium based, so the fact that this is low premium means it's not a big money maker.

[abr]

is the money taxable income when cashing out ?

[Aaaron]

is the money taxable income when cashing out ?

Only if paid with pre-tax witholdings, iinm. IANACPA

[skyguy918]

is the money taxable income when cashing out ?

Only if paid with pre-tax witholdings, iinm. IANACPA

-1. If you actually surrender the policy, you're taxed on the value less the sum of premiums. But usually they advise you to use policy loans instead, which are not taxable. The disadvantage there is that you have to continue to pay premiums in order to keep the policy going.

[yos9694]

-1. If you actually surrender the policy, you're taxed on the value less the sum of premiums. But usually they advise you to use policy loans instead, which are not taxable. The disadvantage there is that you have to continue to pay premiums in order to keep the policy going.

The ideal way to access cash value is to surrender to basis and then borrow. You can withdraw your premiums first and leave the gains in the contract. Then, you can use loans to access the rest of the cash value AND for paying future premiums.

[skyguy918]

The ideal way to access cash value is to surrender to basis and then borrow. You can withdraw your premiums first and leave the gains in the contract. Then, you can use loans to access the rest of the cash value AND for paying future premiums.

You'd think that if you need the money when the insured is 20 (as in the chasuna fund), it would make sense to surrender and pay the tax. But here, you're still likely getting this insanely high rate of return on any money coming into the policy, so it makes sense to keep funding it forever.

[yos9694]

You'd think that if you need the money when the insured is 20 (as in the chasuna fund), it would make sense to surrender and pay the tax. But here, you're still likely getting this insanely high rate of return on any money coming into the policy, so it makes sense to keep funding it forever.

Its definitely simpler that way, but the advantage of to basis and borrow is that the policy stays alive and you never need to pay tax. You also have the potential to get more money out of the policy (through more loans) if the cash value  grows faster than the loan interest, which is highly possible. There's no downside to doing this way.

[Alexsei]

Per their FAQ's this is NYS law (can be insured with anyone)

Right I heard about this 3 months ago but with this law its a no go
My allstate agent claims it's definitely a mistake but as long as it lives it lives

There's one thing we can apply here, "if it's too good to be true, it probably isn't"

Full illustration attached or click here https://imgur.com/a/RkzFr

[skyguy918]

Its definitely simpler that way, but the advantage of to basis and borrow is that the policy stays alive and you never need to pay tax. You also have the potential to get more money out of the policy (through more loans) if the cash value  grows faster than the loan interest, which is highly possible. There's no downside to doing this way.

In this scenario that's certainly true. But on a standard policy it's not necessarily an advantage to keep the policy alive.

[yos9694]

In this scenario that's certainly true. But on a standard policy it's not necessarily an advantage to keep the policy alive.

Why not? Who would want to pay taxes when there is an option not to?

[skyguy918]

Why not? Who would want to pay taxes when there is an option not to?

The choice is pay taxes now and not have to pay any premiums in the future, or no tax now and have to continue funding the policy. It's a math equation. Even if you assume that the latter wins out most of the time, it's not 100% of the time - totally depends on the pricing and personal situations.

[Baruch]

As someone who has so far been makpid on "אשרי מי שבניו זכרים", is there a way I can get in on this deal?

[yos9694]

The choice is pay taxes now and not have to pay any premiums in the future, or no tax now and have to continue funding the policy. It's a math equation. Even if you assume that the latter wins out most of the time, it's not 100% of the time - totally depends on the pricing and personal situations.

Yes it is 100% of the time. I explained already that you fund the policy through additional loans. This is a standard LI concept, perhaps you should google it to get familiar.

[dealfinder85]

Yes it is 100% of the time. I explained already that you fund the policy through additional loans. This is a standard LI concept, perhaps you should google it to get familiar.

doesnt he work in life insurance?

[skyguy918]

Yes it is 100% of the time. I explained already that you fund the policy through additional loans. This is a standard LI concept, perhaps you should google it to get familiar.

I'm going to leave your condescension aside for a moment - I'd say turnabout is fair play since actuaries are often condescending to agents when explaining things, but that only works when you're correct.

You yourself wrote:

... if the cash value  grows faster than the loan interest, which is highly possible...

That sounds like less than 100% to me.

[Yosel]

This is an Actuarial Pricing mistake, hence the return is great for girls and not boys......

Agent earns 20% commission on this policy.

All sibling must "apply" for same amount of coverage. (underwriting requirement)

Get in while u can.............

[skyguy918]

I sent it to a friend who just had twin girls, their first children. Pretty sweet deal for them.

[Jkhein]

so is their a need for the parents to already have an existing LI plan for this, or that was just referring to the chasunaplan although it might be the same