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Re: Whole Life Insurance 'Gift' from Parents

There is no diversification with whole life. They just invest the money in bonds for you. That would be like me saying I bought total bonds at vanguard and total bonds at Schwab and now I'm diversified. You also have underestimated how many years it is a poor investment. This isn't a reflexive pooh...
by dhodson
Thu Mar 26, 2015 12:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Insurance 'Gift' from Parents
Replies: 24
Views: 1395

Re: Whole Life Insurance 'Gift' from Parents

logandouglasbr, Based on the fact that the annual dividends are greater than the premium (about 33% higher), I think it would be best to just keep the policy and stop paying premiums on it so it doesn't cost you anything out of pocket. The cash value and death benefit would grow slower than the re-...
by dhodson
Thu Mar 26, 2015 12:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Insurance 'Gift' from Parents
Replies: 24
Views: 1395

Re: Whole Life Insurance 'Gift' from Parents

While these are horrible purchases, the decision on whether or not to keep an old policy is different then the decision to purchase one or to buy more term. This is bc costs are sunk. The real question is do you want a permanent death benefit. You or someone else has already pretty much paid for it...
by dhodson
Thu Mar 26, 2015 11:54 am
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Insurance 'Gift' from Parents
Replies: 24
Views: 1395

Re: Whole Life Insurance 'Gift' from Parents

By Holding this CV insurance, you are NOT helping the insurance company's balance sheet. :? Can you please explain this a little more, I don't understand? Once a policy has been in force a long time, the insurance company has taken most of its profits for the most part and thus would prefer you to ...
by dhodson
Thu Mar 26, 2015 11:48 am
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Insurance 'Gift' from Parents
Replies: 24
Views: 1395

Re: Whole Life Insurance 'Gift' from Parents

logandouglasbr, Based on the fact that the annual dividends are greater than the premium (about 33% higher), I think it would be best to just keep the policy and stop paying premiums on it so it doesn't cost you anything out of pocket. The cash value and death benefit would grow slower than the re-...
by dhodson
Thu Mar 26, 2015 11:46 am
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Insurance 'Gift' from Parents
Replies: 24
Views: 1395

Re: Life insurance cash value as emergency fund

I assume you mean a group UL and not a guaranteed no lapse UL. Eventually you are taxed at income rates on gains when you surrender the policy which likely is what will happen unless you die prematurely or don't mind paying the ever increasing cost of insurance. If you are happy with the insurance (...
by dhodson
Wed Mar 25, 2015 9:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Life insurance cash value as emergency fund
Replies: 4
Views: 297

Re: Whole Life Insurance 'Gift' from Parents

While these are horrible purchases, the decision on whether or not to keep an old policy is different then the decision to purchase one or to buy more term. This is bc costs are sunk. The real question is do you want a permanent death benefit. You or someone else has already pretty much paid for it....
by dhodson
Wed Mar 25, 2015 7:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Insurance 'Gift' from Parents
Replies: 24
Views: 1395

Re: SPIA: Northwestern Mutual vs New York Life

Whole life isn't an inverse SPIA. You may wish to think of it that way but that's up to you. Whole life is typically purchased as an investment and its absolutely horrible at that. Almost Nobody needs a permanent death benefit. A SPIA at age 80 (not sooner for me) is a pure insurance play. Some peop...
by dhodson
Wed Mar 25, 2015 7:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: SPIA: Northwestern Mutual vs New York Life
Replies: 17
Views: 1312

Re: SPIA: Northwestern Mutual vs New York Life

Limited pay polices don't have mortality credits so not as useful in my view.
by dhodson
Wed Mar 25, 2015 3:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: SPIA: Northwestern Mutual vs New York Life
Replies: 17
Views: 1312

Re: SPIA: Northwestern Mutual vs New York Life

Comdex is about as good as it gets. You just need to realize it doesn't have much prediction power for distant future. Even with Genworth, it wasn't until relatively recently the Comdex went down hill and it in my view goes down pretty fast. You also can't really do anything about it when it happens...
by dhodson
Wed Mar 25, 2015 9:01 am
 
Forum: Personal Finance (Not Investing)
Topic: SPIA: Northwestern Mutual vs New York Life
Replies: 17
Views: 1312

Re: SPIA: Northwestern Mutual vs New York Life

Both of these companies are mutual by the way. SPIAs actually typically don't use a health exam. Sometimes if a person is unhealthy they will try to find a company that will take that into consideration and thus pay more. I'd pick the better return if it were me. Comdex scores just predict the prese...
by dhodson
Wed Mar 25, 2015 8:22 am
 
Forum: Personal Finance (Not Investing)
Topic: SPIA: Northwestern Mutual vs New York Life
Replies: 17
Views: 1312

Re: Whole Life Insurance Vs. 401K/IRA

Here is how whole life works. If you contribute $100k, your friend immediately makes a $7,500 commission. For the next few years that you leave the money in place, your friend takes lower % commissions. Where does this commission money come from? Think about that for a moment. Say at year 3, you de...
by dhodson
Wed Mar 25, 2015 8:15 am
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Insurance Vs. 401K/IRA
Replies: 9
Views: 610

Re: Do we need irrevocable life insurance trust (ILIT)?

In my view (and I too am a physician), its much better to just give items away (remove them from the estate) while you are living. Not only are people more likely to need them before you die, you can receive some joy from seeing the good work you do. I am not aware of any ability to perceive joy onc...
by dhodson
Tue Mar 24, 2015 3:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do we need irrevocable life insurance trust (ILIT)?
Replies: 27
Views: 1700

Re: Do we need irrevocable life insurance trust (ILIT)?

One should keep in mind that if someone lives a normal lifespan according to their health rating then likely they could have more money by using something other than life insurance within an irrevocable trust. While no lapse guaranteed universal with low CSV is typically what people recommend, one s...
by dhodson
Tue Mar 24, 2015 1:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do we need irrevocable life insurance trust (ILIT)?
Replies: 27
Views: 1700

Re: LTC Insurance Premiums for S Corp Owner

That's what I've done in the past for health insurance. I wasn't aware that long term care insurance was treated in exactly the same way. For 2015, my CPA advised that there is some murkiness on treatment of 2% shareholder health insurance under the new law, so he advised delaying company reimburse...
by dhodson
Tue Mar 24, 2015 8:36 am
 
Forum: Personal Finance (Not Investing)
Topic: LTC Insurance Premiums for S Corp Owner
Replies: 3
Views: 266

Re: Tax Differed Variable Annuity

With annuities you change long term capital gains into income rates. You can't tax loss harvest. You don't get a step up basis at death. Those are additional facts. They still have higher fees then taxable although some are more reasonable than others. Best use is IF you want to purchase a very tax...
by dhodson
Mon Mar 23, 2015 9:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax Differed Variable Annuity
Replies: 16
Views: 1111

Re: Exit Strategy VUL policy

If you want to do that then you will still eventually be taxed on gains now just 15 years later. You are just deferring the problem for later. IF I wanted to do that (and again I'm not an insurance agent) then id 1035 exchange into a low cost variable annuity. This way you at least don't pay for eve...
by dhodson
Mon Mar 23, 2015 7:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Exit Strategy VUL policy
Replies: 14
Views: 1206

Re: Tax Differed Variable Annuity

With annuities you change long term capital gains into income rates. You can't tax loss harvest. You don't get a step up basis at death. Those are additional facts. They still have higher fees then taxable although some are more reasonable than others. Best use is IF you want to purchase a very tax ...
by dhodson
Mon Mar 23, 2015 6:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax Differed Variable Annuity
Replies: 16
Views: 1111

Re: Legal for Doctor to Cover Insurance Co-pay?

You need to realize why as noted above.

If someone wanted to be more competitive then they could negotiate for a lower contract reimbursement.
by dhodson
Mon Mar 23, 2015 12:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Legal for Doctor to Cover Insurance Co-pay?
Replies: 40
Views: 2869

Re: Exit Strategy VUL policy

Update...I spoke with Mr Hunt and give him my highest recommendations...a true expert in the field who is willing to put this complicated topic into understandable terms. After review, numerous discussions with Americas, and lots of thought, I believe best option is to change the policy from "...
by dhodson
Sun Mar 22, 2015 11:20 am
 
Forum: Investing - Help with Personal Investments
Topic: Exit Strategy VUL policy
Replies: 14
Views: 1206

Re: Legal for Doctor to Cover Insurance Co-pay?

not sure where the discount the insurer comes into this. Pretty much all the contracts say you have to collect the copays. That doesnt get around it and frankly there is no way to really discount the insurer and not create a huge headache for billing dept. The fees for service have already been agre...
by dhodson
Sat Mar 21, 2015 2:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: Legal for Doctor to Cover Insurance Co-pay?
Replies: 40
Views: 2869

Re: Legal for Doctor to Cover Insurance Co-pay?

Correct not allowed.

For reasons mentioned, shouldn't be done as standard business.
by dhodson
Sat Mar 21, 2015 8:22 am
 
Forum: Personal Finance (Not Investing)
Topic: Legal for Doctor to Cover Insurance Co-pay?
Replies: 40
Views: 2869

Re: Equity Indexed Annuities

But are Indexed Annuities better than Variable Annuities? Indexed Annuities are a type of Variable Annuity. A insurance company could offer a large cap variable annuity. Or they could offer a "index" variable annuity that tracks the S&P 500. Same difference as a large cap fund and a l...
by dhodson
Fri Mar 20, 2015 3:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Equity Indexed Annuities
Replies: 12
Views: 516

Re: Equity Indexed Annuities

The first thing you should do is tell them they did indeed purchase a fixed annuity. It is labeled as such. Its just a new type of fixed annuity. In a nutshell, the company takes your money and invests almost all of it in their general accounts like 95% which is primarily bonds (they take 100% of th...
by dhodson
Fri Mar 20, 2015 3:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Equity Indexed Annuities
Replies: 12
Views: 516

Re: Suggestions and advice for term life policy

Several companies offer "term" on a UL chassis. I believe they do it for different reserve requirements. Term benefits decrease on their own just bc of inflation. The benefits don't decrease, they just become less valuable over time. I would almost always buy a regular term policy over a ...
by dhodson
Thu Mar 19, 2015 11:52 am
 
Forum: Personal Finance (Not Investing)
Topic: Suggestions and advice for term life policy
Replies: 20
Views: 1235

Re: Suggestions and advice for term life policy

Several companies offer "term" on a UL chassis. I believe they do it for different reserve requirements.

Term benefits decrease on their own just bc of inflation.
by dhodson
Thu Mar 19, 2015 11:35 am
 
Forum: Personal Finance (Not Investing)
Topic: Suggestions and advice for term life policy
Replies: 20
Views: 1235

Re: Long Term Care Insurance Premium Increase

Those actually aren't that high of increases compared to others lately.
by dhodson
Thu Mar 19, 2015 7:52 am
 
Forum: Personal Finance (Not Investing)
Topic: Long Term Care Insurance Premium Increase
Replies: 20
Views: 1449

Re: MetLife Annuity

5%-6% is pretty good these days, and I wouldn't worry too much about MetLife. See the link below for their ratings by the four major agencies. https://www.metlife.com/about/corporate-profile/ratings/index.html But in the unlikely event they did go belly-up, each state has a fund which guarantees th...
by dhodson
Wed Mar 18, 2015 9:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: MetLife Annuity
Replies: 9
Views: 1042

Re: MetLife Annuity

Where on this board have you seen people saying MetLife isn't secure? I wouldbe sure to find out exactly what is guaranteed and illustrated returns are after any fees. If it's as high as you say, then as mentioned above upfront costs are sunk and this current return could be valuable. I'd also be su...
by dhodson
Wed Mar 18, 2015 7:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: MetLife Annuity
Replies: 9
Views: 1042

Re: Recommendation for Home Office Printer

I have the same type of combo printEr but from HP

I agree once u have one of these monsters, u won't go back

I actually have a separate photo printer by canon
by dhodson
Tue Mar 17, 2015 6:15 pm
 
Forum: Personal Consumer Issues
Topic: Recommendation for Home Office Printer
Replies: 11
Views: 971

Re: Vanguard variable annuity

Not to mention also lack of tax loss harvesting

OP, you listed poor reasons. A fixed annuity is rarely recommended. There is also no mortality credits for a VA without a rider that costs
by dhodson
Mon Mar 16, 2015 9:32 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard variable annuity
Replies: 7
Views: 721

Re: Annuity -SPIA

We are nearing retirement less than 3 years maybe much sooner (currently age 62 and 55) and at some point would like to purchase a SPIA to cover our bare bones expenses since we have no pension only personal investments. Currently payout rates are dismal for joint life somewhere around 5% or less. ...
by dhodson
Mon Mar 16, 2015 7:50 am
 
Forum: Personal Finance (Not Investing)
Topic: Annuity -SPIA
Replies: 9
Views: 713

Re: Whole Life Insurance as asset protection

edge wrote:Um, the business should have been structured from the start to shield personal assets. The fact that whole life actually paid off is just a factor of luck.


And fortunately for the OP, it had enough CSV buildup when the incident occurred. Double lucky in that regard.
by dhodson
Sun Mar 15, 2015 4:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Insurance as asset protection
Replies: 40
Views: 2944

Re: Whole Life Insurance as asset protection

You need to hope you have sufficient cash within whole life before this happens so I don't find that all that helpful but maybe others would feel differently. If the policy isn't at the point that it can sustain itself then you are broke and the policy will crash since it requires ongoing premiums. ...
by dhodson
Sat Mar 14, 2015 8:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Insurance as asset protection
Replies: 40
Views: 2944

Re: Defined-Benefit Retirement Plan

Neither is necessarily better. with a traditional dB plan, the employer takes on the investment risk although plans can be amended. While it's pretty easy to say what the match is with a dc plan, with a db plan you need to convert that to what you might need to contribute on your own to get the same...
by dhodson
Fri Mar 13, 2015 8:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Defined-Benefit Retirement Plan
Replies: 11
Views: 1121

Re: Why not use inflation-adjusted SPIA?

At some point there cant be an objective analysis and we all just put in some bias. You want to eliminate the idea that people dont or shouldnt care about the return but that just isnt true for most people. They do and many frankly have to in order to have a good retirement and the options they are...
by dhodson
Fri Mar 13, 2015 11:58 am
 
Forum: Personal Finance (Not Investing)
Topic: Why not use inflation-adjusted SPIA?
Replies: 117
Views: 4748

Re: Why not use inflation-adjusted SPIA?

At some point there cant be an objective analysis and we all just put in some bias. You want to eliminate the idea that people dont or shouldnt care about the return but that just isnt true for most people. They do and many frankly have to in order to have a good retirement and the options they are ...
by dhodson
Fri Mar 13, 2015 11:08 am
 
Forum: Personal Finance (Not Investing)
Topic: Why not use inflation-adjusted SPIA?
Replies: 117
Views: 4748

Re: Why not use inflation-adjusted SPIA?

Can someone point me to the evidence that insurance companies use TIPS for SPIAs to any large extent? If you were building an insurance portfolio this is not the way that you would do it. You would build your actuarial models. You would use TIPS for the long term real required rate of return for th...
by dhodson
Thu Mar 12, 2015 7:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why not use inflation-adjusted SPIA?
Replies: 117
Views: 4748

Re: Why not use inflation-adjusted SPIA?

Might want to look at the Japan insurance experience with long term low interest rate environment.
by dhodson
Thu Mar 12, 2015 12:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why not use inflation-adjusted SPIA?
Replies: 117
Views: 4748

Re: Board certification alternative (medicine)

I seriously doubt an alternative will succeed.

Unfortunately medicine on all levels has created an unhelpful monster when it comes to education and certification

i just jump through the hoops
by dhodson
Thu Mar 12, 2015 8:00 am
 
Forum: Personal Consumer Issues
Topic: Board certification alternative (medicine)
Replies: 10
Views: 1179

Re: Why not use inflation-adjusted SPIA?

Can someone point me to the evidence that insurance companies use TIPS for SPIAs to any large extent?
by dhodson
Thu Mar 12, 2015 7:47 am
 
Forum: Personal Finance (Not Investing)
Topic: Why not use inflation-adjusted SPIA?
Replies: 117
Views: 4748

Re: Why not use inflation-adjusted SPIA?

That return includes return of principle Costs drag the return also selection bias since only healthy buy it. They actually use different tables than life insurance. Inflation ones give a much lower initial payout They are however in my opinion good for some portion around age 80 when mortality cre...
by dhodson
Wed Mar 11, 2015 9:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why not use inflation-adjusted SPIA?
Replies: 117
Views: 4748

Re: Why not use inflation-adjusted SPIA?

That return includes return of principle Costs drag the return also selection bias since only healthy buy it. They actually use different tables than life insurance. Inflation ones give a much lower initial payout They are however in my opinion good for some portion around age 80 when mortality cred...
by dhodson
Wed Mar 11, 2015 3:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why not use inflation-adjusted SPIA?
Replies: 117
Views: 4748

Re: Annuities

The federal government can print money if desired. Insurance companies can not. Those things aren't even in the same league of risk. Insurance companies have gone under and there have been instances where the state assoc did not make people whole.
by dhodson
Wed Mar 11, 2015 2:03 pm
 
Forum: Investing - Theory, News & General
Topic: Annuities
Replies: 5
Views: 763

Re: Anyone ever use a closet design company?

I've used a closet company

It is expensive and typically they recommend products which are fake wood or compressed

They finish the job vet quickly which is nice

If I had to do it again I'd do the carpenter recommendation noted above
by dhodson
Wed Mar 11, 2015 10:36 am
 
Forum: Personal Consumer Issues
Topic: Anyone ever use a closet design company?
Replies: 22
Views: 1497

Re: Suggestions and advice for term life policy

It just provides quotes then hooks you up with an agent from what you select. Quotes aren't guaranteed meaning you need underwriting to see if you will qualify for those rates. If for some reason you aren't given a rate similar to what you expect then as I mentioned earlier the agent should be able ...
by dhodson
Tue Mar 10, 2015 8:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: Suggestions and advice for term life policy
Replies: 20
Views: 1235

Re: Have I made a terrible mistake? - whole life

You wont find many agents doing that bc it decreases their commission dramatically. They will only do it if they think they can't get the sale (usually bc they are either competing against another agent or you already know about how to increase CSV). I can't even count how many times it was pitched ...
by dhodson
Tue Mar 10, 2015 8:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: Have I made a terrible mistake? - whole life
Replies: 59
Views: 7394

Re: Suggestions and advice for term tife policy

Each of us has to consider what risks we want to take but if it were me, Id consider the fact that if one of you dies that the retirement you have been saving for two now only has to support one and thus I wouldn't get additional insurance at this point (you seem to imply you have a good amount of r...
by dhodson
Tue Mar 10, 2015 9:02 am
 
Forum: Personal Finance (Not Investing)
Topic: Suggestions and advice for term life policy
Replies: 20
Views: 1235

Re: Wealthy cardholders prefer cash-back rewards

Most people actually understand what they are doing with this. The people that have a good plan to use the points, use points cards. If you don't have a good plan then all the issues mentioned above pop up. I actually do some of both but mostly cash. I have a delta gold Amex which has a yearly fee b...
by dhodson
Mon Mar 09, 2015 7:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Wealthy cardholders prefer cash-back rewards
Replies: 33
Views: 4198

Re: Private Placement Life Insurance/ TIAA-CREF

I guess you haven't noticed but each of the permanent life insurance products have been called a rich mans Roth. This isn't new. Just google it with any permanent policy name. It isn't true. Whitecoatinvestor.com did an article on it with whole life. The issues are the same. It's not about trashing ...
by dhodson
Mon Mar 09, 2015 6:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Private Placement Life Insurance/ TIAA-CREF
Replies: 11
Views: 1137
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