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by dhodson
Fri May 22, 2015 8:11 am
Forum: Personal Finance (Not Investing)
Topic: Whole life or term life?
Replies: 20
Views: 1041

Re: Whole life or term life?

The answer is neither. This is one of the situations where a permanent policy makes sense, simply because of his age, and because he has a young child to support. A whole life policy is a money pit for this use but his eligibility for term is likely to run out in the future. What comes to mind is a...
by dhodson
Fri May 22, 2015 7:05 am
Forum: Personal Finance (Not Investing)
Topic: Whole life or term life?
Replies: 20
Views: 1041

Re: Whole life or term life?

The answer is neither. This is one of the situations where a permanent policy makes sense, simply because of his age, and because he has a young child to support. A whole life policy is a money pit for this use but his eligibility for term is likely to run out in the future. What comes to mind is a...
by dhodson
Thu May 21, 2015 7:08 pm
Forum: Personal Finance (Not Investing)
Topic: Whole life or term life?
Replies: 20
Views: 1041

Re: Whole life or term life?

With permanent insurance you are ALWAYS paying the insurance plus the investment piece. There is no special deal. They invest primarily in bonds but have huge fees/commissions which drag the return. The insurance piece is also more expensive (just check the term rates for the company selling the who...
by dhodson
Mon May 18, 2015 3:18 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 41
Views: 3291

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

... Roughly 1/3 of people surrender very early on and get almost nothing back which greatly helps the insurance company. These contracts are front loaded to the extreme. Another 1/3 surrender before they even break even especially when you consider inflation. A small percentage keep it long enough ...
by dhodson
Sun May 17, 2015 7:45 pm
Forum: Investing - Help with Personal Investments
Topic: Surrender annuities and take penatly better than sitting it out?
Replies: 14
Views: 986

Re: Surrender annuities and take penatly better than sitting it out?

The problem with that mentality is that it assumes you can guess when a correction has occurred. Market timing isnt as easy as it sounds. If it drops 10% and then you take out the money only for it to drop another 10%, you will be mad and find yourself 2nd guessing the timing of it and your actions ...
by dhodson
Sun May 17, 2015 10:20 am
Forum: Personal Consumer Issues
Topic: MDs--Academics or Private Practice?
Replies: 25
Views: 2205

Re: MDs--Academics or Private Practice?

im not sure i agree with the pros/cons exactly. It depends on your field and location.

for instance not all private practice opportunities involve partnership or allow you to be the boss. In my field, pretty much private also starts above academic in regards to pay.
by dhodson
Sun May 17, 2015 8:14 am
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 41
Views: 3291

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

Lapse rates for LTCi were actually lower than permanent insurance which is why they caused a problem. They had to pay out more benefits then they anticipated. One has to realize that these products have been around for over 100 years but they mostly lapse. Thats going to continue or as mentioned abo...
by dhodson
Sat May 16, 2015 9:26 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 41
Views: 3291

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

That's less than 20% of people who purchase whole life.


If lapse rates decreased whole life returns would plummet.

Assuming the average non boglehead will pay those high fees but some how not be in the majority who lapse seems questionable at best.
by dhodson
Sat May 16, 2015 4:05 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 41
Views: 3291

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

Nor does it consider the facts that over 80% of people who buy permanent life insurance surrender it. "Bond like" returns only occur/illustrated with that continuing.
by dhodson
Sat May 16, 2015 1:42 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 41
Views: 3291

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

is this the one where the assumptions include paying an advisor 0.75% and the average ER 0.84%?
Wasnt the work also sponsored by the insurance industry?

Maybe im being harsh but im not sure im going to spend much additional time on that...
by dhodson
Fri May 15, 2015 9:47 pm
Forum: Investing - Help with Personal Investments
Topic: Surrender annuities and take penatly better than sitting it out?
Replies: 14
Views: 986

Re: Surrender annuities and take penatly better than sitting it out?

Obviously you arent in a good situation and i know what this is like. By the way, i do not in the insurance of finance fields, just another poster here on this site. If you can remove 10% without penalties then this seems like a no brainer. Doing that also buys you some time to think. While i person...
by dhodson
Wed May 13, 2015 11:03 pm
Forum: Personal Consumer Issues
Topic: Home Internet - Cat 5e or Cat 6
Replies: 49
Views: 3090

Re: Home Internet - Cat 5e or Cat 6

Id try to provide them the cat6 cable
by dhodson
Wed May 13, 2015 12:07 pm
Forum: Investing - Help with Personal Investments
Topic: Annuity with UBS!!!
Replies: 20
Views: 1993

Re: Annuity with UBS!!!

I sent an email today asking the following questions: 1. what "guarantees" is he referring to? 2. what are the fees? 3. is the annuity qualified or non qualified? 4. why did we put IRA money in an annuity? 5. what is the surrender schedule and exact walk away value in 2017? I received a v...
by dhodson
Tue May 12, 2015 12:14 pm
Forum: Personal Finance (Not Investing)
Topic: Whole Life Insurance 'Gift' from Parents
Replies: 60
Views: 4911

Re: Whole Life Insurance 'Gift' from Parents

All premiums paid forms your basis. Any gains over premiums paid will be taxed as income to you.

Use a site such as term4sale (there are others). This gives you an idea what you could qualify for. I'd be happy with any A rated company personally. I would not over pay for a higher level of A.
by dhodson
Mon May 11, 2015 8:31 pm
Forum: Investing - Help with Personal Investments
Topic: Annuity with UBS!!!
Replies: 20
Views: 1993

Re: Annuity with UBS!!!

I'm going to assume this money is not within a IRA (individual retirement account). I'd ask what the exact walk away value is for 2017. Sometimes the account value they are talking to you about isn't the true walk away value but a shadow account value that only applies if you either annuitize or act...
by dhodson
Sun May 10, 2015 7:35 pm
Forum: Personal Finance (Not Investing)
Topic: $25K Whole Life policy for daughter - $130/year - keep it?
Replies: 10
Views: 1201

Re: $25K Whole Life policy for daughter - $130/year - keep it?

Whole life insurance like this is a terrible deal, because it's drawn out in payments and only paid off when she's 98(!). It's not a rare deal - it's a raw deal. A policy paid up at age 98 is basically a lifetime $130 per year gamble on your daughter dying that year. It's only a good deal if we hav...
by dhodson
Sun May 10, 2015 5:21 pm
Forum: Personal Finance (Not Investing)
Topic: $25K Whole Life policy for daughter - $130/year - keep it?
Replies: 10
Views: 1201

Re: $25K Whole Life policy for daughter - $130/year - keep it?

if you want to evaluate it then what you do is request an inforce illustration from the company looking at both the guaranteed and illustrated columns. Likely it will perform in between there over time. These are horrible purchases. With that said, occasionally you can make some sense of keeping it ...
by dhodson
Sun May 10, 2015 8:04 am
Forum: Personal Finance (Not Investing)
Topic: Vanguard Variable Annuity
Replies: 24
Views: 1996

Re: Vanguard Variable Annuity

My apologies as I misspoke. The estate would not have had to pay any estate or income taxes but income taxes would need to be paid on the accumulated gains thereby reducing the net amount to the beneficiaries of the annuities. It is true that the value of the annuities would be included in the dece...
by dhodson
Sun May 10, 2015 8:01 am
Forum: Personal Finance (Not Investing)
Topic: Vanguard Variable Annuity
Replies: 24
Views: 1996

Re: Vanguard Variable Annuity

I bought my financially-illiterate and disinterested spouse one years ago, and neither know nor care how it compares with everything else as an investment. The point was to tax-shelter some cash years ago and mostly to diversify late-life financial assets. The plan has always been that if I disappe...
by dhodson
Sat May 09, 2015 9:08 pm
Forum: Personal Finance (Not Investing)
Topic: Vanguard Variable Annuity
Replies: 24
Views: 1996

Re: Vanguard Variable Annuity

mindboggling, You may want to consider this scenario if have no income need coming from the annuity and you want to pass it on to heirs. You could exchange it for a SPIA and use a portion of the income to pay the premium for life insurance. The other portion would be used to pay any income taxes ow...
by dhodson
Wed May 06, 2015 2:32 pm
Forum: Personal Consumer Issues
Topic: Viatical Settlement For Life Insurance Policy
Replies: 4
Views: 405

Re: Viatical Settlement For Life Insurance Policy

I don't have any personal experience doing this but did look into it very briefly for a policy I unfortunately purchased and I find it questionable. Its typically for cash value life insurance and what they do is offer the person slightly more than the cash surrender value. They typically are only i...
by dhodson
Wed May 06, 2015 9:44 am
Forum: Personal Finance (Not Investing)
Topic: Military SBP--Delicate Situation [also bad VUL]
Replies: 11
Views: 1097

Re: Military SBP--Delicate Situation [also bad VUL]

This is likely a situation where getting someone like James Hunt to evaluate the policy for I think he charges 100 buck would be a good idea. Keep in mind with any UL, the cost of insurance rises with age. The only way to make this work at all is to keep it in force until death. Taking loans has cos...
by dhodson
Sat May 02, 2015 10:24 pm
Forum: Investing - Theory, News & General
Topic: Annuities: Bad in principle or practice?
Replies: 75
Views: 4181

Re: Annuities: Bad in principle or practice?

The state doesn't actually back these. The association tries to get other companies to make you whole up to the limits. This understates the protection, at least in Md. The state requires membership in the mutual assessment pool to write policys in the state. All companies are subject to pro rata a...
by dhodson
Sat May 02, 2015 1:21 pm
Forum: Investing - Theory, News & General
Topic: Annuities: Bad in principle or practice?
Replies: 75
Views: 4181

Re: Annuities: Bad in principle or practice?

The state doesn't actually back these. The association tries to get other companies to make you whole up to the limits.
by dhodson
Sat May 02, 2015 7:14 am
Forum: Investing - Theory, News & General
Topic: Annuities: Bad in principle or practice?
Replies: 75
Views: 4181

Re: Annuities: Bad in principle or practice?

Both Even if you found a "good one", you are trading long term capital gains to income, no ability to tax loss harvest, increased costs even if not terrible, lack of liquidity, and no step up basis at death. apples and oranges. Annuities provide for consumption over a lifetime. your examp...
by dhodson
Fri May 01, 2015 11:20 pm
Forum: Investing - Theory, News & General
Topic: Annuities: Bad in principle or practice?
Replies: 75
Views: 4181

Re: Annuities: Bad in principle or practice?

While true, u mentioned VAs and index ones. What I said remains. Additional riders are mentioned by some but they are costly for what they offer.
by dhodson
Fri May 01, 2015 11:13 pm
Forum: Investing - Theory, News & General
Topic: Annuities: Bad in principle or practice?
Replies: 75
Views: 4181

Re: Annuities: Bad in principle or practice?

Both

Even if you found a "good one", you are trading long term capital gains to income, no ability to tax loss harvest, increased costs even if not terrible, lack of liquidity, and no step up basis at death.
by dhodson
Wed Apr 29, 2015 8:44 am
Forum: Investing - Help with Personal Investments
Topic: Help with Wife's VUL
Replies: 3
Views: 432

Re: Help with Wife's VUL

The cost of insurance within a VUL rises over time so considering the performance so far and the apparent lack of need or desire for a permanent death benefit then after being sure I had all the term in place I wanted/needed, id surrender this thing. As mentioned above, if the surrender charges will...
by dhodson
Tue Apr 28, 2015 5:35 pm
Forum: Personal Finance (Not Investing)
Topic: Physician Own Occ Disability Insurance
Replies: 20
Views: 1443

Re: Physician Own Occ Disability Insurance

I think you made the right call about non can personally.
by dhodson
Tue Apr 28, 2015 5:32 pm
Forum: Personal Consumer Issues
Topic: Freshly roasted coffee beans
Replies: 29
Views: 1917

Re: Freshly roasted coffee beans

How about for espresso beans?
by dhodson
Tue Apr 28, 2015 5:18 pm
Forum: Personal Finance (Not Investing)
Topic: Which SPIA ?
Replies: 20
Views: 1810

Re: Which SPIA ?

That's over stating it. Wether or not the event will happen isn't completely random. Most people have a period of declining health. They have a decent idea that they might die at 75 or 76 and thus they start drawing more.
by dhodson
Tue Apr 28, 2015 3:01 pm
Forum: Personal Finance (Not Investing)
Topic: Which SPIA ?
Replies: 20
Views: 1810

Re: Which SPIA ?

SPIA Annuities is NOT an investment. You are buying an INSURANCE product. I like to consider them an income stream.... Yeah, it technically is insurance against living for a long time, but a SPIA is very different from most insurance that you buy. They are very simple... Give an insurance company a...
by dhodson
Tue Apr 28, 2015 12:56 pm
Forum: Personal Finance (Not Investing)
Topic: Which SPIA ?
Replies: 20
Views: 1810

Re: Which SPIA ?

I read that people who are in not so good health are grouped along with people in good health,( predictably collecting the money for a longer time), when the Annuity/Insurance companies calculate their payments, foreseeing their company benefits. Thus people who predictably have a shorter life span...
by dhodson
Tue Apr 28, 2015 12:54 pm
Forum: Personal Finance (Not Investing)
Topic: Physician Own Occ Disability Insurance
Replies: 20
Views: 1443

Re: Physician Own Occ Disability Insurance

Read the disability articles at whitecoatinvestor.com I'd be fine personally with any of the own occ companies. Typically fewer words is better but the truth is that you wont be able to find real data to confirm that one own occ is better than another. The real key is not to allow any of these agent...
by dhodson
Mon Apr 27, 2015 9:43 pm
Forum: Personal Finance (Not Investing)
Topic: Which SPIA ?
Replies: 20
Views: 1810

Re: Which SPIA ?

Genworth had a high comdex until recently. The ratings don't predict distant future that well. Keep in mind the association tries to tax other companies still in operation or transfer the policy to a solvent company up to the limits to make you whole. They do not use state or fed money to back the p...
by dhodson
Sun Apr 26, 2015 7:41 am
Forum: Personal Finance (Not Investing)
Topic: Help with VAL policy, UTMA accounts, and EE/E Savings Bonds
Replies: 10
Views: 871

Re: Help with VAL policy, UTMA accounts, and EE/E Savings Bo

For the life insurance policy, id request an in force illustration. Id also compare the current surrender value to basis. if close then id just surrender the thing assuming you dont want to keep it until death (looking at the illustration may provide some guidance on that). If you surrender and have...
by dhodson
Sat Apr 25, 2015 10:11 am
Forum: Investing - Help with Personal Investments
Topic: LTC premiums vs. Self-Insure resources
Replies: 3
Views: 420

Re: LTC premiums vs. Self-Insure resources

additionally long term care insurance doesnt guarantee the premium so you would also have to guess when and by how much premiums will rise. There are very few limited pay polices at this time.
by dhodson
Sat Apr 25, 2015 7:48 am
Forum: Personal Finance (Not Investing)
Topic: Taxes are killing me
Replies: 21
Views: 2924

Re: Taxes are killing me

My radar goes up when a first time poster talks about tax avoidance.
by dhodson
Fri Apr 24, 2015 3:03 pm
Forum: Personal Finance (Not Investing)
Topic: 2 million dollar mistake meeting with MIL's financial guy
Replies: 23
Views: 5198

Re: 2 million dollar mistake meeting with MIL's financial gu

Thank you everyone for the replies. Quick follow up to some points - I have been refusing to meet with the guy for years. He contacted my wife and she agreed to it. We have 2 little kids and about 7 million in 10/20/30 year term policies to meet our life insurance needs. He came to our house and we...
by dhodson
Thu Apr 23, 2015 12:54 pm
Forum: Investing - Help with Personal Investments
Topic: Self insuring for catastrophic risk in retirement.
Replies: 14
Views: 1901

Re: Self insuring for catastrophic risk in retirement.

The ones I've seen use your money first. There is no free lunch.
by dhodson
Thu Apr 23, 2015 9:59 am
Forum: Personal Finance (Not Investing)
Topic: life and disability insurance question
Replies: 3
Views: 359

Re: life and disability insurance question

Paying monthly has additional charges most of the time. As long as you are sticking with term, you should be fine for life insurance.
by dhodson
Tue Apr 21, 2015 1:13 pm
Forum: Investing - Help with Personal Investments
Topic: Semi forced retirement - SPIA ?
Replies: 26
Views: 1376

Re: Semi forced retirement - SPIA ?

I'd spend down the 2 million and delay SS to age 70.
by dhodson
Mon Apr 20, 2015 8:07 am
Forum: Investing - Theory, News & General
Topic: What Guaranteed Return Would You Require to Move All Assets
Replies: 54
Views: 3387

Re: What Guaranteed Return Would You Require to Move All Ass

Doesn't matter, wouldn't do it regardless of what was "guaranteed". If the number is too high then there isn't any way for whomever or whatever to really make good on the promise. There is no magic in this world. I can pretty much always invest better on my own bc of costs. If I am looking...
by dhodson
Mon Apr 20, 2015 7:51 am
Forum: Personal Finance (Not Investing)
Topic: Trying to Help Parents - No EOI Life Insurance?
Replies: 22
Views: 1581

Re: Trying to Help Parents - No EOI Life Insurance?

You need to look at the in force illustrations

Likely the WL will have cash values increasing more than premiums at this point. It maybe a reasonable return on his money at this point. Horrible to purchase WL but once its in place a long time, the return going forward can be "ok".
by dhodson
Sun Apr 19, 2015 12:06 pm
Forum: Personal Finance (Not Investing)
Topic: Trying to Help Parents - No EOI Life Insurance?
Replies: 22
Views: 1581

Re: Trying to Help Parents - No EOI Life Insurance?

im not seeing why he needs any term insurance unless there are items you have not mentioned. I also am not sure it is correct to cancel those old permanent polices. They are horrible purchases but maybe useful at this point. The upfront costs are sunk Id request in force illustrations on both. The W...
by dhodson
Sat Apr 18, 2015 8:57 pm
Forum: Personal Consumer Issues
Topic: New HVAC
Replies: 21
Views: 1555

Re: New HVAC

I'd take a practical approach to your electricity bill. Is it high? If you have lived in the area a while, you should have some idea on this or try to compare to neighbor with similar house but newer unit. Hard to guarantee how long a new unit would last so don't assume another 20 years for the inve...
by dhodson
Sat Apr 18, 2015 8:48 pm
Forum: Investing - Help with Personal Investments
Topic: what to do about variable annuities?
Replies: 16
Views: 1620

Re: what to do about variable annuities?

You should ask if there are any income riders are present or other guarantees besides the death benefit. If none then ask to see the annuitization schedule to see if it's very favorable compared to options available today. She has paid heavily if there isn't anything.
by dhodson
Sat Apr 18, 2015 6:08 pm
Forum: Investing - Help with Personal Investments
Topic: what to do about variable annuities?
Replies: 16
Views: 1620

Re: what to do about variable annuities?

I think you will find that the majority of customer service is geared to selling.

Most of the advantages discussed above would likely be riders. Are there any riders on this annuity?
by dhodson
Sat Apr 18, 2015 1:29 pm
Forum: Personal Finance (Not Investing)
Topic: Trying to Help Parents - No EOI Life Insurance?
Replies: 22
Views: 1581

Re: Trying to Help Parents - No EOI Life Insurance?

Sorry for your difficulties.

As mentioned,check to see if existing policy can be added to without evidence of insurability.

There is no magic in this world. Insurance companies price LI to make money. They just can't offer deals where they are sure to lose.
by dhodson
Fri Apr 17, 2015 1:08 pm
Forum: Personal Finance (Not Investing)
Topic: Life Insurance Taxable
Replies: 1
Views: 294

Re: Life Insurance Taxable

Death benefits are income tax free. Estate taxes both federal and state could apply depending on amount.

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