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Re: Help! Term Life through an Irrevocable Life Insurance Tr

If just give stuff away as I went along so I didn't go over the 10million limit over the next 20 years.
by dhodson
Thu Jul 24, 2014 1:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help! Term Life through an Irrevocable Life Insurance Trust
Replies: 5
Views: 203

Re: Cash out or 1035 exchange? Yes, another WL mistake

If u feel comfortable that u will earn >3.5% then I'd 1035 exchange as u described. Be sure to use a low cost VA.
by dhodson
Sat Jul 19, 2014 5:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Cash out or 1035 exchange? Yes, another WL mistake
Replies: 3
Views: 685

Re: Dad had a whole life policy but it sounds like term life

Also even if it had dividends, depends on what he set them to. If set to decrease premium or pay out cash etc then the death benefit would be level.
by dhodson
Fri Jul 18, 2014 5:39 am
 
Forum: Personal Finance (Not Investing)
Topic: Dad had a whole life policy but it sounds like term life?!
Replies: 25
Views: 1528

Re: Whole Life Conundrum

Everyone understands that about the 10 pay.

The reason the loan isn't taxable is bc it's from the insurance company. No loans are taxable.

Your goal shouldn't be to be paying less in taxes (for the most part). You are just creating a situation where u will have less money.
by dhodson
Thu Jul 17, 2014 12:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Conundrum
Replies: 22
Views: 1613

Re: Newbie whole life insurance policy question

BigTom wrote:The WL policy is invested iN mutual funds as well as you retire plan . They are equally at risk



I'm pretty sure the majority of the insurance company's investments are bonds/treasuries.
by dhodson
Thu Jul 17, 2014 9:33 am
 
Forum: Investing - Help with Personal Investments
Topic: Newbie whole life insurance policy question
Replies: 30
Views: 2292

Re: Whole Life Conundrum

Its true that the IRR going forward is better which is how these polices behave and why after many years of getting killed financially it actually may look reasonable to keep one. however if it were me, id put my bonds in my tax pref space and in my taxable use stocks. I can tax loss harvest, get st...
by dhodson
Thu Jul 17, 2014 8:41 am
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Conundrum
Replies: 22
Views: 1613

Re: Newbie whole life insurance policy question

Yep back door Roth way superior Did he tell you that after multiple decades that you will still have more money even during the dip then with whole life and that u don't need to sell your entire investment during a dip any way? Did he mention whole life dividends have been going down for about 2 dec...
by dhodson
Thu Jul 17, 2014 6:28 am
 
Forum: Investing - Help with Personal Investments
Topic: Newbie whole life insurance policy question
Replies: 30
Views: 2292

Re: Whole Life Conundrum

I'm not sure that is fair to him. None of us who have fallen for this obviously did enough due diligence, what difference does it make that it was 80k per year. We are talking about people who are trained to make us believe they understand what's best for us and that we should just stick to our focu...
by dhodson
Wed Jul 16, 2014 8:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Conundrum
Replies: 22
Views: 1613

Re: Whole Life Conundrum

An overfunded policy is where you have placed as much money into the policy that is allowed to just before it becomes a MEC. In this way, much more of your money goes to the "investment". Unfortunately for agents, this also has some of the lowest commission for said policy which is why the...
by dhodson
Wed Jul 16, 2014 6:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Conundrum
Replies: 22
Views: 1613

Re: Whole Life Conundrum

I would definitely fire this person if it were me. Not only did they put you into whole life which is a horrible investment, they had you pay monthly which has additional fees, and they didn't set the policy up so it would be maximum overfunded. If they had then your loss at the end of the first yea...
by dhodson
Wed Jul 16, 2014 4:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Whole Life Conundrum
Replies: 22
Views: 1613

Re: Newbie whole life insurance policy question

No need to respond to his detailed email point by point. Just keep repeating to him: "I have decided to cancel the whole life policy." I assume not paying next month will cancel your policy but there may be a more formal way to cancel too. This part is not true You need to cancel otherwis...
by dhodson
Wed Jul 16, 2014 9:08 am
 
Forum: Investing - Help with Personal Investments
Topic: Newbie whole life insurance policy question
Replies: 30
Views: 2292

Re: Any benefits of a low cost Vanguard Annuity?

You can also tax loss harvest within the taxable account and the improved liquidity.
by dhodson
Tue Jul 15, 2014 9:30 am
 
Forum: Investing - Help with Personal Investments
Topic: Any benefits of a low cost Vanguard Annuity?
Replies: 3
Views: 611

Re: Newbie whole life insurance policy question

I'd ask him why he didn't over fund this right up to the MEC level since he doesn't care about compensation and since you have no need for a permanent death benefit? I'd tell him that he is incorrect that NWM has a dividend rate 3 times the next company. I don't even think nwm currently has the high...
by dhodson
Mon Jul 14, 2014 11:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Newbie whole life insurance policy question
Replies: 30
Views: 2292

Re: Rate my insurance policy (Northwestern Whole Life)

You need to decide if you want a permanent death benefit or not. If you do then you have that. If no then you need to decide what you would otherwise do with the money. IF you were going to take the money and invest it extremely conservatively within a taxable account then at this point, its usually...
by dhodson
Mon Jul 14, 2014 9:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Rate my insurance policy (Northwestern Whole Life)
Replies: 4
Views: 634

Re: Newbie whole life insurance policy question

Even worse is that he is having you fund this monthly which incurs a high fee. It's like buying on credit card. This advisor also could have set it up such that you had almost 90% if your premiums as cash value after year 1. Of couse he didn't bc that would cut his commission. Insurance is never a g...
by dhodson
Mon Jul 14, 2014 6:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Newbie whole life insurance policy question
Replies: 30
Views: 2292

Re: BRK: What am I missing?

I say that bc there is no evidence that the companies that bh owns are any better than ones that are within index funds. One might want to believe those companies are better but no proof. By the way I own bh.
by dhodson
Mon Jul 14, 2014 2:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: BRK: What am I missing?
Replies: 40
Views: 3541

Re: BRK: What am I missing?

Good discussion regarding Berkshire Hathaway. It is one of only two stocks I own (the other being stock in the company my daughter works for). The remainder of our equity investment is primarily VTI and VXUS, except for some 401k money which is in the broadest index it offers. I do limit each indiv...
by dhodson
Mon Jul 14, 2014 1:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: BRK: What am I missing?
Replies: 40
Views: 3541

Re: Longevity Annuities

The insurance companies have already incorporated that into the pricing since the overweight smoker with bad genes doesnt buy any sort of annuity and they use such tables in their calculations for payments. Again the question becomes with these is why purchase what is in essence a deferred annuity t...
by dhodson
Sun Jul 13, 2014 1:52 pm
 
Forum: Investing - Theory, News & General
Topic: Longevity Annuities
Replies: 18
Views: 2510

Re: Longevity Annuities

Well that's just it, some of these annuities have return of premium options and that greatly reduces mortality credits. Also its known that people purchasing these are typically more likely to live longer and the insurance companies use a different life expectancy table then for life insurance. Thus...
by dhodson
Wed Jul 09, 2014 11:00 pm
 
Forum: Investing - Theory, News & General
Topic: Longevity Annuities
Replies: 18
Views: 2510

Re: Longevity Annuities

If you are concerned that the govt can't meet it's obligations then you might want to realize that insurance companies invest in treasuries as well as bonds primarily.
by dhodson
Wed Jul 09, 2014 6:45 pm
 
Forum: Investing - Theory, News & General
Topic: Longevity Annuities
Replies: 18
Views: 2510

Re: 529 plan...with parent as beneficiary?

I'm not aware of a university that does this. If he/she feels they can just claim their trip to Europe was educational and thus the 529 money then good luck. The accountant probably wont be around when he/she choses to go around on this trip.
by dhodson
Wed Jul 09, 2014 12:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: 529 plan...with parent as beneficiary?
Replies: 15
Views: 966

Re: Take the money and run? (Pension Buyout Offer)

I'd do the rollover. As people have mentioned, inflation will eat up this value over the 30 years you listed.
by dhodson
Wed Jul 09, 2014 11:01 am
 
Forum: Personal Finance (Not Investing)
Topic: Take the money and run? (Pension Buyout Offer)
Replies: 15
Views: 1997

Re: Longevity Annuities

Lots of press recently on Longevity Annuities....drawing on payments starting around 80? Seems like a crap shoot of a gamble with odds going to the insurance companies...what do the bogleheads think? It's less of a crap shoot if you wait until 80 to buy one. By then you can estimate your remaining ...
by dhodson
Wed Jul 09, 2014 9:45 am
 
Forum: Investing - Theory, News & General
Topic: Longevity Annuities
Replies: 18
Views: 2510

Re: List of Worst financial advice (what not to do):

Mixing insurance with investing.
by dhodson
Tue Jul 08, 2014 8:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: List of Worst financial advice (what not to do):
Replies: 130
Views: 14260

Re: Facing possibilities [Self-funded Long-Term Care]

How did $500,000 become "your number"?I have an aunt, age 102, who has been in various forms of assisted living/nursing for 15 years. The only way what you want to do could work is if you eventually transfer to your child or to an appropriate trust all of your assets except for enough to ...
by dhodson
Tue Jul 08, 2014 11:59 am
 
Forum: Investing - Help with Personal Investments
Topic: Facing possibilities [Self-funded Long-Term Care]
Replies: 13
Views: 914

Re: 20 Year vs 30 Year Term Life Insurance for a 35 year old

Paying yearly instead of monthly is cheaper.
by dhodson
Thu Jul 03, 2014 12:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: 20 Year vs 30 Year Term Life Insurance for a 35 year old
Replies: 14
Views: 1246

Re: Longevity Insurance now allowed in IRA/401k/etc.

These products have limited value to me compared to a regular boglehead portfolio with a spia purchased later on. The insurance company takes the money and invests it in their normal portfolio of bonds/treasuries. They have tremendous costs so the return on that part isn't great. There is also some ...
by dhodson
Tue Jul 01, 2014 8:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: Longevity Insurance now allowed in IRA/401k/etc.
Replies: 97
Views: 4749

Re: Using a variable annuity to pre-fund an SPIA

You are changing taxation of gains from long term capital gains to income so that isn't an advantage. I'd use a tax efficient index fund.
by dhodson
Tue Jul 01, 2014 11:53 am
 
Forum: Investing - Help with Personal Investments
Topic: Using a variable annuity to pre-fund an SPIA
Replies: 30
Views: 1345

Re: Figuring out the break even point to leave an annuity

Roll over

I didn't realize it was already within an IRA. If so then 1035 exchange has no value in my view.
by dhodson
Mon Jun 30, 2014 10:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Figuring out the break even point to leave an annuity
Replies: 11
Views: 745

Re: Figuring out the break even point to leave an annuity

You could also transfer to a lower costs variable annuity like the ones sold via vanguard and keep it until you recover the losses (mostly from surrender charges). Once you return to cost basis, id get out of the vanguard annuity.
by dhodson
Mon Jun 30, 2014 1:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Figuring out the break even point to leave an annuity
Replies: 11
Views: 745

Re: Help choosing DI policy

You actually seem to have a good understanding of the differences. It really would be personally decision and not that one is really a good or bad deal. Individual DI is expensive if its a decent policy and that's just the way it is. If it were me id be fine with principal but that's bc I'm okay wit...
by dhodson
Mon Jun 30, 2014 9:00 am
 
Forum: Personal Finance (Not Investing)
Topic: Help choosing DI policy
Replies: 3
Views: 380

Re: Paid off home as LTC Insurance?

As long as you or other family members are not overly attached to the home and feel comfortable that you could sell the home within a reasonable time period at a price that is acceptable to you then the home is just another pot of money. You can use this pot for whatever......additional vacations, n...
by dhodson
Sun Jun 29, 2014 11:09 am
 
Forum: Personal Finance (Not Investing)
Topic: Paid off home as LTC Insurance?
Replies: 38
Views: 2003

Re: NY Times: Not enough younger investment advisors

I'm not sure this is a problem. It has to be tough though. There doesn't appear to be an easy method for advisors to add value and make a lot of money.
by dhodson
Tue Jun 24, 2014 10:50 pm
 
Forum: Investing - Theory, News & General
Topic: NY Times: Not enough younger investment advisors
Replies: 72
Views: 7269

Re: Barron's top 50 annuities

I searched the article text for words like inflation and purchasing power and got zero hits. Perhaps I missed it, but IMO any article about annuities that doesn't even once mention the word inflation is journalistic malpractice. Longevity insurance is a great idea, but only if you can distill it ou...
by dhodson
Sun Jun 22, 2014 9:44 am
 
Forum: Investing - Theory, News & General
Topic: Barron's top 50 annuities
Replies: 13
Views: 1919

Re: MILITARY SBP AND OTHER MISTAKES...

whether or not you should stick your friend out for your friend is a tough decision. Lots of people say dont discuss finances since it will ruin the friendship and others say if you care then you stick your neck out and take your chances. In regards to concerns about the govt, if the govt cant make ...
by dhodson
Sun Jun 22, 2014 9:41 am
 
Forum: Personal Finance (Not Investing)
Topic: Military [Survivor Benefit Plan] and Other Mistakes
Replies: 22
Views: 1315

Re: Should I be worried long term disability insurance won't

I'm not sure what type of rider you think is applicable. If you are thinking that disability begins with diagnosis of the condition then that isn't the case. For instance lets say you have serious cancer. If you are still working then you get nothing even though you have a serious diagnosis that cou...
by dhodson
Tue Jun 17, 2014 11:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should I be worried long term disability insurance won't pay
Replies: 12
Views: 1158

Re: Should I be worried long term disability insurance won't

Payment is based upon income at the time of disability meaning if you are taking a long break from work then you are likely to have difficulties. I do not work in the insurance industry but this is my understanding from my own research/policy.
by dhodson
Tue Jun 17, 2014 10:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should I be worried long term disability insurance won't pay
Replies: 12
Views: 1158

Re: Term 80 Life Insurance

This is a new thread since the comments coming back on the thread I commented on today are more related to the OP rather than my follow up question. I've got a Term 80 policy with Northwestern Mutual (preferred health status, or whatever the highest level is called). I do not intend on keeping it u...
by dhodson
Tue Jun 17, 2014 4:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Term 80 Life Insurance
Replies: 1
Views: 193

Re: Yet another WL keep or ditch thread (sorry...)

The person who talked me into my WL policy also said to look at it as the "bond" part of my portfolio. This is not at all the same thing as you have all of your money at one company. What happens if that company gets into financial hardship or goes bankrupt? It is like having company stoc...
by dhodson
Tue Jun 17, 2014 1:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: Yet another Whole Life keep or ditch thread (sorry...)
Replies: 12
Views: 729

Re: Yet another Whole Life keep or ditch thread (sorry...)

Changing to reduced paid up will be an extremely small fraction. I doubt that's worth doing. That's usually something people consider after they get about 2 decades in and don't want to pay further. At this point, I can't see why it would be better than even surrendering (although I probably favor 1...
by dhodson
Tue Jun 17, 2014 1:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Yet another Whole Life keep or ditch thread (sorry...)
Replies: 12
Views: 729

Re: Yet another WL keep or ditch thread (sorry...)

Not only did he sell u a big whole life policy, he didn't even over fund it just to make the most he could off of you. Could you elaborate or explain this a bit more? Are you saying the agent makes more if it's not overfunded? And what exactly do you mean by overfunded? (He did encourage me to put ...
by dhodson
Tue Jun 17, 2014 11:15 am
 
Forum: Personal Finance (Not Investing)
Topic: Yet another Whole Life keep or ditch thread (sorry...)
Replies: 12
Views: 729

Re: Yet another WL keep or ditch thread (sorry...)

As physicians we need to do a better job of educating each other to avoid whole life and the other financial traps.
by dhodson
Tue Jun 17, 2014 10:46 am
 
Forum: Personal Finance (Not Investing)
Topic: Yet another Whole Life keep or ditch thread (sorry...)
Replies: 12
Views: 729

Re: Yet another WL keep or ditch thread (sorry...)

As you know many of us physicians have made this mistake. Be sure to get term from a different agent and I would never refer a friend to this person. Not only did he sell u a big whole life policy, he didn't even over fund it just to make the most he could off of you. They are hoping you are willing...
by dhodson
Tue Jun 17, 2014 10:25 am
 
Forum: Personal Finance (Not Investing)
Topic: Yet another Whole Life keep or ditch thread (sorry...)
Replies: 12
Views: 729

Re: Advice re: Fixed Annuity Contract

Doesn't seem like a lot of money to worry about one way or the other. Remember penalty and tax is on gains so you should look at what the cost basis is. I'd do one of two things if I were you (by the way I'm not in the finance or insurance industry), 1. 1035 exchange into a vanguard variable annuity...
by dhodson
Mon Jun 16, 2014 6:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Advice re: Fixed Annuity Contract
Replies: 7
Views: 403

Re: Child Life Insurance

I disagree with your statement that MOST parents cannot afford final expenses in the sad event that a child passes away. Not in the US, not in 2014... Then you are completely out of touch with the financial situation of most parents. Most parents have less than $1,000 in liquid savings, do not have...
by dhodson
Tue Jun 10, 2014 1:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Child Life Insurance
Replies: 29
Views: 1105

Re: Child Life Insurance

If they need life insurance later in life, they will certainly be able to get it. Sadly, some of us do develop health conditions in childhood that make us largely uninsurable. That said, I don't think a whole life policy is generally a good idea, the costs are simply too high for what you get. Even...
by dhodson
Tue Jun 10, 2014 1:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Child Life Insurance
Replies: 29
Views: 1105

Re: Insurance trust and other strategies to protect an estat

Hopefully he isn't promoting buying insurance products within the defined benefit plan. You might want to understand that since the benefit is defined, a higher contribution isn't necessarily what one wants.
by dhodson
Tue Jun 10, 2014 12:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Insurance trust and other strategies to protect an estate?
Replies: 8
Views: 464
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