Transamerica Life insurance/investments

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dodgersummer
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Transamerica Life insurance/investments

Post by dodgersummer » Mon Jan 29, 2018 2:21 am

Does anybody have an opinion on Transamerica Life insurance and investments? One of there salesman gave me an hour or so pitch on Investing money with them. From what i understand, money each month would go partially to whole life insurance and partially to investments with a floor of 1% and a ceiling of 15% every year. The salesman said that during any year where stocks go down, i am guaranteed a 1 percent gain. During good years when stocks have positive returns, i will gain the stock returns up to 15 percent. There is a 15 year "surrender" where i need to leave the money in for at least 15 years or i would have to pay a 3 to 4 percent penalty for early withdrawal. After 15 year this money would be pulled out tax free. He said the gains in these investments average between 9 to 15 percent a year. The money that goes to the whole life insurance would be paid out to beneficiaries upon my death. The salesman suggested i keep contributing to my Roth IRA but replace contributions from my 457b with contributions to their life insurance and investment plans due to me getting no match on my 457b plan. Any thoughts on this? Thanks.

mrpotatoheadsays
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Re: Transamerica Life insurance/investments

Post by mrpotatoheadsays » Mon Jan 29, 2018 3:21 am

Run!

NEVER invest with an insurance company.

Cigarman
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Re: Transamerica Life insurance/investments

Post by Cigarman » Mon Jan 29, 2018 6:42 am

Ask him...

1. Percent commission he is getting.
2. How much they are matching your contribution.

In your post you say "the salesman said..." multiple times. That should be enough to make you wary. Sales is about getting paid, not helping people.

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djpeteski
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Re: Transamerica Life insurance/investments

Post by djpeteski » Mon Jan 29, 2018 7:16 am

mrpotatoheadsays wrote:
Mon Jan 29, 2018 3:21 am
Run!

NEVER invest with an insurance company.
+100 This person should be dead to you (at least as far as finances). Never talk to them about money again.

Or sign up with them, and in 5-10 years have a lot of regret. Your choice.

Jack FFR1846
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Re: Transamerica Life insurance/investments

Post by Jack FFR1846 » Mon Jan 29, 2018 7:25 am

Do you think this clown was giving you the hard sell for an hour because he was getting paid zero? No, he was selling you the fabric treatment, the paint sealant, the undercoating and the aftermarket extended warranty.

If you want insurance, then buy term insurance.
If you want to invest, then invest.

In both of those cases, if you change your mind in 5 years, do they fine you tens of thousands of dollars? No, they don't. Does this Transamerica scheme? Yup, it sure does.
Bogle: Smart Beta is stupid

Grt2bOutdoors
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Re: Transamerica Life insurance/investments

Post by Grt2bOutdoors » Mon Jan 29, 2018 7:30 am

457 dollars are more valuable than whole life. Why would you consider giving up $2 or more dollars in exchange for $0.50 cents? RUN!!!!
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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T-Wrench
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Re: Transamerica Life insurance/investments

Post by T-Wrench » Mon Jan 29, 2018 11:56 am

Had TransAmerica through a workplace plan. Only used their mutual funds, never their life insurance.
mrpotatoheadsays wrote:
Mon Jan 29, 2018 3:21 am
Run!

NEVER invest with an insurance company.
+1. In addition to having terrible products (as far as the mutual funds went), they had a bad habit of 'resetting' my AA into their guaranteed pooled fund (4%). Because of that habit, I saw very little growth the entire time that I held them (and never figured out what the 'reset' trigger was). As soon as I had the option, I rolled the money over into a better plan.

If you decide you're going to invest with them, read the fine print.

NotWhoYouThink
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Re: Transamerica Life insurance/investments

Post by NotWhoYouThink » Mon Jan 29, 2018 12:12 pm

The Geniuses at the Apple Store will sell you Apple products. Car salesmen will sell you a car. Furniture salesmen will sell you furniture. And an insurance guy will sell you insurance. Decide whether you want to buy any of these things before you talk to a sales rep.

You may or may not need term insurance, depending on whether anyone depends on your income and would be left in a difficult financial situation if you were to die. You almost certainly do not need any other kind of life insurance, so don't sit down with a sales rep and discuss it.

Insurance is one thing, investments are another. If you don't go to the Apple Store to research cars, then don't go to an insurance agent to research investments. Actually, don't go to any sales rep to research investments. This site is the best place I've found on researching investments. The wiki is full of good information, and whatever arcane question you may have there are a few posters who can and will answer it.

So did you have a question about investments?

itstoomuch
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Re: Transamerica Life insurance/investments

Post by itstoomuch » Mon Jan 29, 2018 12:13 pm

Something this complicated one needs to be absolutely sure on how this works and how it may work or not work for you. :?:

We have complicated annuities. We saw many many presentations from the company that we eventually used and from their competitors. We asked a lot of questions. We did not make a immediate purchase. We also have a few rentals which and each rental had to make their physical/location mark, spreadsheet numbers and fit into our goal model.

Buying LI with an "Investment" component is generally a bad idea. Not always, but most of the time. Because the purchaser can typically buy each component cheaper and with more flexibility than buying the packaged LI + Investment. IOW, "Buy Term and Invest the Difference", ALWilliams.

YMMV
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

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Mel Lindauer
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Re: Transamerica Life insurance/investments

Post by Mel Lindauer » Mon Jan 29, 2018 12:15 pm

Don't mix investing and insurance. This salesman is looking out for his best interest (a nice fat commission) and not yours. As others have said, RUN, DON'T WALK.
Best Regards - Mel | | Semper Fi

Nate79
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Re: Transamerica Life insurance/investments

Post by Nate79 » Mon Jan 29, 2018 1:09 pm

It's just scary the junk that spews from the mouth of these slimey WL and other cash value insurance products. Trying to convince people to not contribute to retirement accounts but put money in their junky insurance products?

John Laurens
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Re: Transamerica Life insurance/investments

Post by John Laurens » Mon Jan 29, 2018 1:23 pm

If it averages 9-15%, just have them guarantee 9% every year and give the excess to them. They should be happy with that deal, right? They won’t take it. That’s how you will know they are lying to you. I’ve never met a financial salesman, I mean advisor that would put their claims in writing.

Regards,
John

Benton Bair
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Re: Transamerica Life insurance/investments

Post by Benton Bair » Mon Jan 29, 2018 1:40 pm

Mel Lindauer wrote:
Mon Jan 29, 2018 12:15 pm
Don't mix investing and insurance. This salesman is looking out for his best interest (a nice fat commission) and not yours. As others have said, RUN, DON'T WALK.
Mel:

If an agent sells me a 30 year level premium term insurance policy and I decide to cancel in the 14th year, will I receive the excess reserve (cash value) the company was required by law to set aside? If it chooses not to, why is that allowed?

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Mel Lindauer
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Re: Transamerica Life insurance/investments

Post by Mel Lindauer » Mon Jan 29, 2018 5:06 pm

Benton Bair wrote:
Mon Jan 29, 2018 1:40 pm
Mel Lindauer wrote:
Mon Jan 29, 2018 12:15 pm
Don't mix investing and insurance. This salesman is looking out for his best interest (a nice fat commission) and not yours. As others have said, RUN, DON'T WALK.
Mel:

If an agent sells me a 30 year level premium term insurance policy and I decide to cancel in the 14th year, will I receive the excess reserve (cash value) the company was required by law to set aside? If it chooses not to, why is that allowed?
Why are you asking an insurance question when nearly all of your posts seem to indicate that you're an insurance "insider" who already knows the answer?
Best Regards - Mel | | Semper Fi

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DaftInvestor
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Re: Transamerica Life insurance/investments

Post by DaftInvestor » Mon Jan 29, 2018 5:12 pm

If you need insurance buy term-life.
If you want to invest do that separately.
If you were to run the numbers (comparing a REAL term life policy at a good price and REAL investment returns of the excess you would have to pay for whole life) to a whole-life policy - the former wins every time (due to the high costs and commissions associated with the latter).

Benton Bair
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Re: Transamerica Life insurance/investments

Post by Benton Bair » Mon Jan 29, 2018 5:54 pm

DaftInvestor wrote:
Mon Jan 29, 2018 5:12 pm
If you need insurance buy term-life.
If you want to invest do that separately.
If you were to run the numbers (comparing a REAL term life policy at a good price and REAL investment returns of the excess you would have to pay for whole life) to a whole-life policy - the former wins every time (due to the high costs and commissions associated with the latter).
What is your understanding of a REAL term life insurance policy?


ART and 5 year level priced policies are in short supply leaving mostly 10 and 20 years available. 30 year term was discontinued by the majority of companies because they considered reserving regulations to onerous. The industry added features like living benefits, chronic care and critical care yet few people even mention the major advantages these features add. Contracts with level premiums for in between number of years or much longer periods like 45, 55 and 70 years are available but not discussed.

Why not ask a company of your choosing how much they might offer in your circumstance. You can be assured they will never over insure you. That might be the one and only time coverage will be available at standard rates. What ever amount is purchased you view it as decreasing insurance because inflation will reduce the purchasing power, Buy a million now and 30 years from now it might be worth $400k after 3% inflation. $400K isn't much now but some how it'll work 30+ years from now. Since everyone will be FI you can go bare. That's not what's happening in the real world out there.

Benton Bair
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Re: Transamerica Life insurance/investments

Post by Benton Bair » Mon Jan 29, 2018 6:06 pm

Mel Lindauer wrote:
Mon Jan 29, 2018 5:06 pm
Benton Bair wrote:
Mon Jan 29, 2018 1:40 pm
Mel Lindauer wrote:
Mon Jan 29, 2018 12:15 pm
Don't mix investing and insurance. This salesman is looking out for his best interest (a nice fat commission) and not yours. As others have said, RUN, DON'T WALK.
Mel:

If an agent sells me a 30 year level premium term insurance policy and I decide to cancel in the 14th year, will I receive the excess reserve (cash value) the company was required by law to set aside? If it chooses not to, why is that allowed?
Why are you asking an insurance question when nearly all of your posts seem to indicate that you're an insurance "insider" who already knows the answer?

I thought you might comment for the benefit of most people here that have much less understanding than you do. You could've accomplished the same in as little space as suggesting I already now the answer. Most recognize you and my name isn't Mel.

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DaftInvestor
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Re: Transamerica Life insurance/investments

Post by DaftInvestor » Mon Jan 29, 2018 6:06 pm

Benton Bair wrote:
Mon Jan 29, 2018 5:54 pm
DaftInvestor wrote:
Mon Jan 29, 2018 5:12 pm
If you need insurance buy term-life.
If you want to invest do that separately.
If you were to run the numbers (comparing a REAL term life policy at a good price and REAL investment returns of the excess you would have to pay for whole life) to a whole-life policy - the former wins every time (due to the high costs and commissions associated with the latter).
What is your understanding of a REAL term life insurance policy?


ART and 5 year level priced policies are in short supply leaving mostly 10 and 20 years available. 30 year term was discontinued by the majority of companies because they considered reserving regulations to onerous. The industry added features like living benefits, chronic care and critical care yet few people even mention the major advantages these features add. Contracts with level premiums for in between number of years or much longer periods like 45, 55 and 70 years are available but not discussed.

Why not ask a company of your choosing how much they might offer in your circumstance. You can be assured they will never over insure you. That might be the one and only time coverage will be available at standard rates. What ever amount is purchased you view it as decreasing insurance because inflation will reduce the purchasing power, Buy a million now and 30 years from now it might be worth $400k after 3% inflation. $400K isn't much now but some how it'll work 30+ years from now. Since everyone will be FI you can go bare. That's not what's happening in the real world out there.
For someone like the OP who is working to self insure -
over time a standard flat rate and flat payout term policy is perfect. $1M may not be worth the same in 30 years but the OP won't need that much in 30 years (in fact - he won't need any policy in 30 years).
I don't understand why anyone would ever need more than a 20, 25 or 30 year term - anything longer is unnecessary for 99% of us. Since you clearly are an insurance salesman I'm sure you have a reason someone might need insurance well after their dependents are no longer dependents and their spouse is able to live off retirement savings - for me - and for most of us - a simple fixed fee plan with a simple fixed payout fits very nicely into our financial plans. Then take the huge savings over what you would be paying a whole life plan and put it in the market and watch it grow.

Benton Bair
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Re: Transamerica Life insurance/investments

Post by Benton Bair » Mon Jan 29, 2018 6:32 pm

DaftInvestor wrote:
Mon Jan 29, 2018 6:06 pm
Benton Bair wrote:
Mon Jan 29, 2018 5:54 pm
DaftInvestor wrote:
Mon Jan 29, 2018 5:12 pm
If you need insurance buy term-life.
If you want to invest do that separately.
If you were to run the numbers (comparing a REAL term life policy at a good price and REAL investment returns of the excess you would have to pay for whole life) to a whole-life policy - the former wins every time (due to the high costs and commissions associated with the latter).
What is your understanding of a REAL term life insurance policy?


ART and 5 year level priced policies are in short supply leaving mostly 10 and 20 years available. 30 year term was discontinued by the majority of companies because they considered reserving regulations to onerous. The industry added features like living benefits, chronic care and critical care yet few people even mention the major advantages these features add. Contracts with level premiums for in between number of years or much longer periods like 45, 55 and 70 years are available but not discussed.

Why not ask a company of your choosing how much they might offer in your circumstance. You can be assured they will never over insure you. That might be the one and only time coverage will be available at standard rates. What ever amount is purchased you view it as decreasing insurance because inflation will reduce the purchasing power, Buy a million now and 30 years from now it might be worth $400k after 3% inflation. $400K isn't much now but some how it'll work 30+ years from now. Since everyone will be FI you can go bare. That's not what's happening in the real world out there.
For someone like the OP who is working to self insure -
over time a standard flat rate and flat payout term policy is perfect. $1M may not be worth the same in 30 years but the OP won't need that much in 30 years (in fact - he won't need any policy in 30 years).
I don't understand why anyone would ever need more than a 20, 25 or 30 year term - anything longer is unnecessary for 99% of us. Since you clearly are an insurance salesman I'm sure you have a reason someone might need insurance well after their dependents are no longer dependents and their spouse is able to live off retirement savings - for me - and for most of us - a simple fixed fee plan with a simple fixed payout fits very nicely into our financial plans. Then take the huge savings over what you would be paying a whole life plan and put it in the market and watch it grow.
Please don't make the assumption I profit in any way from the insurance industry.

I've made it clear in other posts that I only profit from the insurance companies included in Vanguard's Admiral Total Stock Market Index.

I find the appraising abilities for the risk solved with life insurance to be appalling. There are a few posters here that work in the business and share a little of what they know, but for the most part they don't stick their neck out to far recognizing the bias here will cut them off.

I write for the benefit of the many visitors who read, but will likely never post here. Changing inertia is difficult. Is it any wonder Americans are grossly under insured. The problem is growing worse because the demographics of sales agents is leaving the middle class behind. To make any meaningful money agents must go where the money is and work with people who are willing to use it.

harrington
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Re: Transamerica Life insurance/investments

Post by harrington » Mon Jan 29, 2018 6:37 pm

NO NO NO NO NO

MiddleOfTheRoad
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Re: Transamerica Life insurance/investments

Post by MiddleOfTheRoad » Mon Jan 29, 2018 7:02 pm

Benton Bair wrote:
Mon Jan 29, 2018 6:32 pm
DaftInvestor wrote:
Mon Jan 29, 2018 6:06 pm
Benton Bair wrote:
Mon Jan 29, 2018 5:54 pm
[quote=DaftInvestor post_id=3751071 time=1517263929 user_id=51580
.
.
Please don't make the assumption I profit in any way from the insurance industry.

I've made it clear in other posts that I only profit from the insurance companies included in Vanguard's Admiral Total Stock Market Index.

I find the appraising abilities for the risk solved with life insurance to be appalling. There are a few posters here that work in the business and share a little of what they know, but for the most part they don't stick their neck out to far recognizing the bias here will cut them off.

I write for the benefit of the many visitors who read, but will likely never post here. Changing inertia is difficult. Is it any wonder Americans are grossly under insured. The problem is growing worse because the demographics of sales agents is leaving the middle class behind. To make any meaningful money agents must go where the money is and work with people who are willing to use it.
Hahaha. I again call BS.
Americans are underinsured? The annual premiums paid for insurance in the US is $1.3+ trillions. The next biggest market is <$500 millions. The problem is getting worse because the insurance industry is trying to rope in the middle class, who clearly do not need many of the products being sold to them! In fact, many companies are targeting the “middle class” because the high end is saturated. Look at the dollars involved and you see why so much effort is expended.

Dottie57
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Re: Transamerica Life insurance/investments

Post by Dottie57 » Mon Jan 29, 2018 7:47 pm

Benton Bair wrote:
Mon Jan 29, 2018 1:40 pm
Mel Lindauer wrote:
Mon Jan 29, 2018 12:15 pm
Don't mix investing and insurance. This salesman is looking out for his best interest (a nice fat commission) and not yours. As others have said, RUN, DON'T WALK.
Mel:

If an agent sells me a 30 year level premium term insurance policy and I decide to cancel in the 14th year, will I receive the excess reserve (cash value) the company was required by law to set aside? If it chooses not to, why is that allowed?

Term ins is pure insurance. You pay someone enough to take the risk away from you. No cash value just, swapping mney for covering a risk. Difference between term ins premium and whole life premium is mine and I can invest in anything I want.

Easy peasy, very understandable. No confusion.

NotMel

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Raymond
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Re: Transamerica Life insurance/investments

Post by Raymond » Mon Jan 29, 2018 8:28 pm

dodgersummer wrote:
Mon Jan 29, 2018 2:21 am
...The salesman suggested i keep contributing to my Roth IRA but replace contributions from my 457b with contributions to their life insurance and investment plans due to me getting no match on my 457b plan him getting a nice commission...
Fixed it for you.
"Ritter, Tod und Teufel"

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Mel Lindauer
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Re: Transamerica Life insurance/investments

Post by Mel Lindauer » Mon Jan 29, 2018 8:32 pm

Benton Bair wrote:
Mon Jan 29, 2018 6:06 pm
Mel Lindauer wrote:
Mon Jan 29, 2018 5:06 pm
Benton Bair wrote:
Mon Jan 29, 2018 1:40 pm
Mel Lindauer wrote:
Mon Jan 29, 2018 12:15 pm
Don't mix investing and insurance. This salesman is looking out for his best interest (a nice fat commission) and not yours. As others have said, RUN, DON'T WALK.
Mel:

If an agent sells me a 30 year level premium term insurance policy and I decide to cancel in the 14th year, will I receive the excess reserve (cash value) the company was required by law to set aside? If it chooses not to, why is that allowed?
Why are you asking an insurance question when nearly all of your posts seem to indicate that you're an insurance "insider" who already knows the answer?

I thought you might comment for the benefit of most people here that have much less understanding than you do. You could've accomplished the same in as little space as suggesting I already now the answer. Most recognize you and my name isn't Mel.
That's a typical sales tactic. When the going gets rough and Bogleheads are exposing the high costs and lousy investments whole life and their associated investment products usually are (the subject of this thread), attempt to distract folks by changing the subject to term insurance. Bogleheads are smarter than that.
Best Regards - Mel | | Semper Fi

alex11
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Re: Transamerica Life insurance/investments

Post by alex11 » Mon Jan 29, 2018 8:51 pm

A couple questions I have..............

A colleague insists that even during the 2008 crash that their whole life policy did not go down and never will go down.

How does whole life never lose money? What is the money typically invested in?

Grt2bOutdoors
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Re: Transamerica Life insurance/investments

Post by Grt2bOutdoors » Mon Jan 29, 2018 9:19 pm

alex11 wrote:
Mon Jan 29, 2018 8:51 pm
A couple questions I have..............

A colleague insists that even during the 2008 crash that their whole life policy did not go down and never will go down.

How does whole life never lose money? What is the money typically invested in?
Hold to maturity investment grade securities, typically corporates, agencies and US Treasuries, maybe some percentage in broad market equity securities/preferred.

Whole life is credited a rate by the insurance company, no policy is directly/indirectly invested in a portfolio of securities so for your colleague to compare a whole life policy with a general investment account is an improper comparison. The insurance company sets the rate paid to policyholders, that is a win-win situation for them since they control how to invest premiums, they control what rate to pay so long as it does not harm the regulatory reserves they must maintain, the policy holder is no smarter since they have zero idea what spread the insurance company is actually earning on the portfolio. Essentially policy holder is handing over excess capital beyond cost of insurance and letting the insurance company keep/ manage it and take a healthy cut, in return for a fraction of it back in the form of "cash value".
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

MiddleOfTheRoad
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Re: Transamerica Life insurance/investments

Post by MiddleOfTheRoad » Mon Jan 29, 2018 9:43 pm

Grt2bOutdoors wrote:
Mon Jan 29, 2018 9:19 pm
alex11 wrote:
Mon Jan 29, 2018 8:51 pm
A couple questions I have..............

A colleague insists that even during the 2008 crash that their whole life policy did not go down and never will go down.

How does whole life never lose money? What is the money typically invested in?
Hold to maturity investment grade securities, typically corporates, agencies and US Treasuries, maybe some percentage in broad market equity securities/preferred.

Whole life is credited a rate by the insurance company, no policy is directly/indirectly invested in a portfolio of securities so for your colleague to compare a whole life policy with a general investment account is an improper comparison. The insurance company sets the rate paid to policyholders, that is a win-win situation for them since they control how to invest premiums, they control what rate to pay so long as it does not harm the regulatory reserves they must maintain, the policy holder is no smarter since they have zero idea what spread the insurance company is actually earning on the portfolio. Essentially policy holder is handing over excess capital beyond cost of insurance and letting the insurance company keep/ manage it and take a healthy cut, in return for a fraction of it back in the form of "cash value".
Which brings up a huge risk no one talks about. If your life insurance company goes broke and you have a million dollars cash value that is not directly invested in any underlying securities... sure there are state regulations/protections but limited. I hope I am wrong
Last edited by MiddleOfTheRoad on Tue Jan 30, 2018 8:23 am, edited 1 time in total.

Grt2bOutdoors
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Re: Transamerica Life insurance/investments

Post by Grt2bOutdoors » Mon Jan 29, 2018 9:54 pm

MiddleOfTheRoad wrote:
Mon Jan 29, 2018 9:43 pm
Grt2bOutdoors wrote:
Mon Jan 29, 2018 9:19 pm
alex11 wrote:
Mon Jan 29, 2018 8:51 pm
A couple questions I have..............

A colleague insists that even during the 2008 crash that their whole life policy did not go down and never will go down.

How does whole life never lose money? What is the money typically invested in?
Hold to maturity investment grade securities, typically corporates, agencies and US Treasuries, maybe some percentage in broad market equity securities/preferred.

Whole life is credited a rate by the insurance company, no policy is directly/indirectly invested in a portfolio of securities so for your colleague to compare a whole life policy with a general investment account is an improper comparison. The insurance company sets the rate paid to policyholders, that is a win-win situation for them since they control how to invest premiums, they control what rate to pay so long as it does not harm the regulatory reserves they must maintain, the policy holder is no smarter since they have zero idea what spread the insurance company is actually earning on the portfolio. Essentially policy holder is handing over excess capital beyond cost of insurance and letting the insurance company keep/ manage it and take a healthy cut, in return for a fraction of it back in the form of "cash value".
Which brings up a hugh risk no one talks about. If your life insurance company goes broke and you have a million dollars cash value that is not directly invested in any underlying securities... sure there are state regulations/protections but limited. I hope I am wrong
It was mentioned in an indirect manner when I referenced the regulatory reserves the insurance company must maintain, those reserve levels are set by state insurance commission. The biggest thing about cash value - to access it you must take a "loan" - imagine that, having to pay interest to borrow your own money :oops: , that you have no control on how much the money earns, that the death benefit is the face amount, not the face amount plus cash value - the insurance company keeps the cash value. What is the benefit unless you are in rare company and truely need permanent life insurance?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

MiddleOfTheRoad
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Re: Transamerica Life insurance/investments

Post by MiddleOfTheRoad » Mon Jan 29, 2018 10:32 pm

Grt2bOutdoor, I just want to spell it out for those readers that will never post. (I hope mocking people is not against forum policy). Haha

If the insurance company that hold your term policy goes belly up, not much in paid premium is lost. You may be able to get a new policy, even if it is more expensive. Or you may decide you are FI and move on, not much is lost.

On the other hand, you have a huge concentrated risk in a whole life policy if your ins company goes bankrupt. (Don’t say it never happen, look at AIG during 2008). Your policy may be transferred to a different company, but it will be a new contract and your term will not be favorable. Not unlike what people have gone through with the long term care companies recently.

Don’t deal with insurance companies beyond what you need.
Last edited by MiddleOfTheRoad on Tue Jan 30, 2018 8:23 am, edited 1 time in total.

dodgersummer
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Re: Transamerica Life insurance/investments

Post by dodgersummer » Tue Jan 30, 2018 12:51 am

Jack FFR1846 wrote:
Mon Jan 29, 2018 7:25 am
Do you think this clown was giving you the hard sell for an hour because he was getting paid zero? No, he was selling you the fabric treatment, the paint sealant, the undercoating and the aftermarket extended warranty.

If you want insurance, then buy term insurance.
If you want to invest, then invest.

In both of those cases, if you change your mind in 5 years, do they fine you tens of thousands of dollars? No, they don't. Does this Transamerica scheme? Yup, it sure does.
This "salesman" works part time at my law enforcement job and told me that his day job is making investments with the 1 percent floor and 15 percent cap. I was curious about the "investments" which he said were "fixed" and that wealthy people gain their wealth this way. He said stocks "scare" him due to volatility and that his fixed investments will never go down. I was more curious about the "investments" and saw a bunch of red flags but just wanted to learn. When i sat down with him, it magically turned into buying whole life insurance with portions of the monthly payments going to the life insurance and other portions going to the investments. When i asked what percentage goes to the investments he told me he wasn't sure and would have to get back to me. He kept insisting i put my 457b funds into his "investments" due to his being fixed income and the stock market just having ups and downs. He also claimed that that since taxes have historically only risen, i would be paying a lot more taxes on my 457b plan by deferring them into the future, and claiming i would be paying around 40 percent taxes on my 457b plan in retirement (25 percent fed, 10 percent california state). The core of his pitch was that taxes are our biggest expense and that i would "NEVER" pay tax on his insurance/investments. He said that some doctors have been putting over 2k a month into his insurance/investments and that people have been rolling their entire 401k's into his insurance/investments. He said he wants to help middle class americans bridge the gap to the wealthy. Thanks to all bogleheads for the guidance once again for educating me. When i told him i am not interested, he asked me to send referrals his way because he wants "to help out as many families as possible to help them fight the down markets and secure their future for the long run." Thank you all who have educated me on this matter.

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abuss368
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Re: Transamerica Life insurance/investments

Post by abuss368 » Tue Jan 30, 2018 1:00 am

Ready. Set. Run!
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

Nate79
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Re: Transamerica Life insurance/investments

Post by Nate79 » Tue Jan 30, 2018 1:14 am

Very sad that people are taken advantage of by these crooks, I mean salesmen/women. Preying on the ignorant who don't know any better.

dodgersummer
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Re: Transamerica Life insurance/investments

Post by dodgersummer » Tue Jan 30, 2018 2:39 am

Cigarman wrote:
Mon Jan 29, 2018 6:42 am
Ask him...

1. Percent commission he is getting.
2. How much they are matching your contribution.

In your post you say "the salesman said..." multiple times. That should be enough to make you wary. Sales is about getting paid, not helping people.
He never once mentioned being an insurance salesman or even mentioned life insurance or his company name until i sat down with him. He only said he works in "investments" that are fixed and will never lose, even during a stock market crash. He talked about a ROTH IRA and how his "investments" are better because a Roth is volatile. I saw red flags, but was just curious to hear about it.

NotWhoYouThink
Posts: 1964
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Re: Transamerica Life insurance/investments

Post by NotWhoYouThink » Tue Jan 30, 2018 7:55 am

It's possible he is a helpful friendly guy who believes what he is telling you. Really. He'd be wrong, but lots of people are. Few people really understand the product, and the claims sounds pretty good.

donaldfair71
Posts: 305
Joined: Wed Mar 06, 2013 4:15 pm

Re: Transamerica Life insurance/investments

Post by donaldfair71 » Tue Jan 30, 2018 7:56 am

Benton Bair wrote:
Mon Jan 29, 2018 6:32 pm
DaftInvestor wrote:
Mon Jan 29, 2018 6:06 pm
Benton Bair wrote:
Mon Jan 29, 2018 5:54 pm
DaftInvestor wrote:
Mon Jan 29, 2018 5:12 pm
If you need insurance buy term-life.
If you want to invest do that separately.
If you were to run the numbers (comparing a REAL term life policy at a good price and REAL investment returns of the excess you would have to pay for whole life) to a whole-life policy - the former wins every time (due to the high costs and commissions associated with the latter).
What is your understanding of a REAL term life insurance policy?


ART and 5 year level priced policies are in short supply leaving mostly 10 and 20 years available. 30 year term was discontinued by the majority of companies because they considered reserving regulations to onerous. The industry added features like living benefits, chronic care and critical care yet few people even mention the major advantages these features add. Contracts with level premiums for in between number of years or much longer periods like 45, 55 and 70 years are available but not discussed.

Why not ask a company of your choosing how much they might offer in your circumstance. You can be assured they will never over insure you. That might be the one and only time coverage will be available at standard rates. What ever amount is purchased you view it as decreasing insurance because inflation will reduce the purchasing power, Buy a million now and 30 years from now it might be worth $400k after 3% inflation. $400K isn't much now but some how it'll work 30+ years from now. Since everyone will be FI you can go bare. That's not what's happening in the real world out there.
For someone like the OP who is working to self insure -
over time a standard flat rate and flat payout term policy is perfect. $1M may not be worth the same in 30 years but the OP won't need that much in 30 years (in fact - he won't need any policy in 30 years).
I don't understand why anyone would ever need more than a 20, 25 or 30 year term - anything longer is unnecessary for 99% of us. Since you clearly are an insurance salesman I'm sure you have a reason someone might need insurance well after their dependents are no longer dependents and their spouse is able to live off retirement savings - for me - and for most of us - a simple fixed fee plan with a simple fixed payout fits very nicely into our financial plans. Then take the huge savings over what you would be paying a whole life plan and put it in the market and watch it grow.
Please don't make the assumption I profit in any way from the insurance industry.

I've made it clear in other posts that I only profit from the insurance companies included in Vanguard's Admiral Total Stock Market Index.

I find the appraising abilities for the risk solved with life insurance to be appalling. There are a few posters here that work in the business and share a little of what they know, but for the most part they don't stick their neck out to far recognizing the bias here will cut them off.

I write for the benefit of the many visitors who read, but will likely never post here. Changing inertia is difficult. Is it any wonder Americans are grossly under insured. The problem is growing worse because the demographics of sales agents is leaving the middle class behind. To make any meaningful money agents must go where the money is and work with people who are willing to use it.
All this being said, even if we assume it all to be true, it doesn't change the lack of mathematical integrity involved in a WL policy vs. a Term Policy.

UpperNwGuy
Posts: 714
Joined: Sun Oct 08, 2017 7:16 pm
Location: Washington DC

Re: Transamerica Life insurance/investments

Post by UpperNwGuy » Tue Jan 30, 2018 10:54 am

Jack FFR1846 wrote:
Mon Jan 29, 2018 7:25 am
If you want insurance, then buy term insurance.
If you want to invest, then invest.
+1

Grt2bOutdoors
Posts: 18849
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Transamerica Life insurance/investments

Post by Grt2bOutdoors » Tue Jan 30, 2018 3:32 pm

dodgersummer wrote:
Tue Jan 30, 2018 2:39 am
Cigarman wrote:
Mon Jan 29, 2018 6:42 am
Ask him...

1. Percent commission he is getting.
2. How much they are matching your contribution.

In your post you say "the salesman said..." multiple times. That should be enough to make you wary. Sales is about getting paid, not helping people.
He never once mentioned being an insurance salesman or even mentioned life insurance or his company name until i sat down with him. He only said he works in "investments" that are fixed and will never lose, even during a stock market crash. He talked about a ROTH IRA and how his "investments" are better because a Roth is volatile. I saw red flags, but was just curious to hear about it.
If he is selling life insurance or any other type of insurance product without a license - Run!

If he can not explain what or how “fixed investments” are affected by daily changes in market rates - Run!

If he does not explain in clear detail how he is compensated - Run!

If he does not disclose how the insurance company makes money from sale of such products - Run!

If he does not disclose in full detail the amount of expenses and types of charges incurred on a daily basis - Run!

You as the consumer need to be very aware there are individuals who attempt to be “helpers” - the only thing they are interested in though are helping themselves to your hard-earned money and to become wealthy off of you.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

afan
Posts: 3652
Joined: Sun Jul 25, 2010 4:01 pm

Re: Transamerica Life insurance/investments

Post by afan » Tue Jan 30, 2018 6:29 pm

dodgersummer wrote:
Mon Jan 29, 2018 2:21 am
The salesman suggested i keep contributing to my Roth IRA but replace contributions from my 457b with contributions to their life insurance and investment plans due to me getting no match on my 457b plan. Any thoughts on this? Thanks.
This is just appalling.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

afan
Posts: 3652
Joined: Sun Jul 25, 2010 4:01 pm

Re: Transamerica Life insurance/investments

Post by afan » Tue Jan 30, 2018 6:41 pm

Benton Bair wrote:
Mon Jan 29, 2018 6:32 pm
The problem is growing worse because the demographics of sales agents is leaving the middle class behind. To make any meaningful money agents must go where the money is and work with people who are willing to use it.
Which is another way of saying that the policies are overpriced.
Alternatives: Buy low load policies. Bypass agents and deal directly with the insurance companies. Pinch pennies on premiums. Keep death benefit insurance separate from investments.

The loads and expenses of the investment part of life insurance are far too high. They take the tax advantages and pour on so many costs that they cannot compete with buy term and invest the difference.
Remember that if you have a long life, far past the point at which you need a death benefit, with permanent life you are still paying for the cost of insuring your life- which you no longer need.

For most of us, the need for a death benefit is temporary, but a permanent policy, if it performs well, will reach a point where there is no way to access the full cash value. You cannot withdraw it all without paying taxes on the gain. You can borrow against it, but not to take the full cash value amount out.
Think of the cash value NOT as how much money you have in your policy, but as a figure that you must plug into a calculation to determine how much money you can actually get. The actual amount of money can be a lot less.

Which is why it has to be sold by salespeople who have to work hard to get people to buy.
Note that Vanguard is taking over the investment world without a staff of paid salespeople. They do it by offering a good value.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

dodgersummer
Posts: 69
Joined: Tue Jan 10, 2017 2:08 pm

Re: Transamerica Life insurance/investments

Post by dodgersummer » Tue Jan 30, 2018 10:34 pm

NotWhoYouThink wrote:
Tue Jan 30, 2018 7:55 am
It's possible he is a helpful friendly guy who believes what he is telling you. Really. He'd be wrong, but lots of people are. Few people really understand the product, and the claims sounds pretty good.
I think he genuinely thinks he is "helping others." The diagrams that he drew with flow charts reminded me of the carnival cruise trainer in the gym who was selling "detox pills" to help remove "toxins" from the body. The pills were around $400 for a 6 supply. In another seminar the same trainer gave a talk about foot insoles for $200. I hate salesmen! Fortunately this forum saved me once again

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