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re: Life Insurance/ investment suggestions for my wife
Posted on 12/23/23 at 8:04 am to The Torch
Posted on 12/23/23 at 8:04 am to The Torch
quote:
You need to put that out of mind and site, let it do it's thing. Concentrate on other investments
Everyone says this specifically because it’s a tax sheltered investment. But again my wife is only in her 30s. Keeping this likely restricts the ultimate value quite a bit. It also reduces her life insurance value massively, why should I buy more life insurance with other funds when I have over $100,000 tied up here?
Each individual part is good. Together they are good. But nothing really is great here.
If we could loan the money to ourselves with no loss in value I was going to start aggressively doing that for things like vehicle loans and paying our house off, as that actually started to make some sense.
2
Posted on 12/23/23 at 9:21 am to baldona
quote:
My thought process here is to do the following with the cash value of her insurance:
1.) ladder some extra term
2.) possibly buy a very small whole life policy of say $250,000 for nostalgia reasons for her grandfather
You will have to pay taxes on the surrendered value of the policy. What will be your tax obligation?
Have you received quotes on the term ladder and WL policy? How much will be left over to invest after purchasing the life insurance?
Then you need to take into consideration what the taxes may be on future distributions of the invested amount.
If it all makes sense then surrender the policy and dive in to the market if not then build your term ladder with the WL as the base and use the cash value for spending shocks like Healthcare expenses and Long Term Care during retirement. At your's and your wife's age you could be at looking over a million in Healthcare expenses combined and a nursing home stay could cost 100K a year in future dollars. If you take out a loan for any purpose before retiring PAY IT BACK!
Posted on 12/23/23 at 10:53 am to baldona
The market is the smarter play.
Why? You said it. Her age.
Obviously, don't do anything until you price out replacement term coverages.
The value of the current whole life policy is that the expensive cost of the policy has already been absorbed (often takes 7 to 15 years). And the low return is practically a guaranteed return which you don't get in the market.
But those are not enough trade offs for the opportunities available today.
I'm not sure what your attraction to a new whole life policy would be.
If you still need $100k death benefit to bury her at age 85, I don't think your plan worked.
Why? You said it. Her age.
Obviously, don't do anything until you price out replacement term coverages.
The value of the current whole life policy is that the expensive cost of the policy has already been absorbed (often takes 7 to 15 years). And the low return is practically a guaranteed return which you don't get in the market.
But those are not enough trade offs for the opportunities available today.
I'm not sure what your attraction to a new whole life policy would be.
If you still need $100k death benefit to bury her at age 85, I don't think your plan worked.
Posted on 12/23/23 at 12:23 pm to meansonny
I was trying to think of some way to cover the nostalgia of her grandparents purchasing this for her, thus the whole life. I can’t really figure out any investments or insurance that she’d have forever.
The main thing that brought this up is I figured we should get serious about her getting more life insurance. She has had this policy forever so I’ve always back burnered it. If I get a couple mil in term laddered, I just can’t figure out how this policy with so much tied up continues to make sense.
The main thing that brought this up is I figured we should get serious about her getting more life insurance. She has had this policy forever so I’ve always back burnered it. If I get a couple mil in term laddered, I just can’t figure out how this policy with so much tied up continues to make sense.
Posted on 12/23/23 at 12:53 pm to baldona
You won't get a better whole life opportunity than this current policy.
So there is that for keeping it.
Maybe you could pay it forward and include something for your kids (although I really don't like whole life at all).
If you want to do something to memorialize her grandparents, invest the money and 25 years from now buy your kids their houses in honor of your wife's grandparents.
Or wait a little longer and get a vacation spot for the family in their honor.
So there is that for keeping it.
Maybe you could pay it forward and include something for your kids (although I really don't like whole life at all).
If you want to do something to memorialize her grandparents, invest the money and 25 years from now buy your kids their houses in honor of your wife's grandparents.
Or wait a little longer and get a vacation spot for the family in their honor.
Posted on 12/23/23 at 1:41 pm to baldona
quote:
If I get a couple mil in term laddered,
Do you have quotes and if so what are the premiums and terms?
I agree with Means. Getting 250K for nostalgia doesn't really make sense.
Posted on 12/23/23 at 2:17 pm to baldona
This is because it’s a participating policy. That overcharge you for the policy to make it “participating”. The dividends is a return of that overcharge and are being used to purchase paid up additions. It’s just miniature of that mother policy.
When you have $132k of a cash in a $400k W/L you only have $268k of insurance.
W/L is made up of two components. Decreasing Term plus Cash Value.
As the Term+Cash = the Death Benefit.
It is literally term insurance with an inefficient (bank like) cash account.
Just buy a term and invest the difference.
When you have $132k of a cash in a $400k W/L you only have $268k of insurance.
W/L is made up of two components. Decreasing Term plus Cash Value.
As the Term+Cash = the Death Benefit.
It is literally term insurance with an inefficient (bank like) cash account.
Just buy a term and invest the difference.
Posted on 12/24/23 at 11:42 am to baldona
quote:
But again my wife is only in her 30s.
Subtle young wife brag.
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