Comments on: Response to Term vs Whole Life Insurance

By: Tom

Tom — Wed, 01 Jun 2011 16:15:23 +0000

This is a really helpful article. Life insurance is an investment and a valuable tool to lessen the burden of taxes and preservation of your wealth.

By: Matt Spencer

Matt Spencer — Sun, 22 Aug 2010 20:50:07 +0000

EOW- thanks for your posts.
It’s a good possibility I’m a rep. with the company you’ve used in your illustration. I’m glad you also explained the difference between direct and non-direct recognition mutual companies. I’ve recently encountered a dispute with a Primerica rep via Facebook. It all started with recommending my company as a career alternative. Bad Idea. He proceeds to post several false comments I supposedly made on his facebook wall. He has mentioned my name and company. I’ve also seen a George Boelcke, author of “it’s your money” preparing to use the conversation on his Wednesday radio show. First, none of the comments he posted are true. Due to the high amount of regulations and compliance I am obligated to follow, I make no mention to product type or hand out insurance advice via facebook.
I’m sure your adversary citishark is connected to Primerica as well. So I commiserate with you in dealing with these classless, unprofessionals who are “KoolAid” induced. Probably caused by all the strobe lights at their conventions.

By: My Personal Finance Journey

My Personal Finance Journey — Sun, 25 Jul 2010 03:16:11 +0000

EOW – great post here. It seems like you know quite a bit about the ins and outs of life insurance. I have not looked in to life insurance in depth, being fairly young (24 y.o) and no children or wife.

In your opinion, would a whole life, life insurance policy be better for younger people?
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By: sandy

sandy — Fri, 02 Jul 2010 00:15:26 +0000

I think of whole life as a combination of term life with a savings account added on. term life is just insurance and is much much cheaper.

By: Evolution Of Wealth

Evolution Of Wealth — Tue, 22 Jun 2010 19:18:14 +0000

Nunzio:

I’m glad you enjoy the blog. I have a link for the guest post in the top right of the site would love to see some ideas. Thank you for the the comments.

By: Evolution Of Wealth

Evolution Of Wealth — Tue, 22 Jun 2010 19:17:12 +0000

Bern:

I couldn’t agree with you more in regards to people being open to new ideas. However, I have to hesitate with your “beat the pants off” comment. To me it’s like comparing and orange to a chicken. If your doctor says you need some vitamin C you’re not going to eat chicken and if you need protein the orange is useless. Of course there are recipes made with both oranges and chicken.

By: Evolution Of Wealth

Evolution Of Wealth — Tue, 22 Jun 2010 19:15:13 +0000

Joe:

As I said before, they might. I’m not disagreeing with that fact. I haven’t thought twice about it because the companies I work with have all are very responsive to policy holders needs. Actually…I’ll tell you what, right now I’m dialing a very large mutual insurance company and I’ll ask them the question. Be right back.

Okay, the answer is yes. I was told the language is in the contract and of course, the company says they’ve take pride in never having put a hold on access to cash value. I’m paraphrasing, not quoting. Sound good?

By: Evolution Of Wealth

Evolution Of Wealth — Tue, 22 Jun 2010 19:00:22 +0000

Mr. Tube:

You definitely correct. I probably didn’t stress that enough in my answer. Truthfully, the only reason I even put a dividend rate is because I was getting annoyed by him asking for an interest even when I was stressing that whole life policies don’t have one. I probably would have been better off leaving it out as to not mislead people.

By: Joe DeGroff

Joe DeGroff — Tue, 22 Jun 2010 04:17:46 +0000

Actually, insurance companies do reserve the right to hold the cash value for six months. If my memory serves me correctly, they started this in the ’70s when interest rates were so high. People were borrowing right and left from their cash values to invest in other places earning double-digit interest rates (disintermediation). This adversely affected the policyowners that were keeping their money in the policies by driving the dividend rates down. As such, a six month withdrawal period was implemented to ameliorate some of the pressure on the institutions.

So yes, they CAN make you wait six months, but this would only be done in extreme circumstances.

By: Mr. Tube

Mr. Tube — Sat, 12 Jun 2010 07:18:53 +0000

I felt compelled to expand a bit on Evolution’s response, especially for those who want to take the time to get a handle on whole life. I wanted to add some info about dividends from mutual life insurance companies. And yes, I proudly work for one of those.

I’m sure Evolution didn’t intentionally mislead with this one point, as he does a pretty good job of X-plainin (that’s for you citishark) how a mutual company pays out a dividend in response to question No. 6, but in his introduction he states: “The dividend interest rate in 2010, for the policy illustrated, is 7%.”

I don’t want people to think that they’re getting a 7% dividend (again, re-read Evolution’s response to No. 6), nor should one think that the company with the hightest DIR (dividend interest rate) pays the highest dividend. The DIR is not a rate of return, and MOST importantly not all companies use the same “formula” to calculate it, so comparing DIRs is pretty much pointless if you’re trying to figure out which whole life policy is best.