Why Cash Value Life Insurance??

[simplepeddler]

Okay so, I am waist deep in the Dave Ramsey Financial Peace University.
Of Course, he hates cash value life insurance and makes a good case for it when it comes to numbers.

I have no problem saving the money into a mutual fund. I always pay myself first.

So, 6K a year in a mutual fund after 20 years averaging just 5% is 215K or so. Same amount going into an Estate Complife plan only Garantees me 86K or so with a cash surrender of 163K

so question is why do it??
and second question is what the hell is the difference between Guaranteed and cash surrender?

I know I should be taking to my agent, but the guy talks so fast I can't catch up with him.
He is smart as a whip and several multi millionaires use the guy, so I know he makes them money.

What say you salty cajun "gurus"?

[Dink]

Over my head.....but I do have 1 thing to say......

Cash Is King!!!!!

[simplepeddler]

LOL.........I'm wit u Dink..............
Just trying to learn

[Raymond]

Purebay will do a better job of this than I but if you can do both, IRA and an adjustible life policy it works fine. I have never been comfortable selling life insurance as an investment due to the fact it is for the people that live. Typically, an adjustible life policy is pegged to intrest rates and the best time to have one is when they are low like now. With inflation, intrest rates will climb (ala Jimmy Carter) and your cash value will increase. Typically the market works inversely to intrest rates so in a sense it is a hedge. I also like Dave Ramsey but many times he is speaking to less sophisicated folks without much money sense. With the monetary problems they have, cash value policies really don't make much sense; they need coverage for the least amount of money possible. Term life fits the bill in these situations, cheap coverage for little money.

[Ducktrickster]

Its a hedge against your other investments. And 215000 sounds a little high at 5 percent.

[Raymond]

Originally Posted by simplepeddler

Okay so, I am waist deep in the Dave Ramsey Financial Peace University.
Of Course, he hates cash value life insurance and makes a good case for it when it comes to numbers.

I have no problem saving the money into a mutual fund. I always pay myself first.

So, 6K a year in a mutual fund after 20 years averaging just 5% is 215K or so. Same amount going into an Estate Complife plan only Garantees me 86K or so with a cash surrender of 163K

so question is why do it??
and second question is what the hell is the difference between Guaranteed and cash surrender?

I know I should be taking to my agent, but the guy talks so fast I can't catch up with him.
He is smart as a whip and several multi millionaires use the guy, so I know he makes them money.

What say you salty cajun "gurus"?

SP, explain this to your agent because he needs to know what he is doing that could cost him business. After that, ask questions until you understand completely and don't back off. I am not that smart so most of my clients have no trouble understanding my explainations.

[simplepeddler]

Originally Posted by Ducktrickster

Its a hedge against your other investments. And 215000 sounds a little high at 5 percent.

Ran the number based on what is in there now on a Time Value of money calculator

[simplepeddler]

Originally Posted by Raymond

SP, explain this to your agent because he needs to know what he is doing that could cost him business. After that, ask questions until you understand completely and don't back off. I am not that smart so most of my clients have no trouble understanding my explainations.

You are right he is a friend and I trust him but I just have a hard time grasping why this works for me...........

all good input though

[blackmamba]

Originally Posted by Dink

Over my head.....but I do have 1 thing to say......

Cash Is King!!!!!

And debt is dumb!!!

Whole life with cash value is not a good investment tool if that is the only way you are investing but I don't think it is as bad as Dave makes it out to be. Raymond is right about Dave Ramsey speaking more to the people that are deep in debt but need life insurance for their families. Term insurance would be better and cheaper for them.... I have both. I have a little bit of whole life with enough Term life to get me to the number I believe my family would need to be comfortable. For me, the whole life I have is a small investment that has a guaranteed cash value of not much less than what I will have put in, but the potential to be higher. I like it because it does provide insurance for my family but I will not totally lose my money and the premium will remain the same until I reach retirement age. IMO, I think you should have both until you are SELF INSURED (Dave Ramsey term)

[PUREBAY2200]

Originally Posted by simplepeddler

Okay so, I am waist deep in the Dave Ramsey Financial Peace University.
Of Course, he hates cash value life insurance and makes a good case for it when it comes to numbers.

I have no problem saving the money into a mutual fund. I always pay myself first.

So, 6K a year in a mutual fund after 20 years averaging just 5% is 215K or so. Same amount going into an Estate Complife plan only Garantees me 86K or so with a cash surrender of 163K

so question is why do it??
and second question is what the hell is the difference between Guaranteed and cash surrender?

I know I should be taking to my agent, but the guy talks so fast I can't catch up with him.
He is smart as a whip and several multi millionaires use the guy, so I know he makes them money.

What say you salty cajun "gurus"?

Call me , I'll help to clarify and explain what Ur asking about.
Chris Edwards
New York Life Ins. Co.
985-687-9167

[cmdrost]

I tend to agree with Dave Ramsey. But I'm on the other side of the investment world from Raymond and Purebay. IMHO...You should pay yourself first and self fund 401k/IRA's. Buy life insurance as a need to cover your family/business, etc.....once you've maxed out your 401k and IRAs.

I'm not knocking insurance as an investment, because anyone who saves anything is good this day and age.

[simplepeddler]

Originally Posted by cmdrost

I tend to agree with Dave Ramsey. But I'm on the other side of the investment world from Raymond and Purebay. IMHO...You should pay yourself first and self fund 401k/IRA's. Buy life insurance as a need to cover your family/business, etc.....once you've maxed out your 401k and IRAs.

I'm not knocking insurance as an investment, because anyone who saves anything is good this day and age.

Yep.........dat wut I said.

PUREBAY helped me along on my insurance pilgrim ways and now things are going to be all better!
Good guy, know his stuff.