That’s why I said AT LEAST 2.5 years. Certainly you could go higher.
Read the my original post again. I said AT LEAST 2.5 years. By all means buy as much as you can stand. Mine is covered for well over a decade and I do quite well. 2.5 is the bare minimum.
Life insurance, annuities, retirement accounts and the homestead residence under FS 222.
That, too. I usually recommend clients with considerable assets consider buying an umbrella policy for catastrophic risks. They're dirt cheap. But the extra coverage at the same time makes you an even bigger suit target.
Something we can agree on for sure. UL policies sold in the 80’s under sky high interest rates made some insureds a small fortune, but rarely the case today. The only advantage today might be a company’s restriction on underwriting i.e. medical examination and health requirements for whole and term products. UL as a general rule is not as heavily underwritten.
It's a trap only if it's misrepresented. The buyer needs to be informed of the difference between current and guaranteed assumptions and what can happen over time. Costs can rise above current levels and interest rates can drop to the guaranteed minimum level, but the incidence of this happening is much less, esp with costs, than with LTC insurance.
How is it a ripoff again if used properly? With net cash surrender values equal to or greater than 95% of the first yr premium paid, some polices are cheaper than term. Mutual company products. Net IRR of 2-6% dependent on age and class. Throw in the LOC of term costs and the rate of return increases. Understand not all clients have the cash flow to fund them. But again most agents will not sell these types because the commissions are only 1/4 - 1/3 of standard policies. We should talk offline.
Right, got to love the old “vanishing premiums” illustrations from the 80’s. SMH
I broke into financial services 30 years ago selling participating WL contracts like you describe. The commissions were ~ 60% of the first year premium. Large. That ought to give an idea how profitable they were to the insurers.
They're all profitable, term included for the reason it is -- it's rented coverage over a specified period versus terminally owned. Most people drop it before they croak, many at separation of service from an employer at retirement.
