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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 18016  
Subject: Re: Last to Die Insurance Date: 4/7/2001 9:19 PM
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MikeMatheson writes,


First of all, I don't think you read closely enough. The total death benefit consists of :

(1) The Original Sum Assured
(2) The Return of All Premiums Paid
(3) The Interest you WOULD HAVE earned had you invested the premiums elsewhere at an after tax 6%

I agree that six percent isn't terribly impressive - IF we are talking about a simple return on investment. However, we aren't. We are looking at a plan that has this IN ADDITION to the orginal amount of insurance AND getting all the premiums back.

While I am impressed with your ability to find charts and reproduce them here, I don't think you have proven that you can be assured to do better than the guaranteed TAX-FREE benefits available with Life Insurance. There is no better way to handle your estate taxes.

I guess it depends on the size of the death benefit and how much of my money the insurance company has tied up at a paltry 6% investment return. Guarantees get pretty expensive when what you're guaranteeing is pretty close to a worst-case investment return.

I agree that life insurance is a wonderful "investment" if you die early or young. It just not that an efficient "investment" vehicle if you live to a ripe old age -- even if it is tax-free.


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