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Author: dhodson Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 17951  
Subject: Re: Disability Insurance Date: 7/11/2012 6:36 PM
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You must not understand fiduciary. It has nothing to do with AIG or any bailout. It has to do with giving the best advice for the client. Whole life is only best when a person needs a permanent death benefit.

The returns do not exceed investing appropriately regardless of tax angle. To tell people they can see an IRR of 5% is inappropriate. Nobody knows the return on whole life ahead of time. Returns that were higher were when us treasuries and bonds returned over 8% Since insurance companies cant do that currently, dividends which are of course not guaranteed have been falling like rocks with no end in site. If the current interest rate environment persists then returns will be a lot lower. At the current rate of dividend decreases, it will be less than 4% although nobody knows what will really happen long term.

While i dont know Ben, Ive heard he invests in insurance bc he doesnt want his moves to affect the market. Its inappropriate yet again for you to pretend he does this bc he thinks they will provide a better return. Please provide some proof for this. Comparing OJ is another inappropriate example. Ill just touch on the protection part but what any celebrity or person does regardless of their wealth or status is meaningless in this conversation. For most Americans, the protection is worthless and the reason for this is that if you get sued in the first 20 years of having a whole life contract then you wont be able to pay premiums and it will fail. If you take money out, well that money also isnt protected. Of course the agent doesnt tell you this.

The vast majority of people lose a ton of money on whole life. You will notice not one company lists its persistency rate. This is bc very few whole life policies are kept in force until death. Review the info from society of actuaries. You will see most people surrender or lapse their whole life and many likely lose a ton of money on whole life.
http://www.soa.org/research/experience-study/ind-life/persis...

Whole life is not an asset unless you need a permanent death benefit. Those tax free loans cost typically 8% on interest and of course reduce the death benefit.

Please educate yourself. Orman and Ransey have nothing to do with this.

By the way, I unfortunately i have a large whole life policy.
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