Insurance Pro Blog Podcast | Life Insurance and Annuity Insights

Despite the strengths of whole life guaranteed cash value, many people attack the guaranteed ledger of a whole life insurance illustration because they believe they can do better.  Do better is a highly subjective and relative notion, but one major argument notes that with whole life insurance, you are guaranteed to lose money if you buy it.

Seems like a reasonable claim.  The ledger reflects a cash value less than your premiums in the first few years--a guaranteed negative return. 

If you look at a whole life policy illustration (that we provide to our clients and potential clients), you'll notice that the increase in cash value year-over-year is not linear.  Now in truth, the growth of cash value in a whole life policy that earns dividends will sometimes fail to increase by an ever-growing number year-over-year.

If the dividend rate drops significantly, it's possible that the growth in cash value could drop below the prior year.  Take special note here; we're not saying the cash value will be less; we're saying that the growth in cash value may be less than the year prior.

But back to that whole life illustration for a moment.  It shows us that the guaranteed accumulation of cash values produces an ever-growing result year over year.  This means that a very large reduction in the dividend could result in absolute growth in cash value that is less than the prior year. Still, the guaranteed cash value accumulation in a whole life policy will likely make this difference extremely small. 

If you want to hear more, please listen to the full episode.

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And if you'd like to see how a whole life policy might work for you just as we describe above, please click here to contact us. We'd love to help.

We have discussed indexed universal life insurance (IUL) at great length in previous podcast episodes, but we know the big question remains: does it work? So, to further investigate that question, we decided to update a bit of an experiment we ran about ten years ago.

We will use a hypothetical IUL contract (a real contract from which we have borrowed heavily, but we won't name names) with a minimum interest rate of 0% per year and a maximum of 10%.  We're viewing this from two different approaches, one will be a model based on Monte Carlo methods, and the second will be a historical analysis of 140 years of annual growth in the S&P 500 index. With the S&P index, we used a mean return of 10% with a standard deviation of 15%.

If that comparison interests you, please listen to the full episode. __________________________________________

If you'd like to explore your own life insurance strategy, please click right here to get in touch with us. We work with people nationwide every day, and we'd be happy to hear from you too.

We don't often talk about the risks of running out of money related to needing some long-term care as you age. But it's a real risk nonetheless.

In today's episode, we discuss some personal experiences with this very thing and watch as the need quickly consumed several hundred thousand dollars. Exhausting substantial resources doesn't take long when the need for care exceeds $10,000/month. 

This could be a real threat to your wealth, but it's a risk you can insure if you plan ahead. 

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If you'd like to explore your options, please click here to contact us. We'd love to help.

While most financial advice is heavily focused on maximizing return while minimizing fees (and this perhaps is one of the reasons so many people fail long-term in their financial plan), today we're going to introduce a concept that is by no means new but one of those golden little nuggets that could dramatically change the way you look at financial matters through the lens of your personal self-worth.

Since you'll never have control over the rate of return, it makes little sense to spend significant amounts of time worrying about it. Consider an alternative that puts you in total control of your outcome. 

If that sounds enticing, listen to the full episode...and if you like some visual support, click on over to see the concept in multi-color graphs. 

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And when you're ready to have us help you develop a real plan that maximizes your outcome (with less focus on the rate of return), click right here to send us a message. We'd love to hear from you.

We've spent a lot of time trying to locate the source that validates this assumption (8% average return on investments). And back in 2018, we recorded an upside reporting our findings.

At the time, we couldn't find evidence supporting 8% as a reasonable return assumption. But we decided it's been nearly five years since that original study, so we need to revisit it. 

How did the extreme market increase over the last five years change things, or did it?

Listen to the full episode to find out what we discovered.  ___________________________________

If you'd like to look at planning for your future and are questioning how you could do that in a way that makes reasonable assumptions, we'd love to help you. Please click here to get in touch.

After spending a considerable effort attempting to corroborate an 8% compound annual growth rate for stock market investments, we’re about to unveil the latest and greatest research on achieving such returns - five years in the making. But this attempt at updating our data set with recent performance yielded something remarkable – prompting us to dedicate an entire episode exploring it further.

What was the discovery...?

It seems almost unbelievable, but a staggering 20-year compound annual growth rate of just 2.76% is something we've seen in the rolling 12-month returns data! That's huge – when those plans you made based on 8% don't come to fruition due to actually getting 3%, it profoundly impacts your life.

Listen to the full episode for more details on what this all means and how you might want to adjust your plans to accommodate the risk of coming up short. ______________________________________

If you want help with a solution that can help you mitigate future risks, please click here and get in touch with us. We'd love to chat.

Annuities have experienced a cold dark winter over the last decade or so. It's not to say that annuities stopped existing and that the benefits they offered fell short. The product serves a vital role in providing guaranteed income in multiple combinations.

However, the prolonged period of depressingly low-interest rates that we had from the financial crisis until the earlier part of 2022 saw the popularity of annuities fall. Again, they always fulfilled their promises as an income-focused product, but there was no real immediate gratification to them.

Now things have shifted, and they've done so quickly and definitively. If you think you might like to have some portion of your future retirement income with a guarantee, now is the time to look at annuities more seriously. Please don't wait--the window is open, but we have no idea for how long. 

Today's episode discusses how a move toward annuities could hurt the stock market.  _________________________

If you'd like to see how an annuity might benefit you, please click here to reach out. We've seen some pretty outstanding results lately with annuities and had some delighted clients as a result. 

What's old is new again, it seems, in the world, of talking about the myriad ways to use life insurance as a wealth-storing tool that is highly leverageable. As introduced by Nelson Nash, the infinite banking concept goes back several decades. He was the first person we're aware of to clearly articulate the benefits of using whole life insurance to create your bank. 

In recent years, with the popularity of Youtube and the internet, self-proclaimed "eggspurts" have spread the idea to the world. However, the idea has been perverted by many and has ventured far from the original premise introduced by Nash.

Today, we're outlining the problems with its modern interpretation while validating the original idea. The concept works, but you can't ignore the realities. Listen to hear precisely what we mean. _______________________________

If you'd like to talk with us about how the ideas we outline in this episode might work for your situation, please click right here to reach out to us and mention that you've been listening to our podcast. 

For years, we've all been taught that bonds are the "safety" valve to the otherwise stock-heavy allocation of our retirement/investment portfolios. And for years, we've argued that this was largely unproven as all of us have been living through extraordinary times where bond ETFs and mutual funds haven't faced the pressure of rising interest rates. 

But the tables have turned over the last year to 18 months. Interest rate policy has shifted, and bond funds (ETFs and mutual funds) are reaping the sour harvest. The notions about bonds being more stable and safe are not holding. 

In this episode, we look at specific data that may surprise you. Did you ever think you'd live through a time when the value of an investment-grade bond-focused ETF would experience a 17% loss in a calendar year? 2022 was one of those years.  ____________________________

If you're looking for an asset that provides similar average returns to bonds over time without the risk of losing money year-to-year, perhaps you might be interested to see how whole life insurance compares. We have more than 30 years of combined experience assisting clients with whole life insurance that achieves that result, and we'd love to work with you. Please click here to contact us and have us work for you to get the right policy set up this year. 

When looking at life insurance illustrations or the actual policy documents, you'll see some version of "Please seek the advice of your tax professional..." in numerous places. But why? Is it really necessary for you to go over every possible financial decision or potential purchase of a potential product with a tax professional?

Well, that's up to you, but in our experience, that would be pretty costly and unrealistic. Not that seeking professional tax advice is a bad idea. Still, in many cases, insurance companies add these disclosures or warnings as a CYA tool because they can't possibly know of every person's situation--the sources of income you have, how much of it you have, what deductions you might have, etc.

Today we discuss when it might be a good idea to seek professional tax advice and what you can expect from most tax professionals when guiding you on a life insurance purchase.  __________________________________ It's a new year, and we know that many of you listening to our podcasts probably are thinking about your finances and still pondering the big question..." will some sort of cash value life insurance work for me?" If that's you, please click here to get in touch with us; we can help you figure that out pretty quickly and guide you on the right policy if, in fact, if is a good fit for you.