"John A. Weeks III" <john[at]johnweeks.com> wrote in message
news:120720042121104489%john[at]johnweeks.com...
- quote -

Who is the insurance institute of America? I've never heard of them, and
neither has any of my agent buddies, and we have several centuries of
combined insurance experience.

For the record, whole life does not have "high fees" nor "sub-par
performance." Without qualification, both of these statements are patently
false and unsupportable with verifiable evidence.

There are two components to the premium for whole life, from the consumers
perspective:

1. Policy Fee, usually a fixed annual amount that can never change, and,
2. Rate per thousand of death benefits, which also does not change for the
life of the insured.

Policy fees used to be measured in pennies, circa 1870. Today, they are
often $50 to $100 per year, depending on the contract (this goes for term,
as well).

Rates per thousand are about HALF today what they were 15 years ago, and
less than a quarter what they were prior to World War II. The continue to
drop because people are living longer, even though reserve requirements are
up and interest rates are modest. Whole life has never been a better buy
than it is today, and it keeps getting better.

Policy fees are present in ANY individual product, including term insurance.
A good agent can show how putting a term rider on a permanent contract can
often save money over two separate contracts, and without a doubt, EVERY man
AND woman is a prospect for a final expense policy, because mortality
remains 100%. For final expense purposes, participating whole life
insurance is virtually ALWAYS the lowest cost dollar to pay the toll when
the time comes, over a lifetime.

- quote -

What is the "typical investor?"

For example, single premium life insurance, especially with accelerated
living benefits, is often a fantastic investment alternative for the
"typical" senior citizen. In cases of impaired risk, it is often unbeatable
in all but the most extraordinary (read: HIGH RISK) scenarios (read:
Gambling in Las Vegas).

Whole life insurance is a death benefit, primarily, and a savings vehicle,
secondarily. It is not possible to argue anything to the contrary, as these
facts cannot be disputed.

- quote -

Whole life has NEVER projected a 15% return, so you're making this up (even
Variable products have been limited to 12% since 1969).

The highest projected rates, circa mid-1980s, was in the 12% range, and for
ONLY a VERY BRIEF period of time. Less than a handful of companies
illustrated these values, while most others were in the 9-11% range. These
illustrations reflect the current interest rate environment of the time, and
on would have to be ignorant of history to assume that they would remain
inflated ad infinitum.

The majority of illustrations for these products, at that time, showed a
"vanishing premium" (what we now call "premium offset by policy values").
Only VERY inexperienced agents show whole life as an accumulation vehicle
for individuals (COLI/BOLI is an exception, but we all know that you're not
eligible for those contracts). Most professional, experienced agents
illustrate "pennies in a bucket to get out a dollar" because it is the
lowest lifetime cost approach to purchasing life insurance for various needs
that never go away and/or grow throughout life.

Obviously, you have not had the priviledge of spending any time with a bona
fide successful professional life insurance agent, otherwise you would not
promulgate this mythology and urban legend as if it were fact (and what you
say clearly is NOT based on actual fact or verifiable evidence).

Professional agents tend to work with other professionals. Successful
agents are most likely to be found working with other successful people. We
follow money, because we sell monetary solutions to monetary problems. If
one doesn't have any money, a successful professional life insurance agent
isn't going to spend any time with them.

Time is money.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

"John A. Weeks III" <john[at]johnweeks.com> wrote in message
- quote -

Thanks everyone who took time to answer my questions.

I am still ignorant about WL and Term but I will pass on any insurance
for now.Just as an update,I contacted the realtor for the coop and
surprisgly she told me a ghost story about how difficult it is to sell
one of these, and sadly pitched for other homes in the
neighbourhood... Dont know what to trust.

Thanks.

"John A. Weeks III" <john[at]johnweeks.com> wrote in message
news:120720042121104489%john[at]johnweeks.com...
- quote -

Did you NOT read the BOLD print above. I stated unequivocally,
that W/L is NOT an investment vehicle. Which part of NOT was
difficult to understand?

btw, In over 41 years, I have not seen a Whole Life Illustration
that showed or assumed a 15% "rate of return". MANY-MANY
years ago, they DID illustrate 15% "Current Interest", and then
projected that same interest for an extended period of time. That
proved disastrous for all, and most companies are currently
illustrating a much more conservative "current interest".

Cal Lester CLU

In article <5PDIc.65110$IQ4.24947[at]attbi_s02> , Cal Lester
<cal-lester[at]comcast.net> wrote:

- quote -

The only way this could be true is if every other investment that
this person makes goes down the tubes. The insurance institute
of America states that whole life policies have high fees and
sub-par performance. As a result, they are rarely ever an appropriate
investment for the typical investor. And if whole life is not an
investment vehicle, why does every whole life presentation that I
have ever been to shows some example assuming 15% per year rate of
return where I end up with $4-million dollars at age 65 by putting
in $99 a month? Sounds like a duck to me.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

"Ed Zollars, CPA" <ezollar[at]mindspring.com> wrote in message
news:ccuqb2024te[at]news1.newsguy.com...
- quote -


EXCELLENT anology


- quote -



As I have mentioned MANY times here, It pays to
deal with a professional, "Caveat Emptor".
Cal Lester CLU

- quote -


======================================= MODERATOR'S COMMENT:
If you don't know how to trim posts to which you respond, please say so on your next post.

"Alex" <a193[at]hotmail.com> wrote in message
news:fd3ea3e1.0407120956.5e626458[at]posting.google.com...
- quote -

Whole Life comes in Two Deliciouse flavors, Par & Non Par.
Par refers to Participating, wherein the company "refunds" to
the Insured a portion of the premium (amount dependent on
many factors) in the form of a Dividend.
One of the many uses of that Dividend would be to have it
applied to pay premiums. One of the dangers involved here,
is that IF you get into the "habit" of NOT paying premiums
directly, should the dividends be insufficient at some time,
the policy would be in danger of Lapsation.

IF the agent used the term that YOU did,"pay off the policy",
then he would be in danger of a loss of license. The ONLY
way that YOU could pay off the policy in 6 or any amount of
years is to pay a TREMENDOUSE premium up front. The dividends
could be "illustrated" to show a"probability" of sufficiency to
pay premiums coming due, but that would only be an illustration
of a possibility, NOT A GUARANTEE OF ANYTHING.


- quote -


You most certainly are. As I mentioned before, Whole Life
Insurance is just that, Life Insurance, and ABSOLUTELY
NOT AN INVESTMENT VEHICLE (even though it might turn
out someday to have been one of the best investments you make).

- quote -

No stupidity here, actually an excellent question. The fact that
you are "currently" self employed will have some bearing on the
companies requirements as to eligibility, and amount that you
can purchase. However at the time of claim, the only question
is whether you meet the "policy definition" of disability. If
you
do, then you should receive the amount that you contracted for.



I am not qualified to respond to the balance of your questions about
housing.

Cal Lester CLU

"John A. Weeks III" <john[at]johnweeks.com> wrote in message
news:120720041405268015%john[at]johnweeks.com...
- quote -


I am certain to be accused of FLAMING, but it would
be helpful if this poster knew anything about the subject
before he gave out advice.
Cal Lester


======================================= MODERATOR'S COMMENT:
Please trim the post to which you respond.

In article <fd3ea3e1.0407120956.5e626458[at]posting.google.com> , Alex
<a193[at]hotmail.com> wrote:

- quote -

Term is where you buy a specific amount of insurance for a specific
length of time at a fixed price. For example, you can buy 10 years
of $500,000 at $45 per year. Whole life is where you spend your
whold life paying for your insurance agents' BMW and boat, and
just happen to get a little insurance coverage to boot. It is
mostly a scam, and very few people fit in the category where whole
life is the right type of insurance.

- quote -

Whole life has two buckets for your money...an insurance bucket, and
an investment bucket. Like all other jack-of-all-trades, you get
neither the best insurance nor the best investments. It is far better
for most people to pick up term insurance, then invest outside of
the insurance plan on your own or with the help of an advisor.

- quote -

Generally you purchase a certain level of income replacement. For
example, if you make $120K annually, you may need $80K to live if
you are disabled, so you would buy that level of disability.

- quote -

You cannot predict the future performance of any investment. For
example, would you be interested in buying stock in Worldcom or Enron
right now? Both were high fliers and went up a lot in the year 2000.
It is very possible that housing is in a bubble and may pull back. As
a result, I would never suggest that you buy housing based on the
assumption that it will go up in value. It would be nice if it did,
just don't set yourself up to depend on it.

My suggestion is to buy the co-op. Live there for a while, save
some money. If you want to buy something else after you have saved
up a bunch of money, then go do that. The cost of the co-op versus
what it could rent for would give you positive cash flow in the event
that you wanted to keep it for an investment and rent it out later on.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

Alex wrote:

- quote -

Be very careful to understand exactly how much of what you were told
is guaranteed and how much is based on projections. I expect if you
read carefully, you'll discover that there is no guarantee on that
six year period. That illustration is based on *assumptions* about
the policy outperforming its guaranteed rate of return by a certain
amount.

That is, I expect if you read the fine print you'll discover that
you have agreed to pay the premiums for life and the insurance
company has agreed that so long as that level premium continues to
be paid they will pay the death benefit at your death, as well as
provide for scheduled increases in the cash surrender value of the
policy. However, since your policy very likely is a participating
whole life policy, you "participate" should the insurance company's
performance outperform the guarantee assumptions. That
"participation" is what creates the dividends.

Those dividends (which, remember, represent performance in excess of
the guarantees) can be used to reduce premiums.

Now in the alternative it is possible you are being shown a policy
that truly is guaranteed to be "paid up" after six years of
payments. But note that such a policy generally would require a
much more significant premium commitment over that period. But that
is a very different beast from a whole life policy that is
illustrated to eventually have dividends rise to pay the premium.

In the first case you know that so long as you pay $X over the term,
you have permanent coverage. In the second, you *hope* that the
policy performs well enough to enable you to not have to fulfill the
commitment to pay the remaining premiums.

Whether that hope is reasonable depends on knowing a lot more than
we can possible know in this forum. However, it is important to
know that the *insurer* is hedging their bets on that one
<grin> --they aren't willing to say that it will work, just that it
might if things go as illustrated.

What that means is that if you go that route, you need to have
regular "in force" illustrations prepared by your agent while you
hold the policy to show if things are going according to plan, or
whether the plan appears to have hit a "pothole" and the impact of
that "pothole" on your policy.

Where people get in trouble with permanent insurance is when they
fail to understand the distinction between what the insurer has
*committed* to do and what is being illustrated based on possible
results. The one thing I know about any illustration is that it is
a virtual certainty that your policy will *NOT* perform exactly as
illustrated, because results will be different. What I don't know
is if the policy will do better or worse than illustrated.

That's why it's also important to ask your agent to vary the
assumptions to show how sensitive the illustration is to various
changes in results that aren't guaranteed. If your agent didn't
manage to effectively communicate that the results he/she is showing
you aren't guaranteed, you probably need a new agent because either:

a) you and he simply aren't able to effectively communicate, and
you need someone who can get you to understand the potential
variation in the results *OR*

b) you have an agent who is intentionally soft-peddling any
potential negatives in order to close the sale.

The latter case would be a real problem, since such an agent might
also be tempted to go for the most favorable illustration that he
reasonably thinks he can show and stay out of hot water--one that
almost certainly will be more favorable than what actually happens.

--
Ed Zollars, CPA
Phoenix, Arizona

OK guys...thank you all for your contribution.I am a newbie to any
kind of life insurance.So for now whole (WL) or Term (T)in itself is
something new.

On reading all the posts I feel I got to ask a few questions:
Q: For WL the agent refered to something where in I pay off the policy
in six years and want pay anytinhg after that as the policy starts
paying for itself.I think he was refering to the dividend which will
pay the premium.

As for my current situation I am not sure how much I am keen on buying
into any kind of life insurance (as my sense of WL was that its an
investment like investing in mutual funds and on top of it, it will
provide insurance, but may be I was wrong).

Q: I am self emloyed, which kind of disability insurance works for
self employed people.How will the insurance compnay determine my
annual pay.Do they go by a fix income and cacluate diability benefits
or if and when I am diabled they will check my employment hitory to
come to a diability number.I may sound stupid asking these q's but I
got to.

Q: I am still renting.I came across a 1 BRM coop in the haevily
crowded town in central Jersey.The cop is offernig 1 brm for 35K and I
dont forsee any appreciation on these but if I won one of these
(besides 35K I will pay 480$ per month) and the rent I am paying
currently is 1K.
I m ok with the coop and the fact it want appreciate as I figured if I
rent it later it will rent for 900/month and with 35K investment - 500
montlh maintenance, the return will be around 10% on 35 K.What u guys
think.R coop owership a bad idea,Is it possible the value my go won to
0 on this investment.

Finally should I go out and buy a 1500 sq ft townhouse in a good town
for 350k.The annual tax will be around 8K.It may appreciate as these
town homes were 200K in year 2000.Yes its 350K here in central jersey.

I am confused please help..

Thanks.

"Richard Cline" <dcline[at]silcom.com> wrote in message
news:dcline-62D9BD.22442711072004[at]news.silcom.com...
- quote -


Dick, please do NOT misunderstand. I did NOT
recommend Whole Life over Term. I simply pointed
out the differences. The decision as to which might
be better for YOU will depend on what you want it to do.
Cal Lester CLU

In article <71kIc.36108$WX.8711[at]attbi_s51> , "Cal Lester"
<cal-lester[at]comcast.net> wrote:


OK I understand you now. Whole life is the better deal.

Dick


- quote -

"Michael Sullivan" <mes[at]panix.com> wrote in message
news:1ggrhff.1udk7j1eocr6aN%mes[at]panix.com...
- quote -


Please do NOT missunderstand, I am NOT trying to prolong
a debate, but I must point out an inconsistancy in the
sentence
above.
Term Insurance is an EXTREMELY important tool, to provide
a specific number of dollars in the event of DEATH during a
specific period of time. Having (or not having dependents)
is
NOT the primary factor. Having a OBLIGATION for a specific
number of dollars during a specific period of time IS.
Examples would be:

pay off a note, pay off a mortgage, provide
college
funds, provide LTC for a parent, cover a
Buy/Sell
Agreement, cover a Key Person, etc.etc..........



Term insurance insures against an unlikely early death, and
- quote -

precisely

Permanent insurance is essentially an
- quote -

A decided over simplification. Estate Planning is primarily
a program for conservation. Permanent Life insurance is a
valuable instrument to use in that program.

- quote -


In my personal experience, I find that very FEW people
become
"financially self sufficient" to warrant dropping an
existing Life
insurance policy (except very costly term). Any existing
Life
policy "at death" becomes a relatively inexpensive source of
ready needed cash.

As to the second portion of the above, please be aware that
IF one has the capability of "conversion" of Term, and not
every
contract offers that ( most people who BUY term, usually buy
the
15 - 20 - 30 year contract, which is NOT usually
convertable), that
the cost of any Permanent Policy at that age is DRASTICALLY
higher.

Since
- quote -


It was not offered as an EXCUSE, simply a statistic. As I
mentioned above, Term is an EXCELLENT tool, when
purchased intelligently by an informed client, from an
informed agent (I realise that might appear to be an
Oxymoron).

- quote -


No problem if you include "durring a specific period of
time".


Permanent insurance is (generally)
- quote -


Cal Lester CLU

Cal Lester <cal-lester[at]comcast.net> wrote:

- quote -

That is to be expected. Whole Life is bought (or should be bought) by
people who expect to own it until they die, period. Term is bought by
people who want to insure against financial catastrophe of dying while
they still have dependents, and insufficient reserved capital to support
them. Term insurance insures against an unlikely early death, and
becomes prohibitively expensive once you are old enough that death is no
longer unlikely in the near term. Permanent insurance is essentially an
estate planning vehicle, even where the functions overlap some.

In general, I would expect most people who own term to either drop their
life insurance (after becoming financially self-sufficient, or no longer
having dependents), or convert/replace it with some form of permanent
life insurance sometime near their retirement years (50s/60s). Since
not too many people die before then, it's natural that most people who
die with life insurance in force will have permanent insurance. It's
simply not cost-effective to own term at the ages when most people die
(80+)

I don't like seeing this statistic used as an excuse to avoid term
insurance. Term vs. whole life is like buying an option instead of a
stock. It's much more volatile, and will often expire worthless, but
when it pays off, it pays off *big* on a small investment. The
insurance company makes its profits because you pay it to take the
volatile downside of the bet. As long as you understand the structure
and are taking advantage of the hedge effect, it can be correct to buy
term insurance even though a significant fraction of the payment is
going to enrich the insurance company, just as it can be correct to (for
example) buy S&P put options to hedge against a stock crash while you
are holding onto a security with a large capital gain, even though a
large fraction of the payment will go to enrich the broker of the
transaction (options are essentially zero-sum -- in the long run, the
brokers make all of the money).

Term insurance is (generally) the most cost-effective way to buy
*insurance* against *early* death. Permanent insurance is (generally)
the most cost-effective way to guarantee a payout on *any* death. I
think that's the key to keep in mind when deciding between the two.


Michael

"John A. Weeks III" <john[at]johnweeks.com> wrote in message
news:090720042137461745%john[at]johnweeks.com...
- quote -


Whole (or any) Life Insurance IS NOT an investment vehicle
even though it is often SOLD as such. The PURPOSE of ANY
Life Insurance policy (whole included) is to provide DOLLARS
at a specific point in time (usually death).

I do NOT know which watchdog you are quoteing, but ANY
Life Insurance buyer does NOT benefit from the purchase of
ANY form of Life Insurance, UNLESS it is on the life of another.

The main purpose of any Permanent Life Policy (whole included)
is to offer the ability to have a LEVEL PREMIUM FOR THE LIFE
of the policy. Whereas Term Insurance (that includes EVERY form
of Term Insurance) has an ANNUAL Increase in the C.O.I., due
to theageing of the insured.


- quote -



Kids are an overrated commodity ! ! ! ! ! Any person would have
a NEED for Insurance if there is a NEED to have a specific
number
of dollars available at a specific point in time (usually
death).

Cal Lester CLU

"Richard Cline" <dcline[at]silcom.com> wrote in message
news:dcline-B80999.20313409072004[at]news.silcom.com...
- quote -


WHOA ! ! ! ! Let us be a bit more precise, if we are going to
EXPLAIN what a product is. Whole Life (generic) IS a Life
Insurance policy, that contains a Guaranteed Reserve Account,
often referred to as the Cash Value, which is REQUIRED by
law, to offset the rising COST involved in ANY Life Insurance
product, providing the ability to maintain a Level Premium Basis
throughout the life of the contract.............................
There is NO
Savings Plan involved here at all (even though some agents &
companies do advertise it as such)


Insurance companies PREFER to sell Term Insurance, as it is
the second best profit item to them. The latest statistic that I
have
shows that LESS THAN 3 % OF ALL DEATH CLAIMS are paid on
in-force Term Insurance. Conversely over 97% of all claims are
paid on In-Force Permanent Policies (all types).

There is an old adage in our industry, that "people who OWN Term
Insurance DON'T Die, whereas people who DIE do NOT OWN
Term Insurance."

(note, I have no problem with YOUR personal opinion)



- quote -


Glad that you included the word "often", as there are many
OTHER needs for various Life Insurance products

- quote -


No argument here ! ! ! ! ! !

Cal Lester CLU

In article <fd3ea3e1.0407091302.23546e3[at]posting.google.com> , Alex
<a193[at]hotmail.com> wrote:

- quote -

Asking and reading is a good start. Posting here is a good start.

- quote -

Yes, you do have this money invested. Everything you do with it
is an investment. Putting money in at 2% while inflation is running
at 3% means you are losing 1% per year on your money. Since this
is a fixed return, that means you are locking yourself in on these
loses. I would suggest finding an investment that is less risky,
ie, one where you are not losing buying power each month.

- quote -

Raw land is a normally a pretty risky investment. First, you cannot
get conventional loans or mortgages on most land. Second, land has
no use or value until it is developed. A piece of land might be
the next big sub-division, or it might sit unused for 50 years.
Third, land is a risk. Someone could ride a horse or motorbike
onto your land, get hurt, and sue you. That means you need to keep
insurance. Finally, land eats. You have to pay taxes and possible
accessments, plus you have to keep the grass trimmed and weeds cut,
and all that costs money.

- quote -

No. Whole life is rarely ever a good investment for anyone. The
major insurance watchdog group states that they typical insurance
buyer does not benefit from whole life as compared to term.

A bigger question is what do you have to insure? If you don't have
kids, you likely have no real reason for insurance. Especially not
with $200K in liquid assets sitting in the bank.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

In article <fd3ea3e1.0407091302.23546e3[at]posting.google.com> ,
a193[at]hotmail.com (Alex) wrote:

Whole life insurance is a combination of two things, it is an insurance
policy and a saving plan. Insurance companies prefer to sell whole life
insurance to term insurance as they make more profit. It is my personal
opinion that your insurance and your investments should be separated.
If you feel the need for insurance, consider term insurance.

Moreover, you may not have a great need for insurance. Insurance is
oten a need for those with families where your death would seriously
impact the family. It sounds like you have not purchased insurance up
to now. Has it become important? Do you feel the need to spend part of
the 200K?

Real estate is a good investment if you purchase in the right location
at the right time. Do you want a vacation home, a rental property, or
raw land? They each have their own problems. I believe that making a
profit in real estate is far more difficult than making a profit in
stocks.

Dick

- quote -

"Alex" <a193[at]hotmail.com> wrote in message news:fd3ea3e1.0407091302.23546e3[at]posting.google.com...
- quote -

Alex, IF this is a real question, and NOT a "flame thrower", then I
will attempt to cl;ear some of it up for you. Let me start out by saying
that I am NOT a "practicing" Financial Advisor. I am however a 41 year
veteran in the Life Insurance field.

Based solely on the information that you provided, there does NOT seem
to be a pressing NEEd for any Life Insurance "per se". Whole Life is a
Life Insurance product that provides a DEATH benefit, if you DIE while
the policy IS in-force, requires premium payments for life in order to
keep it in-force, and depending on the specific contract, has a Guaranteed
Reserve (also called the Cash value Account), and may pay either dividends
or interest on that Reserve.

Generaly speaking a Whoe Life Policy does NOT offer Disability benefits
(although ity may contain a Waiver of the required premium in the event of
a QUALIFIED Disability). That is NOT to say that the contract can not contain
some form of a specific RIDER (extra cost) that could provide Disability Benefits.

Now as to your situation, you may or may not someday have a Federal Estate
Taxable ESTATE at your Death, and an in-force Life Insurance policy would
be the least expensive way to pay that TAX. Being unmarried, in your 30's, that
does not seem to be of paramount importance at this time. I have no idea what
you do (or do not do) for a living. Looking into a G O O D (stand alone) Disability Income
Contract at this time MAY be an important option for you.

As to the investment, I will leave that for other more qualified people to answer.

Cal Lester CLU



- quote -

Dear all,

I dont know where to start.

I have around 200K sitting in the bank 2% APY.I do not have any plans
to invest this anywhere.

I am interested in buying land real estate as investment.Am shy of
mutual funds and dont know y.I am in metro NJ/NY area.Any pointers as
to what to do where to start...

In the mean time one of the insurance agent is pursuing me to buy
guardian whole life insurance policy with around 18K premium every
year.I have no idea what whole life is all about but he sounds
impressive.He is promising diability benefits etc... is this something
I should look into.

I have no kids, married and am in my early 30's.

Please advise. Thanks.