Not necessarily. These policies were purchased when we were in our 20s but
the cash value is only around $5k each. We're expecting to max out on other
tax-advantaged vehicles this year or next as I mentioned in my original
post. I don't know that I'd want to purchase another whole life policy at
this point, but if I can start with the $5k in annuities and then add to it
over time, it would give me another option for new cash.


"John A. Weeks III" <john[at]johnweeks.com> wrote in message
news:john-D71DAA.19445805072005[at]ip-lcc.supernews.net...
- quote -


======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. "Trim" means that except for a few lines to add context, the previous post is deleted.

In article <1120569120.568185.79450[at]g49g2000cwa.googlegroups.com> ,
beliavsky[at]aol.com wrote:

- quote -

I think it is pretty safe to assume that if this person was
in the situation that you describe, they would have far more
than $5,000 in the policy. You cannot avoid very much taxes
with a $5K policy. If it was $500,000, then it would be a
different story.

-john-

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

John A. Weeks III wrote:
- quote -

People who make such strong statements often don't know what they are
talking about. Whole life is a reasonable alternative for someone in a
high tax bracket who otherwise would buy term insurance and invest in
bonds, because the growth of the cash value is free of income tax.
Other tax-advantaged savings opportunities, such as 401(k)s and IRAs,
should probably be used first.

nowhere[at]noplace.com wrote:
- quote -

- quote -


Congtrat's, you are in rather fine shape. It appears from your last statement,
that you are aware that the "group coverage" is NOT yours, and is usually
lost when either you leave the company, or IT leaves you.

However, you mention a U/L policy. Did you apply for it YOURSELF, or was it
something that the company provided for you. The former, you can normaly
carry with you, the latter, rarely. You may want to research the "portability"
of that U/L contract at your earliest convenience.

IF it is truly portable, then one of the options that you should have would be
to TRANSFER (called a 1035 Exchange) the funds from the Whole Life policy
DIRECTLY into the U/L policy. No cost & no current taxation.

cal Lester CLU

(we use the term Death Benefit to alert prospects to the fact that they WILL Die.
we just don't know when)


--
If you don't learn to laugh at trouble, you won't have anything to laugh at when you are old

Cal,

The death benefit (love that term) of these policies is $10k each. We each
have employer group term coverage plus a Universal policy through my
employer that I can continue with if I should leave their employ. I have a
child in college whose tuition, etc. is covered by funds that are now in
very conservative instruments. No parental obligations. Mortgage will be
gone in a little over a year.



"Cal Lester" <cal-lester[at]comcast.net> wrote in message
newso6dne-R_el0AFTfRVn-1g[at]comcast.com...
- quote -


======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. "Trim" means that except for a few lines to add context, the previous post is deleted.

In article <VfCdnUDtWZfm9FTfRVn-jQ[at]comcast.com> ,
"BMS" <mcfarland[at]yahoo.com> wrote:

- quote -

Every last company that was held by the mutual fund would have
to go under. That is a pretty unlikely scenario.

- quote -

Bankruptcy doesn't mean what it used to for companies. Now days,
whenever someone gets in trouble, they file, get rid of the debts,
clean up the union contacts, and on they go. When is the last
time you heard of a company actually shutting down? Even Enron
still has options going across the USA, let alone biggies like
Chrysler, KMart, United Airlines, Worldcom/MCI, etc.

These days, all bankruptcy ends up being is a way to get a
competitive edge on your competitors.

-john-

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

nowhere[at]noplace.com wrote:
- quote -

I see that you have already received a number of replies ALL giving you advice about THIER favorite
product.
None of these people bothered to find out just what you have, what your options are, and more
important
what your R E A L needs are.

As an example:
Do you have other Permanet Life Insurance that YOU own??
Do you have a family (other than wife)?
Are there provisions for college funds if YOU die.?
Do you have parental obligations?
WHEN the Estate Tax comes back in 2010, could you have a Federal Estate Tax problem?
Is the Face Amount Greater than $5,000 (Say $25,000 Death Benefit). Would "investing" that
$5k be equal to the Death Benefit if you DIE soon?

Cal Lester CLU

John A. Weeks III wrote:
- quote -

These were certainly large bankruptcies, but are you sure about these
being their respective industry's largest?

"For a time, WorldCom was the Unites States' second largest long
distance phone company (AT&T was the largest)."
http://en.wikipedia.org/wiki/WorldCom

For K-Mart, I haven't been able to check one way or the other; at one
time it was the biggest discounter, but I am skeptical about it ever
having been the biggest retailer (as I recall, discounting became
dominant around the time that K-Mart was fading, in the 80s).

To illustrate the distinction:
"Kmart is the nation's third-largest discounter and the 14th-largest
retailer based on revenue." (2004)
http://www.freep.com/money/business/...9_20040329.htm

"Kmart fell from its perch as the biggest discounter [not retailer] and
became better known for corporate bumbling than for anything it sold..."
NYTimes, Nov. 18, 2004
http://www.rit.edu/~930www/News/inth...imes_Kmart.pdf

Just asking in the interest of complete and total accuracy :-) Your
point that large companies can fail is clear, though.

- quote -

One needs to differentiate between fixed annuities and variable
annuities.

"The story is different for variable annuities. In that case, you've
invested mutual-fund-like porfolios that are held separate from the
insurer's general account [much as a mutual fund is held separate from
the sponsoring fund family]. You can lose money when stocks or bonds
tank, but for the most part your annuity income remains immune to the
insurer's financial woes."

http://money.cnn.com/2003/01/20/reti...grave_annuity/

- quote -

Just like with many direct sale annuities. Specifically, with the
Vanguard annuity that the OP is considering.

"Other annuities may charge a surrender fee when you make withdrawals
within the first several years of opening the contract. But the
Vanguard Variable Annuity won't charge you any fees for withdrawing
money."

http://flagship2.vanguard.com/VGApp/...walContent.jsp

There are tax consequences - these are essentially similar to those
associated with a traditional IRA (taxed on earings, 10% penalty for
withdrawals under age 59.5), but an annuity should be used the same way
as an IRA - for retirement.

One downside of tax-managed or index funds is that one cannot rebalance,
or shift to more conservative investments as one ages (gracefully),
without tax consequences in a non-sheltered account. An annuity (or
401(k) or IRA or ...) facilitates managing one's portfolio. Whether
that is worth 30 basis points (the wrapper cost of a Vanguard annuity)
is the question.

http://flagship2.vanguard.com/VGApp/...ExpContent.jsp
--
Mark Freeland
nNeEwTs[at]sonic.net

What mutual funds can't go bust?

If you invest in the best in class annuity companies, you have no real risk
from the company going under. If companies like Allianz, ING and other top
companies go belly up, you better be in canned goods and shot guns.

An annuity offers the ability to invest in the best fund managers without
the fees for changing families.

In article <8obye.750$gD5.544[at]trndny06> , <nowhere[at]noplace.com> wrote:

- quote -

Whole life is evil, so dump that on Tuesday and try to get back
what little money will be left. Annuities are not as bad, but
the still lock you into companies that may go bankrupt and leave
you high and dry. And these days, any company can go bankrupt,
from the largest telephone companies (Worldcom) to the biggest
retailer (K-Mart, which was at one time), to high fliers like
Enron.

Investing in a tax efficient fund, such as an index fund that
has little turnover, ends up being just about the same as
tax deferred over time, and you actually own the funds (not
some big city insurance scheme), and you can pull the money
out any time you want to without any restrictions or surrender
charges. And the dealer doesn't get paid a 125% commission
to get you hog-tied into one of these deals.

-john-

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

My wife and I each have Pru whole life policies. We are in our mid to late
40s and have had these policies since our early twenties. Their cash value
is around $5k each. I'm thinking about surrendering these policies and
using the proceeds to purchase Vanguard variable annuities. The purpose is
to have another vehicle in which to invest tax deferred after taking full
advantage of 401k and Roth accounts. With the whole life policies I can't
incrementally invest additional money like we'd be able to with the
annuities. If these contributions plus earnings become a substantial amount
over the next 8-10 years, we could use the annuities to be an income stream
source during retirement. I would appreciate your pro/con opinions on this
idea. Thanks in advance.