What do you mean, are there any cases in which life ins. can be held? Do you mean that someone passes on and has life ins but the ins company is refusing for some reason to pay out benefits to the beneficiary(s)? Let me know..I'm able to help with the life ins part, but it looks like I need a little more info.
i dunno but my mom wants me and my bro to get life insurance cause her neighbour's son died really suddenly and was only 32 and it got my mom thinking about funeral costs and whatnot and thinks we should be covered just in case, cause she'd never be able to cover the costs.<br><br>
never too early for it really, i heard about 2 people my age passing over the holidays in car accidents, two seperate incidences.
i have a $400,000 policy on myself. If i die, mom and sis will have something to ease the pain. It also has an investment(stocks) feature which is tax free as long as i never terminate the policy, i can borrow from it whenever at a nominal interest rate like 1%(for the 1st 10 yrs, 0% after that) but they dont require me to pay back any money, it will just come out of the payout when i die. The policy itself is like $25 a month, but i make a payment of $200, which the rest goes into the investment part.
I've heard many consumer groups say that the only kind of life insurance that is worth the money usually is term life insurance for when you may have dependents and not enough time for your investments to build up for them to live off of. Much cheaper. Until then, my money will be in IRA's and mutual funds, etc. But I don't doubt there are some good ones out there, say, if you start at a very early age.<br><br><br><br>
I have some minimal coverage for free from work. Will pay like 10,000. More than enough for my folks to cremate me and buy some vegan snacks for a wake. Funeral businesses really take advantage of people and my family is wise to that. We would never want more than a few thousand spent on us. We'd throw ourselves in the river if we could.
Apple, in most states you can't sign a valid will until you reach age 18. You've got a while to read up on them . . . <img alt="" class="inlineimg" src="/images/smilies/smiley.gif" style="border:0px solid;" title="">
Thalia, the investment section of my life ins is set up similiar to 401k plans inwhich your investment is spread out over mutual funds of your choosing, you can switch them as you wish. In direct investing into these funds you have to pay taxes on your earnings, with a 401k im pretty sure there are still taxes at some point and huge penalties if you need to withdraw money before you are 65, in addition to taxes on that withdraw, with the plan i have im able to borrow against that money, loans arent taxed, and since i dont really have to pay it back if i dont want to, its pretty much the same as withdrawing it, except no taxes or penalties exist, my beneficiaries just receive less money, but never less than $400,000. Does my family need $400,000? no, and i will probably be switching that at some point to donate it to charity, minus the cost of my death services.
For all I care, shove my body in a snow drift, let me rot in a pile of leaves, just don't leave my body around to trip over, ya know? It's not like I'll give a hoot, because the dead don't care. Funerals and the like are for the living, not the dead.
Majake - I would double check some parts of your policy, in particular the part about loans and not paying them back. I am a licensed insurance agent and I hold my Series 6 (investments), and what you describe sounds odd. It sounds like some sort of universal life policy, except I have never heard of one that allows you to take a loan at such a low rate, and not pay it back. (The part about the unpaid portion of the loan being taken out of the insurance amount upon death is correct.) At some point, the interest would start coming out of your cash value.<br><br><br><br>
There can be tax implications in the scenario you suggest, as being allowed to take a loan out at almost 0% interest could be construed by the IRS as a withdrawal. I also see no advantage to the insurance company in this case - they are letting you shelter money and avoid taxes with nominal gains to themsleves.<br><br><br><br>
Double check the interest rate on the loan - make sure it is not a variable rate. It could be that the rate is low now, but could be higher in the future.<br><br><br><br>
I will look up some information on universal life policies, to see if there are some other catches I am not thinking of at this time.<br><br><br><br>
Thalia - term life is the way to go. Keep plugging money in those IRAs and mutual funds - it will pay off.
Tame, i did a bit more research into it. It is referred to by the company as a Variable Life Ins Policy<br><br><br><br>
It is an annual interest rate prepaid each year at 5.2%, the loan amount and interest amount are put into a reserve account which earns an interest rate of 4.75%. So if the loan isnt repaid the interest rate would be at 5.2%. Each year the interest is calculated on the unpaid balance plus perviously accrued interest. So far i have found no indication of non-payment penalties or tax penalties on a loan, they do have withdrawals i can make which would be taxed.
Majake - a variable life policy is (I think) a variation of the universal life.<br><br><br><br>
Check into what happens to the insurance amount if the investments you have chosen go awry. Also, check into what your premiums would do in such a case.
i believe the $400,000 would be the minimum that is paid out, minus whatever fees that the ins company puts on and any outstanding loans, even if my investments go south, the investments wont affect the base $400,000. The investment are added onto the $400,000 payout upon my death. Im not required, except for the 1st year to put money into the investment portion, after that i only need to pay the monthly preminum for the $400,000, which is age banded.
<div class="quote-block"><i>Originally posted by Tame</i><br><br><b>Also, the only part of your withdrawals that would taxed would be your interest/dividend earnings. The original premium plus future premiums in your cahs value are not taxable.</b></div>
Wouldn't he get a 1099r for the total withdrawal and have to claim it as income on his taxes?<br><br><br><br>
My company sells VUL (variable universal life), and you are right in your earlier post as well that variable life policy is a variation of universal life.
Here are some links on variable life insurance policies. They have some serious issues as investment plans.<br><br><br><br><a href="http://www.finaid.org/savings/variablelife.phtml" target="_blank">http://www.finaid.org/savings/variablelife.phtml</a><br><br><br><br><a href="http://moneycentral.msn.com/articles/insure/basics/10481.asp" target="_blank">http://moneycentral.msn.com/articles...sics/10481.asp</a><br><br><br><br><a href="http://www.riskylife.com/insurance/policyloan.html" target="_blank">http://www.riskylife.com/insurance/policyloan.html</a><br><br><br><br>
I *think* that any non-payment of premiums will come out of your cash value, and if you cv becomes zero, the policy can forfeit. Everey source I can find recommends policy loans for short periods of time only.<br><br><br><br>
Also, from what I can find, the investment portion of your policy does not go to your heirs if you die. Wholelife policies (standard, variable, and universal) are written in a way that assumes you don't die. Annuities are the same way - they are great if you outlive them.<br><br><br><br>
In short, based on the commissions and fees involved, you are better off to but term insurance and invest the difference.
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