Menu
This forum is no longer active. Please use the new forum at https://www.whitecoatinvestor.com/forum/

Inappropriate Whole Life Policy of the Week

Home Insurance Inappropriate Whole Life Policy of the Week

  • The White Coat Investor The White Coat Investor
    Keymaster
    Status: Physician
    Posts: 4656
    Joined: 05/13/2011

    This one is an IUL, not whole life, but looks even worse than most whole life policies as far as I can tell, and this in a bull market. That’s right, 80% loss after 2.5 years.

    I made a post last Fall about an IUL policy I own. I still have it
    and am wondering what you think I should do with it. Here’s some
    background info:
    
    I’ve had it for 2.5 years. Monthly premium is $500. Face amount is
    $532,000 with increasing death benefit. Cash value is $18,733. Total
    surrender value is $5398. Total premiums paid $25,500 
    
    
    

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #189082 Reply
    Avatar Peds
    Moderator
    Status: Physician
    Posts: 4715
    Joined: 01/08/2016

    wonder why this person cant see how bad this is….

    #189462 Reply
    The White Coat Investor The White Coat Investor
    Keymaster
    Status: Physician
    Posts: 4656
    Joined: 05/13/2011

    Today’s edition. Let’s see, what is this a -92% cumulative return or so? Hey whole life advocates! What’s your excuse for this one?

    My wife has a 250,000 whole life policy which I don’t like. This was established by her parents before I was married and I found out about it after getting married. She signed up for this in 2015 and has made monthly payments of $215 with a total of about 7-8K put it. Her cash value balance is only 500 dollars. I discussed terminating the policy with her but she is hesitant losing the money she already put in.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #193064 Reply
    Liked by Craigy, Peds
    Avatar Peds
    Moderator
    Status: Physician
    Posts: 4715
    Joined: 01/08/2016

    if my spouse wouldnt get rid of such a terrible product, id laugh about it with spouse #2…..

    CordMcNally CordMcNally
    Participant
    Status: Physician
    Posts: 3074
    Joined: 01/03/2017

    Send her a link explaining the sunk cost fallacy. She’ll either thank you or be pissed at you for a while.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #193099 Reply
    Liked by Hank
    The White Coat Investor The White Coat Investor
    Keymaster
    Status: Physician
    Posts: 4656
    Joined: 05/13/2011

    Send her a link explaining the sunk cost fallacy. She’ll either thank you or be pissed at you for a while.

    Click to expand…

    Already did.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #193136 Reply
    The White Coat Investor The White Coat Investor
    Keymaster
    Status: Physician
    Posts: 4656
    Joined: 05/13/2011

    This week’s addition. 6 years into a policy and still with a cumulative -67% return on it.

    Hey, WCI, I’m sure you get questions about this ad nauseum, but
    I’m wondering if you could help me out. I’m a 32 year old doctor
    married to a 34 year old doctor. I was sold on a Whole Life insurance
    policy when I was 26. I have been reading a lot of articles here about
    Whole Life policies and its downfalls. I was wondering who I could
    talk to about having someone looking over my policy to see whether its
    worth me bailing on the policy now, 6 years into $12,000/year of
    premium payments with only $4000 Cash Value to show for it so far.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #194165 Reply
    The White Coat Investor The White Coat Investor
    Keymaster
    Status: Physician
    Posts: 4656
    Joined: 05/13/2011

    Today’s edition. I sometimes wonder if there are any doctors who haven’t been sold a policy.

    I think what we’re looking at here (although it’s hard to tell) is $72K per year for 13 years is now $430K. That’s -14.59% per year. That seems terrible, so my assumptions are probably wrong. Maybe they didn’t start paying $72K a year until partway through the policy. Either way, it’s impressive how much of their income whole life insurance was eating up. They’re going to feel positively rich after eliminating that monthly expense.

    Both of us me and my husband have whole life insurance paying 2k/ month for 2M coverage and in our 13th year.. Rethinking best way to cancel ? Have at least $430 k in cash value. I’m shock my FA is still trying to convince us to stay !!! He said he also own it for 5M coverage. We even added 2k per month to add more on our cash value hu hu hu, sad I didn’t learn early enough

     

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #194599 Reply
    childay childay
    Participant
    Status: Physician
    Posts: 1097
    Joined: 01/09/2016

    I realize these insurance salesmen are quite skilled.  But how do people not research this stuff?  Where else would you sign up for $4K per month purchase without exhaustive googling?  I mean I spend way too much time researching which $50 toaster to buy on amazon..

    #195027 Reply
    The White Coat Investor The White Coat Investor
    Keymaster
    Status: Physician
    Posts: 4656
    Joined: 05/13/2011

    I realize these insurance salesmen are quite skilled.  But how do people not research this stuff?  Where else would you sign up for $4K per month purchase without exhaustive googling?  I mean I spend way too much time researching which $50 toaster to buy on amazon..

    Click to expand…

    Fantastic question. Part of the issue is the top three pages on the search engines when you Google whole life insurance pops up sites where people are selling it. It’s harder than it looks to really get any sort of unbiased or even negative opinion about it. Even a simple explanation of how it really works is hard to find.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #195042 Reply
    Liked by childay, Craigy
    SerrateAndDominate SerrateAndDominate
    Participant
    Status: Physician
    Posts: 501
    Joined: 02/01/2018

    Agree. I think another issue is timing. Some groups target students or residents nearing the end of training, which is a hectic time where people are wrapping up projects, selling/buying homes, preparing to move, having kids, etc. Someone slick can come in and say “oh you absolutely need this more than any other retirement account; the sky is falling and you have to protect everything blah blah”.  As the target, it’s convenient to accept some of these falsehoods by someone who appears knowledgeable when your mind is really on how to pack up that Uhaul truck.

    Earn everything.

    #195050 Reply
    Liked by childay
    Avatar Peds
    Moderator
    Status: Physician
    Posts: 4715
    Joined: 01/08/2016

    another summary after 15 pages of this: some of y’all have way too much money….

    #195122 Reply
    Liked by Vagabond MD
    Arkad Arkad
    Participant
    Status: Physician
    Posts: 114
    Joined: 07/27/2016

    I realize these insurance salesmen are quite skilled.  But how do people not research this stuff?  Where else would you sign up for $4K per month purchase without exhaustive googling?  I mean I spend way too much time researching which $50 toaster to buy on amazon..

    Click to expand…

    I think another issue is when these people are given names of other physicians who did not know enough to avoid these.  They figure that it must be a good product if these other people are buying it.  After many years of never even listening to the pitch, I finally decided I needed to review my strong objections to them because of all the people I knew that had them.  It did not take long to reconfirm my long held beliefs.

    #195127 Reply
    jfoxcpacfp jfoxcpacfp
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8368
    Joined: 01/09/2016

    I realize these insurance salesmen are quite skilled.  But how do people not research this stuff?  Where else would you sign up for $4K per month purchase without exhaustive googling?  I mean I spend way too much time researching which $50 toaster to buy on amazon..

    Click to expand…

    I think another issue is when these people are given names of other physicians who did not know enough to avoid these.  They figure that it must be a good product if these other people are buying it.  After many years of never even listening to the pitch, I finally decided I needed to review my strong objections to them because of all the people I knew that had them.  It did not take long to reconfirm my long held beliefs.

    Click to expand…

    Honestly, what I’ve always wanted to know is how physicians can do this to each other. Since the system feeds off physicians sending other physicians and their residents/fellows to these agents, what are they thinking? I don’t refer anyone I wouldn’t send a family member to. Don’t you guys have the same attitude?

    Johanna Fox Turner, CPA, CFP: I am not your financial advisor; any responses are for general purposes only
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #195130 Reply
    The White Coat Investor The White Coat Investor
    Keymaster
    Status: Physician
    Posts: 4656
    Joined: 05/13/2011

    I realize these insurance salesmen are quite skilled.  But how do people not research this stuff?  Where else would you sign up for $4K per month purchase without exhaustive googling?  I mean I spend way too much time researching which $50 toaster to buy on amazon..

    Click to expand…

    I think another issue is when these people are given names of other physicians who did not know enough to avoid these.  They figure that it must be a good product if these other people are buying it.  After many years of never even listening to the pitch, I finally decided I needed to review my strong objections to them because of all the people I knew that had them.  It did not take long to reconfirm my long held beliefs.

    Click to expand…

    Honestly, what I’ve always wanted to know is how physicians can do this to each other. Since the system feeds off physicians sending other physicians and their residents/fellows to these agents, what are they thinking? I don’t refer anyone I wouldn’t send a family member to. Don’t you guys have the same attitude?

    Click to expand…

    The “advisors” think they’re doing a service and the clients think they’re getting good service, so why wouldn’t the clients refer more clients to the “advisors”? It’s the blind leading the blind. Maybe that’s why the best person to ask for a referral to an advisor is someone that doesn’t need one.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #195432 Reply

Reply To: Inappropriate Whole Life Policy of the Week

In case of a glitch or error, please save your text elsewhere, clear browser cache, close browser, open browser and refresh the page.

Notifications Mark all as read  |  Clear