TechByronParticipantStatus: Other ProfessionalPosts: 17Joined: 01/16/2019
I recently had the two attached plans, the $10k taken out when I was born in 1981 and the $25k taken out in 1988, handed over to me after my father died in November. I am trying to figure out if these are decent whole life insurance plans, if such a thing even exists, by determining the current rate of return but the policy form is not intuitive to me. Could someone help explain?
For the $10k plan, I see my annual premium as $93, the total cash value as $3.8k, the previous annual dividend of $17, and then some “previous total increase” of $127 (is this the dividend plus some amorphous increase in the cash value?).
To determine the rate of return, should I be subtracting that annual premium of $93 from the “previous total increase” of $127 and then dividing that by the total cash value? If I do that, then I get a piddling 0.9% return. Is that right?
Attachments:You must be logged in to view attached files.February 6, 2019 at 2:40 pm MST #188668Faithful StewardParticipantStatus: Financial Advisor, Small Business OwnerPosts: 199Joined: 06/12/2017(is this the dividend plus some amorphous increase in the cash value?).Click to expand…
Yes, it’s dividend plus the contractually spelled out increase in cash value.
Michael Peterson, CFP® | Faithful Steward Wealth Advisors
http://www.fswealthadvisors.com | (717) 496-0900February 6, 2019 at 5:16 pm MST #188722TechByronParticipantStatus: Other ProfessionalPosts: 17Joined: 01/16/2019
Thanks, haven’t seen the contract yet, just those two statements screenshots. Is the way I am calculating the return correctly? The sales rep said it was 4% but it wouldn’t seem to be given the above info…February 6, 2019 at 5:30 pm MST #188726FIREshrinkParticipantStatus: PhysicianPosts: 776Joined: 01/11/2017
After 38 years the plan has barely broken even, ignoring inflation. I don’t think you need to know more than that.The White Coat InvestorKeymasterStatus: PhysicianPosts: 3954Joined: 05/13/2011
I’d just consider it a nice thing for your dad to do for you, cash it out, and use it for your financial goals. If you wish to consider keeping it as an investment, you’ll need an inforce illustration to calculate your return going forward.
Those forms are not an inforce illustration.
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