I bought single premium term policies for my kids. I think it was a 1 time payment of $170 per kid. Covers them until they are 26 with a guaranteed option to buy permanent insurance. Not big policies, but it covers them for a while and gives the option of a small permanent policy if they are otherwise uninsurable.
I totally agree with Josh. I’m a real life example of what Josh is talking about, I’m uninsurable due to a medical condition (birth defect). My parents bought a policy when I was in my teens, with the ability to increase the policy later. That $10k policy allowed me to increase it to $50k w/o proving insurability. Without that policy I wouldn’t have any life insurance and I’m in my 60s now Josh thank you for explaining the benefit and let others know there’s a reason to buy whole life insurance.
I’ve known 3 people who’ve had a child die before adulthood. Family and friends were putting on benefits to try to help pay for the funerals. I worked with a woman who was so excited to be finally making her husband’s last funeral payment,10 years after he passed…. My 90 year old mother, has a policy on my 60 year old brother who has depression and is an alcoholic, a whole life policy that costs her $112 per year. She has made special arrangements for the policy once she passes. I know that if she had put the yearly payment in a traditional IRA she may have been ahead, but her main concern has always been to be able to afford a funeral for him. I believe in life insurance for children and adults , to at least cover the funeral expenses. I sure don’t want to have the pain of making a monthly payment to a funeral home, years after my loved one has passed.
Average cost for a full funeral in Texas is about $8,000 and there are cheaper options. I don't see committing to a 20 year payment for funeral costs to be a good idea. As for income replacement, I think there are better options. The benefit for whole life is not likely to occur for most families.
Yep, totally understand the odds and the math…. I guess knowing people personally that had the worst happen, played a large part in the decision for our family.
At 8:18 Josh lays out the real purpose of life insurance: to replace the income of departed. Outside of that I don’t see it as attractive or a great investment compared to alternatives.
Josh, I took out WL policies on my wife and I many decades ago. We are in mid 50s and both uninsurable now. I am so glad we made that decision. I have also taken out WL policies on my youngest son. 👍🙏👊
Insurance is A financial instrument, can be used to achieve various objectives. One use for what Josh is describing is also referred to "The Rich man's Roth". When constructed properly can render 4-6% return NOT subject to market volatility. Tax advantaged and also is Guaranteed. Your financial advisor uses the word "Guaranteed" and they can go to jail. Also the cash value is protected from lawsuits and even bankruptcy. Of note Insurance Companies love to sell term ins. the pay out ratio is 3%. Very profitable. Term serves a purpose but Insurance has many other uses as "part" of your over financial picture.
Compare putting the premium payments in a taxable brokerage account or custodial Roth IRA for your kids to the face value of these policies. Now extrapolate over the next 50 years. The life insurance policies are always a bad choice. Come on man. You should know better.
Would love to see the actual proof of this. Apples to apples comparisons, that I see, is that life insurance is very competitive, and it also offers more flexibility.
Too complicated. Term life only, and then only when you need it. Other than that, live off investments when able. All this insurance / annuity BS.... I priced a joint/survivor annuity for fun. If I buy an annuity starting in 5 years for the rest of our lives for 750K it will pay us for 5K for the rest of our lives. If we both die before the initial 750K is repaid they will continue to pay my estate for either 20 years (from start of payments) or until the net payout was 750K. So they will pay back my initial investment. Think about that. They use my money essentially for free and pay us 5K per month until we die. Doesn't seem like a good deal if you have your own money.
A floor of income you cannot outlive that exceeds long bond income, and stock returns during market declines, helps tide you through 3-5 years of lost principal in a market correction. Annuity holders aren’t alone in losing immediate access to full principal. But they’re not selling stocks at a 30% discount to pay for groceries or travel. And they do get some return, especially upon outliving the 13-15 years til full distribution of principal. Their stock balances become less concerning. Even some high-balance folks would be unhappy to sell at steep discounts.
Term only pays out less than 3% of the time. I have met with several people who cashed out their permanent life insurance before being declined for term coverage. Then they had no life insurance. If you keep going with term there might be a time you won't qualify for it medically. Using investments as life insurance is not a sound decision. Most people don't actually invest the rest.
🤨 $300 a year for 20 yrs for a $75000 whole life policy? At that price, I’m assuming this is bought when they’re born? I guess That would make sense if their life expectancy is 77 yrs, and that $75000 policy will be worth $15000 in todays dollars. Or you could forego the whole life policy, put $25 a month for 20 years into a 5% annual investment, it’ll be $10275, then sit there with no more principal for the remaining 57 years of their life and have $176,500 with a value of $35000 in todays dollars. Great exercise. I enjoy the channel, but not getting whole life 😂
@ so the beneficiary gets the $75,000 plus the cash value. Right? 🥸 Of course not. So I can take the cash value while I’m living and not affect the face value? 😏 of course not. If you take any of your cash, they reduce the face value benefit. Can I cash out without being penalized? Of course not. Is there ANY way to get my cash without reducing my benefit? Sure, you loan yourself your money and then pay yourself back plus interest to the insurance company to thank them for lending you your money. If I take “my” cash value or any portion of it, it’s tax free right? Since it’s an insurance product? Ummmm, no. Then the saving grace MUST be that the cash value grows at a great rate? Sure, 1-3% is average. 😜 Not sure why you didn’t mention all that. 😀 I have nothing against people who buy or promote whole life, I just think the product is bad. Pretty sure I’ve laid out the reasons why. If, knowing all of that, one still believes it’s the best option, go for it. Best thing about whole life? Promote it and it’ll definitely get a conversation going lol.
Josh, buying any type of whole life for kids or grand kids is almost complete WASTE of money. The only time you "win" is if a kid dies at a young age. The guarantee later in life is way overrated.
I meet with 5 or 6 people a year where the only insurance they qualify for medically are the guaranteed options they have. You are also helping your family out for generations. Guaranteeing insurability is a critical factor.
@@rajbeekie7124 it isnt for the morbid scenario of your kids dying young. It helps to lock in their insurability for the rest of their life. Also, you know your grandkids and great grandkids wont be on the hook to pay for their parents final expenses.
I bought single premium term policies for my kids. I think it was a 1 time payment of $170 per kid. Covers them until they are 26 with a guaranteed option to buy permanent insurance. Not big policies, but it covers them for a while and gives the option of a small permanent policy if they are otherwise uninsurable.
Exactly!
I agree
Go Knights!
I totally agree with Josh. I’m a real life example of what Josh is talking about, I’m uninsurable due to a medical condition (birth defect). My parents bought a policy when I was in my teens, with the ability to increase the policy later. That $10k policy allowed me to increase it to $50k w/o proving insurability. Without that policy I wouldn’t have any life insurance and I’m in my 60s now Josh thank you for explaining the benefit and let others know there’s a reason to buy whole life insurance.
I’ve known 3 people who’ve had a child die before adulthood. Family and friends were putting on benefits to try to help pay for the funerals. I worked with a woman who was so excited to be finally making her husband’s last funeral payment,10 years after he passed….
My 90 year old mother, has a policy on my 60 year old brother who has depression and is an alcoholic, a whole life policy that costs her $112 per year. She has made special arrangements for the policy once she passes. I know that if she had put the yearly payment in a traditional IRA she may have been ahead, but her main concern has always been to be able to afford a funeral for him.
I believe in life insurance for children and adults , to at least cover the funeral expenses.
I sure don’t want to have the pain of making a monthly payment to a funeral home, years after my loved one has passed.
Average cost for a full funeral in Texas is about $8,000 and there are cheaper options. I don't see committing to a 20 year payment for funeral costs to be a good idea. As for income replacement, I think there are better options. The benefit for whole life is not likely to occur for most families.
Yep, totally understand the odds and the math….
I guess knowing people personally that had the worst happen, played a large part in the decision for our family.
It’s only 300 a year if that yoire “committing” to.
Not much
At 8:18 Josh lays out the real purpose of life insurance: to replace the income of departed. Outside of that I don’t see it as attractive or a great investment compared to alternatives.
Love it my three daughters will all have a custodian Roth IRA and whole life insurance policy God is good
Josh, I took out WL policies on my wife and I many decades ago. We are in mid 50s and both uninsurable now. I am so glad we made that decision. I have also taken out WL policies on my youngest son. 👍🙏👊
Insurance is A financial instrument, can be used to achieve various objectives. One use for what Josh is describing is also referred to "The Rich man's Roth". When constructed properly can render 4-6% return NOT subject to market volatility. Tax advantaged and also is Guaranteed. Your financial advisor uses the word "Guaranteed" and they can go to jail. Also the cash value is protected from lawsuits and even bankruptcy. Of note Insurance Companies love to sell term ins. the pay out ratio is 3%. Very profitable. Term serves a purpose but Insurance has many other uses as "part" of your over financial picture.
What can the cash value be used for? Does that effect the insurance amount?
Used for anything- but absolutely will affect the death benefit and could make the policy lapse
Compare putting the premium payments in a taxable brokerage account or custodial Roth IRA for your kids to the face value of these policies. Now extrapolate over the next 50 years.
The life insurance policies are always a bad choice. Come on man. You should know better.
You are assuming he doesn’t have a Roth IRA for them, sometimes you can walk and chew bubble gum at the same time
The false dichotomy rings its ugly head again.
@@HeritageWealthPlanning I can say a couple things with clarity.. we will all pay taxes and our boy Josh loves Jesus Christ and his kids
Would love to see the actual proof of this. Apples to apples comparisons, that I see, is that life insurance is very competitive, and it also offers more flexibility.
😊
Yes!!
Don't be like me.
You never want to use it.
Too complicated. Term life only, and then only when you need it. Other than that, live off investments when able. All this insurance / annuity BS.... I priced a joint/survivor annuity for fun. If I buy an annuity starting in 5 years for the rest of our lives for 750K it will pay us for 5K for the rest of our lives. If we both die before the initial 750K is repaid they will continue to pay my estate for either 20 years (from start of payments) or until the net payout was 750K. So they will pay back my initial investment. Think about that. They use my money essentially for free and pay us 5K per month until we die. Doesn't seem like a good deal if you have your own money.
Literally the furthest thing from complicated. Quite simple actually.
A floor of income you cannot outlive that exceeds long bond income, and stock returns during market declines, helps tide you through 3-5 years of lost principal in a market correction. Annuity holders aren’t alone in losing immediate access to full principal. But they’re not selling stocks at a 30% discount to pay for groceries or travel. And they do get some return, especially upon outliving the 13-15 years til full distribution of principal. Their stock balances become less concerning. Even some high-balance folks would be unhappy to sell at steep discounts.
Term only pays out less than 3% of the time. I have met with several people who cashed out their permanent life insurance before being declined for term coverage. Then they had no life insurance. If you keep going with term there might be a time you won't qualify for it medically. Using investments as life insurance is not a sound decision. Most people don't actually invest the rest.
🤨 $300 a year for 20 yrs for a $75000 whole life policy? At that price, I’m assuming this is bought when they’re born? I guess That would make sense if their life expectancy is 77 yrs, and that $75000 policy will be worth $15000 in todays dollars.
Or you could forego the whole life policy, put $25 a month for 20 years into a 5% annual investment, it’ll be $10275, then sit there with no more principal for the remaining 57 years of their life and have $176,500 with a value of $35000 in todays dollars.
Great exercise. I enjoy the channel, but not getting whole life 😂
Ummm- there is a cash value component too- not sure why you overlooked that
@ so the beneficiary gets the $75,000 plus the cash value. Right? 🥸 Of course not.
So I can take the cash value while I’m living and not affect the face value? 😏 of course not. If you take any of your cash, they reduce the face value benefit.
Can I cash out without being penalized? Of course not.
Is there ANY way to get my cash without reducing my benefit? Sure, you loan yourself your money and then pay yourself back plus interest to the insurance company to thank them for lending you your money.
If I take “my” cash value or any portion of it, it’s tax free right? Since it’s an insurance product? Ummmm, no.
Then the saving grace MUST be that the cash value grows at a great rate? Sure, 1-3% is average. 😜
Not sure why you didn’t mention all that. 😀
I have nothing against people who buy or promote whole life, I just think the product is bad. Pretty sure I’ve laid out the reasons why. If, knowing all of that, one still believes it’s the best option, go for it.
Best thing about whole life? Promote it and it’ll definitely get a conversation going lol.
Josh, buying any type of whole life for kids or grand kids is almost complete WASTE of money.
The only time you "win" is if a kid dies at a young age. The guarantee later in life is way overrated.
I meet with 5 or 6 people a year where the only insurance they qualify for medically are the guaranteed options they have. You are also helping your family out for generations. Guaranteeing insurability is a critical factor.
@@TheGwhitey9 Way overrated. People are generally scared into buying life insurance for kids.
@@rajbeekie7124 it isnt for the morbid scenario of your kids dying young. It helps to lock in their insurability for the rest of their life. Also, you know your grandkids and great grandkids wont be on the hook to pay for their parents final expenses.
@@rajbeekie7124 I write probably 15-20 youth policies a year.
@@TheGwhitey9 Yep, if you sell this stuff you are scaring people. If you bought, you were scared into it.