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  #11  
Old 09-01-2017, 09:26 AM
MathGeek92 MathGeek92 is offline
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If you are uninsurable, then it's still a good deal for you to convert -almost universally because your lifespan must be really short if you are uninsurable.

If you own term today and have a heart attack... If it's more than a year from the end of your term period, you most likely would be re-underwritten as table D. Table D 10 year term is still considerably cheaper then permanent coverage. Using some simple examples.. 10 yr Table D premiums age 55 M ~$6.5/1000... permanent WL age 55 M ~ $21/1000.. the permanent assumes a "competitive" permanent product is available to you for conversion.

Most people only need significant insurance amounts during their working lifetimes. The estate tax doesn't kick in until a level way higher than even most people on this board. So if you want to give money to heirs tax free, you still can do so.

IMO, the benefits of permanent insurance are way oversold to the "average" income earner. It only makes sense (to me) in a tax deferral/avoidance scheme. Buy a VUL/UL/WL base upon your risk appetite and have tax free/deferred growth that can be given to heirs outside of your estate (when you die).. but again, the level is so high, most people would never hit it... OR you use the return of basis and loan provisions for an income tax free stream at retirement.. but be careful your loan doesn't make the policy explode before your death otherwise you will have a huge tax bill when the policy is exhausted.
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  #12  
Old 09-04-2017, 11:01 AM
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Wally Wally is offline
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Life insurance needs tend to be more permanent than most people realize. For example, after the kids are finished with college, there is frequently a mortgage balance remaining. At retirement, permanent life insurance may lead to a higher pension, as it may make it prudent to take the full lifetime annuity rather than a reduced one with a survivor benefit.
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  #13  
Old 09-05-2017, 12:40 PM
RoadToFSA RoadToFSA is offline
 
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Quote:
Originally Posted by snikelfritz View Post
Most give the option, but most do not lock in the price, so you're still subject to paying more later if your insurable need lasts longer than expected.
You're right. I don't know of any that lock in a price for you, and I don't find that to be terribly unfair.

Luckily, many companies also allow you to choose any one of the company's permanent products. Some only allow you to take their 'selected' plans, which can be more expensive.
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  #14  
Old 09-05-2017, 12:56 PM
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twig93 twig93 is offline
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Quote:
Originally Posted by Wally View Post
Life insurance needs tend to be more permanent than most people realize. For example, after the kids are finished with college, there is frequently a mortgage balance remaining. At retirement, permanent life insurance may lead to a higher pension, as it may make it prudent to take the full lifetime annuity rather than a reduced one with a survivor benefit.
Yeah, it seems like there is more of a need for 25 or 30 year term insurance... long enough to get all the kiddos through college and pay off the mortgage. By then, you should have substantial retirement savings built up, so an earlier-than-expected demise will result in the disbursement of retirement assets to the surviving spouse and/or kids, which is probably good enough in most cases.

Also seems like there's a need for decreasing term... as time goes by the PV of future earnings decreases. Although not linearly due to inflation & TVM. I guess the premium for a decreasing term insurance product wouldn't be enough lower than for a flat benefit to make such a purchase worthwhile. And in a higher inflation environment you might even need increasing term, at least in the early years.
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  #15  
Old 09-05-2017, 03:55 PM
BLASTFROMTHEPAST BLASTFROMTHEPAST is offline
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Originally Posted by RoadToFSA View Post
You're right. I don't know of any that lock in a price for you, and I don't find that to be terribly unfair. .
A Canadian company, Empire Life, does this. Their term insurance renews to a certain age, then becomes a Term to 100. T100 premiums are guaranteed at policy issue. So basically, guaranteed conversion with premiums at conversion guaranteed at issue. Interesting, particularly the way permanent premiums have been going lately.

Quote:
At retirement, permanent life insurance may lead to a higher pension, as it may make it prudent to take the full lifetime annuity rather than a reduced one with a survivor benefit.
I'd love to see the numbers on that. I know that in some cases a 'back to back' permanent plus annuity sale makes sense. But I've never seen numbers that say 'buy a whack of whole life at age 40 to increase your pension payout at retirement'. Surely someone's run these numbers.....
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