Northwestern Mutual...

life insurance........

 

This is a good thread.

FWIW, My wife's grandfather bought her a Northwest mutual whole life policy when she was 18, an I'm happy she has it. I doubt I would want one now, because I actually DO invest the diffence, and I have a nice term policy for frikkin cheap.

That said, it's our only non-cash aset that increased in value this year, plus is has the death benefit.

I dislike the 100% capital gains upon the sale, though.

Welcome to the board, NML_agent09.

 

NML, good post. Realize that I am just passionate about helping people like I am sure you are and I just see so many people getting screwed absolutely by the policies they are invested in like I did. Does it mean it is bad for everyone, no. Does it mean that 70% of life insurance policies sold should be Whole Life, ABSOLUTELY NOT and that is my greater point. The average middle class American needs 7-10 times their income in life insurance to protect their family in the case of death and most of them get sold a 50/100K Whole Life (based on what we know statistically) not because it is good for them but because it is good for the salesman and he gets a higher commission (not to mention the high cost of 7-10 times of Whole Life for the average family is too high). That is what makes me sick and why I help people in my Church/Community the way I do.

Many people also aren't told that the company will keep their cash value when they die and I know people jaded by that. Most also aren't told that if they borrow from their policy and then die, the government will consider that income and come calling for taxes on it. I know families that has happened too. Those are the types of things that people aren't told by many agents and it burns them and you and I both know the agent isn't paying any of that out of his pocket (except when they drop him for good reason).

I am like you that this conversation has only emboldened my views and why I have to work so hard on Financial Education in my Church and Community. But, it's been a spirited debate which is always good from both sides. Obviously, as you can tell from other threads, I am a Ramseyite so I see a bigger need for people to get debt free and an emergency fund set up and good Lord, if people will just get there, this is a secondary conversation because at least they will have money to do something then. People are obviously under-insured not only in Life but also Disability, Health, Long Term Care and even Home/Auto many times so I do try to educate others on those needs as well.

Given that, I do follow the philosophy that if people will live debt free, have an emergency fund, pay cash for their kids college by investing and saving up before-hand as well as save 15% for their retirement, the need for Whole Life definitely diminishes for the average American. Furthermore, I heard one of the reporters on FoxBusiness say that there are rumblings, even among Democrats, that they will re-set the Estate Tax to only Estates above 7 Million which would eliminate the vast majority of American households and absolutely eliminate the need for Whole Life IF they handle their money correctly before-hand. None of us knows if that will come true but I don't live my life in Fear and a good Estate Attorney can set up many other avenues if the threshold is set at something along the lines of 1-2 Million.

BTW, LOL at the Attorney being your Father. My Dad works for a Mutual company like you so we have been through this row but I am guessing you already figured that out since I can argue it pretty well. We just agree to disagree and go on from there.

 

The point is that those licenses aren't that tough to obtain compared to other licenses so let's not make it out like it's the same as becoming an Attorney or Actuary. It's just not that difficult based on some of the people I know that were able to pass them. It's obviously an exam you have to study for but let's keep it realistic. BTW, I would say the same thing about the Real Estate exam which I have passed before for a job I was doing at that time. It was something to study for but no reason you can't pass it if you study for it. Actuarial exams are a whole 'nother level. Those things are freaking brutal and you spend six months studying for one exam and even that doesn't guarantee you will pass it.

 

This is where I am at and absolutely don't regret it at all. I am probably way over-insured with Term because it is so freaking cheap but I like having that assurance there in case I die before we pay off the house or before my girls go to college. One of the strategies I have done is to add a Term policy after each one of my daughters is born so that I have them covered (plus freaking some) for college. Furthermore, I have another policy in place that will pay off the mortgage (no other debt so that isn't a problem) and provide significant income streams for my wife when she invests the proceeds (not to mention the vast excess left over from the ones I bought for myself to cover my daughters). On the wife who only works part-time, we just have a basic half-million which is really covering the cost of what she does as a Mom more than covering her income as I am the bread-winner by far in my house.

 

BTW, for the record, you aren't the only one who can claim these honors and mine was in Statistics with a concentration in Economics. Just throwing that out there for the record since you threw yours out there. Though, I tire of people who throw stuff like this out and then can't do their freaking job (not saying you, just in general). I've worked with Duke grads who were proud of their academic "achievements" and couldn't do their dadgum jobs. Course, given the recent article on grade inflation at places like UNC-CH, these honors are quickly becoming irrelevant sadly.

 

Ya'll, insurance ain't this complicated.

 

If they raise the estate tax exemption level to 7 million, they would loose out on a shit load of revenue. I will have to disagree with this in that over the next 8 years we will see higher taxes (and lower estate tax exemptions) because we need money to pay for all the bailouts, the war, and all of the other debt we have -- estate tax is a very easy way for the government to collect $$

I personally think it is a BS tax, but a lot of my work is done in the Irrevocable Life Insurance trust mkt, so I can't complain because it pays my bills. Even if they did raise it, a family worth 4 million in their 50's that lived into their 90's would have a massive increase in their estate, and would have to put something in place because by the time they would truly need the insurance (65 or so), they might not be healthy enough to get it or it would become terribly unaffordable. But who knows, right now 2010 is a great time to kick the bucket!

 

NML, I was very shocked when she said there were rumors of 7 Million. I don't believe that myself and wouldn't plan for that. It is an easy way for the government to double-tax us.

Yeah, 2010 is a great time to die if you are rich.

 

Well it is 7 for this year: 3.5 million for each spouse, but I would be surprised if it remained this way -- it is just too easy for the fed to tax the wealthy and get a boat load of cash. And 99% of America doesn't have estate tax problems, so why would they have sympathy for those who do? I don't know what they will end up doing, but I hope that they make it something and leave it so people can actually plan for it!! Not only does the government take your money, but they won't even give you the right information necessary for you to plan for it!