All Forum Posts by: Zachary Paschke

Thomas, my statement of “market participation is a lie” and your statement “life insurance products DO NOT participate IN THE MARKET” might seem to same as the same statement. My inclination is that you misread the statement and continued on because you couldn’t help but act a fool. 

There’s nothing incorrect in my post. If you really want to play word games no IUL company “is essentially spending the dividend on hedging activities.”  Because it’s not a dividend. Is it? Could be? Most often is not. Strange mistake by a person who is a tax expert. 

Do you like being this person? Do you like showcasing your winning demeanor and lack of common sense? If you want to educate people, feel free. Trying to argue with people that agree with you is just dumb. 

@Mike S. is absolutely right. I’m always cautious about pulling out of a 401K especially if you’re younger. You have to watch what you’re putting it into. I never call life insurance an investment. It’s a hedge against investments turning south. Any life insurance product that is meant to be a hedge against inflation must be carefully funded to avoid fees and many agents don’t try to do it right because that lowers their commissions. 

Annuities and life insurance can be a hedge against market volatility, but they should be part of your plan, not all of it. 

A lot of times clients are sold on the lie of “market participation” of indexed products. It is true an indexed product had limited downside and goes up if the market goes up, but you do give up on some market upside. Many policies “illustrate” the product using the past 10 years as an example (illegal in some states). That can be dangerous because the last 10 years is unlikely to be like the next 10 years. My personal opinion is that indexed insurance products will out preform the market the next 10 years, but not the next 20. That’s my personal opinion. Don’t make financial choices based on the financial ramblings of a stranger online. Take the premise, do your own research and act accordingly.

That said the ball is in your court, if you feel safer with slower, safer growth that’s where you’ll find it. Often my clients will move a chunk of money from volatile retirement strategies to an annuity as they approach retirement to remove some risk from staple income needed in retirement.  

 Anytime you’re looking to buy an insurance product (including an annuity) you need to ask if the underlying promise from the company matches your goals. When you buy an insurance product you’re purchasing a promise. That company is contractually obligated to fulfill their end. Make sure the goal they promise matches your goal.

None of this is financial advice. As providing directed financial advice to a stranger online is a no-no.

Don’t let him scare you about the IUL policy. For a 22 year old term makes a ton of sense. As you get older term insurance is detrimental to your savings goals. If you were slow paying a Whole Life policy, I’d agree to look for a way out, but with time a well-funded IUL is not an expense since it generates income and is safe money. 🤷‍♂️ Everything for its purpose. Welcome to it and good luck!!!

If a financial advisor ever recommends a fixed or indexed insurance product… I’d take it because they make way more money on assets under management or a variable product like a VUL. There’s less concern about profit motive with an IUL especially if it’s properly funded. 

 I’m not sure the question. 

Easiest solution if you’re selling FE is to increase income. Buy aged leads and door knock if you can physically do it. 

Depending on your son’s situation have him get a public defender. If you loose the house it’s worse than his legal trouble. 

I’m sorry for what you’re going through. I have a rental note and an insurance note:

Insurance: most life insurance policies have a terminal Illness rider that allows you to get access to the money early (keep in mind they’ll discount the death benefit but it might be worth checking on how much if it would be of more help now than later).

Rental: find overlap between a job and the rental. If you are managing short term rentals, do it for other investors and charge a fee. You won’t have to visit the homes much yourself, you can hire out cleaners, handymen… there’s lots of tips in this site about how to do that. 

When it comes to obtaining property look at secondary markets. Better to pay $150k for a property that will rent for $4k/ month than a $600k property that will rent for $6k/ month. Look for areas near hospitals where you can rent to travel nurses. Buy somewhere where you can long-term rent if you short term dries up. 

Job ideas: I’d look at building a business from home. I sell life and health insurance in 17 states from home. It offers a lot of flexibility, and if you’re good it is incredibly profitable! You don’t have to do that, but you can do something like that. The property management job would be like that. 

When a situation like this comes up you insure what you can. If traditional life is completely out of the picture you go to a failure to survive policy (where the carrier excludes the uninsurable condition, but covers other forms of death) or an accidental death/ accidental disability. 

Accidental is really inexpensive, failure to survive has a pretty serious premium. 

That said I’ve been able to get people coverage they couldn’t from others. I specialize in the health complication market, so it’s always worth trying again.

Before he reaches out to someone he should have all his health data and any letters declining coverage. 

You’re also right that CA makes it harder. Many insurers don’t like doing business there. 

Yep. I can help with any questions. There’s no one right company, it depends on your wishes for the plan and you personally what company makes the most sense. The biggest thing to realize is as David said there’s a funding period for the policy. I tell clients to plan on funding it for 3 years before pulling a loan big enough for a house. 

If you do take out a whole life policy you want as much cash in it as possible. Using the paid up additions riders lowers the cost of the policy and helps get as much money in as possible. It raises the cash value.your agent will help you, but there are limits on the % of premium that can go into the policy. You want to be as close to that limit as possible. 

I recommend not starting a policy unless you have at least 3 years to fund it before you start taking significant loans against it. 

Math is pretty simple. Your life insurance should pay a healthy interest rate and dividend. An agent can illustrate for you how money going in and out of the policy should affect things for you.