Personal Investments • Question on permanent insurance illustration

Are you doing this solely to avoid capital gains taxes?

You do realize that when you go to withdraw the cash value, it will be ordinary income at your marginal rate?

The illustration is probably wildly optimistic. At the end of the day, your returns won't be much better than bonds.

What do the numbers look like after 59? Your 60s is usually when the premiums start to blow up. (You're more likely to die.)

Note that after 5 years, you will have paid $150,000 in premiums and only have $155,000 in cash value. That's the effect of the fees. You could earn $12,000 in interest on only $30,000 after 5 years right now -- $7,000 more than what this policy will do.

Also note that the cash value after surrender charges is lower than your premiums until year 7. Those are also the commission and fees.

If they're telling you that you can "be your own bank" note that you will pay interest on the loans to the insurance company. You're also mostly getting your own money back and earning bond-like rates.

Statistics: Posted by Phil8352 — Thu Jan 18, 2024 6:54 am — Replies 19 — Views 705