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Oh no, mainstream is rediscovering Life Insurance March 18, 2009

Posted by shaferfinancial in Finance.
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Frankly, I get a little wary when the mainstream media, starts to pick up on ideas I have been posting on for years, but here it is right on cue.  Kiplinger via yahoo finance has 10 Financial Myths Busted.  Here is #6:

MYTH 6. Life insurance is not a good investment. This canard spread as 401(k)s and IRAs supplanted cash-value life insurance as Americans’ most popular ways to build savings while deferring taxes. True, the investment side of an insurance policy has higher built-in expenses than mutual funds do. But two factors point to a revival of insurance as an investment. One is guaranteed-interest credits on cash values, which means that if you pay the premiums, you cannot lose money unless the insurance company fails (see “Savings Guarantees You Can Trust,” on page 55). The other is the boom in life settlements. If you’re older than 65, you can often sell the insurance contract to a third party for several times its cash value — and pay taxes on the difference at low capital-gains rates.

Truth: A good investment is one in which you put money away now and have more later. Checked your 401(k) lately?

What has happened is that the propaganda the mutual fund companies have put out has become naked in its wrong assumptions.  Now I have posted several times on the issues [look to the right under mutual funds and click], and even done a comparison between the two where I found a way to make mutual funds come out ahead.  But the bottom line is that when comparing the two options; mutual funds and life insurance it all depends on what happens in the future as to which one works out the best.  Here are the deciding factors:

1. When do you die?  An early death benefits the life insurance option;

2. What happens to the market right before you retire?  A boom market benefits the mutual fund while a bear market benefits the insurance policy;

3. How much variation is in the market going forward?  The more variation, the better the life insurance does because it never goes below zero.

4. What tax bracket and tax rates are when you retire?  The lower your personal tax rate is, the better the mutual fund does; and

5.  How well you can withstand drawdowns?  What do you do when the market goes south like it has?  Do you get out of the market?  Move to bond mutual funds?  Chase higher returning funds?  All these things lower you overall return.  So if you are risk adverse, or not up to being an active investor, then this suggests the life insurance policy will work better for you.

Two years ago, after going over the previous five items, I suggested to five different families they should either re-finance their homes to 80% loan to value or cash in their 401K and pay the penalty to fund a equity indexed universal life insurance policy.  Only one did.  I think about the other four.  How are they handling their 50% loss in their 401K?  How about seeing their main savings vehicle, their home lose 35% of its value?  Per chance I ran into one of them the other day.  He was bitterly complaining about his 401K loss blaming AIG and the banks for their malfeasance.  I didn’t have the heart to remind him he ignored my suggestion [I think he had  forgotten about it].  He said after his 401K dropped 45% he sold and now is in a money market account.  Thank god, he said he got out.  I asked him how long he would be out of the market?  Forever he said.  Maybe I should approach him about the EIUL?  But I don’t think he could stomach another loss with the penalty for getting money out of a 401K.

Equity Indexed Universal Life Insurance May 28, 2008

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When BawldGuy asked me to blog on equity indexed universal life insurance (EIUL), I thought no problem, since I had been blogging on it for a couple of years on both my site and others.  Then he asked me to look at the archives from Bloodhound to see his previous blogs and I knew I had to write something a little different.  In order to make sense of EIUL contracts you really need to understand the misinformation that underlie the arguments being put out by folks in books, the mass media and blogs on both sides of the issue.  You need to be clear on what your wealth creation plan is and what it isn’t.  So bear with me for a few paragraphs as I burn down the straw-men arguments before we get into the mechanics of EIUL’s.


 Usually these discussions surround a common theme, EIUL’s versus mutual funds inside a tax deferred wrapper (401K, IRA’s).   First let’s talk about mutual funds.  Mutual funds were designed to reduce risk or as financial experts describe it variance.  They were a boom to Wall Street as mutual funds induced many folks to invest in stocks, something they were not inclined to do in the past.  They have been around for 2 generations so we have plenty of data to tell us accurately how people do investing in mutual funds.



We have plenty of studies of wealthy folks too; many specifically designed to find out how they became wealthy and what wealthy folks invest in.  What they tell us is very clear.  The higher the net wealth, the smaller percentage of wealth is in mutual funds.  Or to be more exact, the super wealthy (net worth in excess of $10M), have less than 5% of their wealth in mutual funds (mostly bond mutual funds), the wealthy (net worth $1M to $10M) has only a slightly higher percentage of wealth in mutual funds, and the mass affluent ($100,000 to $1M) has close to 30% of their wealth in mutual funds (second in percentage only to home equity).  And if you look at this class closer you see a curve that continues the trend with the higher the net worth ($500,000-$1M) looking more like the wealthy and those under $500,000 in net worth having the highest percentage of their wealth in mutual funds.


So it is very clear that those that invest primarily in mutual funds are planning to be in the $100,000-$500,000 net worth category.  Now there are some real reasons for this and they can be summed up quickly:

  1. The rate of return people get from their mutual funds is meager.  Study after study has pointed out that individuals’ rate of return from mutual funds on average ranges from 7-10% BELOW market returns (Dalbar, Inc. Vanguard, etc.).  Average fees range from 2-4% of value for mutual funds.  Employer managed 401K’s have the highest fees sometimes as high as 6%;
  2. People don’t consistently put money into mutual funds as they are instructed to, because life intervenes and the money is used to cover expenses; and
  3. The experts advising folks on mutual fund investments actually cause folks to have a lower rate of return than if they did it themselves.


The bottom line is that when your advisor or the mass media you are listening to tells you to invest in mutual funds they are putting you on a plan to have low six figures in net worth in today’s dollars.  One can reasonable assert that investing in mutual funds will not make you wealthy, only keep you from being poor.


Tax deferral programs (401K, IRA’s) were designed by the government for two reasons.  One was to encourage folks to save money.  It should be noted that it was never thought to be the only retirement vehicle, but an adjunct to defined benefit pensions and social security.  The second reason is to increase tax revenues.  By giving a tax break as you put the money in and taxing it as you take it out, even getting a meager rate of return will assure greater tax revenue.  It is pretty simple to understand.  From these meager beginnings 401K/IRA’s have become the only retirement vehicle most people have outside of social security. 


Those that oppose the use of EIUL’s accurately state that most people upon retirement have a decrease in income, and tend to move down a tax bracket.  And they also accurately point out that the advantages of EIUL’s goes up as your retirement tax bracket goes up.  So for those who plan to have a drop in income and/or a drop in tax bracket EIUL’s might not be advantageous.


By now you are probably wondering why I am talking about mutual funds and 401Ks instead of the topic at hand EIULs.  I am trying to bring some clarity into the readers’ thinking in order to break down certain categories in your mind.  Categories created by folks surrounding investing, retirement, wealth.  Frankly, most people are on a snipe hunt when it comes to creating wealth through mutual funds.  They are looking at the amount of fees charged, or which mutual fund returns slightly better than others last year, or speculation on how much their 401K’s will be worth somewhere in the future.  Frankly, all that stuff doesn’t matter.  It only appears to be important because of the categories you have created and put mutual funds/401Ks into; retirement funds or wealth creation.  Truly, mutual funds don’t belong in those categories; they really belong in the asset protection category or more specifically the asset transfer category.  I know that is a hard pill to swallow, but if you really look at information I have given you, and really think about it, you will understand why.  You really are just moving some of today’s income into tomorrow’s income hoping to account for inflation.


Now let’s talk about the EIUL.  It is a life insurance contract.  Life insurance is designed to solve two problems.  The first is to protect against the loss of income in the case of death of an income producer.  The second is asset protection from the tax man.  Life insurance like mutual funds will not make you rich.



So let’s burn down those straw men right now.  Neither mutual funds nor life insurance have demonstrated the ability to make their owners wealthy.  Anytime a mutual fund salesman/financial planner/CPA tells you that the rate of return from mutual funds is 8, 10 or 12% they are not being entirely truthful.  (Don’t respond with your own fantastic returns from mutual funds, it simply doesn’t matter in this argument).  Planning to live on less money in retirement than in your working life is planning to fail, no question about it.  And not planning to have enough assets to have to protect them from the tax man is not what I call a real wealth plan.


Now it’s time to put the pedal to the metal.  Everyone who is planning to have a net worth less than $500,000, please raise your hand.  Everyone who is planning to have a big drop in income when you retire, please raise your hand.  Everyone who has no dependants or who plans to not have dependants and/or who plans to not have any assets to protect, please raise your hand.  O.K., all those with your hands raised, EIUL is not for you.


Now, for the rest of you, here is how it works.  Permanent life insurance has two sides, an insurance side and a cash value side.  The cash value side either earns a fixed amount of interest or in the case of a variable universal life can be invested in the stock market.  Equity indexed universal life insurance is of the fixed interest type, although your interest credited is connected to a stock index.  EIUL’s have a floor in which the interest credited can’t go below and a ceiling in which the upside is capped.  So you know each year the cash value of your life insurance will go up between those two figures, say 2% and 12%. So each year, you look at how much the benchmark index (usually the S & P 500) goes up or down and you know how much your cash value will appreciate.  Now here is the key provision.  You can access your cash value through policy loans.  The loans costs are generally no more than the interest credited (companies have different plans so make sure you understand how your company treats loans).  When you take out a loan against your policy there are no tax implications as long as it was set up correctly initially.  You are under no provision to ever pay back the loan.  Now previous to 1982 you could load these contracts with as much cash as you wanted.  Many of the wealthy loaded up their contracts with massive amounts of cash, enough to get the attention of the IRS.  The IRS subsequently put limits on how you fund the cash value and how much insurance you need to go along with the cash.  So the strategy is now codified into tax law.  Follow their guidelines and you have no tax problems.


Properly structuring these life insurance contracts now means minimizing the face value of life insurance, which maximizes the cash value.  The cash value increases in value depending upon the index, but never goes negative.  By maximizing the cash value the cost of insurance stays low.  The contracts I sell have a rider on them that precludes the owners from taking out so much cash that the insurance is not covered, keeping these contracts from lapsing and a taxable event occurring. Surrender fees generally stop at year 10 to 15, but the point is once you fund the contract to keep it for life, so surrender fees are really meaningless.  Expenses and commissions are front loaded, so it takes about 10 years for these contracts to really start performing.  That means if you are in your 60’s this strategy probably doesn’t make sense for you. 


Anytime during the contract you can access your cash value with a policy loan tax free.  Some people use them for retirement income, while others use it as a bank, purchasing automobiles and paying the policy back instead of occurring interest by getting a bank loan.  They can also be used as a reserve account for emergency funding.  This liquidity and flexibility is what makes them so attractive to folks like me and BawldGuy.  What rate of return can one expect?  Well, I run them with 6.5%, but the historical amount (using data back to 1950 and plugging in that historical figure is 7.5%).  I like to be a little on the conservative side.  Once again, the point is to transfer assets so as to protect them from the tax man, not create wealth.  Look, the bottom line is an unleveraged investment must get a rate of return well over 12% to really build wealth; neither mutual funds nor EIUL’s are likely to get that high of a return!


So what is the bottom line?  You use real estate investments to create the wealth.  Leverage, depreciation, 1031 exchanges, etc. all do the wealth creating.  Then you protect those assets against the tax man by using EIULs.  And if something bad happens to you, your family is protected.


When you take away all the “straw men” arguments it all gets clear.  Protect or not protect assets?  Protect or not protect dependants? Accept a moderate rate of return for these benefits?


You choose? 

Life Insurance; Who Owns It and Why? May 27, 2008

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Last week I spoke about my dislike of mutual funds as folks primary investment.  This week I am talking about Life Insurance.  Now let me be clear, like mutual funds, life insurance will not make you wealthy.  However, it will provide a hedge against inflation and will protect you from the tax man.

Interestingly, most of the mass media “financial experts” tell people to buy term insurance and invest the difference at best, while some tell you how bad insurance is as an investment.  Well, as usual, their advice runs contrary to what the wealthy actually do. 

First off, as a financial product permanent life insurance is one of the few that has performed as it is advertised, with the exception of variable universal life insurance.  So right off the bat, I am telling you to not buy that product.  You see life insurance is not an investment, at least not the way some people try to sell it.  Variable life insurance allows you to invest your cash value in mutual funds (any bells going off for you?).  But the inherent costs of the product as well as the ability for folks to try to “time” the stock market makes it an inferior product in my opinion.  But for variable universal life, permanent life insurance is a great product.

First, what it allows you to do.

1. Create a pool of money that YOU own and can be accessed without penalty (as long as you don’t end the contract), and without tax issues for whatever reason you want without government interference;

2.  Create a pool of money that your heirs can receive tax free (with the exception of the inheritance tax);

3.  Create a pool of money that has guaranteed principal and minimum guaranteed rate of returns;

4.  Create a pool of money that is protected from lawsuits (except divorce);

5.  Protect your family from loss of your income if you die prematurely; and

6.  Create a pool of money that can sustain you in your retirement years.

This money is protected by the insurance company you write the contract with.  Life insurance companies rarely fail, unlike banks which fail by the thousands every decade or so.

Perhaps the most telling point is to look at what corporate executives use for their compensation packages.  Here is a very small slice of companies that pay for life insurance as a form of compensation for their top executives:

American Express/Anheuser-Busch/Bank of America/Dow Chemical/Fannie Mae/General Electric/Johnson & Johnson/Harley Davidson/Pfizer/PNC Bank/SunTrust Bank/ TD BankNorth/Wachovia/Verizon/Lockheed Martin

The king is apparently William Ryan of TD BankNorth whose annual premium of $1,260,000 is paid for by the corporation.

Interestingly, banks along with purchasing life insurance on their key executives also buy what is called “Bank Owned Life Insurance.”  They own a tremendous amount of life insurance because it is considered “TIER ONE” capital, which is there to protect the bank in times of adversity.  Other Tier One capital includes cash, gold, funds borrowed from the federal goverment and the federal reserve.  Just so we understand, banks buy cash value life insurance for safety and as a reserve requirement.  How much?  Over  110 BILLION dollars of it. Corporations also own quite a bit of it.

So financially astute executives own it, banks own it, corporations own it, why do the so called experts tell you not to own it?  Even some of the corporations that own alot of it (GE), have their employees giving out advice not to own permanent life insurance!!  Are you ready to throw out all those financial advice books into the nearest trash can yet?  You should!

Here is the final story I would like to tell you.  It might make your blood boil as it tells the story of how a corporate criminal kept millions away from those that he harmed.  Remember Enron and its main man Kenneth Lay?  About 10 years before his death, Enron purchased a $11.9M life insurance policy for him.  In bankruptcy the trustees was able to collect the $1.25 M in premiums from his estate.  Of course that left over $10M for his family.  That came in handy as the rest of his estate was valued at $0.  So after his death his wife collected over $10M that was paid for by Enron and no one could sue to get that money.


Retirement Strategies REdux: Old School v. My Way April 21, 2008

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Mary and Joe are typical folks, they have about twenty years to retirement with two kids fast approaching needing money to attend college.  Joe has been fortunate and has had the same job for over 15 years, while Mary works part-time for a local business and still does the majority of taking care of the kids.  They have accumulated around $100,000 in a 401K and owe $100,000 on a home that is worth $300,000 by aggressively paying off the mortgage and owning the home for 15 years.  Their emergency fund is meager at $8,000.  They know they need to figure out a way to get more money for retirement, but frankly, are at a loss how.  They make an appointment with John, the financial planner.  Mary pulls up in a 7 year old Honda minivan and waits for her husband.  Joe running a few minutes late pulls up in a 4 year old Chrysler 300.  Joe parks next to a new Lexus and admires it as they go into the office.  John meets them at the door and acknowledges Joe looking at the Lexus and mentions he has just leased it a few weeks ago.  Joe is impressed.

John, takes all their information and runs the numbers.  He looks them in the eye and delivers the bad news.  At their present rate they will not have enough to retire on.  They need to do something now!  Mary and Joe are a little embarassed about their situation, but they thought they were doing the right thing, paying off their mortgage and putting 8% of Joe’s salary in to the 401K.  Frankly, Mary knows because the wives talk about this, that they are better off than most of their friends.  So she is a little peeved at John’s rather cavalier attitude toward their retirement savings.  Then John throws in the kicker.  He can help them achieve success.  He starts to talk about asset allocation mentioning that they have all their money in one mutual fund.  He pulls out a prospectus that is for an international mutual fund that returned 28% last year.  Joe is impresses as he knows his fund returned a meager 3% last year.  Then Joe pulls out another prospectus for a Precious Metals Mutual Fund that returned 85% last year.  Joe is fully impressed now.  John suggests he take control of the $100,000 in the 401K to manage it.  He tells the couple to keep up the good work paying off the mortgage, but they need to put away more, much more if they want to retire comfortably.  John also suggests they need some life insurance so he suggests a $250,000 10 year term insurance which he says is dirt cheap now.  Joe and Mary look at each other with the same thought.  They are already pretty thrifty, but there goes the one night a week they eat out together and maybe Mary could work more hours after all the kids are old enough that they don’t need Mary to be there when they get home from school.  But, if that is what they need to do, then they will figure it out.

On the way home Joe is sold but Mary has some doubt about John.  She remembers reading “The Millionaire Next Door” in her book club a few years back, so she is not impressed with John’s car.  Her intuition also tells her that the returns that he showed them for those two funds were a little high, they must be risky she thought.  She thinks  they should talk to someone else.

Can you spot the mistakes?

1.  The assumption that leasing a nice car means that you know what you are doing financially is incorrect and probably the exact opposite.

2.  Mutual funds as a class underperform the market and specialized mutual funds have even more variability which means that those two mutual funds will probably underperform for many years to come to make up for their amazing performance last year.

3.  They use little leverage on their finances and are decreasing it by paying off their mortgage.

4. The majority of their net worth is home equity which gets a 0% rate of return.

5.  Suggesting to a frugal couple that they need to be more frugal is like throwing gasoline onto a fire.  They drive older cars, eat out only once a week and work 1 1/2 jobs between them while caring for two kids.  Life shouldn’t be this onerous for this couple.

My Way:

Move their 401K money to a discount brokerage account and buy $100,000 of Berkshire Hathaway B’s.  Warren Buffett’s returns 21% over 43 years and 18% over  the last 10 years.

Re-finance their home with a $250,000 mortgage now available at 5.75%.  This gives them $150,000 cash.

Take $25,000 and purchase a $200,000 duplex in Dallas, Texas that is cash  flow positive (See my Friend Jeff www.bawldguy.com for details)

Purchase a $450,000 equity index life insurance contract.  Fund it with $25,000 year for five payments.

Reduce the 401K amount to the 3% company match to cover the extra expense of the larger mortgage.

Place the $100,000 left over into a money market fund or high paying savings account to act as an emergency fund and reserve fund for the real estate.

As each year goes by make the $25,000 life insurance premium payment. 

Taxable income goes down as the mortgage interest goes up substantially and the real estate investment throws off tax advantages.

Let’s look down the road five years.  The real estate investment has a cash flow of +$3,000, +$3,000, +$4,000, +$5,000, +$6,000 as rent could be increased.  This $21,000 is held as reserves for deferred maintenance and is not counted for assets.  College aid was applied for the kids and this amount was not counted!

The insurance contract has a cash surrender value of $110,000 since the front loaded fee’s have been paid.  But this works as the couple’s emergency fund available to them with no tax consequences.  The big positive is that this is not counted toward income or assets for college aid.  So they have moved over $100,000 off the college aid books allowing the kids to qualify for more aid.

The Brokerage 401K is worth $228,776 with Warren Buffett continuing the 18% he got the last decade.

The duplex is worth $250,000 getting slightly less than 5% return. They have around $80,000 in equity.

Their home is worth $380,000 getting the same 5% return.  They have over $150,000 is equity.

Their taxes have gone down due to the mortgage interest deduction and the investment real estate.

Their passive income from the real estate is 500/month.

Their kids received large amounts of student aid for college.

They have a emergency fund/reserves over $130,000 so they sleep well at night.

The costs to do this was $5,000 for the refinance, $5,000 to buy the duplex, $12 to buy the stock, and the commission and fee’s for the insurance contract.

There are no ongoing fee’s (other than the insurance contract) payable to a financial planner.

No reduction in life style needed.  In fact as the couples net worth rose, they started to take a nice vacation once a year and Mary will stop working  as soon as the kids are out of college.

Old School V. My Way:  You make the choice!

PS  I used conservative numbers all the way through my way!

PSS  As usual this should not be construed as financial advice with respect to any particular stock or any general investment advice that might come under the auspice of the SEC.  It is only the ramblings of a derelect and a individual that does not have a license to issue stock or mutual fund or real estate advice.  Please see an “expert” for all tax issues.  

A hurricance of reactions to my Life Insurance Post! February 20, 2008

Posted by shaferfinancial in Uncategorized.
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Holy Smokes, lots of phone calls on my post about Cash Value Life Insurance!

Most were insistent that I prove my point on the investment value for life insurance.  But I have already run the numbers based on realistic assumptions and so have others and the outcome favors the life insurance contract.  So I have challenged myself to find a set of assumptions that leads to a different conclusion.  So here it is, enjoy!

Let’s look at two cases:

Assumptions:  The  S&P 500 Index returns one third what it has historically returned or 4% going forward.  Now lets compare putting $100,000 into a indexed universal life insurance contract as opposed to $100,000 into a low expense, indexed mutual fund.  Assume a 45 year old man in good health.  Further lets assume the mutual fund was in a 401K wrapper for tax deferral.  And finally lets assume a 15% marginal tax rate, the lowest possible which means they live in one of the five states that doesn’t have a state income tax. 

First the life insurance contract. In order for it to abide by IRS rules and avoid being a modified endowment contract it must be funded over 5 annual payments.  So we start with $100,000 make our first $20,000 payment and then put the balance of $80,000 in a money market getting 3%.

That buys us $400,000 worth of insurance which we index to the S&P 500 Index.

So if we die after 10 years we get $400,000. Our rate of return is 14.4%

If we die after 20 years we get $400,000.  Our rate of return is 7.2%

We live to our life expectancy of 80 and we get $400,000.  Our rate of return is 4.1%.

But wait you say, you can’t get to that money in a life insurance contract.

Wrong, you can access the surrender value anytime you want taking out policy loans.  At age 67 there would be $170,000 to access.

But there is more to this strategy.  You could use the interest earned in that money market fund you created to fund the life insurance to buy more insurance or you could just let it be.  After your five payments are made there would be $6400 in the account.  Let’s assume you took the interest and purchased an additional 20 year term policy with it.  You could purchase a $150,000 policy.  Remember, you will accumulate no cash value with this so it is just added protection which will add to your wealth before retirement if you don’t make it.

Now you have $550,000 if you die after 10 years.  Rate of  return is 18.6%

At the 20 year mark you die and you have $550,000.  Rate of return is 8.9%.

At 80 it would be the same (4.1%) since the term policy is no longer in force.

Now let’s compare that to the mutual fund.  Once again it is an index mutual fund tied to the S&P 500 Index with a very low overall expense ratio of .5% (average is 2.5%). The rate of return for the fund is 3.5% (4% Index rate minus .5% expense ratio).

If you die after 10 years you would receive $141,060.  But there are income taxes due (your heir has to pay it). We assumed the lowest marginal tax rate of 15% so you pay $21,159 in taxes and end up with $119,901 for an after tax return of 1.8%.  Not good!

OK, you live to retirement age of 65.  You have $198,979, but you gotta pay taxes on that so it reduces the amount to $169,132.  Your return is 2.7%.

You live to 80.  Congratulations!  If you have not used the account.  You have $333,359 in the account.  After taxes it is worth $283,355 for a return of 3.1%.

Let’s review:

                                      LI                                              MF

10 year R/R                 18.6%                                        1.8%

20 year R/R                  8.9%                                         2.7%

35 year R/R                  4.1%                                         3.1%

Available cash at 65   $148,000                              $169,132  

Bottom line is that you have significant better rate of returns from the life insurance at a cost of $21,000 in cash flow at age 65.  A toss up in my book.   

Let’s do this if the S&P 500 Index returns in the future what it has in the past because it dramatically changes the calculations.  Your marginal tax rate goes up to 25% because you have to withdraw an amount that puts you in a higher tax rate. You also have a estate tax problem that cost you if you leave it in the mutual fund until age 80.  All other assumptions stay the same, but the historical return of the index is 12%.

                                       LI                                         MF

10 year R/R                   18.6%                                  9.7%

20 year R/R                    9.6%                                   9.8%

35 year R/R                    8.5%                                   9.8%

Available cash at 65   $429,377                              $661,155  

So what I have done is to put the real numbers from insurance software against the best case of a mutual fund.  So, if you have a mutual fund with an expense ratio of .5% which is 2% below average and you never access it.  If you live to your age expectancy.  If the market returns the same as it has historically done. If you are in the lowest tax rate possible and live in a state with no state income tax.  And finally, if when you need the money the market is not in a down period then you come out ahead putting your money in a mutual fund.  If any of these things are different then you don’t.

So there it is, I believe I have made a case for the mutual fund over cash value life insurance!  Had to work hard to do it!

I think this demonstration answers the question, is cash value life insurance an investment easily.  It doesn’t answer the question which is best for you.  Only you can look at your situation and answer that.  For me, I have a large equity indexed insurance contract and still own mutual funds from previous employers retirement plans.  Although, I am starting to sell the mutual funds in favor of a single stock.  But that is a story for a future post!

PS I let my securities license lapse, so anything I have said should not be considered in any way or form investment advice.