Life Insurance vs High-Yield Savings | Detailed Financial Review (SURPRISING RESULTS)

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Күн бұрын

Пікірлер: 24

@BetterWealth Ай бұрын

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@robertdillard8917 Ай бұрын

Good job as always, one thing to be mindful of is that the tax system is marginal. A life policy is still great as a safe cash flow tool

@mickaelsimonet675 Ай бұрын

Hey Caleb, love watching your content. You mentioned you've made a video with the benefits of whole life. Do you have the link by any chance? thanks

@cwall216 Ай бұрын

I would much rather have a policy than depending on my savings account

@HazeltineLLC Ай бұрын

This is a good comparison Caleb. As you point out, it's all about the assumptions behind the numbers, not the numbers themselves. When we show numbers, the purpose is to illustrate a concept - the number don't speak for themselves (they require interpretation). I'd love to see you add in the cost of a LTC policy in addition to the cost of term and see what that would do. You could also throw in a small liability policy as well (since the life insurance policy has creditor protection). Additionally, if you had critical illness protection and disability waiver of premium on the life insurance policy, you would add in a small critical illness and disability policy as well. That could get very interesting. Thanks again for going through this exercise!

@HazeltineLLC Ай бұрын

That's partially true. The convertible term with living benefits often has far reduced payouts when you peel back the onion; plus it doesn't cover for disability or liability. Also, those policies are usually with companies that have no permanent product worth converting to, hence the conversion privilege isn't really worth much.

@MoneyStrategiesSOULutions Ай бұрын

@eyebeesea why would you convert an IUL or WL to a perm?

@HazeltineLLC Ай бұрын

No, when I say liability I mean creditor protection; there probably isn't a way to mimic it outside of whole life, but an umbrella (liability) policy would be the closest thing. You could purchase term with living benefits, but obviously that would be more expensive than the term policy shown in the example, so it would be an added cost to try and make it more of an apples to apples comparison. A disability rider in term is not comparable to whole life at all.

@HazeltineLLC Ай бұрын

You could look at either disability waiver of premium or disability income, but it would be something else to consider. Not sure if you're deliberately misunderstanding what I'm saying or not; the point is simply that, if you're going to make it an apples to apples comparison (or as close as you can), there are other benefits to consider than just the death benefit. Yes, you could get some of those by purchasing a term policy with living benefits.

@valuegiven Ай бұрын

This needs shared with the masses. Well done Justin.

@BetterWealth Ай бұрын

Thank you! Very proud of Justin for making his first KZbin appearance 🙏🏻

@BetterWealth Ай бұрын

If you want to see a lot more life insurance case studies, and more videos with Justin, make sure to subscribe to the And Asset channel - www.youtube.com/@AndAsset. That's where all of our primary life insurance content will be!

@jaycox1836 Ай бұрын

Will do. I think this could be simplified and build up to the loan example. For the savings account, calculate the effective rate of return by subtracting the taxes. Savings_APY - (marginal_tax_rate x Savings_APY) = Effective_APY A savings account advertising 5% APY, minus 20% marginal taxes, delivers 4% effective, after-tax interest. The effective rate can be calculated for an insurance policy, today's good designs may net 3 to 4%. When you get to the higher tax brackets with Net Investment Income Tax, the choice is easy. The cost of insurance is much cheaper than paying Uncle Sam 38.8%.

@The_vincepryor Ай бұрын

This is a good explanation that Life insurance IS NOT an Investment, but a TOOL. The only criticism is the actual investment example is to perfect. What fund , what thing can someone invest $100k into and get $24k back a year for 10 years reliably ? please let me know😁😂🤣. The example I would have used in a setup would be the following: You found a investment property in December and you know you could earn about $2k a month in rent. The cash price is $70k the fix-up cost is 20k and keep $5k for misc. January 1st your new tenants move in. Or you found and buy on January 1st a coined operating carwash earning about $1,500 a month that was not well taken care of. You buy it for $65k you Spend $25k Cleaning up and updating the carwash. you spend 5k on advertising and 5k on initial supplies. Now your are earning 2-3k a month let's just say 2k to be conservative.🤔😉 Life insurance is not an Investment. It's a tool. That's how I see it.

@johnp7739 Ай бұрын

" What fund , what thing can someone invest $100k into and get $24k back a year for 10 years reliably?" If you can do that without too much volatility or losses, you could make a millions managing hedge funds. I'd quit my day job very quickly with that track record, lol.

@The_vincepryor Ай бұрын

@johnp7739 that's what I said😂🤣😁. You could buy a house for $150-175k and Gross earn 2k a month In Rent. That's the only legal thing I can think of. But even the monthly rent is Guaranteed. What about unexpected capital costs. I am more interested in that $500k fund. 🤔🫣😛 Get my money back in 5 years and never have to work again.

@johnp7739 Ай бұрын

@@The_vincepryor Yep. I've owned one rental house. It turned out to be a decent (not amazing) investment, but the renters missed their payments a few times in the 2 or 3 years I owned it. And there were a couple of repair/maintenance expenses.

@denko44 Ай бұрын

Caleb, people have issues with Todds numbers. The nunbers here aren't bad theyre fair. But youre focusing too much on comparing a taxable asset vs a non taxable asset. Personally, this is something i dislike, so in a way, you are padding the narrative. One of my biggest peeves is when insurance sales people always compare taxable vs tax free. That said we wamt more Justin.