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| My annuity is a variable one that I have had over 20 years ago and there is some small fee annually or quarterly I forget. The big problem with it is the lack of performance in the funds themselves and the hidden fees inside them compared to a Vangaurd. I have meant to roll it a few times and the new agent drags his feet and I forget to call back. I will agree the fixed annuities from the 80s probably look good now compared to cds but compared to a stock that pays a 4% dividend or one that pays 0 dividend but grows in value. What is the min interest on a fixed annuity today?
I understand the need for buy sell agreements but what I hate about funding them with life insurance is that means the buy sell agreement is going to be at fixed rate and be a huge burden on growth. What happened to land values from 2007-2013, I would hate to get paid 2007 values in 2013. Your right term insurance won't work for this and it will require lots of expensive whole life insurance, that pays what 2x-3x first year premium in commissions not counting 2nd year and renewal, would that be accurate? Many estates could buy another farm with the premium. Some dysfunctional estates may be better off just trying to get along and dividing up farms vs paying all that premium, I know of families that have done it both ways. The one that just divided up farms seems happy time will tell on the buy sell life insurance family but I could see it getting ugly so hopefully for them it works out.
The $100k whole life purchased for a baby will not do much for a estate plan or buy sell. The last part is what really angers me selling a UL as a retirement savings plan and life insurance combined is wrong. Yes extremely wealthy people could use it as a tax shelter but most farmers are cash poor. A UL is just term insurance and a annuity combined which you know, and the min interest and max cost of the term insurance in the UL will make the product very expensive. So in english for NAT boone is talking about a life insurance policy that the premium is paid into a annuity that could be tied to stocks or bonds, from this annuity money is withdrawn to purchase term life insurance which will go up a unknown amount every year but is subject to a maximum cost of insurance (which is very high) and a minimum rate of return on the annuity (which is very low) leaving customer still open to risk when buying life insurance ( I know kinda odd but true lol). Typically they are sold incorrectly, not funded properly, and become a very expensive term life insurance policy that will be cancelled because it is cost prohibitive when the client needs it the most. At least it lasted long enough for the agent and ins company to get paid. What's the percentage of these that get funded at a level to make it to retirement age? to age 100? It is very low. | |
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