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Q: Whole Life Insurance ( Answered 5 out of 5 stars,   7 Comments )
Subject: Whole Life Insurance
Category: Business and Money
Asked by: brentwill1-ga
List Price: $50.00
Posted: 13 Jan 2006 15:55 PST
Expires: 12 Feb 2006 15:55 PST
Question ID: 433098
I am a 25 year old male in very good health.  I also have around 130K
invested and should gain about 3 million from inheritance.  I am
interested in starting a whole life insurance policy to protect these
assets when I die from taxes.  I would like to buy into the policy
now, when the premiums will be cheap and I want to guarantee that the
premiums will remain the same price throughout my life.  I also want a
plan that allows for options to buy more insurance at the same
pro-rated amount.  I would like to start with the minimum about of
coverage possible and end up with about 1 million dollars of insurance
when I am 50.  I have found one plan at liberty national insurance
(  that allows this, in a way.  It gives me
138K of insurance now, and gives me eight options through the years to
increase the coverage by 50K every 3 years, which would give me 538K
of insurance by age 49.  The premiums for me would be 77 dollars a
month and I would buy the extra insurance at the same price.  I would
like to know, is this best price?  What options do other insurance
companies offer and how do they compare?

Request for Question Clarification by hedgie-ga on 15 Jan 2006 05:10 PST
I doubt you need VUL, but you sure can use  some advice.
 financial plan does not require a full time money manager and GA is
not a good place to get a personal financial plan from. (Read the
GA may give you  info about how to select a financial planner, what
info is available publicly and  what kinds of planners and scams are

 Question is whether you are open to an advice. For example, some experts say
" High Charges May More than Offset Tax Benefits
As well as insurance protection, the main attraction of VULs is as a
tax shelter -- under current law, VUL investment earnings do not
represent taxable income, and if the policy is held to death, no
income taxes are ever assessed..."

If you already know that you need VUL, do you need experts?

So, my RFC, do you want me to answer, but provide a meta-data, rather then 
financial plan. Meta data say 'how to get data'?

Clarification of Question by brentwill1-ga on 16 Jan 2006 14:45 PST
I think I would like the answer using "meta-data" but I also don't
think that it is worth $200.  If you would provide that answer for

Request for Question Clarification by hedgie-ga on 16 Jan 2006 16:57 PST
Sure (and open to all)

Howto change your question price 
You can change your price at anytime as long as your question is not
currently 'locked' and being answered by a Researcher. To change your
question price, go to "My Account," select "My Unanswered Questions"
and click on the question with the price you want to change. Then
click on "Change Question Parameters" to modify the price.

Clarification of Question by brentwill1-ga on 17 Jan 2006 10:44 PST
Okay, the price is now $50
Subject: Re: Whole Life Insurance
Answered By: hedgie-ga on 12 Feb 2006 01:25 PST
Rated:5 out of 5 stars

    I apologize for not following up,right away, to answer your
modified question. I hoped someone else will pick up this question,
but since no one did,
this is my answer:

 You do not need a full time personal money manager. There is a professional
 advice available, from financial or estate planner, for a hourly fee,
 of some $100 to $200 per hour.

 You still need to know enough, to select the 'right adviser'.

Here is an advice of one seasoned professional:

 Page 'whom can you trust?' gives a sage advice

You Never "Buy" Stocks from a Stockbroker
You Never "Buy" Insurance from an Insurance Agent
You Never "do" Financial Planing with a Financial Planner

 Moody's site is still one of the best on the net, even though
 it looks like plasterd an ad for his book an every page. I say
 'seems' since I did not inspected all 3000 of them.

It is imperative for a consumer to understand the difference between
 load  and 'no load' funds  and fee-for-service and 'free advice planners'.

I suppose you do know these basics, things like:

"Is there really that much of a worthwhile difference between load and no-load
funds? An analogy to comparing mutual fund structures would be a
one-hundred yard race. If the race competitors have equal ability, but
one has a five
 to six yard head start, you obviously know who would win the contest."

and 'about for fee advisors'

National Association of Personal Financial Advisors (NAPFA)
NAPFA (National Association of Personal Financial Advisors) is the
professional association of fee-only financial
advisors. Find planners near you and other ... 

No Load Insurance, Financial Planning
No & Low Load Insurance, Financial Planning, Fee Only Financial Advisor,
Universal Life & Variable Life Insurance,
 Retirement Planning, ... - 17k - Cached - Similar pages

 If not, consider subscribing to

Kiplinger's Personal Finance is a magazine that has been continuously
published, on a monthly basis, from 1947 to the present day. It was the the
nation's first personal finance magazine, and prides itself on delivering
"sound, unbiased advice in clear, concise language". It offers tips and
tricks on managing money and achieving financial security, as well as
information and practical guidance on saving, investing, planning for
retirement, paying for college, and buying automobiles, homes and other major

 and membership in AAII: 
The American Association of Individual Investors provides investment
education for the individual investor. AAII arms the individual
investor with ...

 or in 

"BetterInvesting has helped over five million investors take control of their
financial futures. That's because we're dedicated to providing a sound
program of investment education and support to help our members become
successful lifetime investors..."

We, here at GA, do not providw financial or other professional advice
(please read the disclaimer at the bottom of the page) but we can suggest
professions and publications which deal with issues relevant to askers question.

 SEARCH TERMS: estate tax, trust

 (when entered into a search engine) will bring many sites, many
provided by professionals, which describe issues and services, sites

Will You Owe Estate Taxes? (Tax Guide: Personal Finance ...
Note 1: You can avoid estate tax on life insurance proceeds by setting up an
irrevocable life insurance trust to own the policies on your life. ... homefamily/index.cfm?story=estatetax 

Tax Law Changes for Gifts and Estates and Trusts
2006 Federal Tax Rates for Estates and Trusts. The 2006 federal estate and
trust tax rates are as follows. 2006 Federal Estate and Trust Tax Rates ...,,id=112782,00.html 

Federal Estate Taxes - Bypass Trust - Credit Shelter
As such, when our husband dies, the first $2 million that is left in trust
escapes federal estate taxes because it is below his $2 million credit. FCIC: Establishing a Trust Fund
A bypass trust allows a married couple, in certain cases, to shelter more of
their estate from estate taxes. The first spouse to die can leave assets in a

Wills & Estate Planning - Resource Center
Make your own legal will, living trust, healthcare directive (living will),
and powers of attorney. Avoid probate and estate taxes. FD1795A9-8049-422C-9087838F86A2BC2B/309/

Please, feel free to ask for clarifications, and when all is clear,
please do rate the answer. We want to know if our search was useful to
the customer.

brentwill1-ga rated this answer:5 out of 5 stars
Very indepth

Subject: Re: Whole Life Insurance
From: canadianhelper-ga on 13 Jan 2006 16:07 PST
Google Researchers are not allowed to answer your question 'how do
they compare'...they can provide you with links to the info and links
to other peoples opinions but they are not going to be able to provide
you with 'their' opinion, for instance.  Also,  without access to
industry exclusive info they can't answer whether something is the
'best' price...they can't find what isn't on the net.

Hopefully a summary of options and a listing of their prices is going
to be sufficient.

I would rather (as someone in the financial services industry) see you
personally visit a few financial planners with reputable firms that
either have access to or are licensed to talk about insurance and
estates.  Their time should be free and likely much more informative.

My 2 cents on this one but if you have a 3million $ estate coming down
the pike I wouldn't be goofing around with amateurs.  Google Answers
researchers are generally NOT experts and should not be relied on as

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Subject: Re: Whole Life Insurance
From: brentwill1-ga on 13 Jan 2006 16:54 PST
I would love to go to an expert, but my current assets means I don't
think it would be worthwhile for me to get a full time money manager
at this point.  I have all my current assets with dodge and cox and I
am rather satisfied with the rate at which my money is growing. 
However, I know this money is comming at some point and I want to
protect myself while I can still do it cheaply and I don't want to pay
the rate I would pay for a money manager.  Anyway, my thought was with
130K invested and that being my total net worth, does it really make
sense for me to get an advisor?
Subject: Re: Whole Life Insurance
From: canadianhelper-ga on 13 Jan 2006 18:15 PST
Now that's a question that I hope you can get an answer on! Why not
cancel this one and start a new one (without spending $200)...

I'm in Canada so I can't advise you on costs but generally between
150k and 300k is when the straight cost of advisors and fees is
cheaper than say mutual fund fees (assuming equal return rates) here
in Canada but I'm sure it's quite different there.

For instance...your funds are costing you approx .6% Expense Ratios...

Up here in Canada it is quite common to get full management, all in,
including tax prep, invest management etc for about 3000$ to 5000$ per
year. Mutual funds sold by the banks will charge between .5 and 3%
Expense depending on how much money you have the full
management becomes more and more attractive...

I'll bow out to a local Answerer!

Good Luck.
Subject: Re: Whole Life Insurance
From: myoarin-ga on 13 Jan 2006 20:23 PST
This is just a comment, no financial or tax advice.
If you are young and healthy and assured of such an inheritance, you
don't need life insurance.  If you don't want to manage the money when
the inheritance comes to you, talk to professionals about investment,
annuity possibilities.

It is appropriate for you to consider the eventualities, but insurance
companies are generally not the best place to put your funds, unless
you need the security of the company's paying off a mortgage or
providing for survivers.
Subject: Re: Whole Life Insurance
From: brentwill1-ga on 14 Jan 2006 06:28 PST
Actually, you do need it.  When I die, the government will take about
40 percent of my net value over 100K.  (The death tax).  Life
insurance offsets this.
Subject: Re: Whole Life Insurance
From: daniel2d-ga on 14 Jan 2006 12:16 PST
You need to go to an estate planner to figure out how to arrange your
assests to met your goals.  A trust or trusts, set up in various ways
will probably achieve this purpose.  Insurance is only a part of the
equation.  For example, real estate that pawwes to another at your
death will be inheried at the stepped up basis (the currene value at
death not the original purchase price).
You can give tax free gifts over your lifetime (up to a maximum)to
people you want.  You can purchase term insurance, rather than whole
lfe.  You really need an estate planner rather than a life insurance
salesperson to advise you.
Plus, start reading up on your own.
Subject: Re: Whole Life Insurance
From: scubajim-ga on 18 Jan 2006 09:13 PST
Get someone versed in estate law.  If you buy the insurance you might
be making the problem worse.  If you (check with estate lawyer) have
an irrevocable trust own the insurance policy then the insurance
amount won't be included in the estate and hence the cash can be used
to pay the inheritance tax.  Also in the US the estate tax has a large
offset before taxes kick in. (I think about $700,000 before amounts
over that start getting taxed, but it varies from year to year due to
recent tax law changes.)

Get an experienced estate lawyer.

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