Fully Underwritten vs Simplified Issue vs Guaranteed Issue

[Todd King]

Thanks Todd.

But in my specific case prior discussion in the thread indicated that a $10K policy would cost me a single premium of $9K plus non-fraternal and possibly drop to $8K plus with fraternal coverage. If I can achieve a longer life, annual premiums would actually cost me more than the policy face over a period of time.

So I take my $9K to $11K out of computershare, give up the dividends and no longer have to track 1099s. I put it in a single premium life insurance policy that has a difference of less than $1K between the premium and policy face.

If I am doing GI to even get the coverage, if I die soon, my wife probably doesn't even get the increase from premium to policy face. If I die longer out I have basically just preserved "the principal" with no increase at all. And in the event I should need a policy loan for something, the policy cash value probably drops $2K below the premium paid.

Although I do have a wealth transfer objective that policy would meet, as I said earlier, now that it is tax season again, I am reminded that I had forgotten my main reason in thinking about the life insurance was to reduce the amount of paperwork my wife would have to pay an accountant to process at tax time. I believe the life insurance option "costs too much"; I need to think out other possibilities.

My bad, I completely forgot that you had some issues and may not even be able to get one to begin with!

 

[BobHarris]

Thanks Todd.

But in my specific case prior discussion in the thread indicated that a $10K policy would cost me a single premium of $9K plus non-fraternal and possibly drop to $8K plus with fraternal coverage. If I can achieve a longer life, annual premiums would actually cost me more than the policy face over a period of time.

So I take my $9K to $11K out of computershare, give up the dividends and no longer have to track 1099s. I put it in a single premium life insurance policy that has a difference of less than $1K between the premium and policy face.

If I am doing GI to even get the coverage, if I die soon, my wife probably doesn't even get the increase from premium to policy face. If I die longer out I have basically just preserved "the principal" with no increase at all. And in the event I should need a policy loan for something, the policy cash value probably drops $2K below the premium paid.

Although I do have a wealth transfer objective that policy would meet, as I said earlier, now that it is tax season again, I am reminded that I had forgotten my main reason in thinking about the life insurance was to reduce the amount of paperwork my wife would have to pay an accountant to process at tax time. I believe the life insurance option "costs too much"; I need to think out other possibilities.

It truly isn't going to matter if your wife hands your CPA/Attorney 1 piece of paper or 30 pieces of paper, it's going to cost her the same amount

 

[LostDollar]

I would suggest a small FIA, making your beni the one you planned on using for your whole life policy. This suggestion is based of course on your goals, age, amount, and required distributions. These would be important things to investigate before purchasing.

Thank you for the suggestion. I have not been ignoring it. I have been hunting for info on Flexible Premium FIAs before I responded to you.

I thought I had a possible alternate solution with Elco Mutual whole life coverage, but a rep told me today those policies have a minimum face of $25K.

There is one other insurance option I have to find someone to talk to me about before I come back to responding directly to your post above.

Sagicor WealthCare Single premium UL.

I need to find out whether it matures at age 100 or age 120.
I need to see what face coverage a $5k premium would buy at age 80 policy issue.
I need to see what premium a face of $8K would require for an age 80 policy issue.

I may be able to qualify for that coverage,

(I could also look at rates for Baltimore Life, but their products mature at age 100 and I am not sure I want to do that.)

After I get that Sagicor info, I think I can tell you options I have found based on your suggestion and make buying decisions to accomplish my goal.

 

[LostDollar]

I was not satisfied with the way I left this thread, but I couldn't think what else to ask or say at the time.

Now that tax season is here, I was reminded of my most basic underlying objective for the questions.

Over the years I have managed to accumulate a few thousand dollars in an assortment of small stock holdings in computershare.

I have reached a point in life where tracking and entering 1099 div's (into tax software) is no longer fun.

I thought selling the stocks and using the money to buy a small whole life policy might be an effective hands-off way to manage that money.

What I think your posts have shown me is the single premium life insurance would preserve whatever money I chose to put in it but it would not allow much further increase of it. I believe I need to think on other alternatives.

My thanks again to each of you who took the time to give me comment and advice.

I would suggest a small FIA, making your beni the one you planned on using for your whole life policy. This suggestion is based of course on your goals, age, amount, and required distributions. These would be important things to investigate before purchasing.

While looking for flexible premium annuities to address another concern, I found a Mass Mutual Ascend Legend 7 product with a Min Pur Amt of $10K, max issue age of 85, and a very nice inheritance rider. While it is not my optimum solution and my qualified funds got hammered by current events, I am still able to appropriate $10K of qualified money, convert it to Roth so beneficiaries would get tax free inheritance income and use that to purchase the annuity.

If I still want to reduce stock holding when I get ready to purchase the annuity, I can sell $8K of stock to cover my 2025 IRA contribution. That would put me as close as I can get to the concept of selling stock and using the money to buy life insurance to create a tax free inheritance.

As usual, the biggest problem is probably going to be finding an agent to sell me the small product.