Whole Life Comparison

steeplechaser83

New Member
10
I received whole life illustrations for 100K whole life, overfunded from NYL, Guardian and MetLife. MetLife's illustration outperforms NYL and Guardian in both guaranteed DB and CV. Why is this? I though mutual companies were better.
 
Illustrations are worth the paper they are printed on.

Marvin Feldman once said this about illustrations: "Remember the rule 1 to 100. In 1 year, 100% of your illustrations will be wrong."

Remember why you're buying, not necessarily what you're buying.

Even Ben Feldman said that: "Dividends are not guaranteed. They are estimates. And the companies all earn about the same amount of money on their investments. None of the companies are that far apart. We're apart because someone made a different estimation on dividends."
 
DHK, I understand illustrations are not accurate however I am comparing the GUARANTEED values (DB and CV) of these three carriers and MetLife is the best.
 
Illustrations are worth the paper they are printed on.

Marvin Feldman once said this about illustrations: "Remember the rule 1 to 100. In 1 year, 100% of your illustrations will be wrong."

Remember why you're buying, not necessarily what you're buying.

Even Ben Feldman said that: "Dividends are not guaranteed. They are estimates. And the companies all earn about the same amount of money on their investments. None of the companies are that far apart. We're apart because someone made a different estimation on dividends."

I'm actually going to take issue with this. Not you specifically, but rather with Marv and Ben.

There is a lot that can be reviewed by looking at illustrations and while the numbers may bounce around a bit, there are functional pieces to policies that are way easier to recapitulate with an illustration and quantify their effect on the policy vs. other options.

----


As for the original question, mutuals are not "better." There are career sales agents who work for those mutual companies (whose job it is to sell the companies' insurance products) who would have you believe that mutuals are better. And there is no doubt that mutuals themselves think that they are better. But being mutual does not make you superior simply because you are a mutual.

As far as your comparison goes. MetLife isn't a bad whole life carrier at all. And they compete against the companies you listed (and several others) all the time.

Now, functionally there are a lot of things you can do with Guardian that you cannot do with MetLife (nor really with NYL). And those features that would be unique to Guardian could give them a serious advantage. And Guardian isn't the only company that has such advantages.

But ultimately no, Guardian and NYL are not superior just because they are mutuals and MetLife can certainly compete with them.
 
Promises (insurance) can vary enormously in quality, especially over a lifetime.

Since many of the investments in insurance companies' general fund are similar, the only realistic way to consistently outperform is through tight underwriting control. This limits flexibility, i.e., the company that allows the most "flexibility" in allowing a customer to get into a contract quickly (overfunding maximally) has less control of their investment pool and can't commit as much to longer-term, higher yielding assets and therefore risks underperforming on returns over a lifetime. Without limits, a number of financial institutions would always buy whole life during low interest rate periods and dump ("trade") the contracts quickly when the economy strengthens, affecting (diminishing) life insurance companies returns in their general funds, but increasing flexibility for institutional traders.

I do like the mutual's corporate bias--no outside shareholders owed fiduciary duty is a real plus, allowing consistent, long-term thinking.

As to performance, look at MassMutual's performance during the last recession, for example (annual financial statements), relative to other insurers--just outstanding. I have never found better all-around quality (I continue to search), both on long-term return crediting consistency, customer service/helpfulness, and many intangibles (like happy employees, infrequency of contested contracts <2 years old, etc.).

I look for long-term outperformance, as it's too hard to predict who will outperform over the short-term accurately (I've tried--I give up!). There are too many short-term variables to predict consistently (even 10 years is too short).

The only way I have been able to come to terms with "who to choose" in my own conscience is to focus on quality, on all levels. That makes sense for financial statements and for a lifetime.

Hope that helps (a little!).
 
Now, functionally there are a lot of things you can do with Guardian that you cannot do with MetLife (nor really with NYL). And those features that would be unique to Guardian could give them a serious advantage. And Guardian isn't the only company that has such advantages.

What features would you be referring to with Guardian?
 
DHK, I understand illustrations are not accurate however I am comparing the GUARANTEED values (DB and CV) of these three carriers and MetLife is the best.
Guarantees are important, but I question their value in being the sole basis for comparison. I don't know of a single company who ever just decided not to pay a dividend, so to not consider them in your comparison is a bit extreme.

I'd be more interested in the design differences and their real-world effects on not just accumulation but on the cost to access cash value and income stream generation.
 
Larry is right on. I do look at the guarantees, but you most look at much more. What do you plan on doing with the policy, how do they look at loans, when is the loan interest charged, history of the company, how the plan was designed, and much more.
You can have the same company with the same premium and same policy, but the agents structure it totally different. This is important.
 
Can you post the illustrations for everybody to see? You see I have three things in my hand and one of them is better than the others, won't tell you a whole lot more about them, but trust me (or trust my sales manager) that one is better, if you take away other things from all of them.

;)

We're debating illustrations we haven't seen but are told they are the same. We're being told something is better than the other two without seeing any of the three. C'mon man.
 
I wouldn't put that much stock in the guarantees. Pick a realistic average and then see who wins. Knock off a couple points from the realistic average and see who wins, etc.
 
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