It seems as though I have an unusually high number of friends who are life insurance salesmen. I love my friends but it can get annoying when they're constantly trying to try to sell me insurance and sometimes it seems as though the only way to remain friends with them is to buy their products.
Two of them constantly try to sell me whole life, life insurance. Now, I have to admit they make these products sound quite appealing at first. They tell me that instead of having nothing to show for my insurance payments in 30 years, I'll have a large amount of money in cash value and that the cash value is a safe bet. They say how I can borrow against my policy while keeping my policy in place along with many other appealing benefits.
Well, I finally put one of their policies to the test. I ran an analysis showing the value of his New York Life policy vs. a plan to buy term and invest the difference. My analysis shows that buying term and investing the difference leads to much better results. It can be downloaded by clicking on the link below.
The analysis is still in draft form and I am certainly open to suggestions as to how to make it better or more accurate as I am definitely not an expert on taxation or personal finance. You can change any of the assumptions in blue and yellow to see how they affect the results. The Whole Life piece is an actual illustration from my friend who is a New York Life agent.
Click Here to pull up a copy of my analysis
Subscribe to:
Post Comments (Atom)
Posts
2 comments:
You did not include the stock market being volatile. Use actual returns over the period you covered. You will get much different results.
You bring up a good point but that's why I used the Compound Annual Growth Rate of the S&P instead of just the average annual return so in effect, yes I did account for market volitility. Without a crystal ball, the CAGR is the best way to account for the volitility.
Post a Comment