I have $175,000 dollars. $125,000 in a cash value life insurance contract paying 4% annually net of all premium payments. I expect that percent increase to continue and perhaps increase over the next couple of decades. I have $50,000 divided among a Roth and Traditional IRA, fully invested in PRPFX. I am thinking
(sometimes not a good thing to do) of using the life cash value as my Cash/Bond holdings under the PP model, and dividing the $50k equally between VTI and GLD. Thank you in advance for the group input.
Allocation Assistance
Moderator: Global Moderator
Re: Allocation Assistance
If it's a fully liquid contract (withdrawable as cash or available as a policy loan) with no surrender chrages then it could be used as a portion of the cash portion of the PP...you'd still need some actual "cash" for rebalancing purposes too.
A cash value life contract isn't technically "cash" or "T-bills" as Harry Browne recommended but I suppose it's about the same as using a "stable value fund" in one's 401K as cash (stable value funds being backed by the same General Account of an insurer as life insurance cash value is). Just be sure and stay under the limits of your state's guaranty program.
Is it a UL or WL policy? Also, was it set up at issue as a low-base face, high-PUA (with term blending), max funded non-MEC 7-pay contract? if not, you probably got rooked and the agent who sold it to you got a lot fatter commission than he/she should.
A cash value life contract isn't technically "cash" or "T-bills" as Harry Browne recommended but I suppose it's about the same as using a "stable value fund" in one's 401K as cash (stable value funds being backed by the same General Account of an insurer as life insurance cash value is). Just be sure and stay under the limits of your state's guaranty program.
Is it a UL or WL policy? Also, was it set up at issue as a low-base face, high-PUA (with term blending), max funded non-MEC 7-pay contract? if not, you probably got rooked and the agent who sold it to you got a lot fatter commission than he/she should.
Re: Allocation Assistance
WL paid up @ 96. Bought it in 1995. Premium is $535 monthly and could be offset. I am funding my Roth $6000 annually.
Re: Allocation Assistance
When you say "offset" do you mean via the dividend paying the premium or do you mean by RPU'ing the policy?WL paid up @ 96. Bought it in 1995. Premium is $535 monthly and could be offset. I am funding my Roth $6000 annually.
Did you buy this policy mainly for the death benefit or for the tax-sheltered cash accumulation?
Is there any reason the premium is set as paid monthly instead of annually? Paying annually is usually cheaper in terms of modal premium than paying quarterly or monthly.