Gyroscopic Investing

moda0306 wrote: Life
Disability
Homeowners
Auto liability
Umbrella
Health
Maybe long-term care

Details to come .

MachineGhost wrote:

moda0306 wrote: Life
Disability
Homeowners
Auto liability
Umbrella
Health
Maybe long-term care

Details to come .

You only need life and disability if you have children and/or a housewife or househusband. yeap Homeowners (or renters) and auto seems self-evident. yeap  Umbrella is only necessary if you have more assets than the other forms of insurance will cover; its also an low-cost alternative to offshore asset protection.  Health is mandatory now; no point in debating that one the debate is.....am I better with the penalty and then sign up if I get really sick? Can I just do that? .  Long-term care I believe is a scam because you won't get the promised benefits when you actually need them besides the fact the premiums skyrocket every year you get older AND your continual ability to keep it depends on your continual ability to pay AND rampant inflation from excess demand for LTC is whittling away the true value Yeap .  It truly is a sucker's bet.  I fully expect the government is going to have to step in to deal with the crisis of a lack of LTC from the Baby Boomers in a few years. gold is the insurance if the government is going to pay with printed dollars  No one can really afford LTC long-term except those self-centered rich jerks living on the Upper West Side.

Kshartle wrote: debating that one the debate is.....am I better with the penalty and then sign up if I get really sick? Can I just do that?

MachineGhost wrote:

moda0306 wrote: Life
Disability
Homeowners
Auto liability
Umbrella
Health
Maybe long-term care

Details to come .

You only need life and disability if you have children and/or a housewife or househusband. 

Homeowners (or renters) and auto seems self-evident.  Umbrella is only necessary if you have more assets than the other forms of insurance will cover; its also an low-cost alternative to offshore asset protection. 

moda0306 wrote: I disagree. Especially on disability. With your ability to work, you have a risk on your balance sheet to your financial security, no matter who is dependent on you. It is big enough to be worth transferring. Disability events can be extremely financially devastating at worst, and very disruptive annoyances at best... In fact, especially if you don't have a spouse to help you through it .

With life insurance, if you are likely to need it in the future due to a spouse and/or child, you can lock in your health class by securing it now. If you have a spouse that also works, there could still be a very large financial risk to a premature death of either spouse.

Not really. If the need for robust auto liability is self-evident, then why isn't umbrella?  In many states, when juries decide damages, they don't know how much you have in assets or insurance. Any judgement above and beyond your insurance and unpayable by your assets can be garnished.  In my state, max garnishment is 25%.

Regarding long-term care, I'll leave that one alone. I don't think it's a "scam," but it is somewhat inefficient and unstable. I tend to like the idea of building up a decent state partnership benefit, at least.

Reub wrote: Also, do not forget flood insurance. It is usually cheap and can be vitally important. Homeowner's insurance will not cover flooding.

MachineGhost wrote: Seriously, if you waited until you were dying of a catastraphobic disease and there was an exception to the open enrollment period requirement for that, you'd be saving the taxpayers a lot of money anyway! 

MangoMan wrote:

MachineGhost wrote:

Kshartle wrote: debating that onethe debate is.....am I better with the penalty and then sign up if I get really sick? Can I just do that?

No, I think they were smart about that.  You can only sign up during the open enrollment period with only very limited exceptions outside of the open enrollment period.  Seriously, if you waited until you were dying of a catastraphobic disease and there was an exception to the open enrollment period requirement for that, you'd be saving the taxpayers a lot of money anyway!  The penalty is pretty prohibitive anyway (starts at 1% and increases to 6% I believe),  so I can't imagine where its more cost effective to pay the penalty then just be in the risk pool.  The major downside that I can see is that all the plans on the exchanges seem to be those chain-gang HMO's.

Now that the Republicans have accepted the reality that Obamacare is a success and is here to stay, they are finally coming out with legislation to improve the many faults.  About time!

Actually, that is not true. Any 'qualifying life event' makes you eligible at any time outside of open enrollment. And one of those qualifying events is simply moving to another state. Inconvenient? Maybe, but if you faced catastrophic medical bills, relocating seems like a no-brainer loophole.

Kshartle wrote: How does that save the taxpayers money? Wouldn't I have been the one saving all the premium dollars?

MachineGhost wrote:

Kshartle wrote: How does that save the taxpayers money? Wouldn't I have been the one saving all the premium dollars?

Well, end of life care is the most expensive cost center, so the shorter you're on it, the less taxpayer money you're exploiting wasting using.
But alas, looks like I was wrong.  What an incredibly stupid loophole.  I hope the Republicans patch that.

doodle wrote:

MachineGhost wrote:

Kshartle wrote: How does that save the taxpayers money? Wouldn't I have been the one saving all the premium dollars?

Well, end of life care is the most expensive cost center, so the shorter you're on it, the less taxpayer money you're exploiting wasting using.
But alas, looks like I was wrong.  What an incredibly stupid loophole.  I hope the Republicans patch that.

Money obfuscates the underlying reality of an economy. I prefer to think about this in terms of real resources. Do we have enough hospital beds and doctors.....there will always be enough money.

MachineGhost wrote:

Kshartle wrote: How does that save the taxpayers money? Wouldn't I have been the one saving all the premium dollars?

Well, end of life care is the most expensive cost center, so the shorter you're on it, the less taxpayer money you're exploiting wasting using.

But alas, looks like I was wrong.  What an incredibly stupid loophole.  I hope the Republicans patch that.

Kshartle wrote: It doesn't make sense to pay for insurance for routine stuff like an annual checkup or a cold (which I never get anyway thanks to a healthy diet, exercise, low stress and Florida sunshine).

MachineGhost wrote: We need so much reform at all levels of government, its a tragic farce.

Mountaineer wrote:

MachineGhost wrote: We need so much reform at all levels of government, its a tragic farce.

Oh my.  Another agreement with MG.  I must be losing it! 

... Mountaineer

Reub wrote: I'm surprised they haven't gathered a committee to investigate it.

Tortoise wrote: Life insurance was actually the topic of the conversation I had this past weekend that I mentioned in the opening post. One of my relatives is an index universal life insurance agent, and he was trying to convince my wife and me that we should ditch our 401(k)s and IRAs and instead get an index universal life policy with his company.

Tortoise wrote: Thanks for the ideas, everyone. As I suspected, it sounds like I probably want to look into life insurance a bit more.

Life insurance was actually the topic of the conversation I had this past weekend that I mentioned in the opening post. One of my relatives is an index universal life insurance agent, and he was trying to convince my wife and me that we should ditch our 401(k)s and IRAs and instead get an index universal life policy with his company.

I'm a bit skeptical of universal life insurance, because I've read (and I believe MediumTex even told me a while back on this forum) that term life insurance gives you a lot more bang for your buck. But I guess my relative thinks that one of the key benefits of his policy is that it has the side benefit of being a great wealth-transfer vehicle since it's transferred tax-free as cash to beneficiaries (as opposed to 401(k)s and IRAs, which are subject to estate tax).

I haven't verified the various claims my relative was making, but he was basically saying that index universal life insurance plans are the best thing since sliced bread, that they are the wave of the future, and that 401(k)s and IRAs are going to prove to be an unmitigated financial disaster on a national level. He's a persistent guy, so I'd at least like to educate myself so that if I turn down his offer, I'll have a good rationale to support my decision.

Kshartle wrote: I'm not sure about index universal life, this one is about Variable universal life. I think there are ways to keep the policy in the letter of the law and get all the money tax free through loans that youtake while livingand then pay off with the death benefit. The book is an easy read. I actually have considered getting a policy myself but I am 35 with no need for a death benefit or any related premiums. There would be fewer investment options and certainly fees but the tax savings probably outweighs all of that.

MachineGhost wrote:

moda0306 wrote: I disagree. Especially on disability. With your ability to work, you have a risk on your balance sheet to your financial security, no matter who is dependent on you. It is big enough to be worth transferring. Disability events can be extremely financially devastating at worst, and very disruptive annoyances at best... In fact, especially if you don't have a spouse to help you through it .

That's a good point.  So how much does disability insurance cost for those disability categories that Social Security doesn't cover (since filing for private disability insurance makes you go through the SSD process first so they can fob you off onto the government, if at all possible)?

With life insurance, if you are likely to need it in the future due to a spouse and/or child, you can lock in your health class by securing it now. If you have a spouse that also works, there could still be a very large financial risk to a premature death of either spouse.

So as opposed to LTC, you can lock in your "health class" with life insurance?  What does that mean exactly?  Premiums never rise?

Not really. If the need for robust auto liability is self-evident, then why isn't umbrella?  In many states, when juries decide damages, they don't know how much you have in assets or insurance. Any judgement above and beyond your insurance and unpayable by your assets can be garnished.  In my state, max garnishment is 25%.

I meant self-evident as in a legal requirement.  I'm sure most people don't know about umbrellas because its not advertised widely because its not much of a profit center for insurance companies.  Heck, I knew all the ins and outs of offshore asset protection long before I ever heard of umbrella insurance!  Are you saying that even umbrella insurance won't fully cover judgements?  Wow.

Regarding long-term care, I'll leave that one alone. I don't think it's a "scam," but it is somewhat inefficient and unstable. I tend to like the idea of building up a decent state partnership benefit, at least.

Yes, I have a flair for the dramatic.   What is a "decent state partnership benefit"?

moda0306 wrote: I don't like variable universal life, but the other products (whole, universal, index) CAN be good if structured and used correctly for minimum fees and maximum performance... Or if used in conjunction with a conversion of someone's term policy who is NOT in good health.