CNBC recommending WHOLE LIFE INSURANCE?
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I haven’t watched it yet. But I often see people (even “experts”) confuse WHOLE life with ALL permanent life products in general. I have seen advice columns talk about “whole life”, and but when they explain it, they are clearly explaining Universal.
NEWS FLASH FROM CNBC…new investment product now available to the retail investor
STRIP BONDS See our Feature Tonight on Strip Bonds........8:00 P.M. ESTJust watched it. I think they are saying that it would be a new “Asset” class for most people’s portfolios. In other words, look at insurance as an investment versus a death benefit. Most people don’t view life insurance as an investment. They also quoted both whole life and universal as options.
B24 - Have not viewed the show, but are you not a little shocked that a policyholder is not aware of the CSV of a policy? Or that in providing a list of Assets there is section indicating Insurance Policies ( which should indicate a REAL VALUE ) the lender knows of the value of that asset class.
Like many things , either not covered or simply not remembered/forgotten.[quote=anonymous]
Whole life insurance is an asset, but it's not an investment.
[/quote] But boy, can it generate some awesome investment returns elsewhere![quote=anonymous]
Whole life insurance is an asset, but it's not an investment.
[/quote] Here is the definition of an investment: In finance, the purchase of a financial product or other item of value with an expectation of favorable future returns. In general terms, investment means the use money in the hope of making more money.How is Whole Life Insurance not an investment. I agree there are other investments that can get a better return, but a favorable return is actually garunteed with Whole Life Insurance.
so bythat reasoning then I guess a TBill is an asset but not an investment?
Go tell Bill Sharpe[quote=MinimumVariance]so bythat reasoning then I guess a TBill is an asset but not an investment?
Go tell Bill Sharpe[/quote] A T-Bill can go down in value. Whole Life insurance does not. Hence, a T-Bill can be considered an investment but WL does not.Asset Class or Investment. The asset being the CSV of the policy. The guarantee being the Death Benefit. With that being said , in a personal instance I own two Whole Life Policies with Standard Life Assurance Company. Approximately two years ago the company demutualized and Policy Holders were given Shares of the newly listed company ( FSTE ). The Policy Holders still own the policies with the CSV and Death Benefit but also have shares in the company. For the sake of this discussion and in cases where Companies demutalize … does this now deem the Policy a True Investment?
How about we call it an investment IN security?It is an investment, but it’s not a security.
CSV in a WL policy has two components - the guaranteed table, and the non-guaranteed. The non-guaranteed column shows the guaranteed CSV + the current dividend rate. Even when a company demutualizes (and presumably no longer pays a dividend to the policy holders), there still is a guaranteed CSV. It cannot go down in value - that is guaranteed in the contract. Therefore, it still would not be considered an invesment in the true sense of the word.Asset Class or Investment. The asset being the CSV of the policy. The guarantee being the Death Benefit. With that being said , in a personal instance I own two Whole Life Policies with Standard Life Assurance Company. Approximately two years ago the company demutualized and Policy Holders were given Shares of the newly listed company ( FSTE ). The Policy Holders still own the policies with the CSV and Death Benefit but also have shares in the company. For the sake of this discussion and in cases where Companies demutalize … does this now deem the Policy a True Investment?
Deekay - agree that by definition a Whole Life Policy can not be defined as an Investment but does qualify as an Asset. The Demutualization issue adds a " bonus " for the Policy Holders and off course for the Company the ability to access the markets.
In other times and markets as you may recall a number of Insurance Companies became very active in demutualizing and in most cases the company and the shareholders were rewarded fairly well in the process.Ice - agree with assest , security and investment ( somewhat , Cash in interest bearing bank account would be similar ). The risk being the government and economic policies versus the actual T-Bill.