/biz/ - Business & Finance

Unironically kys.

>>51653182
Anything other than business/house/car insurance is retarded and straight boomer rhetoric.

>>51653182
>putting money into a whole life insurance policy so it can grow tax free and I can borrow against it for free.
Have you never heard of a retirement account? Yopu can literally do this yourself without a company raping you of 70% of the earnings. And you don't have to die to get the proceeds. Life insurance as you describe makes sense only because any long-term planning is better than none, but investing it directly yourself rather than going through a company that profit rapes you will result in literally double to 10x returns over a life time. Insurance comapnies exist to make money, so unless you are planning on killing yourself early t hey are going to come out way ahead on average. Again, the only reason to ever buy life insurance is if you legit are gonna kill yourself soon (this happens way more than you think and accounts for a ton of losses for the life insurance companies that they pass on to people who live long healthy lives)

>>51653200
>Unironically
that is a very ironic comment though...
I am serious though, what do I not know about this? I have always run away from life insurance in the past because it felt like a scam, but I'd like to actually understand how it works and if it is a scam I'd like to understand what the scam is.

>>51653230
I have 3 retirement accounts and they're all shitting themselves in the market today.

The way it has been sold to me is that these life insurance policies are allowed to grow with the market, but they're also sheltered from loss when the market goes down, so the point isn't the death benefit, but rather being able to allow your money to grow tax free.

Then they tell you that with the right policy you can take out the money that you've paid into it, or better yet you can borrow against it, and the insurance company will use the interest on your basis to pay the interest of the loan.

It all sounds too good to be true, so I'm trying to figure out what the catch is.

>>51653247
>Invest $60 a mont yourself: Have 60k after 30 years
>Spend $60 a month on life insurance. life insurance profits $30 or more a month of it, you have 30k after 30 years.

It's really that simple unless you plan on killing yourself early.

>>51653309
I don't care about the death benefit, I'm trying to understand if/how you can borrow against your own policy to take out an interest free loan while the basis is allowed to grow tax free.

>>51653302
>but they're also sheltered from loss when the market goes down,
Who sold you this retarded nonsense? Sure, you can be sheltered from losses by investing more so in 4% bonds. But then they'll also be making only 4% while stocks have a year like last year and go up 130%. In the end being invested in a broad market absolutely ddestroys every "le active managed" investment strateg by a mile. You are really being sold snake oil.

>>51653182
Imagine caring about a tax hit after youre dead, hahahahahahahahah fucking sheep

>>51653344
A friend told me about it, and then I found this guy when I was looking into it...
https://www.youtube.com/watch?v=gxXV7OzIwK4&ab_channel=DougAndrew-3DimensionalWealth

https://www.youtube.com/watch?v=6wM-2jntuQs&ab_channel=DougAndrew-3DimensionalWealth
It feels like snake oil, but I'm trying to figure out the catch

>>51653337
Unless there's some weird government policy made by lobbyist to help insurance companies, I don't see how you'd be able to borrow more from the 30$ effective investment from $60/ month premiums rather than just your own $60 direct investments. Talk to your local banker. If you're not a gorilla ape you often can get loans for suprisingly large amounts with little capital.

>>51653380
Yeah according to this video it seems life insurance could be good for the sole reason that they got governmetn to pass a special law to give them special treatment to increase business by letting people with it avoid taxes (if what he is saying is true). But still looks sketchy so try asking more people (not people trying to sell you the life insurance and not retards on /biz/)

>>51653383
it's not that I need a loan specifically, but for some reason my friends who have opened these policies say that it's smarter to dump your money in the policy and borrow for a project than to just pay for the project in cash... I guess the point is that the effective $30 investment can grow at the market rate just like a brokerage investment, but somehow they eliminate the risk (I don't fully understand that), and on top of that, if you use the money by borrowing instead of withdrawing then you don't have to pay tax on it, and on top of that you don't even have to pay it back because you can just let the interest on your basis pay for the loan that you borrowed against it...
It all sounds too good, but if it really can work that way then it's a no brainer... I just don't wana rope myself into a scam, but I can't really wrap my head around it...

Also, I guess there is a weird government policy in that a life insurance policy uniquely (supposedly) doesn't have to be reported on your 1040, so it is in a sense sheltered from the IRS

>>51653182
All insurance is a scam