Payment “Sign-Down”
Total Tax Free Death Benefit: $1,865,838
Total After Tax Account: $717,037
Cash Value / Opportunity Fund: $1,472,672
Because Dave is 80 years old his 30-year level term policy has expired, he has no death benefit. Plus, it has cost him $169,110 in premiums and the Lost Opportunity Dollars at 3.61%, which was $40,888 that he lost. Sam’s family gets the Cash Value/Opportunity Fund of $1,472,672, plus the Net Death Proceeds of $393,166 for a tax-free total of $1,865,838, while Dave’s family ends up getting just $717,037. Which account would your spouse choose? Folks, it does not take a rocket scientist to see the difference. Why is this strategy taught? Because insurance companies want to sell your term insurance. Why? Because over 95% of term policies lapse. The buy term/invest the difference strategy Dave Ramsey spouts is absolute nonsense. Beware of Universal Life because they tend to blow up in later years. I own one! NOTE: If you need coverage for a young family, then purchase a ten or twenty-year term with a conversion privilege so you will at least have the option of converting to a permanent life insurance policy in the event you become uninsurable. The two major economic events that can happen to a family are either Dying Too Soon or Living Too Long. I have experience both with my family, and a life insurance policy can help to deal with these tragedies a little easier. Privatized Family Banking (PFB) is not a product, but a process involving time, money, debt management, and discipline.
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