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Appropriate Whole Life Dump of the Week

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  • Appropriate Whole Life Dump of the Week

    I thought I should start this thread given the depressing length of the "Inappropriate Whole Life Policy of the Week" thread that I just contributed to. I want to start a more uplifting and inspiring type thread of getting out F*** out of this stuff.

    My high school buddy turned Northwestern Mutual financial "adviser" screwed me into buying whole life for me and my wife despite having $360K in student loan debt.  1 million-dollar policies paid up at 65. Premiums were about $14,000 for each us, $28K total per year. After 7 years, my wife's policy cost basis was $92,000 and the actual cash value was $67,000.  I've now 1035 exchanged my wife's policy into a variable annuity at Fidelity

    I'm about to do the same for my whole life insurance policy as my premiums are paid up until this month. Cost basis of $72K and current cash value $50K.

    I'm so glad I got out of this!  Instead of now paying the $28K in premiums this year, I maxed out the backdoor roth for me and wife this year!

    That only amounts to $12K as you guys know.  In all honesty, me and wife are planning to blow the rest of the money on vacations (sorry Jim- I swear we'll use next year extra cash an put in taxable brokerage account).


    BTW, the reason I chose the Fidelity VA is because it seems to be the lowest cost VA with a cost of 25 basis points per year plus the expense ratio of its funds and the best ones in there are only 12-17 basis points.  This beats the Vanguard VA which has 50 basis points per year cost.  However, if your cash value is above $96K, you'll want to use Nationwide (formerly Jefferson National) VA which has a flat fee of $240 per year, as past $96K in cash value the 25 basis point fee from Fidelity will cost you more.

  • #2
    Better late than never.


    • #3
      thank you Jim Dahle- my wife's old whole policy's cash value has just hit cost basis in low cost VA! took 1.5 years to grow $25K Click image for larger version

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      now one more to go