Looking forward, I am getting huge dividends from SPH and AIMS in December. Nowadays, I only do some general monitoring of my Singapore Dividend Portfolio. No major changes expected in the near future. I am satisfied with the overall composition of the stock portfolio fairly. I guess my portfolio has reached a “stable” stage. I am still focusing on my new Global Dividend Growth Portfolio. Will be posting it soon.
It is also possible, of course, to construct a huge wad of cash and purchase a “paid up” policy from the get-go. But the majority of us can’t afford that. Most of us pay the monthly or annual rates just, one little bit at a time, because as salary slaves, we receives a commission that way.
Is VERY EXISTENCE Insurance a good deal? In the event you apply dividends to reduce premiums, or to buy additional “paid up” improvements? So how exactly does it try pay back what you have spent long? In the event you buy additions to an insurance plan if they are offered? After twenty years, I finally have some answers to these questions – and I am finally understanding what these insurance policies are all about.
I harp here on a regular basis about never buying things you don’t understand fully, and also to some extent, my entire life Insurance investments are an example of this. I did not understand these investments very well at the start, and that was an expensive mistake, somewhat. However, it was better these policies were bought by me that spend the amount of money on a Jet-Ski, I assume.
To answer the first question, the overall answer is NO – Whole Life Insurance is not really much. You would do better investing that money in the CURRENCY MARKETS likely, or in Bonds even. When you get a complete Life Policy, some of that money goes to the death benefit insurance itself (a term policy, basically) and another part goes to the investment portion. Right from the start, you can view this isn’t an efficient way to get. It does become a required investment scheme, every month as you have a normal amount deducted from your money.
100 – about what people pay for a CABLE TELEVISION bill or CELLULAR PHONE plan these days. And in that regard, I am glad I spent that money on the life span Insurance, than Cable TV rather. One has paid off, the other would not. As a means of diversifying a stock portfolio, it isn’t a negative adjunct to other investments.
But I would not put all my money into that one basket – or perhaps a significant chunk from it (Life Insurance, in terms of cash value, signifies significantly less than 1/10th of my online worth). In the event you apply Dividends to Reduce Premiums? YES – always. In the event that you go through the chart above, for my Northwestern Mutual plan, you can see that the “crossover” point, where in fact the cumulative premiums become less than the cash value, took about 12 years. The chart below tells a different story.
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This chart illustrates the same data for Mark’s State Farm VERY EXISTENCE policy. This State Farm plan has taken longer to repay its payments, mainly because we didn’t apply dividends to premiums early on. Root performance of the business can be an concern also, although as illustrated here, State Farm has exceeded its guaranteed values. Conclusion: As an investment, life insurance coverage is no real discount. 800 annually) will stay relatively toned.
For every money invested as this point, the plan boosts by two dollars about. Might as well keep it, now. Here, I did not use dividends to lessen rates until about 2009, and as you can see, once I did, the slope of the dividend curve decreased and crossed the cash value collection very much faster. This chart differs from the main one above in that it illustrates the guaranteed values from the continuing state Farm Policy, whereas in the Northwestern chart, I projected cash value as time passes.
These charts illustrate graphically how using dividends to decrease premiums really is the way to go. Your payback, in terms of cash value exceeding total premiums paid, will accelerate. At this true point, both plans are worth more than I paid for them. The Northwestern policy clearly is the winner – returning an average pf about 2.9% a year over 20 years. The constant state Plantation plan is not doing as well – coming back a pathetic 0.21% on the premiums paid since inception. But like the Northwestern Policy, at this true point, every dollar put into it increases the money value by two dollars.