Everyone knows on some level that as they mature, generate income, and think beyond the immediate present, that conventional wisdom instructs us to develop a financial plan.
Perhaps one of the reasons that this generates a feeling of discomfort or undue pressure is that the industry does not explicitly define what a “financial plan” means. …
This very simple thought experiment will inoculate you against the many errors that circulate online regarding why the values (cash values and death benefits) change relative to premiums (base and PUA) the way they do in dividend-paying whole life insurance.
For instance, promoters of life insurance policy design that we might call excessively “tight,” where very little of the total annual premium is allocated to the base, will say that “base buys death benefit; PUA buys cash [value].”
This is false.
Let’s jump into the thought experiment to understand why.
I promise to pay $10,000 to my friend Bob in one year from now. I enumerate this promise in writing and stipulate that the bearer of this promise to pay is entitled to claim the $10,000 from me in one year’s time. I give this legally binding document to Bob. …
Every year, David Stearns, Bob Murphy, and Carlos Lara — the Board of the Nelson Nash Institute — invite current member-Practitioners — called Authorized IBC Practitioners — to Birmingham, AL. It’s called the Think Tank.
I wrote about this year’s Think Tank on this blog back on February 9. David was kind enough to pick up that article for republication in the monthly newsletter at the NNI called BankNotes. You might want to read that first in order to understand the context of my talk.
I was hesitant about releasing this to the public. There are a couple reasons.
First, the audience is primarily financial professionals and their guests. The guests may be prospective financial professionals, family, enthusiastic associates or clients, or a combination of the three. The audience is not representative of the general public. …