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bratch

457 & Life Insurance

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My school district already has a 403(b) plan and is in the process of setting up a 457. I understand that you can use part of your contribution to purchase life insurance in lieu of mutual funds. I also understand that the % of contribution depends on what type of insurance: Term vs Whole Life. I am very healthy and would like to take part of my contribution and purchase life insurance, any assistance from anyone would be greatly appreciated. I am over 50 and plan on maximizing my contribution of $15,000.

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Guest Guest_Alec

Bratch,

 

I take it you've first decided that you actually need life insurance.

 

If so, will you be given a physical by the insurance company to determine your premium? If there is no physical (meaning that everyone of your age group pays the same premium), and you are healthy, you could likely get lower premiums outside the 457. Kind of like getting supplemental life insurance through your employer.

 

I'm not sure about this, so check on it. If you'll be paying the premiums with pre-tax dollars, the death benefit could be taxed. Versus paying life insurance premiums with post-tax dollars and the death benefits not being taxed (I think). Something to think about when comparing 457 pre-tax premiums and death benefits versus post-tax premiums and death benefits.

 

- Alec

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Guest Guest_Joel

The purchase of life insurance with pre-tax dollars is somewhat complicated and in a general sense should be avoided.

 

If, however, you are serious about buying life insurance with 457/403b assets please get all the info from the IRS PRIOR TO MAKING THE DECISION. YOU MUST UNDERSTAND ALL OF THE ASPECTS OF THIS COMPLEX FINANCIAL TRANSACTION PRIOR TO ENTERING INTO THE TRANSACTION!!!

 

Peace and hope,

Joel

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I an 50 years old and was sent a quote spreadsheet by an insurance agent for 15 year level term. The lowest cost out of 10 companie for 250,000 was $37.00 & for 500,000 was $67.00. I'm going to purchase the term and put the difference into my retirement plan. I think this is a much better deal than buying it through my 457.

 

Jim

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Jim,

 

For what period of time are these premiums for?

 

Joel

This is 15 year level term. The premiums & coverage will stay level for 15 years.

 

I am 50 years old and have a 21 year old, a 19 year old and a 14 year old at home still. I figure that 15 years will take my youngest through school and me into retirment.

 

I got the quote from an insurance agent who was referred to me. He provided me with a spreadsheet of 11 different companies.

 

Jim

 

 

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Jim,

 

Did you ask TIAA for a quote?

 

Joel

Joel,

 

Since you mention it, yes I did go to TIAA CREF to as soon as I read your post. Their cost for 250,000 of term is $517.50. The MOST expensive quoted to me by the insurance agent, (who is making an evil commission unlike the pure and good TIAA), is $458 for the year. $500,000 is $950.00 with TIAA and the most expensive with the insurance agent is $835.

 

The least expensive was Prudential for $412 for 250,000 and $740 for $500,000.

 

Personally I am stymied by this since, according to the teachings of Joel, insurance companies are bad and TIAA is good. It is a puzzler.

 

Jim

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Guest Guest_Joel

Personally I am stymied by this since, according to the teachings of Joel, insurance companies are bad and TIAA is good. It is a puzzler.

----------------------------------------------------------------------------------------

Jim,

 

What have I done to deserve all of your personal attention?---I'm flattered.

 

Now stop the BS...We could never have the quality of life and peace of mind that we have as Americans if we did not have insurance companies. I never said that insurance companies are bad and TIAA is good. I will pay your first year commission if you can produce the quote where I said "insurance companies are bad and TIAA is good". Are you this way when you join your colleagues for lunch?----You are one tough cookie!! You may want to know that TIAA is a life insurance company.

 

Please stop trying to "catch" us well-meaning souls and take a deep breath. I would like to see you use your energies in a positive way. When you have some time try solving the puzzle and become unstymied by calling TIAA. Ask them why they are not competitive with the 15 year level term that you are interested in. Please get back to us with your findings.

 

Peace and Hope,

Joel

 

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When you have some time try solving the puzzle and become unstymied by calling TIAA. Ask them why they are not competitive with the 15 year level term that you are interested in. Please get back to us with your findings.

 

Peace and Hope,

Joel

Joel,

 

Why would I want to spend my time doing that? Not only that, but they'd probably think I was crazy. They price their products how they want and personally I don't care why they sell them at that price.

 

Do you go into Macy's and ask them why they don't sell merchandise for the same price as Walmart?

 

Do you go to a restaurant and ask them why they don't sell the same hamburger for the same price as Burger King?

 

If you want to know the answer to your question I suggest you pick up the phone and call TIAA. I'll be fascinated by your answer.

 

Jim

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Jim, it was you not I that claimed to be stymied and puzzled.

 

YOU APPARENTLY DO NOT WANT TO LEARN---IT TAKES TOO MUCH OF YOUR TIME---YOU WOULD RATHER SPEND YOUR TIME ATTEMPTING TO "CATCH" US WELL MEANING FOLK.

 

LIKE I SAID IN ANOTHER POST "YOU ARE SOME TOUGH COOKIE!

 

Peace,

Joel

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Jim,

 

I recognize the fact that you are selective as far as responding to my questions---most of which you have chosen to ignore. Well let's see if you trash this one: If you had a choice of investing with Security Benefit Group or anyone of the many no-load vendors which would you select?

 

 

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Jim, it was you not I that claimed to be stymied and puzzled.

 

 

*sigh* Joel,

 

That's called sarcasm. As a strict devotee of the TEACHING'S OF JOEL I WOULD be stymied and puzzled by the GREAT & GOOD TIAA-CREF charging more than an evil "regular" insurance company. I would probably buy it anyway because even though I am paying more, the fees must be lower.

 

It's called sarcasm Joel.

 

Jim

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Jim,

 

I recognize the fact that you are selective as far as responding to my questions---most of which you have chosen to ignore. Well let's see if you trash this one: If you had a choice of investing with Security Benefit Group or anyone of the many no-load vendors which would you select?

Joel,

 

I don't think I've ignored any of your questions. And I will certainly answer this one: Security Benefit. Yes I know I pay higher fees but I also believe I get added value for those higher fees. I have a rep I can call, I have "rebalancing" available and I have more investment options than TIAA offers. I know you disagree, but having a choice is one of the great things about this country. Let me try to explain this in "real world" terms.

 

My wife and I bought a 2002 Lexus RX300 yesterday. I also looked at a 2004 Toyota Highlander. Both were approx the same price. BUT, with the Lexus, (since it is used I realize I paid more for it than I would have for the Highlander), offers me a higher level of service. Free road size assistance, free towing, loaner Lexus when I bring it in for a service, other bells & whistles that might not be of any value to you but are of value to me.

 

When I want a hamburger I can go to In&Out, or Burger King, or Carl's, but I can also choose to go to Hamburger Hamlet and pay more but get service & silverware.

 

Now let me ask you some questions that I've asked repeatedly and you've ignored:

 

1. What is your background to give out so much investment advice?

2. Who do you work for?

3. How much do you have in TIAA? How much do contribute per month? Which funds do you put it in?

4. What were YOUR actual returns like during the bear market?

5. Why do you sometimes post as Redwoods & sometimes as Joel_guest?

 

It is pretty obvious that you are some sort of financial services professional. Why won't you answer my questions? I've poseted them before.

 

I'm not trying to catch you out Joel. I just wonder why you are so dogmatic in your beliefs.

 

Jim

 

It is pretty obvious that you are some sort of financial services professional. Why won't you

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