Isn’t anything with a cash accumulation just combining Insurance with Investment, and charging you ?unknown? extra fees compared to having Insurance from an Insurer, and Investing the money saved in a low cost dedicated Investment option?
So, GUL or Term, depending on your relative $ position?
I think you’re asking: Wouldn’t you do strictly better to get cheap life insurance with no frills, and just invest all the money you’d save on premiums in index funds?
The honest answer is, I’m not sure. This is something I’ve wondered about a lot, and I haven’t been able to get a firm grip on the math. That same math is also relevant to the question of whether it’s more economical to take out a policy with a higher death benefit now, or to wait and purchase additional insurance later.
Note that however the math comes out, I’m still quite wary of term insurance for reasons mentioned in this comment; but the math might well indicate that people should go for GUL. The reason I didn’t give GUL more of a chance is that it isn’t offered by the most cryonics-friendly insurance carrier, Kansas City Life, and the situation of having to set up a trust and take out an additional life insurance policy seemed like a major enough barrier that GUL wasn’t worth considering. Perhaps that was a mistake.
I also think, but am not sure, that IUL and GUL are generally pretty close to the same price, and which one is cheaper depends on your insurability. If it’s the case that IUL is cheaper for me, I see no reason to prefer GUL.
Another consideration is that cryonics might be proven to not work sometime in the next 10-30 years, and if you have a bunch of value invested in a no-longer-needed insurance policy instead of a liquid stock fund, that would be suboptimal.
Yes, every situation is different, and if you did the math correctly, any given set of insurance & investment could be the correct choice. The important thing is to actually do the math if you are going to deviate from the naive heuristic of “pay as little as possible in fees.”
Isn’t anything with a cash accumulation just combining Insurance with Investment, and charging you ?unknown? extra fees compared to having Insurance from an Insurer, and Investing the money saved in a low cost dedicated Investment option? So, GUL or Term, depending on your relative $ position?
I think you’re asking: Wouldn’t you do strictly better to get cheap life insurance with no frills, and just invest all the money you’d save on premiums in index funds?
The honest answer is, I’m not sure. This is something I’ve wondered about a lot, and I haven’t been able to get a firm grip on the math. That same math is also relevant to the question of whether it’s more economical to take out a policy with a higher death benefit now, or to wait and purchase additional insurance later.
Note that however the math comes out, I’m still quite wary of term insurance for reasons mentioned in this comment; but the math might well indicate that people should go for GUL. The reason I didn’t give GUL more of a chance is that it isn’t offered by the most cryonics-friendly insurance carrier, Kansas City Life, and the situation of having to set up a trust and take out an additional life insurance policy seemed like a major enough barrier that GUL wasn’t worth considering. Perhaps that was a mistake.
I also think, but am not sure, that IUL and GUL are generally pretty close to the same price, and which one is cheaper depends on your insurability. If it’s the case that IUL is cheaper for me, I see no reason to prefer GUL.
Another consideration is that cryonics might be proven to not work sometime in the next 10-30 years, and if you have a bunch of value invested in a no-longer-needed insurance policy instead of a liquid stock fund, that would be suboptimal.
Yes, every situation is different, and if you did the math correctly, any given set of insurance & investment could be the correct choice. The important thing is to actually do the math if you are going to deviate from the naive heuristic of “pay as little as possible in fees.”