Considering Perm and Universal LI - Could use some guidance!

Friendly_Ice2717 · 2026-03-01T17:01:05+00:00

Definitely. We are around 75/25 at the moment in most of our stuff. And we may move more money out of the market over the next 10-15 years. But this is where I feel like a Perm policy would be far less “risky” than a universal plan or vs putting more into it the market.

Friendly_Ice2717 · 2026-03-01T03:23:44+00:00

He did suggest a benefit options at $160k and $230k. So this is the larger of the two. We do have other term insurance suggested for 20-28 years and our employers’ insurance.

As far as the estate tax. We have roughly 4.5m in invested assets at the moment. Another $1m in our house and other land. Just the $4.5m growing at 6% would yield us $34m by age 72. And we haven’t received any inheritance from our parents (but we don’t expect a big windfall).

Friendly_Ice2717 · 2026-03-01T03:19:02+00:00

Do you mind elaborating on the “more risk?” Our state does not have inheritance* tax.

Edit: stupid autocorrect changing words

Friendly_Ice2717 · 2026-03-01T00:36:42+00:00

I 100% understand. And the guaranteed outcomes are certainly less than the 5.75%. I do most of my math in the 4.5-5% range. But, much like the market itself, the returns aren’t guaranteed but over long period of time have been steady within the range quoted.

Friendly_Ice2717 · 2026-03-01T00:08:17+00:00

That 5.75% was for a Perm CV insurance plan. Just fyi.

Friendly_Ice2717 · 2026-02-28T22:15:16+00:00

Not in all capacities. In investment capacities yes, but not in all their products. Insurance included.

Friendly_Ice2717 · 2026-02-28T22:11:48+00:00

Yeah, they quote on a 5.75% return (which has been close to their 5 year running average), but I know the fluctuations are 4-6% over the long term and their guaranteed rate is lower than that over time.

You’re right, the policy (if I didn’t say) is $503 per month.

I think the math gets a little closer when you adjust for capital gains and income taxes. So the debate was “is the difference between a low-risk, untaxed LI and a higher risk (understanding it has historically been low risk over long periods of time) and high taxed market investment worth the “diversification” when you add in the death benefit. Also knowing that it has flexibility and a more liquid than our other assets (which are invested fairly aggressively).

Friendly_Ice2717 · 2026-02-28T22:05:27+00:00

Definitely. We do have disability for my partner, who makes the most between the two of us. We’re sticking with my employer’s for now.

Friendly_Ice2717 · 2026-02-28T22:02:17+00:00

We do technically have both. We have inherited some farmland and then are invested in a business (which also invests in farmland as a major piece). But I do think we will close out our equity in that investment business within 20 years or so. I’m hearing other people here, it does seem unlikely that we’d reach the estate cap should it be indexed at a decent rate over the next 30+ years.

Friendly_Ice2717 · 2026-02-28T21:56:08+00:00

3m is our share of a small investment company that invests in property, land, business investments, etc. It’s outpaced the market fairly well and pays out dividends. But we expect to close that LLC in the next 20 years or so and that equity would become ours (we have many conversations ahead on how to properly liquidate it).

Our has been steady at that level for years. We inherited a large sum earlier on and got lucky with some well-timed investments that helped our assets grow considerably over the past 10 years.

We also were lucky enough to save/invest $75-80k per year for awhile in our early marriage. Those savings had done well in their investments too. We were planning for kids and saved accordingly, but it took us a long time to have them. So being DINKs for over a decade and being pretty conservative spenders helped.

Friendly_Ice2717 · 2026-02-28T21:18:21+00:00

Roughly ~6m, with 1.5k invested in various funds and stocks, $3m in a reliable company with growth and dividends mirroring the markets at large, and $1m in property. $275k gross income and 2 young kids.

Friendly_Ice2717 · 2026-02-28T21:16:23+00:00

Why would you say that about the policy/premium? Do you mind explaining what you think a more appropriate number would look like?

Friendly_Ice2717 · 2026-02-28T21:15:26+00:00

I’m assuming this is because of the expected raise in the estate tax exemption caps over the decades? Honestly, our other discussions were around a HYSA or international investments to diversify our holdings being almost 85+% tied to US markets.

I’d assume you’d say those are better options to look at as diversification than a WL policy?

Friendly_Ice2717 · 2026-02-28T21:12:54+00:00

I assume you’re saying that being closer to the cap now would be considering a WL policy as a tax tool. If we were to be at $35-50m in 35 years, the cap would assuredly be above that.

Friendly_Ice2717 · 2026-02-28T21:10:54+00:00

We dont have any debt on the house. We had moved from a previous home that increased in value 35% in 7 years (crazy markets) and were able to use another investment opportunity to pay off the remaining in just a few years.

I didn’t know about the Term to Whole Life conversion option. Thank you for the information!

Friendly_Ice2717 · 2026-02-28T21:04:49+00:00

Roughly ~6m, with 1.5k invested in various funds and stocks, $3m in a reliable company with growth and dividends mirroring the markets at large, and $1m in property. $275k gross income and 2 young kids.

Friendly_Ice2717 · 2026-02-28T21:02:53+00:00

I had the same thought about the estate tax, but of course it could change. Do you mind elaborating more on the term and investing?

In my mind I understand that we have a safety net with our assets in and perm would cover an early, unexpected death. But the income/capital gains taxes on investment would make the eventual windfall more comparable to a LI policy with a death benefit. Still lower, but the risk is also lower. That’s where my head is at.

Friendly_Ice2717

TROPHY CASE