A Whole Life Insurance Review - Penn Mutual

We review IUL policies for over 700 people every year. This week we're looking at the Penn Mutual's Guaranteed Whole Life II. Let's look at the pros and cons of this policy and see if it's a good fit for you and your goals.

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[bitcoindom]

You can earn 4% compounding and have a loan rate of 5% simple interest and still be positive. So being upside down one whole percentage point will still have you in the green.

[adam]

The cash value should be at least $20k in year one... you are showing a TERRIBLE WL design. Agents that promote WL over IUL do the same thing, they will show a TERRIBLE IUL design to lift up WL. This is a problem in our industry... uggh

[lifeuhvriley]

If I were using this Whole Life Policy for the purposes of "being my own bank" (so a glorified savings account), would I be correct in interpreting this as a realized 1% loan? Which would likely beat anything a bank would offer.

[MomentoMori]

The analysis fails to compare this negative spread to the return of the investment outside of the policy. For example div rate of 5.5 and loan rate of 6 but your investment performs at 8. All in all, your still way ahead of the game for IBC purposes.

[bradjensen]

Don't forget the cash value is Einstein's 8th Wonder of the World: Uninterrupted Compound Interest for the rest of your natural life (or the policy lapses)! From a IBC angle (cash value-designed policy unlike the one you are using): A WL loan rate is simple interest. Interest rates are nearly irrelevant to the volume of interest you pay on a normal loan (mortgage, car, etc.), vs. a WL policy loan (like a line of credit). Run the mortgage and auto loan calculators vs. a simple interest policy can even have the mortgage/auto interest rate a couple of points lower--you will pay much less with a policy loan.

[mattehlen]

Doesn't penn have a wash provision after year ten or so? The have overloan provision that helps access cash at age 65

[tommyrat]

i had an account with penn mutual, I tried to get another loan, and they told me I "maxxed out" therefore I was unable to renew the policy. After having an annual review prior I dont understand why the financial advisor never explained this

[justincorpus]

What are your thoughts on OneAmerica? They are a whole life but with an Indexed dividend option, Would like review on that product too!