Conference nyoss1::market_investing

    IEEE has great rates. Even after paying for high annual membership
    fees, they beat all the other quotes I got for term insurance.
    The insurance is thru NY Life which I beleive has a strong financial
    strength.
    
    For low load Universal, I got good quotes from AMERITAS insuarance
    company. Look for ads in magazines like Forbes and Money for their
    ads. Look for AMERITAS or VERITAS (they are both part of same company).
    Unlike some sleazy agents, they take very little commission and are
    honest about showing an exact breakdown of where your money goes to.
    
    In any case, if someone has group insurance rates from ACM, please post
    them here for comparison w/ IEEE rates.

If you live or work in a state that has SBLI (Savings Bank Life Insurance),
such as MA or NY, their rates are quite good -- not as good as IEEE, however.

    See the old INVESTING file for more on ACM and IEEE insurance.
    
    My ACM term insurance is about $6 per $10,000 per year, but of
    course it varies with age, gender and with whether you smoke or
    not.  I'm 39 and don't smoke, if that'll help you judge the cost.
    If you go for coverage over a quarter-million, the rates drop a
    bit!
    
    Membership costs for each start at about $50 if you go for the
    bare-bones minimum, and there are various requirements for each
    which I don't know exactly, but an engineering degree or several
    years experience in the field is probably enough.  Since I'd be
    a member of the ACM anyway, the membership fee didn't figure in my 
    calculations for the ACM insurance, and helped to rule out IEEE
    insurance (which I think cost a little less).
    
    The ACM recently moved over to another insurance provider, and
    they've raised the limits on coverage--I think it's pretty much
    unlimited on the ACM member and there's provision to raise the
    coverage on the member's spouse above the old 75K limit.
    
    		-John Bishop

    Does ACM or IEEE life insurance require a physical or statement of
    physical health? In other words, can previous medical problems prohibit
    issuance of a policy from either source?
                                              thanks/Norm

    The ACM wanted a health history including a pointer to my doctor,
    and took a blood sample.
    
    I don't know what the rules are on pre-existing conditions, sorry.
    
    		-John Bishop

IEEE insurance (underwritten by NY Life) does have some fairly
strict requirements.  On the three occasions that I have requested
insurance increases, either a paramedic revisited me or a physical
examine was required. You also had to give permission to be tested
for HIV virus.

For those fortunate individuals able to qualify for IEEE it's a good
deal.  Because of the strict requirements, the rates are very low.

The Digital plan has a less strict health requirements.
For that reason, the Digital rates in some cases are 
SIX times higher than IEEE.

Gim

    I received some junk mail last week about term life insurance. Normally
    I will toss these things in the garbage. This time I started making
    some comparisons between thier rates and Digital rates..
    
    I was surprised to see that thier rates were lot lower than DEC rates.
    For example $250,000 coverage for 15 years term life, with no annual
    premium increase was costs $558per year. Compared to this Digital
    policy for apporximately same amount was about $700..
    
    I some how assumed that DEC rates are cheaper than outside rates. Am I
    wrong ? Also I called an insurance agent to verify the outside rates..
    His view was that it is not advisable to have a insurance policy with
    the company one works for.. The reasons he gave was :
    * One cannot continue with the policy once they leave the company.
    * Also it is possible that when the person leaves the company  ( say at
      50 years ) and later applies for insurance in other private plans, 
      and his/her health has become bad in the mean time , he/she may become
      uninsuarble. If one has insurance, independant of the company he/she
      works for, he/she does not may become uninsurable, with health reasons. 
      as long as they have paid the premium.
    
    My question is :
    
    Suppose if one has Digital ( John Hancock ) life insurance, can he/she
    continue to the Optional portion of term life insurance after leaving 
    Digital.
    
    Jay
    

Why don't you check your benefits book or ask your PSA?

IEEE term insurance is the cheapest that I know of.  ACM and SBLI are close
behind.  DEC optional insurance is more expensive than any of the above.

The following table lists the semiannual premiums for IEEE term life insurance.

			IEEE Semiannual Premiums

            |           |  Member** | Spouse   | Spouse   |
            |  Member*  |  $10,000  | $5,000   | $5,000   |
  Member's  |  $10,000  |  Option   | Option   | Option   |
   Age at   |  Option   |   15%     |   No     |  15%     |   All
    Last    | No Volume |  Volume   | Volume   | Volume   | Children
  Birthday  |  Discount |  Discount | Discount | Discount | $5,000***
------------+-----------+-----------+----------+----------+------------
 Under 35   |   $3.00   |   $2.55   |  $1.00   |   $.85   |  $3.00
   35-39    |    3.50   |    2.97   |   1.50   |   1.28   |   3.00
   40-44    |    6.00   |    5.10   |   2.00   |   1.70   |   3.00
   45-49    |   10.50   |    8.92   |   3.50   |   2.98   |   3.00
   50-54    |   24.50   |   20.82   |   8.00   |   6.80   |   3.00
   55-59    |   38.00   |   32.30   |  12.50   |  10.63   |   3.00
    60      |   43.50   |   36.97   |  14.00   |  11.90   |   3.00
    61*     |   51.50   |   44.00   |  16.50   |  14.03   |   3.00
    62*     |   61.00   |   52.00   |  19.50   |  16.58   |   3.00
    63*     |   72.00   |   61.00   |  23.00   |  19.55   |   3.00
  64-79*&   |   87.00   |   73.95   |  28.00   |  23.80   |   3.00
  80-99*&   |   115.00  |   97.75   |  37.00   |  31.45   |   3.00

	* Amounts of coverage decreases with age.
	& Premiums shown for age 70-99 are for renewal purposes only.

	Group Insurance Program for IEEE Members  1-800-424-9883

    RE: -1
    
    The volume discounts apply for coverage of $160,000 or more.

    Also note that typically, 50% of the premium is returned to the
    policy holder as a dividend. Of course, the dividend is based on
    the actually experience.  I have IEEE life insurance and am a satisfied
    customer.
    
    It is always wise, particular in these times, to have life insurance
    from an outside carrier. 

    I do keep a miminal amount with Digital as an inflation hedge since the
    amount is index to the individual's salary. With outside carriers,
    there is no assurance that you will be able to increase your insurance
    coverage in the future.

    Regarding Digital cost: yes.. the rates are high.  The premiums
    received from employees have EXCEEDED payouts by 50%. In 1992, premiums
    received were $22 million. Payout was $15 million.  Since these new
    rates went into effect about 6 years ago, the would imply that there is 
    a net surplus of about $42 million sitting somewhere.

    Attached is official statement of benefits sent to all employees.
    
	Gim



From:	MYTVAX::MYTVAX::MRGATE::"MLOMTS::MROMTS::NROMTS::MRGATE::NEST::DICS_DIST" 11-MAY-1992 16:05:32.34
To:	@Distribution_List
CC:	
Subj:	 YOUR SUMMARY ANNUAL REPORTS 

From:	NAME: DICS_DIST <DICS_DIST@NEST@MRGATE@NROMTS@NRO>
To:	See Below


YOUR SUMMARY ANNUAL REPORTS
For U.S. Employees of Digital Equipment Corporation        May 1992
         
Summary Annual Reports for Digital Equipment Corporation
     The Employee Retirement Income Security Act (ERISA), passed by 
Congress in 1974, protects individuals covered under any company-
sponsored benefit plan. One of the rights guaranteed by ERISA is that 
you are entitled to information about your benefit plans' annual 
financial status. In other words, you have a right to review a summary 
of each plan's yearly expenses and payments. 
     This information for fiscal year-end 1991 is contained in the 
Summary Annual Reports that follow.
     These reports highlight only the most important financial 
information about each plan. They show that each of Digital's benefit 
programs is in sound financial condition and will continue to provide 
benefits to you and your family.
         
Insurance Information
     The Plan has a contract with John Hancock Mutual Life Insurance 
Company to pay life and accidental death and dismemberment claims 
incurred under the terms of the Plan. The total premiums paid for the 
Plan year ending June 30, 1991 were $22,715,785.
     Because it is an "experience-rated" contract, the premium costs 
are affected by, among other things, the number and size of claims.  
Of the total insurance premiums paid for the Plan year ending June 30, 
1991, the premiums paid under such an "experience-rated" contract were 
$22,715,785, and the total of all benefit claims paid under the 
experience-rated contract during the Plan year was $15,846,812.
    

    
    Can someone provide the telephone no to ��contact IEEE for insurance
    purposes ?
    
    Thanks,
    
    Santosh

    I was approached by NORTHWESTERN MUTUAL to buy life insurance,
    specifically a $50000 "65 Whole Life" policy.  Basically I would
    pay $700/year from now (I'm 29 years old) until 65.

    Some background:

    I'm single, no children, no house, no loans.  I have money in the
    stock market in the form of 401K, IRA, and mutual funds.  The rest
    of my money is in tax-free bonds.

    Basically I feel that I don't need the life insurance right now,
    but they suggest I get it since it builds cash value every year
    tax free.  In 22 years the cash value will be $34,000 which I
    could take a loan against and pay no taxes.  When I'm 65 the
    cash value is estimated at $149K.  I could then take this money
    out as a tax-free loan and never pay it back. Then again who
    knows what the tax laws will be like 36 years from now.  But I
    also figure if I put my money into a conservative mutual fund,
    even at 8% between now and 65, I would do better.

    My gut feeling is that I shouldn't bother with this, what do you think?
    thanks,
    ken

    Read "Wealth Without Risk" by C.Givins or a similar book who's title I
    can't recall by A.Tobias and you'll be told that a) given your
    situation (single, no children) you don't need life insurance and 
    b) Whole Life is pretty much a waste of money, use Term and invest the
    difference wisely.
    
    Personally, I pretty much agree with these guys.  Read *everything*,
    get all the facts and make your own decision.

    
    I second the pervious comments
    
      "you don't need life insurance"  life insurance is only to cover
    	expenses in your "absence", you have nothing to cover or anyone
    	relying on your income ...
    
    also ..
    
    "Whole Life IS a waste of money, use Term and invest the difference wisely"
    
      You end up paying for their overhead and their conservative, maintain
      the principal at all cost mentality style investing.  Whole life is
      not a competative commodity, where term life is a very well defined
      competative commodity -- if you go for term - shop around...
    
    while I'm at it --- if you have a Spouse, and/or children etc ... 50K
    term is not nearly enough. More like $250K --- The procedes of a life
    insurance need to generate the income that your dependents need in your
    absence for an "indefinate" time frame ... $50k will usually cover 1-3
    years depending on your situation .. think about it 
    
    my 2 cents -- your mileage may vary ... mine does ... jim
    

    don't buy it, with no dependants, you have no income to protect.
    
    michael

1.  In years 1 to 10, how much do you get back if you cancel the
    policy?  Most insurance policies are structured so that you
    get very little back. 

2.  Is there a guaranteed rate of return?

3.  When you take out the loan, what is the interest that you pay?
    Is that interest tax deductible? (perhaps not)

4.  When you take out the loan, how does that affect the return 
    on the policy? 

5.  An "illustrative" return was probably used to arrive at that 
    figure.  Has that rate gone down?  What happen to policy
    holders who were given higher illustrative rates two years ago?

6.  What does the salesman make on commission? [Note: when you buy
    a mutual fund, you know what the load is as well as expenses.]
 

A few years ago, I looked at the same solution and concluded that it
was better to create a "virtual" whole policy by buying term
and literally investing the difference.  I have a conservative mutual
fund that I make annual purchases. I RELIGIOUSLY make these
purchases. 

I will  post results in 20 years to compare my "virtual" policy against
what insurance projections.


Gim

PS - Northwestern (as of two years ago) was one the few insurance 
     companies that were top rated by all three rating firms.

    I think if you dig deep into the policy you will notice a fairly high
    load for the company selling you this policy.  If all you are concerned
    with is tax free return, boost your 401k to the maximum, put the
    maximum amounnt ($2000) into an IRA (not deductable, but still tax free
    gains), and if you still have some left over each year try an annuity
    (it's a little more heavly loaded but still better than most varible
    life insurance policies).  Scudder has an interesting annuity through
    the Charter Insurance company....Very low cost analysis against other
    common annuities.
    
    /michael

The problem you will have is this.  The projection sheet (illustration of
future values) will not come close to what the actual policy will get for
you.  You see, they can print anything they want on the project sheet
and then the actual policy will have the real projections in it which will
be much much lower than what they projected.

...then again 40,000 whole life policies are sold each day to the
unfortunate public....

      My advice is this:

      If  you  need/want  life insurance (seems like you don't) then buy
      life insurance.  Term life insurance is almost certainly a  better
      insurance buy than whole life or life paid up at [60|65|...].

      If you need/want to invest, then buy an investment. You can almost
      certainly find a better investment than life insurance.

      If  you  need/want  both  life  insurance  AND investment you will
      probably find that treating this as two separate things is better.
      i.e.  buy  term  life  insurance,  and buy whatever investment you
      want.

      Whole  life  insurance  is  a  better investment than nothing, and
      there are some people who will  buy  insurance  and  keep  up  the
      payments,  but  who  will  not  start  and  keep  up an investment
      program.  Arguably, whole life is "good" for  these  people,  even
      though they could do "better" if they only would.

	Thanks for all the info!  After reading all these notes I
	have decided against this policy.  some follow up info...

	re: .20

	I'm already maxed out on 401K and IRA.

	re: .19

>1.  In years 1 to 10, how much do you get back if you cancel the
>    policy?  Most insurance policies are structured so that you
>    get very little back. 

	After 10 years I would get back $7251 (estimated!)
	But I would also have to pay taxes on that income
	because I canceled the policy.  At that point I
	would have put in $7000 total!

>2.  Is there a guaranteed rate of return?

	No.  Current rate used for projections is 9.22% but
	that can change.

>3.  When you take out the loan, what is the interest that you pay?
>    Is that interest tax deductible? (perhaps not)

	You pay back at 8%.  I don't know about tax deductions,
	but you don't pay tax on the money you receive.

>4.  When you take out the loan, how does that affect the return 
>    on the policy? 

	You earn the above quoted 9.22% on the money that is still
	in there (i.e. the money you didn't borrow).

	You earn 7% on the money that was borrowed.  So you can
	"borrow" it but never pay it back and keep receiving 7%.
	This was the part I found interesting and was the reason
	he was pushing this policy.

	But I think this 7% rate is subject to change, just like
	the 9.22% rate.

>5.  An "illustrative" return was probably used to arrive at that 
>    figure.  Has that rate gone down?  What happen to policy
>    holders who were given higher illustrative rates two years ago?

	Funny you should ask.  I actually have some old info from
	2 years back (they gave me some info 2 years ago which I kept).

	The estimated death benefit at age 65 has fallen from $292K
	to $247K in just 2 years!  The cash value has fallen from
	$176K to $149K (at age 65).  I asked the salesman about this
	and he said the insurance industry was hit with new taxes
	which caused lower dividend payout!

    How are life insurance, i.e., death benefits, taxed??
    
    (must the dead pay their "fair share"?)

    Benefits are not taxable income to the benficiary, nor taxable
    to the maker of the policy.
    
    If your estate is the benficiary of your life insurance, of course
    estate tax is due on the estate.
    
    Thank the lobbying of the insurance industry for this.
    
    		-John Bishop

    I'm not sure it's the insurance industry or if it's the IRS rule of
    taxing earnings once:  If you pay life (death) insurance with after
    tax money, the proceeds (benefits) are not taxed again.

    Great news on the insurance front for all those people like me that
    don't fit the industry guidelines...Digital has finally realized that
    the JH term life that is being offered now is non-competitive, even to
    "non-healthy" employees.
    
    The upcoming OPEN enrollment for the CIGNA plan should give many of us
    "non-healthy" employees the opportunity to increase our coverage without
    a medical exam. (JH thought I was overweight...well, maybe a little)
    
    Haven't seen the rates yet but JH was very high.

    How does the new life insurance program compares to previously
    mentionned programs? and would you, investors, consider the Cash
    Accumulation Fund?
    
    Any comments?

    The new life insurance is significantly better than the previous plans,
    especially for younger employees.
    
    As for the 'Cash Accumulation Fund', I believe it is almost always
    better to keep investments and insurance distinct; the same $ put into
    a reasonable investment program should do better over the long term
    than $ put into something like a 'cash accumulation fund'.

If you elect to buy insurance from Digital and if
you have money in a bank CD or money market fund,
the GUL provides a better return. The return is 7% for CY1994.

You can't bet that anywhere. I suspect that Digital is 
"returning" the excess money to the insurees from the
previous plan.

Regarding rates - if you are healthy and fit the profile of
a low risk person, you CAN ALWAYS find better rates. Don't 
forget, Digital has open enrollment - that means that both 
the healthy and the not so healthy can get insurance.

Gim

    I believe that SBLI offers better term rates than Cigna/Digital.

    Thank you all for your input. I'll look into SBLI as life insurance and
    will continue investing on Mutual Funds.
    

I believe that Massachusetts is one of the only states that offers
SBLI.  Also, SBLI does not pay a death benefit related to AIDS.*



*from July Consumer Reports

> I believe that Massachusetts is one of the only states that offers
> SBLI.  Also, SBLI does not pay a death benefit related to AIDS.*

SBLI from MA does pay death benefits if you submit to blood test.
If you don't, then SBLI will not pay death benefits related to AIDS.

re:-1

I was only quoting what Consumer Reports had printed.  They said that
SBLI does not pay for Aids related deaths period.  They made no mention
of blood test (although most all insurance companies will require blood 
tests just to get approved, especially if you are getting a large amount
of coverage.)

    Re: .33
    
    I ��am pretty sure that NY ��savings banks also offer SBLI term.

    Some 20+ years ago my wife and I took out two SBLI policies. Well guess
    what? We received a notice in the mail recently saying the policies are
    all paid up.
    
    Has anyone else paid up their SBLI policy and if so what's next? I'm
    sure there are several options.
    
    MJS