X-Message-Number: 12411
From: "John de Rivaz" <>
References: <>
Subject: Re: Insurance vs mutual funds
Date: Mon, 13 Sep 1999 10:41:46 +0100

I am afraid that I am still not clear on this. With a life policy comes a
bit of paper which is a trust which designates someone other than the person
paying for the policy as the owner of the policy. After it is signed, the
person paying for the policy has no further control over what happens to the
proceeds. This confers freedom from tax and freedom from litigation
benefits.

Is there any fundamental reason why a similar piece of paper cannot be
written concerning a holding in a mutual fund as opposed to a life policy?

The only difference I see is that the life companies provide this piece of
paper included in the price of the policy, whereas a buyer of a holding in
mutual funds has to pay a substantial sum to an attorney to produce a
similar piece of paper.

There are form books such as Doug Casey's "How to avoid probate without a
lawyer" which offer forms that are said to produce similar effects. However
lawyers often see them as a means to earn money by encouraging people to
contest them.This is good for their profession as a whole and good for the
people who win such cases. People are less likely to be persuaded to contest
life policies as their legal action would be against the financial might of
a life insurance company motivated by the need to demonstrate to the public
the safety of its products.

The difficulty I see with life policies are that
1. you may be paying for protection you don't need
2. you cannot invest in technology stocks, so transcessionary pressure will
erode your investment (as well as the lost opportunity).
3. they are a lot more bother to buy than buying mutual funds - if you want
a holding in mutual funds and you have the money you just write a check and
that is it.

--
Sincerely, John de Rivaz
my homepage links to Longevity Report, Fractal Report, my singles club for
people in Cornwall, music, Inventors' report, an autobio and various other
projects:       http://ourworld.compuserve.com/homepages/JohndeR

> But mutual funds, in a trust or not, do not create the "instant" estate
that
> life insurance does.  Although I love mutual funds!  Own 'em and sell 'em.

Rate This Message: http://www.cryonet.org/cgi-bin/rate.cgi?msg=12411