Life Insurance

[Shooting-For-800]

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@GApeachy wrote:

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@Shooting-For-800 wrote:

People buy whole because they were SOLD whole or they have no savings or investment accounts and they were SOLD whole.

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We bought both Term and Whole....our Whole policies have earned a lot of dividends and they can't cancel on us due to health issues plus the premiums stay the same, our Terms we lost at renewal.

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Your whole costs 5 or 6 or 7 times as much as term. 

How much did you earn on your dividends and how much do you pay per year?

You cant be canceled on a term policy for health either.

You can buy a term policy for 30 years, then buy another one 10 years later, then another one 10 years later. etc.

Life INSURANCE is term.  Whole life is insurance and SAVINGS.

They make both for a reason, but for people who are worried about payouts for their kids, term is a much better value.

I guarantee you that the average return on whole life is no where near what one can earn in safe investments plus a term policy. 

In addition, if you find you cannot afford your whole life policy because it is 5 or 6 or 7 times as much as term, you will lose it unless you have been paying for 10 or 15 years.  With term (especially 5 or 6 or 7 policies) you can drop one or two or three and still have coverage.

[Green456]

Get Term. You loose money on Life Insurance. Get quote for both however and invest the difference monthly into IRA. Long term wise IRA will give you greater pay out than life insurance. And the term insurance will protect you 10-20 years depending what you choose.

[GApeachy]

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@Shooting-For-800 wrote:

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You cant be canceled on a term policy for health either. (You are correct, I just asked DH again...so sorry- this whole time I've been mad at my company. I will correct my above post)  DH said what they did was change one of the Terms to Whole Life at a decent rate about 11years ago.)  This last Term DH was turned down for was because the Ins. Company keeps saying his doctor/office will not release the medical records.  I even picked up the packet and took to Agent but Ins. Co. cancelled app. and sent us our money back after about 3 months of trying.   So I did get it wrong...glad you straightened me out.)   Now I'm off to change my above stmt. to reflect my errors. thanks!

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[GApeachy]

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@Shooting-For-800 wrote:

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Life INSURANCE is term.  Whole life is insurance and SAVINGS.

They make both for a reason, but for people who are worried about payouts for their kids, term is a much better value.  Thank you I have a call in to my agent now.

I guarantee you that the average return on whole life is no where near what one can earn in safe investments plus a term policy. Well, I don't know about any of that...it's all Greek to me obviously, again I will ask Agent.

In addition, if you find you cannot afford your whole life policy because it is 5 or 6 or 7 times as much as term, you will lose it unless you have been paying for 10 or 15 years. (Why is that? 10 or 15 years)  With term (especially 5 or 6 or 7 policies) you can drop one or two or three and still have coverage.

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[CreditInspired]

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@Shooting-For-800 wrote:

I would invest mostly into term.

Generally, you don’t save much on higher amounts so I would get several policies from different companies.

ie $200k cost twice as much as $100k.

Stick with real companies:  Statefarm, Allstate, etc.

I have separate email addresses just for stuff like this so I can easily ignore solicitors.

Get a yahoo email and leave your phone number off or use the local time and temperature number.

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^^this

[Anonymous]

As a former life insurance agent- I would definately reccomend term. Even a short policy would work while your child is young so in case something happens he is covered- of course you can't leave a policy to a child under 18 so you will have to designate a beneficiary that will ensure the money goes to taking care of the child.

If you are in good health, younger, and don't smoke, you can get a 500k term policy for under $40 a month (approx.)

Can you save that money monthly- sure. Can you invest that money- yep. But its simple peace of mind in case of accidents. Its purely a policy in case you die. Nothing more. No partial payout for injury, disease, etc. No money returned. As a single mother myself once upon a time- I had a term plan as well through State Farm (and sold through Farmers as well as SF). I agree with the other commenter- look for a good insurance company and ask for a quote when you are ready. You can cancel at any time as well- say if you get a full time job with life insurance or other. Little to lose in my opinion.

Good Luck!

[Anonymous]

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@Anonymous wrote:

As a former life insurance agent- I would definately reccomend term. Even a short policy would work while your child is young so in case something happens he is covered- of course you can't leave a policy to a child under 18 so you will have to designate a beneficiary that will ensure the money goes to taking care of the child. 1

If you are in good health, younger, and don't smoke, you can get a 500k term policy for under $40 a month (approx.)

Can you save that money monthly- sure. Can you invest that money- yep. But its simple peace of mind in case of accidents. Its purely a policy in case you die. Nothing more. No partial payout for injury, disease, etc. No money returned.2 As a single mother myself once upon a time- I had a term plan as well through State Farm (and sold through Farmers as well as SF). I agree with the other commenter- look for a good insurance company and ask for a quote when you are ready. You can cancel at any time as well- say if you get a full time job with life insurance or other. Little to lose in my opinion.

Good Luck!

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I am also a former Insurance person, and much of what JustSimpleCents wrote is true. I have some additional comments, and I have inserted in my quote from Just SimpleCents footnotes in red to correspond with what I have to add.

1: You could designate a Trust as the Beneficiary with yourself as the Trustee. Obvioulsy you would also need a trusted friend or relative to be the Alternate Trustee for when you die, to take over for you. In your will you would designate a Guardian for your child(ren) and that person would be a logical candidate for Alternate Trustee. I say this because you won't always be "just starting out" financially, and a Trust is a good way to keep your assets away from ex-spouses and other predators - especially in Community Property States.

2: Not true. You can buy whatever riders you want into a Term Life Insurance policy, including a Return of Premium rider. This is July, 2019. Next month I will be getting a check from a Life Insurance company for $27,000 as the Return of Premium of a term policy that I have that is maturing and I no longer need. Also, many companies have early Viatical Payout provisions that can pay benefits against the policy death benefits to you while you are alive in the event you become terminally ill.

[Anonymous]

This is a little off your specific question but I think it's something else to consider.  My  mother passed away in May.  I am an adult male in my mid 40s.  My mother took out two whole life polices for me. The first was to help pay for college and the second was a policy she inherited from my grandmother.  Both of the polices had balances that paid dividends and allowed loans against them.  I cashed in the student life insurance policy for $12k to help pay for my mom's homecare.  It had 26K cash value but she had stopped paying the premiums on it 12 years ago, so it was just canablizing itself.  I believe the premium was $520/year.  The other policy has a cash value of 6K and is $30/month.  It has a 50K cash benefit so I am going to keep paying premium on it (and pay down the existing loan 5K @ 7.74% interest) so that it is a back up to my employer's life insurance.