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Posted: 12/17/2001 7:13:32 AM EDT
[#1]
My lay opinion- IIRC, term is fixed with no return of premiums, and whole-life is where there is some future return of premiums invested, right? My recommendations:
Term, and for the period of time when you no longer have to support the kids or pay for their school... say, until they're 22 or so (and presumably past college). The amount should be for whatever it woud cost to pay the house off and pay for educational expenses, so the survivors don't have to radically change their lifestyles mid-stream. After that point, there is little left to protect, presuming you're also saving for retirement and the survivors will be able to support themselves. Whole life is just a different way of investing, where you don't have as much control over where the money is invested and where the upper limit to the amount of profit you could make is capped. Check expenses/costs for the two, and you'll see that term is cheaper overal, IIRC. Now, if you've got no other retirement, there are more effective ways to achieve that goal, too. Geez, I almost sound like I know what I'm talking about, huh! Get professional advice from a non-interested party- NOT the guy selling the insurance! [:D] |
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Posted: 12/17/2001 7:21:32 AM EDT
[#2]
Thanks DScott for your insights!
BTT for all others to chime in. |
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Posted: 12/17/2001 7:55:04 AM EDT
[#3]
Quoted: Whole life is just a different way of investing, where you don't have as much control over where the money is invested and where the upper limit to the amount of profit you could make is capped. Check expenses/costs for the two, and you'll see that term is cheaper overal, IIRC. Now, if you've got no other retirement, there are more effective ways to achieve that goal, too. Geez, I almost sound like I know what I'm talking about, huh! Get professional advice from a non-interested party- NOT the guy selling the insurance! [:D] Yeah, you almost sound like you know what you're talking about. Almost. Your first point is valid, but you strayed when you compared insurance to "investing." Variable life aside (garbage now that interest rates have tanked), insurance is insurance, investing is something else. You may need what would seem to be a large amount of term insurance during the time the kids are your responsibility. Add it all up and you will be surprised by the figure you will be paying to raise them. Typically this is several hundred thousand dollars. Term insurance, assuming good health and non smoker will be cheap. You will need some amount of whole life insurance for the long haul. Nearly every other asset can be lost, due to medical bills, etc., but whole life insurance, with premium waiver in place (this pays the premium if you become disabled), cannot be lost and will be there whenever you die, no matter what. You should be able to insure your whole family for well under a hundred a month. Cheap for what it does. Yes, I am a life insurance agent--going on 24 years. [:)] A man just left my house, after thanking me profusely for "talking his brother into buying insurance." I didn't really talk him into it, but, the brother just died at age 64. The insurance is the only asset. Makes my job seem worthwhile. Then this thread--must be an omen. [:D] |
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Posted: 12/17/2001 8:00:44 AM EDT
[#4]
Here's simple way to determine the proper amount of life insurance one should have.
It's called the DIME method. D- Death, how much will it cost to bury you and to pay off any medical bills incurred during you final days. Those can be substantial. I- Income, if you die, where will the family get money to survive. Would you want your wife to have to work? M- Mortgage, pay off the mortgage or allow them to make the regular payments. E- Education, money to send your children to school. You are probably looking at $350,000 to $1,000,000 in coverage to pick up the whole tab. With term insurance, that could $50 to $150 per month in premiums. With term insurance you get the most for the least amount of money. Later in life you can probably convert that same term policy, regardless of any health issues, to a permanent policy or a reduced coverage permanent policy. Of course the premiums will be higher. Be careful on selecting a whole life policy. There are many different versions out there. There are ones that pay dividends and ones that don't. There's also variable life products which are connected to the stock market. There's also ones with vanishing premiums, etc....and the list goes on. Hope this helps. |
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Posted: 12/17/2001 8:25:01 AM EDT
[#5]
beekeeper1
Oops! I'm just a consumer of the stuff, after all! [:D] Sounds like our man here has alot of savings, and both he and his wife are working and are fully invested in company retirement plans. Would ANY whole life make sense? |
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Posted: 12/17/2001 8:25:56 AM EDT
[#6]
You guys just reinforced what a friend of mine told me. He basically said to go for Term Insurance of 30 years. Whatever I save compared to Whole Life can be invested in some stocks or mutual fund and I will still come out ahead. Of course he did tell me to get maybe a $50,000 Whole Life on the side if my finances allow it. [:)]
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Posted: 12/17/2001 8:30:44 AM EDT
[#7]
Quoted: You guys just reinforced what a friend of mine told me. He basically said to go for Term Insurance of 30 years. Whatever I save compared to Whole Life can be invested in some stocks or mutual fund and I will still come out ahead. Of course he did tell me to get maybe a $50,000 Whole Life on the side if my finances allow it. [:)] This is the direction I steer my clients whose situation is similar to yours. The WL policy is the "fallback" if all else fails. You won't regret it. |
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Posted: 12/17/2001 8:35:32 AM EDT
[#8]
Quoted: beekeeper1 Oops! I'm just a consumer of the stuff, after all! [:D] Sounds like our man here has alot of savings, and both he and his wife are working and are fully invested in company retirement plans. Would ANY whole life make sense? |
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