- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Is There Any Good Reason to Convert a Term Life Plan to Whole Life?
Posted on 1/11/14 at 8:37 pm
Posted on 1/11/14 at 8:37 pm
Insurance agent has been ringing me up trying to get me to covert a 20-year term life plan to a whole life plan (in part or in full). I have a few weeks until the 10th anniversary of the term plan, then the plan can no longer be converted.
I know there is probably financial incentive for the insurance agent to convert, but is there any good reason for a policy holder to in full or in part?
TIA
I know there is probably financial incentive for the insurance agent to convert, but is there any good reason for a policy holder to in full or in part?
TIA
7
Posted on 1/11/14 at 8:48 pm to shutterspeed
Depends on your goals
Will you be where you need to be in 10 years when the term expires, in relation to providing for your family if you were to die!
Whole has cash value that can not be seized from creditors or judgements
How is your health? Are you insurable ?
There are some reasons to convert, most situations it is probably not the best idea, but all depends on your goals
Will you be where you need to be in 10 years when the term expires, in relation to providing for your family if you were to die!
Whole has cash value that can not be seized from creditors or judgements
How is your health? Are you insurable ?
There are some reasons to convert, most situations it is probably not the best idea, but all depends on your goals
Posted on 1/11/14 at 9:18 pm to shutterspeed
One non-financial reason is that usually on a conversion, you don't have to go back through underwriting. You should get the rates you qualified for when you signed up originally. Your policy may be different.
As for financial reasons, it is hard to say without seeing the entire picture. I personally use while life as part if my overall strategy.
As for financial reasons, it is hard to say without seeing the entire picture. I personally use while life as part if my overall strategy.
Posted on 1/11/14 at 10:57 pm to shutterspeed
Short answer, yes tere are good reasons, but it depends on whose product you are converting to. There are a ton of terrible whole life products out there.
However, thre are plenty of scenarios where it is t a good idea.
It is a topic that gets very polar responses from people who don't fully understand the stuff. There are a ton of topics on here about it. I'd be happy to explain it more if you like, but it is a bit late
However, thre are plenty of scenarios where it is t a good idea.
It is a topic that gets very polar responses from people who don't fully understand the stuff. There are a ton of topics on here about it. I'd be happy to explain it more if you like, but it is a bit late
This post was edited on 1/11/14 at 10:59 pm
Posted on 1/11/14 at 11:03 pm to shutterspeed
If you're financially independent in 10 years and the family is taken care of you don't need term or whole life insurance
Posted on 1/12/14 at 7:02 am to ATL TGR
Why not just buy another term policy that will carry 20 more years if you are not ready to self insure?
Posted on 1/12/14 at 10:18 am to shutterspeed
Rarely is this a good idea- there are some exceptions
IF you are healthy, financially stability in your future- you need to go with the longest term life you can afford
You need a new insurance agent- take your current premium and check some of the online sources to see what you can purchase in straight term
IF you are healthy, financially stability in your future- you need to go with the longest term life you can afford
You need a new insurance agent- take your current premium and check some of the online sources to see what you can purchase in straight term
Posted on 1/12/14 at 10:39 am to 756
I already have $500,000 term insurance, but I think I will want more coverage in the near future. So, I am thinking of getting some whole life to get more coverage and I want to use it as a savings/retirement plan. Is it a good saving plan, or should I just buy more term coverage and invest my money in other ways?
Posted on 1/12/14 at 11:15 am to Stingray
Most people will reply to this spewing out exactly what Dave Ramsey and most of the other personal financial gurus say. And most of them can't even afford the premiums on whole life.
I personally believe that whole life can be used as a piece of the overall strategy, especially if you are sitting on some cash that you don't want to expose to the market.
It's all about your strategy and individual situation.
I personally believe that whole life can be used as a piece of the overall strategy, especially if you are sitting on some cash that you don't want to expose to the market.
It's all about your strategy and individual situation.
Posted on 1/12/14 at 11:47 am to Douboy
Ding ding. As a part of an overall portfolio, it is a great asset. However, it should not be your only asset.
Advisors who tell you to only buy WL are just as foolish as those who tell you it is never a good idea to buy an asset that guarantees to grow and will never go backwards on you.
As to the Dave Ramsey part, the major reason he advises against WL is because who he is marketing to. His market is the people who are covered in debt and need help gettig out of it. I wouldn't recommend WL to those people either. Not until their debt is under control.
So, long story short, it can be a good tool to help add a secure base to a retirement portfolio, that is going to compound at a competitive rate. Anyone that says it is never a good option, frankly isn't worth my time. That would be like me telling some lbody the only allocation to invest in is aggressie/growth.
Now, with all that said, thre is a bunch of junk in the WL market. Universal life isn't true WL. It is a crap product in my opinion. If you are looking at WL, look at NOrthwestern mutual, New York Life, and Mass. They have the best WL IMO.
Advisors who tell you to only buy WL are just as foolish as those who tell you it is never a good idea to buy an asset that guarantees to grow and will never go backwards on you.
As to the Dave Ramsey part, the major reason he advises against WL is because who he is marketing to. His market is the people who are covered in debt and need help gettig out of it. I wouldn't recommend WL to those people either. Not until their debt is under control.
So, long story short, it can be a good tool to help add a secure base to a retirement portfolio, that is going to compound at a competitive rate. Anyone that says it is never a good option, frankly isn't worth my time. That would be like me telling some lbody the only allocation to invest in is aggressie/growth.
Now, with all that said, thre is a bunch of junk in the WL market. Universal life isn't true WL. It is a crap product in my opinion. If you are looking at WL, look at NOrthwestern mutual, New York Life, and Mass. They have the best WL IMO.
This post was edited on 1/12/14 at 11:49 am
Posted on 1/12/14 at 2:24 pm to GoCrazyAuburn
to the two posters above me, thank you. your advice helps.
Posted on 1/13/14 at 1:34 pm to Stingray
quote:
I am thinking of getting some whole life to get more coverage and I want to use it as a savings/retirement plan.
If you have the cash now, check out the "10 Pay" product from Guardian. You pay all of the premium up front with a guaranteed ROR over the life of the contract (not to mention death benefit). You also get a discounted premium due to the way they apply the lump sum payment over 10 years.
But as mentioned above, make sure it fits in your overall plan.
Posted on 1/13/14 at 4:37 pm to GoCrazyAuburn
Our advisor got us set up with WL through Minnesota Life. Like you said, they pushed that it's only a part of an overall portfolio. The advantages of it come from the tax end - you'll get nailed when you take out your 401k. So in our case, this is something that's good to have in addition to those other assets that will be taxed.
Posted on 1/13/14 at 4:41 pm to shutterspeed
What is the MB consensus on return of premium term life plans?
Posted on 1/13/14 at 5:51 pm to TheFolker
Friend of mine had a heart attack (didn't die.). He converted some term to whole life because it didn't require physical exam. It seemed like it made sense to me.
Posted on 1/13/14 at 8:28 pm to Traffic Circle
Thanks for the help, everyone. I decided to stick with the original term plan rather than convert any to whole life.
Posted on 1/14/14 at 12:23 am to LSUJuice
quote:
Our advisor got us set up with WL through Minnesota Life. Like you said, they pushed that it's only a part of an overall portfolio. The advantages of it come from the tax end - you'll get nailed when you take out your 401k. So in our case, this is something that's good to have in addition to those other assets that will be taxed.
Honestly, I don't think I've ever seen a Minnesota Life WL policy. What is their minimum rate of return if you don't mind me asking? Also, do they offer a disability waiver of premium benefit?
*Note to everyone else, if you haven't looked at getting a disability waiver of premium benefit on your term or WL policies, do it. It is pretty damn cheap, and absolutely worth it. If you have any WL policies on your kids, get it on theirs too. I know companies that have approved disability waiver claims on 10 year olds. Just a insider heads up I guess
Posted on 1/14/14 at 8:51 am to GoCrazyAuburn
quote:
What is their minimum rate of return if you don't mind me asking?
It's either 2% or 2.5% guaranteed.
quote:
do they offer a disability waiver of premium benefit?
I don't know, I'll have to go look, or I'll ask.
Edit: Looks like it's an option on my policy. It's listed in the definitions, but just as an option. I'll ask next time I meet with the FA.
This post was edited on 1/14/14 at 9:00 am
Posted on 1/14/14 at 9:03 am to LSUJuice
quote:
It's either 2% or 2.5% guaranteed
That's a pretty low guarantee. Most are 3-4% Was there a reason he suggested Minnesota Life? I looked them up this morning, and they have really high expense and mortality rates, which isn't good for WL performance. Furthermore, they are also a stock company, which limits the dividends you will be eligible for.
quote:
do they offer a disability waiver of premium benefit?
I don't know, I'll have to go look, or I'll ask.
Definitely check into that. Its a benefit that if you become disabled, the company will pay your premium as long as you are still disabled. Some companies will even convert your term insurance for you, they still pay the premium, and you get all the benefits.
I don't mean to nitpick if it comes off that way, just trying to be helpful.
This post was edited on 1/14/14 at 9:06 am
Posted on 1/14/14 at 9:51 am to GoCrazyAuburn
Ah, thanks. I'll definitely bring all of this up. And I do remember discussing the premium waiver now that I think about it. So I think it's included.
Page 1 of 2
Back to top
Follow TigerDroppings for LSU Football News