Term or Whole? Insurance | TigerDroppings.com

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Phattie Jet
LSU Fan
LaPlace
Member since Aug 2012
135 posts

Term or Whole? Insurance


Which is the suggested way to go-38 yrs old, excellent health, wanting to protect my family and assets.






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TDsngumbo
LSU Fan
Member since Oct 2011
5063 posts
 Online 

re: Term or Whole? Insurance


quote:

38 yrs old, excellent health, wanting to protect my family and assets.

$1M or $2M 30-year term policy. Do not get Whole Life unless you are very wealthy.






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Phattie Jet
LSU Fan
LaPlace
Member since Aug 2012
135 posts

re: Term or Whole? Insurance


Thanks you sir-that's what I thought but there is just so much stuff out there it hard to understand it all-gonna do a mil on me and a mil on the old lady





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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
13664 posts

re: Term or Whole? Insurance


Why not both?

You don't have to be super wealthy to get WL. Yes, it is more expensive than term, but if you are actually investing the difference, you are paying the same amount anyways.

Now, if you are down to getting your death benefit in term and that is all you can spend, or spending that amount in WL, then go term.

Where did you get the $1M number from? Have you don't an actual death benefit calculation? L30 may be a good choice, but a corresponding term 80 policy may actually be cheaper over the 30 years, I'd have to look at the actual numbers, but jus something else to think about.






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iknowmorethanyou
LSU Fan
Paydirt
Member since Jul 2007
4482 posts

re: Term or Whole? Insurance


The correct answer is you've supplied an insufficient amount of information so far.





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AUtigerNOLA
Auburn Fan
New Orleans, LA
Member since Apr 2011
9651 posts
 Online 

re: Term or Whole? Insurance


quote:

You don't have to be super wealthy to get WL


Yea was wondering about this comment. I mean I got it because I was under the impression it could be used as extra income at retirement. That is basically the whole reason why I got it. Is this not smart? I feel like it made sense when the guy was explaining this to me.






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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
13664 posts

re: Term or Whole? Insurance


That is definitely a reason people get WL. There is not one answer as to why it is used. There are lots of variables that it can come in handy.

However, like you NOLA, one reason I have some WL is so that I have a way to supplement retirement income with something that is guaranteed to grow as long as I keep it. I have insurance that I can have pay for itself if I want to, and get tax free income in retirement. Basically get all my money back plus interest, and still have insurance for estate needs, leaving legacy, whatever. If I remember correctly, you have a similar plan to me. Some WL, some term with the goal to convert when I can, and DI.

As iknowmorethanyou said, impossible to recommend what is best from what is known. I don't even know if $1M of insurance is right for the guy.



This post was edited on 4/30 at 2:55 pm


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AUtigerNOLA
Auburn Fan
New Orleans, LA
Member since Apr 2011
9651 posts
 Online 

re: Term or Whole? Insurance


quote:

If I remember correctly, you have a similar plan to me. Some WL, some term with the goal to convert when I can, and DI.


Yes we do, pretty similar. As always, appreciate the insight.






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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
13664 posts

re: Term or Whole? Insurance



Any time.






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lsu13lsu
LSU Fan
Member since Jan 2008
1879 posts

re: Term or Whole? Insurance


quote:

However, like you NOLA, one reason I have some WL is so that I have a way to supplement retirement income with something that is guaranteed to grow as long as I keep it.


I thought to take money out of whole life would be a loan? How do you take money out? Serious question.






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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
13664 posts

re: Term or Whole? Insurance


It is a loan, but a loan you don't have to pay back. If you do, it goes right back into the policy, and you have access to it the next day. Think of it like being your own bank. Basically, the cash value account can be accessed while you are living, or help increase your death benefit. If you take the money while you are alive, then your increase in death benefit is decreased by that amount. All of this is tax free as long as the policy is in force.


This post was edited on 4/30 at 3:11 pm


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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
13664 posts

re: Term or Whole? Insurance


Just a random observation, it seems like these threads always are at their highest volume during the spring. I wonder why that is?


This post was edited on 4/30 at 3:12 pm


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olemissfan26
Ole Miss Fan
Oxford, MS
Member since Apr 2012
1377 posts

re: Term or Whole? Insurance


I'd say do whole to the amount you can afford and term to cover the rest so you are at least getting a little return on the investment

ETA: what I'm saying is a mix of both is good



This post was edited on 4/30 at 9:57 pm


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CidCock
South Carolina Fan
Member since Sep 2007
Member since Feb 2011
5178 posts

re: Term or Whole? Insurance


Term is so cheap, invest the difference. 40% of police holders cancel it. The policies are so backloaded, you basically get nothing out of it. They make it too much of a loss to cancel the policy.





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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
13664 posts

re: Term or Whole? Insurance


Huh? What do you mean backloaded?





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CidCock
South Carolina Fan
Member since Sep 2007
Member since Feb 2011
5178 posts

re: Term or Whole? Insurance


I mean that if I pay $200 a month and opt out after 2 years, I don't have much of a cash value. Certainly not $4800





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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
13664 posts

re: Term or Whole? Insurance


Wouldn't that be front loaded then? The expenses are in the early years?

Why would you opt out after 2 years though?






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olemissfan26
Ole Miss Fan
Oxford, MS
Member since Apr 2012
1377 posts

re: Term or Whole? Insurance


quote:

Term is so cheap, invest the difference


True, but most Americans don't have the discipline to invest the difference






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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
13664 posts

re: Term or Whole? Insurance


They are also spending the same amount of money. So, in the grand scheme, one option is not more expensive than the other. Both can be good options. The idea that only one is the way to go, is crazy. There are no absolutes when it comes to financial planning. Situations vary.




This post was edited on 5/1 at 1:20 pm


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iknowmorethanyou
LSU Fan
Paydirt
Member since Jul 2007
4482 posts

re: Term or Whole? Insurance


Over 60% of the population to be exact.


This post was edited on 5/1 at 2:15 pm


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