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Message
Term or Whole? Insurance
Posted on 4/30/14 at 12:51 pm
Posted on 4/30/14 at 12:51 pm
Which is the suggested way to go-38 yrs old, excellent health, wanting to protect my family and assets.
4
Posted on 4/30/14 at 12:57 pm to Phattie Jet
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.
Posted on 4/30/14 at 12:59 pm to TDsngumbo
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
Posted on 4/30/14 at 1:46 pm to Phattie Jet
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.
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.
Posted on 4/30/14 at 1:53 pm to Phattie Jet
The correct answer is you've supplied an insufficient amount of information so far.
Posted on 4/30/14 at 2:01 pm to GoCrazyAuburn
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.
Posted on 4/30/14 at 2:53 pm to AUtigerNOLA
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.
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 4/30/14 at 2:55 pm
Posted on 4/30/14 at 3:00 pm to GoCrazyAuburn
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.
Posted on 4/30/14 at 3:02 pm to AUtigerNOLA
Any time.
Posted on 4/30/14 at 3:03 pm to GoCrazyAuburn
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.
Posted on 4/30/14 at 3:10 pm to lsu13lsu
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 4/30/14 at 3:11 pm
Posted on 4/30/14 at 3:11 pm to GoCrazyAuburn
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 4/30/14 at 3:12 pm
Posted on 4/30/14 at 9:55 pm to Phattie Jet
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
ETA: what I'm saying is a mix of both is good
This post was edited on 4/30/14 at 9:57 pm
Posted on 5/1/14 at 6:40 am to olemissfan26
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.
Posted on 5/1/14 at 8:06 am to CidCock
Huh? What do you mean backloaded?
Posted on 5/1/14 at 9:36 am to GoCrazyAuburn
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
Posted on 5/1/14 at 11:28 am to CidCock
Wouldn't that be front loaded then? The expenses are in the early years?
Why would you opt out after 2 years though?
Why would you opt out after 2 years though?
Posted on 5/1/14 at 1:15 pm to CidCock
quote:
Term is so cheap, invest the difference
True, but most Americans don't have the discipline to invest the difference
Posted on 5/1/14 at 1:18 pm to olemissfan26
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 5/1/14 at 1:20 pm
Posted on 5/1/14 at 2:15 pm to olemissfan26
Over 60% of the population to be exact.
This post was edited on 5/1/14 at 2:15 pm
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