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Posted on 6/28/22 at 8:00 pm to Jag_Warrior
Exactly. I even tell them "Look, I have a duty to do what's right for you, not me. Therefore I would recommend term over whole life in your situation but if you insist on whole life, I'll get you in touch with an agent who will be happier to sell the higher premiums to you", thinking that will wake them the frick up but it still doesn't. Nine times out of ten they respond with a jubilant "ok thanks!".
You can't fix stupid but I can definitely carry out my fiduciary responsibility on a recorded line for compliance and legal purposes
You can't fix stupid but I can definitely carry out my fiduciary responsibility on a recorded line for compliance and legal purposes
Posted on 6/28/22 at 8:28 pm to TDsngumbo
quote:
Yes, it’s always better to buy term and put the rest of your money into an actual investment product.
Not sure how you can say always when you still haven’t accounted for capital gains taxes and investor behavior. How many aren’t getting positive rates of return because they freak out and pull their money out when the market is down?
quote:
Ok, great! Now you’ve “created your very own bank”, right? Sure, if you think of it that way. So now you borrow some money from it. FREE MONEY!! No need to pay it back because it’s your own money, right? Nope! It’s the insurance company’s money. You borrow it and don’t pay it back and you’re gonna have 5-8% or more interest accrue and add to the loan balance.
It doesn’t have to be used as a loan.
Posted on 6/28/22 at 8:52 pm to TDsngumbo
I find it fascinating that people with minimal financial knowledge are so set in their ways.
Financially speaking, the folks on the MTB are the 1 out of 100K when it comes to financial interest. I am unashamed to say that I struggle to wrap my head around a number of these insurance products - whole life, universal, annuities, et al - are so much more complex to understand the fees, returns, tax implications, opportunity costs than basic financial management.
I’ve tried learning about these for years and can’t get comfortable with the fine print to utilize them. I’m not signing up for a product I don’t have full confidence in understanding what is being paid into and what value streams can be extracted from it…
Financially speaking, the folks on the MTB are the 1 out of 100K when it comes to financial interest. I am unashamed to say that I struggle to wrap my head around a number of these insurance products - whole life, universal, annuities, et al - are so much more complex to understand the fees, returns, tax implications, opportunity costs than basic financial management.
I’ve tried learning about these for years and can’t get comfortable with the fine print to utilize them. I’m not signing up for a product I don’t have full confidence in understanding what is being paid into and what value streams can be extracted from it…
Posted on 6/29/22 at 8:46 am to KillTheGophers
quote:
I do believe that young workers and professionals should lock in long term life insurance at a low cost while they are healthy, young and can get good rates.
Before 42 is the preference for savings for those nearing that age. After that, premiums go up quite a bit, per my insurance agent. My wife and I are 41 and 40, and we're locking in term this year. The decision we have now is 30 or 20 year, we have our first (and possibly only) little one coming in a few months.
This post was edited on 6/29/22 at 8:48 am
Posted on 6/29/22 at 9:44 am to ColoradoAg03
quote:
Before 42 is the preference for savings for those nearing that age. After that, premiums go up quite a bit, per my insurance agent. My wife and I are 41 and 40, and we're locking in term this year. The decision we have now is 30 or 20 year, we have our first (and possibly only) little one coming in a few months.
My term policy is laddered. 20 years at $X and 30 years at $Y. It's a little bit more cost efficient and you 'self insure' as you get older.
Posted on 6/29/22 at 2:45 pm to ColoradoAg03
When I was 40 I made that term life and went with 30 years, you can always drop it, change something else or whatever is best for your situation but you most likely will never be able to buy it cheaper than you can at your current age and if later down the road, you wish you had gone with a 30 year policy you can’t undo the 20.
I kept the policy 10 years and replaced it with another 30 years policy, it cost a few hundred a year more than what I had but it gives my family longer security.
I kept the policy 10 years and replaced it with another 30 years policy, it cost a few hundred a year more than what I had but it gives my family longer security.
Posted on 6/29/22 at 3:30 pm to ThatsAFactJack
quote:
I'm a life insurance agent and I tell every single one of my customers to never buy a whole life policy from me because I have an ethical duty and responsibility to do what's right for the customer
I thought the AL Williams marketing scams died years ago?
Posted on 6/30/22 at 11:02 am to Lutcher Lad
Whole life is not an investment.
If you need tax shielded income muni bonds are a much better option IMO.
The only time while life might ever make sense is with buyouts for partnerships.
If you need tax shielded income muni bonds are a much better option IMO.
The only time while life might ever make sense is with buyouts for partnerships.
Posted on 6/30/22 at 1:01 pm to Abstract Queso Dip
quote:
The only time while life might ever make sense is with buyouts for partnerships.
Even then, they are too expensive with a non-beneficial cash value component driving up the cost.
There is permanent life insurance without cash value which suits perfectly for anyone actually buying the life insurance for just the life insurance.
Posted on 6/30/22 at 1:14 pm to ColoradoAg03
quote:
Before 42 is the preference for savings for those nearing that age. After that, premiums go up quite a bit, per my insurance agent. My wife and I are 41 and 40, and we're locking in term this year. The decision we have now is 30 or 20 year, we have our first (and possibly only) little one coming in a few months.
It isnt the attained age driving up the cost.
It is the maturity of the policy coverage driving up the cost (the closer your policy reaches to average life expectancy, the more expensive the coverage will be).
Posted on 6/30/22 at 3:14 pm to meansonny
quote:
It isnt the attained age driving up the cost.
It is the maturity of the policy coverage driving up the cost
Actually, what's driving up the cost of life insurance is the fact people die.
Posted on 6/30/22 at 5:19 pm to TDsngumbo
quote:
Actually, what's driving up the cost of life insurance is the fact people die.
That goes hand in hand with a life insurance policy hovering with hundreds of thousands of dollars of coverage just before or just after the average life expectancy of an American.
Policies covering us to age 40, 50, or 60 are cheap. 60+, 70, 80, and above... the insurance company is in business to stay in business.
Posted on 6/30/22 at 9:03 pm to Lutcher Lad
If he has a lot of money what does he need life insurance for? Life insurance is to make sure your dependents are taken care of. He should be self insured. He needs good investments and a will
Posted on 7/5/22 at 8:08 am to TDsngumbo
Should have used a cliff jumper story. A tides go in and out. When the tide is low the jumper can see all of the rocks. But when the tide is high, that’s when the jumper wants to hit the water. But the jumper must go when it looks the worst when the tide is at its lowest, so when the jumper hits the water the tide has come back up!
Posted on 7/28/22 at 11:26 am to LSUtiger89
Odd bump, but two quick questions that probably don't need their own thread.
1- How do y'all look at the total $ need for life insurance over time? It at least makes sense to me to have a smaller whole life and and really big term life plan when you are young, have plenty of debt and a lot of years left to support raising your kids if something were to happen. But by the time I'm 60, kids gone, and debt free, I just don't see the reasoning to have a big term policy.
What little I found on google seemed to say 10x your income, but didn't have anything about tapering down over time. Am I looking at this the wrong way?
2- Could the case at least be made that one of the points of whole is to lock in your insurance rate for life? I just know of people that are 65+ that still feel like they need good sized term policies, but the rates are astronomical.
TIA for any input.
1- How do y'all look at the total $ need for life insurance over time? It at least makes sense to me to have a smaller whole life and and really big term life plan when you are young, have plenty of debt and a lot of years left to support raising your kids if something were to happen. But by the time I'm 60, kids gone, and debt free, I just don't see the reasoning to have a big term policy.
What little I found on google seemed to say 10x your income, but didn't have anything about tapering down over time. Am I looking at this the wrong way?
2- Could the case at least be made that one of the points of whole is to lock in your insurance rate for life? I just know of people that are 65+ that still feel like they need good sized term policies, but the rates are astronomical.
TIA for any input.
Posted on 7/28/22 at 5:09 pm to Kingpenm3
My research was all over the place for a “rule of thumb” on how much term to secure. I saw the 10x income reference you mentioned. I likely went high on the amount as I can carve it back easily (but cannot add more as easily). My simple logic on a term amount was “if I die, I want my wife and kids to be covered without a doubt, maintaining their same standard of living.”
As with most risk management, you can pay more to mitigate more risk. In this case, the extra was worth the peace of mind. I also did not want to accept a situation where our house was fully in financial order with me alive, but became a stress point with my passing. I got enough to buy the house outright and she could live off dividends forever.
One thing I didn’t take into account: We both have life insurance through our employers. That’s lagniappe at this point.
I did get a larger policy on my wife than probably required. In the case of her death, I would be a mess and need to take notable leave time. So again, took out a larger policy that would sustain the family without me working for a sizable window of time.
As with most risk management, you can pay more to mitigate more risk. In this case, the extra was worth the peace of mind. I also did not want to accept a situation where our house was fully in financial order with me alive, but became a stress point with my passing. I got enough to buy the house outright and she could live off dividends forever.
One thing I didn’t take into account: We both have life insurance through our employers. That’s lagniappe at this point.
I did get a larger policy on my wife than probably required. In the case of her death, I would be a mess and need to take notable leave time. So again, took out a larger policy that would sustain the family without me working for a sizable window of time.
This post was edited on 7/28/22 at 5:15 pm
Posted on 7/28/22 at 9:04 pm to Kingpenm3
quote:
How do y'all look at the total $ need for life insurance over time? It at least makes sense to me to have a smaller whole life and and really big term life plan when you are young, have plenty of debt and a lot of years left to support raising your kids if something were to happen. But by the time I'm 60, kids gone, and debt free, I just don't see the reasoning to have a big term policy.
Life insurance covers catastrophic losses that your family would be unprepared to handle if you die.
1) loss of income
2) child supervision
3) final medical expenses
4) funeral expenses
I list it this way because your income should cover your debt (otherwise you aren't financially sound with your debt).
When you are 60, you probably won't have child supervision expenses.
And most of your working years are behind you. But what about social security? Does your family need that income?
I don't like whole life insurance.
When you are 60, you should have enough saved to pay for your funeral.
The "life insurance argument" is that a funeral expense never goes away. But are you destitute? There are lots of ways to pay funeral expenses. Why buy the most expensive life insurance product for something that can be saved/invested?
quote:
Could the case at least be made that one of the points of whole is to lock in your insurance rate for life? I just know of people that are 65+ that still feel like they need good sized term policies, but the rates are astronomical.
Good term options will have conversion options. That also locks in your health.
Are you expecting a healthy retirement saved at 65? What are you expecting to need life insurance for?
If you need permanent life insurance, I prefer universal life insurance with strong guarantees (basically permanent term insurance). Outside of income replacement or some burning desire to leave some sort of estate, I don't see a need for the majority of people to have permanent insurance.
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