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re: Why dont more people see the value in Life Insurance?
Posted on 2/8/17 at 4:34 pm to stevengtiger
Posted on 2/8/17 at 4:34 pm to stevengtiger
From listening to Kent Smetters, Wharton Professor, for a couple years now, my understanding is Whole Life generally only makes sense for the super wealthy which is where you are starting to deal with estate tax issues. The other 97% of Americans should go the term route and buy it when they are young.
Term insurance is to INSURE against the risk your family faces in the unlikely event of the breadwinner dying early. It provides liquidity and gets your loved ones through to maturity.
My family also used it on my grandfather when he was in his 80s. They paid huge premiums and decided that if he out lived the term policy then it would be a gift that he is still alive. When he passed, everyone in the family collected a large parting gift in excess of the premiums. This was a unique situation...
Term insurance is to INSURE against the risk your family faces in the unlikely event of the breadwinner dying early. It provides liquidity and gets your loved ones through to maturity.
My family also used it on my grandfather when he was in his 80s. They paid huge premiums and decided that if he out lived the term policy then it would be a gift that he is still alive. When he passed, everyone in the family collected a large parting gift in excess of the premiums. This was a unique situation...
3
Posted on 2/8/17 at 4:36 pm to Keeble9145
quote:
There is a reason why all rich people own massive life policies on themselves but I guess they are all idiots lol
This is the second time you've posted this but I don't find it to be true. I review probates of wealthy individuals pretty regularly and hardly ever see significant life insurance policies.
Personally, I see life insurance as being for younger working people with dependents. I'm 32, if I die in 10 years I'd want my sons' college paid for and my wife to be debt free - that's it.
This post was edited on 2/10/17 at 8:26 pm
Posted on 2/8/17 at 4:37 pm to lynxcat
quote:
From listening to Kent Smetters, Wharton Professor, for a couple years now, my understanding is Whole Life generally only makes sense for the super wealthy which is where you are starting to deal with estate tax issues. The other 97% of Americans should go the term route and buy it when they are young. Term insurance is to INSURE against the risk your family faces in the unlikely event of the breadwinner dying early. It provides liquidity and gets your loved ones through to maturity. My family also used it on my grandfather when he was in his 80s. They paid huge premiums and decided that if he out lived the term policy then it would be a gift that he is still alive. When he passed, everyone in the family collected a large parting gift in excess of the premiums. This was a unique situation...
your family has a huge sack on them. I could only imagine the type of premium yall were dishing out at that age.
Posted on 2/8/17 at 4:37 pm to lynxcat
quote:
Whole Life generally only makes sense for the super wealthy which is where you are starting to deal with estate tax issues.
There is no doubt that a whole life policy makes sense for some wealthy people for tax reasons.
quote:
The other 97% of Americans should go the term route and buy it when they are young.
Agreed.
Posted on 2/8/17 at 4:42 pm to lynxcat
quote:
my understanding is Whole Life generally only makes sense for the super wealthy which is where you are starting to deal with estate tax issues.
an estate of 4.5 mil really isn't that much in this day in age though, especially if you own your own business.
Posted on 2/8/17 at 4:44 pm to Keeble9145
quote:
an estate of 4.5 mil really isn't that much in this day in age though, especially if you own your own business.
Just a FYI, the current estate tax exemption is $5.49 million for single people. And $10.98 million if married. You keep spouting this off ignoring the 2x.
And if you own your own business that has an estate transfer value of over $11M and didn't maneuver it for exemption, you aren't smart at all.
Posted on 2/8/17 at 4:45 pm to Keeble9145
quote:
an estate of 4.5 mil really isn't that much in this day in age though, especially if you own your own business.
If Trump ends the estate tax, like he has proposed to do, would you still consider the whole life policy as valuable as you do now?
ETA: About to bail but good conversations here. Will continue to read this evening.
This post was edited on 2/8/17 at 4:46 pm
Posted on 2/8/17 at 4:56 pm to stevengtiger
It might lose some of its value but I still wouldn't get rid of it just because that was money that was just sitting in the bank getting .00000015% (exaggerating a little). 625% return on investment is good enough for me haha. The 80k in the grand scheme of things won't make or break my retirement savings and I can always cash it out if I want to invest in a business later on in life. I guess it's different with my age. If I was older I wouldn't put as much value into it.
Posted on 2/8/17 at 6:23 pm to Keeble9145
quote:quick hijack here/
Keeble9145
But why Is majority of your post followed by "haha" and "lol" , with a few thrown in the middle? Are you a female?
I'd hate to see your text log on your phone
Posted on 2/8/17 at 7:09 pm to AUtigerNOLA
quote:
Right. Plus if I die before then, they get the life policy plus whatever cash value was built up. So it isn't all for nothing. Big pay day for them
Better review your policy carefully, in the case of the most common type of whole life policies, your beneficiaries will collect only the face value of the policy, the cash value remains with the insurance company if you have not used it while you are alive. This is something that is misunderstood by many policy holders and usually not clarified when the policy is sold , almost by design.
Posted on 2/8/17 at 7:12 pm to Keeble9145
Sound like someone is fresh off a WL insurance seminar
Posted on 2/8/17 at 7:27 pm to EA6B
quote:
Better review your policy carefully, in the case of the most common type of whole life policies, your beneficiaries will collect only the face value of the policy, the cash value remains with the insurance company if you have not used it while you are alive. This is something that is misunderstood by many policy holders and usually not clarified when the policy is sold , almost by design.
False, I have one with State Farm and every year the face value grows along with the cash value. The initial benefit for mine is like 502 and by the time I'm finished paying it's like 517 and continues to grow.
Posted on 2/8/17 at 7:29 pm to EA6B
Every company's policies are different and work differently though. There is a reason State Farm is the number one life insurance company in the U.S though.
Posted on 2/8/17 at 8:28 pm to Keeble9145
quote:
quote:
Exactly. And I've got this until I'm 65. For more than 2x OP's value and 1/6th the cost.
So you're paying how much and for how many years?
$58.53 monthly. 1mil 30 year term
Posted on 2/8/17 at 8:30 pm to Keeble9145
quote:
False, I have one with State Farm and every year the face value grows along with the cash value. The initial benefit for mine is like 502 and by the time I'm finished paying it's like 517 and continues to grow.
Nothing I said is false, I never said most WL policies, not all, and you show also probably review your own policy, while you have a policy where the death benefit increase along with the cash value, your beneficiaries are only going to get the death benefit not both.
Posted on 2/9/17 at 12:17 am to Keeble9145
quote:
You must not be very good in math, a 10 pay at 8,000 a year would be a total investment of $80,000. 10 pay means you don't pay anything after ten years. So go ahead and tell me about that interest now
You are both horrible at math if you believe the numbers you have posted.
Posted on 2/9/17 at 12:51 am to Keeble9145
Common misconceptions dealing with universal life and whole life policy. Major difference if you have a policy that your cash value is added to your death benefit it's almost for sure a UL not WL.
Do you understand how insurance works with regards to interest rate, death benefit and cost of insurance? With an increasing death benefit you will have increasing premiums or the policy will not run to maturity
Good luck but you knew all this already.
Do you understand how insurance works with regards to interest rate, death benefit and cost of insurance? With an increasing death benefit you will have increasing premiums or the policy will not run to maturity
Good luck but you knew all this already.
Posted on 2/9/17 at 12:58 am to Keeble9145
quote:
There is a reason State Farm is the number one life insurance company in the U.S though.
By what metrix? State Farm is 8th in market share and is not a mutual company. Anyone who buys a cash value WL policy from a public company is being duped. You may as well buy a policy from AIG or MetLife. If you're using total premium State Farm doesn't even crack the top 10.
Posted on 2/9/17 at 7:00 am to Keeble9145
its not for debt... its for the income i wont earn b/c i've passed away.
its insurance not investment
its insurance not investment
Posted on 2/9/17 at 7:16 am to Keeble9145
The average person with children should really have a policy IMO. A modest term policy for when the kids are young isn't very expensive.
How many GoFundMe posts do I see where I shake my head thinking how come these people never bought insurance?
How many GoFundMe posts do I see where I shake my head thinking how come these people never bought insurance?
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