any advice on purchasing life insurance, what's the difference....?

Question

between whole life, term, do I want to cash out?
I am the higher income earner in our family, we have 2 children a fat mortgage that neither one of us want to be paying alone if something should happen to the other..any advice would be greatly appreciated. thanks

Answer 1

What's the difference between the two? The obvious difference is the premium amount. For example, if you had a $100,000 coverage and you bought whole life, it would cost you around a $1000/year for a 30 year old. If this was a 30 year term, it would cost around $250/year for a 30 year old. That's a $750 difference!

Second difference: Whole life builds cash value, while term insurance is just pure insurance (such as car insurance). While cash value do grow tax-deferred, you can only access it by taking a loan from it. If you die, you lose all the cash value. If you invested your money separate from life insurance such as a Roth IRA, your investments will worth more than what is in cash value policy in the long run. Plus, if you die, your beneficiaries will get your investments.

You can conclude that term insurance is the best option to protect your family. Even if you outlive the term, you should have plenty of money in your investments. This only holds true if you invested since the time you got term insurance.

You are probably wondering how much coverage you need. General rule of thumb, its ten times your annual income. If you make $40,000/year, then you need $400,000 coverage.

Answer 2

I could sit here and give you a whole mantra on why term life is better, but I won't. It just is. Whole life is a ripoff. Of course, that's the one the insurance agent will try to sell you, because the insurance company is making loads off of you and pays the agent the big commission on whole life.
With term, it's cheaper and you're only paying for the coverage. Take the money you are saving over whole life and set it aside in a mutual fund. You'll be way ahead.

Answer 3

properly, there are countless. both maximum astonishing are: value - time period coverage is critically more cheap than entire existence, exceptionally in youar early years and coverage time period - how lengthy the price is locked in for. With time period, it would want to be everywhere from a million year, to 30 years, you %.. With entire existence, this is till you change ninety 5. So once you're 30, you may want to pay 10X as a lot for entire existence, as time period, for the subsequent 30 years - and not in any respect be ready to purchase ANY coverage once you're 60 by using well being causes. yet once you're 70 and procuring for existence coverage, that fee to procure once you've been 30, you nevertheless pay - and particular this is going to be more cheap than time period, for an identical coverage. this is why it concerns, a fashion LOT, to pick what precisely it really is you pick the existence coverage to DO for you. maximum human beings say, ok, I have 20 years left on my loan, and 2 children to work out by potential of school. If i purchase 20 year time period coverage, and do not die, i'm ok without coverage after that, because virtually all of my economic responsibility has been acheived. some human beings say, ok, yet we've a kin farm, and after I die, my children can ought to promote it to pay the sources taxes, and we are going to lose the farm. So perchance entire existence is what we choose, to pay those sources taxes.

Answer 4

Term is cheaper, with the price going up as you age. When you no longer need it - because the house is paid off and the kids are done college you just terminate it. Whole life is more expensive and has a cash value - which will seem surprisingly small in 20 years. Your chances of becoming disabled are greater than you chance of dieing - a policy to cover that might be better.

Answer 5

Buy a boat load of term. I am an wealth management specialist and i have term. YOu get a ton of coverage for very little cash. Insurance is meant to cover catastrophic loss....cash value or whole life is ok if you have no other tax deferred savings outlets...ask the agent who is telling you to buy this what his commission is (its 80+% of first year premium) You throw the money away with term but who cares...its 30 bills a month for a million or so depending on age....you do the same with your car insurance but no one cares aobut that.

Best part of that long winded load of bullshit by the guy below me is that I am sure he, at one time in his "financial planning" career worked for a company called NML or the eqvivalent, bought whole life himself and has very little cash to his name. Ask him how long it takes for any of that cash to build in whole life and where the "break even point' is. I dont sell insurance, I simply fix for the ultra high net worth what pesky insurance sales people ****** up in the fast. I would get myself whole life, but something I will have no use for in 30 years. Lastly, who wants anything with an internal rate of return of 2.3-3.8% over the long term....its worse many money markets. WHole life is crap.

"trust is the best option to trust" i.e. the last poster on this topic....he is completely right. the dildo from primerica... despite his astute sounding nature, has little to offer other than the bullshit they taught him when he was a trainee. im surprised he has not called you to sell you something. thats all they do is screw up good things. i have one calling me on a daily basis, even tho i told him i do it myself. its literally ultimate desperation. listen to the last fellow. he knows his stuff. "last fellow" you look me up....i have some things we should talk about.

night all. put this primerica bullshit to bed.

Answer 6

I have attached a link to the Florida Department of Financial Services guide to Life Insurance and Annuities.

Each state has an agency that regulates insurance companies. They almost always have comsumer guides. You may wish to look for your state's.

Answer 7

Hi i work with Primerica Financial Services a marketing division of Citigroup. We can offer you a complimentary Financial Needs Analysis and help you find the right kind of Life insurance and offer it to you at low prices, we also help you retire early and pay off your home early if you choose to. you can go to www.primerica.com to find a Primerica in your location.
check it out and speak with a representative,you wont regret it.

Answer 8

stick with term whole life is a rip off. they tell you whole life because they make alot on your money. i say go term a long enough term that your kid will be raised that's what ins. is for .

Answer 9

Thank you, bright future penguin. At last, some sense among all of the crap!

Answer 10

Hi, your friendly insurance guy here, again!

Before I get to answering your question, two quick things:

1. A lot of the posters in this thread trash insurance reps. Ignore them. Just like any job in which commissions are paid, one must carefully select who to work with. The kind of blanket condemnation of insurance reps seen in these posts are ridiculous and unwarranted. It's like saying you'll never find anyone honest no matter how hard you look, and that is just not true. Use your judgement just like you would when taking your car to the shop. Auto mechanics can pad your bill and rip you off, but that does NOT mean most mechanics are thieves. So it is with insurance reps. Most do their job because it feels pretty good to know the kid in the picture in your client's wallet is going to have a house to live in even if daddy or mommy dies.

2. A lot of folks shout "BUY-TERM-INVEST-THE-REST." Ignore them, too. The truth is that there are several kinds of life insurance and each has its place. For MOST consumers, Term IS the way to go. However, nobody here has asked you enough about your financial situation to know if you fall into that category or if you are one of the rare folks for whom another form of insurance is the best fit. But unless someone knows a LOT more about your financial situation than you disclosed in this question, he or she has ZERO ability to determine for sure what the best product for your situation is. Shame on them for issuing blanket statements. And what the "buy term, invest the rest" legions usually fail to mention is that in most cases, people "buy term and SPEND the rest" instead of investing or saving. Don't let people just chant a mantra at you without backing it up with a reasonable explanation of why it applies to your specific situation.

Ok, so here's the answer to your actual question:

Differences between term and whole life:
Term insurance is called "pure insurance." It is a straight bet between you and the insurance company. You are betting you will die. The insurer is betting you will live. This kind of coverage is designed to last a specific period of time (the TERM of insurance.) Usually it can be renewed past that point, but at an ENORMOUSLY increased cost.

For situations like "I want to make sure the house is paid off if I die before the mortgage is done" or "I want to make sure my kids college is paid for if I die" TERM is your best bet. Those are risks with definite, finite time periods you need to worry about.

Whole Life insurance is designed to last till you die, no matter how far in the future that may be. It will tend to cost 8-12 times as much as the same face value of term insurance. Properly designed, its face value will increase over time at a rate that approximates inflation. It has a cash-accumulation vehicle as well.

What Whole Life is NOT:
It is NOT an "investment." No life insurance is an investment. There is one type (Variable Universal Life) that has some properties that are investment-related. But Whole Life is NOT an investment. It's actually against regulations for us in the industry to even describe it as an investment. The cash value tends to grow a lot slower than actual investment products like mutual funds. On the plus side, its cash growth is guaranteed. That's still not a good reason to sink money into it in hopes of high growth.

Good reasons for using Whole Life include:
Funding buy-sell agreements
Funding certain executive benefit plans
Sheltering assets from certain kinds of seizure (it's not especially easy to take someone's cash value life insurance away from them, compared to, say, suing their bank accounts out from under them).
Transferring wealth when you are at an age when Term Life is not available. (Usually the types of Temr insurance you can get begin to disappear starting at age 50. Most insurers won't let you buy 30-year term after that age. Most won't let you buy 20-year after age 60, etc.)

Mortgage protection is generally NOT a good use for Whole Life. It's usually WAY too expensive for that role. Ultimately, you have to decide how insurance fits into your financial situation and life circumstance. I'll close with these suggestions:

1. Always START with term insurance as the baseline. It is the least costly. See what Term can do for you before exploring other options.

2. Always focus on getting the right face value (amoutn paid on death) before worrying about what TYPE of insurance you want. Believe this: If you die prematurely, your survivors aren't going to ask "what kind of insurance was it?" They are going to ask, "How much did you have?"

3. Get a local agent. The premium any given insurer charges will typically be identical regardless of whether you buy direct or use an agent. (Mostly you'll HAVE to use an agent, but there are exceptions). Since the cost will tend to be the same, it's good to have someone local you can go visit in person to make them fix any problems, file papers for you, help you fill out forms, etc. that kind of help doesn't work well by phone or e-mail. Once you buy through an agent, you have the right to make that person bend over backwards to help you with your insurance.

4. Don't REPLACE existing insurance with new insurance unless you are absolutely sure it is in your best interest. Reasons to replace could include finding a significant cost savings for equally good or more insurance; or discovering the type you have is inappropriate to your needs. Never replace it just to replace it. That just tends to cost the client money.

Feel free to contact me with questions. I wish you good luck in your insurance pursuits and in life.