what kind of life insurance I should buy?

Question

A salesman told me to buy whole life insurance from massmutual? He said I can take money out after 10 or 20 yrs when I get old? If I pay 1500 very year, so after 10 yrs, that means I can take 15000 plus interest and dividends, is that right?

so when take I the cash value with out pay interest or something esle or I have to pay something anyway, except the beneficiary take the money after I die.

Answer 1

It could be right, but to be sure, I suggest that you get a second opinion from another company. Ask your family or friends to recommend another sales person and have them give you a similar presentation. I am in the life insurance business in Canada, so not sure about best rates in the US. However, I would always get a second opinion. Remember, sales people are 100% paid by commissions based on sales, so they're very motivated to clinch the deal. Make sure what you're buying suits your needs. Also, whatever you buy, make sure that you get a copy of the insurance policy to be sure about the fine points, like being entitled to interest and dividends (some policies only refund the amount you paid). Good luck!

Answer 2

They type of insurance depends on your needs. What do you want the policy to do for you?

From your posting it seems that your main attraction to this policy is the cash value. If that is indeed the case, you should look into an investment and not a life insurance policy.

However, if you need the insurance protection and want the option to invest as well, look into a Variable Life Policy. Do keep in mind that there are many agents out there that will show you unrealistic returns and largely inflated values simply to make the sale. Be wary of this and ask to see an illustration at 8% or 9%, Most likely the numbers will not look as attractive, but will be more realistic!

The big attraction to these policies is the tax free income stream. However, this is only achieved by overfunding the policy and is usually done by highly compensated individuals that have maxed out their other means of tax deferred growth.

One other factor that is appealing to a VUL is the ability to stop paying premiums after a specified time period and still maintain the coverage. This is achieved by using the accumulated value to pay the cost of insurance.

Another consideration to withdrawing the cash value of a policy is the potential tax issues. While the cash accumulates tax deferred, if you take out the cash value and the policy lapses as a result, you will be taxed on the gain within the policy. Depending on the amount, this can be quite large.

I hope this helps.

Dawn

Answer 3

The type of life insurance you should buy depends on your own specific needs.

Look at your question - You say a "salesman" told me - That's just it, it was a salesman trying to make a sale.

Take your time before you buy. Consider all of your options. Learn about your options before you make a choice.

One web site that provides good information about life insurance is http://www.iii.org - They have a complete library of life insurance articles that explain how and why people buy life insurance, and what type might be right for you.

Don't let pushy salesman try to force you into buying a life insurance policy just because they want to make more money off of you.

Also, why would you consider life insurance an investment? Life insurance is to protect your family in case you die.

The insurance company just takes that money you pay in premiums and invests it themselves (after taking out the insurance expenses) and they pay you a smaller return on the whole life policies. Why not buy term life insurance and invest the remainder yourself in secure government bond funds or something where you receive the full return of the investment?

Maybe you should speak with a certified financial planner to help you in choosing a complete financial plan including investments and life insurance to make the most of your money and get the best protection for your family.

I hope that helps. Best of luck to you.

Answer 4

If you have a term need (you know exactly how many years you need the insurance) buy term insurance.

If you have a permanent insurance need, buy permanent (whole life, universal life, variable universal life)

The reality is that most people never collect a dime from term insurance (most companies report around 3% or so). Yes, it is less expensive when you are young. However, as you get older, term premiums skyrocket and you may not be insurable anymore. By the time you are most likely to collect, you usually either cant afford or qualify for term. Add ten/twenty years to your age and see what the term premium would be then....usually pretty ugly.

I want to address Spocks answer. Completely ludicrous. Agents typically make the same percentage on term as they do permanent. The agents commission should have ZERO impact on your decision. Buy what you need.

THE MOST IMPORTANT THING YOU CAN DO....find an advisor that you completely trust. If you trust them and value their opinion and they have conviction, do what they recommend. You are paying for their advice...make sure you get it.

Answer 5

Do not, Do not buy Whole life or any other cash value insurance, it is a rip off and a scam, buy term insurance and invest the difference in the premiums you be much happier with the situation and much better off.

Whole life policies you have to borrow your cash value and pay interest to the insurance company; you may not have any cash value in your policy for 1-5 years; you get a very low rate of return in the cash value; and when you die the insurance company keeps the cash value. So why pay extra for the cash value if you don't get it anyway. Every leading financial publication says buy term insurance and invest the difference. I can give a company recommendation but I won't do it here, if you want it email me and I will tell you.

Answer 6

whole life is the salesman's dream sell -- he makes the highest commisson rate on the biggest fee.

and the figures you suggest are not true. if the salesman told you those specific figures [get all your money back PLUS 'interest and dividends'] he lied, so you'd best RUN.

Every insurance contract states right in it that only the written materials are claimed correct by the company -- the implication is that everything else the salesman tells you is possibly 'mere sales puffery' [which means a lie].

***
"Term" insurance is the cheapest variety. It includes no hidden savings products and has no residual value. You'll find that term is far cheaper per 100,000 coverage than ohter forms -- half or less is not uncommon.

What you do after your children are grown and you have income and assets is stop buying any insurance.

***
Btw, the myth that children are harmed by growing up poor is exactly that -- a myth. Plenty of kids grow up with only one parent who works full time and come out just fine.

So what if the money is a bit tight? Understanding the real life truth from an early age combats silver-spoon-in-mouth disease and leads to a lifetime desire to work and get ahead. Pretty darn useful from where I sit.

Answer 7

This "nice lady" at church of all places is making a fortune off of you if you are interested. You need to insure yourself, not your kids. They are not the breadwinners of the family are they? You insure the breadwinner, so if that person dies, the rest of the family has money from a policy to continue a hopeful normal life. Also, a whole life policy is something you pay for your whole life, and it can cost 5-10 times as much as term per year for the same coverage. You are tossing away money so needlessly I am amazed.

Answer 8

No, that is not correct.

Whole life insurance builds cash value because in the early years of the policy life, you pay more than it costs to provide protection, and as you age, the premium remains the same, but protection cost rises.

The amount of the premium that is not used to provide insurance protection is invested. The cash value grows at a stated amount, and is guaranteed by the company. Your agent can give you a print-out showing growth of the cash value. Growth is typically slow douring the first 10 to 15 years of the policy, and as interest mounts, it grows faster for the next 20 to 40 years. Whole life policies are designed to have cash value equal face value of the policy when the insured is 100 years of age, at which point the policy is deemed mature, and the company delivers a check for the face amount of the insurance to the policyholder and the policy ceases to exist.

As for taking money out of the policy's cash value, that is something that should be done only as a last resort. This is basically borrowing money and it will have to be repaid with interest, or the cash values will not grow at the planned rates. At the very least, don't touch the cash value until you are ready to retire and use it for a retirement income.

I am a great believer in whole life insurance. For a majority of people, it is the only investment they will ever make.

People who push term insurance claim that older people do not need as much life insurance as younger people do. BULL! If anything, older folks need life insurance more than young folks. Think about the rising cost of hospitalization. Do you really want to leave your widow and children with a crushing burden of hospital bills?

I know nothing of Mass Mutual, so I'd suggest you get quotes from several different companies. Ask to see print-outs of the cash-value and living benefit options. It is a good idea to have insurance equal to at least five years of your income to protect your family. Be sure to keep your insurance coverage updated (this might be a good place for using term insurance), it would be most bothersome for your widow to discover that though you ended your life with a six figure salary, and bills to accompany the salary, your insurance protected you with five times your first year salary of $30,000.00.

I don't know where you are located, but you might want to check into Ozark National Life's life insurance and investment programs. I worked for them for a few years, and I am still a customer. You can get contact infor for an agent near you at: http://www.ozark-national.com/

Answer 9

How long did the agent spend with you? Did he even meet you face to face, or did he just give you some quotes over the phone? Any agent who gives you balaket advice on this site without speaking to you directly should be avoided. You need to be sure that ANY insurance plan fills as many needs as you wish to afford. Do you want a plan that can provide a nest egg when you grow older, or do you just want insurance in case you pass on early? Do you wish for the insurance to cover any disability or just your life? You need to speak with your agent and decide together what you need and then what you wish to afford. I have clients all of the time ask me for quotes on certain things, but after a 30 minute conversation, we find out that they need LESS than what they asked for. You should have an agent who wishes to help you and not yourself. Good luck.

Answer 10

My take is that you should look at LIC. Your money is completely safe and you can enjoy a much higher rate of return. If you'd like to know more info, please email me at [e-mail]

Remember the benefits of LIC: higher return, tax free savings and complete risk coverage.