I want to TALK about LIFE INSURANCE.

[LuckyJB]

We all know atleast some may know....how much talk there is about getting Life Insurance or not....Here is my take on it...

#1 PROTECTION
Isn't the whole idea about Life Insurance about Protecting yourself in case YOU DIE. If your the breadwinner of the house or not...and you have Lots of responsibilities (BILLS RIGHT? a mortgage, cars, kids,college, taking care of your parents, etc..etc...etc!) wouldnt you like to know that your family will live on...be taken cared of...ofcourse with your death benefit.

a. its just another bill?
uh no...we get insurance for our cars, a piece of metal...our phones....our wifes wedding rings...but we dont insure ourselves...i dont get it. I think my families more important to me know they will live on stress freee...and taken cared of....even if i dont have a lot of responsibilities.

b. Im to YOUNG, I dont need it....i dont have kids or a family. I will get it when im older.
Heres the thing with this...and this is what I feel is soooo important....When your young its CHEAPER. And if you waited and you end up getting cancer, diabeties, asthma...etc...etc..sick...etc...Your either NOT going to qualify EVER or it will just be to expensive..
heres some personal examples to prove my point:
Im 24 and I rated preferred elite and pay 11 a month for a death benefit of 150K that my family will get...and I have zero responsibilities.
My sister is 20 and she pays 7 as preferred elite with 100K..and a childrens rider for her son.
My mother pays $86 at age 48 b/c they found tobacco in her.
I am currently try to get 2 folks age 76 and 82 insurance...enough for them to be buried...10K each or so...which is very expesnive...thats if I get them to qualify.

Understand that one day you will have responsibilities, or a family...and its important to protect yourself also against the $ we dont have....especially when life throws us unexpected events such as a death in the family. I have experienced car washed and rasining $ for a loved one....at least you can protect yourself just in case..

#2 Some other thoughts.
a. Asset Protector - Irs doesnt tax your death benefit.
b. Cash Value potential - I pay more into my policy for cash value purposes, tax free purposes, long term purposes..., non public record purposes.
C. Temporary or long term - either one is fine depending on your situation...I have long term.

[tripods68]

Spoken like true insurance Agent

I, too once sold NOT Life but Term insurance during my college years part time. In contrast, Life Insurance to me does no good to people (because of higher cost and less protection amount) when people could buy cheaper Term Insurance with much higher protections and invest seperately towards self-directed investment accounts like an IRA. The low yields earn on cash value insurance usually warrants the benefits of having a seperate investment accounts.

[disneysteve]

I agree with much of what you said, but term is the way to go. I don't care if the policy expires before I do. As you get older, your need for insurance gradually decreases. In fact, I've lowered my coverage twice in 10 years. Debt gets repaid. Personal assets grow. Children get older and closer to adulthood. I'm 43 now. By the time I'm in my mid-50's or about 60, I don't anticipate needing any life insurance, or maybe just a relatively small amount compared to what I carry currently.

The fact that folks in their 70s or 80s need life insurance to cover burial costs is a sad statement. Surely, by the time I'm that old, I will have more than enough in personal assets that my wife or family can tap to pay for burial.

The purpose of life insurance is to replace lost income/earning potential. If I die tomorrow, my wife will need money to pay living expenses and household bills and continue to save for our daughter's college education and her own retirement. When I'm 60, our retirement will be pretty well funded and our daughter will be grown and off on her own. They'll be no need for insurance at that point.

[LuckyJB]

Good responses....when you say "I dont anticipate needing any life insurance"...its obviously not for you. Its a good way to pass down wealth to your families....its a wealthy mans concept...why not use Life insurance for that use...
And yes when you are in your 60 you say you will be pretty well funded....But what about after 60 and something does happen...its not just for your daughter...your wife....or even any other future family add ons....

IM just saying....just a point.....using Life insurance to pass weatlh down to your future generations...if done correctly ofcourse...

thanks tho

[terry1156]

Oh man, that is probably the worst advice I've ever heard. Insurance is for insurance (protecting assets in case of an unfortunate incident), not building wealth. You can earn much better rates investing than putting money in insurance. Any insurance agent that suggests insurance is a good investment as you have done is one insurance agent you should be running away from as fast as you can.

[LuckyJB]

lol im not saying you shouldnt go out and not invest.....I never said insurance is a good investment...I have my views on it and have done my research. When I recieved a large death benefit from a family member I invested it into a good investment which will in turn be nice upon retirement or so....
Yes insurance is for insurance PROTECTION that is #1........you can build wealth like the way I am with the benefit I got....ok....

not giving bad advice....you can whatever you like...just shooting out what I have done.

[LuckyJB]

I think it's one of the best ways. It's not a common concept so most people with some financial literacy dissagree or think it's wierd. It's definitely not the BEST way and it's definitely not the ONLY way to do it. If it's the ONLY product you're licensed to sell then it's easy to get caught up in marketing it as if it were the holy grail of financial products, even though it is damn close. It just depends on the person and their specific situation.

[sweeps]

Any insurance agent that suggests insurance is a good investment as you have done is one insurance agent you should be running away from as fast as you can.

Well said.

[HNorton]

Many of the buy term and invest the difference folks are WAY more investment and financially savvy than the rest of Americans. The ugly truth is that when faced with investing the difference...most don't. Also people tend to accumulate more debt as they age vs. paying it down.(just the facts) With that being said I'm not against permanent insurance. Universal life provides permanent protection and it's not too much more than Term. If you are disciplined enough to buy term and invest the difference it is a better way, but that represents a fraction of the populus.

[sweeps]

The ugly truth is that when faced with investing the difference...most don't.

Which is exactly why we can never get rid of Social Security.

[LuckyJB]

Many of the buy term and invest the difference folks are WAY more investment and financially savvy than the rest of Americans. The ugly truth is that when faced with investing the difference...most don't. Also people tend to accumulate more debt as they age vs. paying it down.(just the facts) With that being said I'm not against permanent insurance. Universal life provides permanent protection and it's not too much more than Term. If you are disciplined enough to buy term and invest the difference it is a better way, but that represents a fraction of the populus.

well said

[sweeps]

So, the argument for whole life insurance is it's better than blowing your money on useless crap?

Good reading: Term or Whole Life? (Insurance: Personal Finance) at SmartMoney.com

[gamecock43]

question...when you say young people pay $7-24 dollars a month for insurance vs older people who pay up to $80 a month...do the rates change as a person grows older? Do people in their twenties pay $20 and when they hit 31 yrs they get a new bill for $40? or do you suggest youngstersget in early because they will be paying the same low monthly bill their whole lives?

[terry1156]

Many of the buy term and invest the difference folks are WAY more investment and financially savvy than the rest of Americans. The ugly truth is that when faced with investing the difference...most don't. Also people tend to accumulate more debt as they age vs. paying it down.(just the facts) With that being said I'm not against permanent insurance. Universal life provides permanent protection and it's not too much more than Term. If you are disciplined enough to buy term and invest the difference it is a better way, but that represents a fraction of the populus.

Which is of course, a poor way to handle your finances. Since this is a site specifically to help people with finances, it makes no sense to recommend to do something that is stupid to do. I restate - insurance is for insurance, not to make money. If you try to make money with it, you are either doing insurance fraud or making poor money decisions.

[tripods68]

Yes. The actuarial valuation premium is based on life expectancy. The older you get the higher premiums. The rates is also determine based coverage amount and how healthy you are.

If you knew you were going to be married in the short few years, buying death protection while young might be a good choice. However, a more practical solution would be buying short term disability instead, since younger person is likely to get into an accident than actually die (statistically speaking). That's just me. Otherwise put your extra money towards paying down your debt or saving more towards retirements.