I work in the insurance industry and I'm very familiar with the various types of insurance.
First, with regard to the posts by acesup, ignore them because they are pure drivel coming from an insurance salesman. I won't go into all the different types of insurance policies (universal, whole life, term, minimum return etc etc etc) and the myriad of options available from different providers. The first thing you should do is decide if you need insurance or not. Insurance is meant to be a source of funds to replace your income or contribution in case something happens to you. Who's depending on your income? If someone depends on your income, you need to have insurance in case something happens to you. If nobody is depending on your income, there is no reason to get insurance. Whether you have debts or not is irrelevant, unless someone is a co-signer, in which case that falls under "someone depending on your income".
Whole life is basically a mix of investment and insurance. Except for very very specific circumstances, it simply doesn't make sense to mix insurance with investment in one vehicle. If you decide you need insurance, get term life to fit your needs, then use the additional amount you would have spent on whole life, and invest it for the long term. Ultimately you'll be in the best position that way.
First, with regard to the posts by acesup, ignore them because they are pure drivel coming from an insurance salesman. I won't go into all the different types of insurance policies (universal, whole life, term, minimum return etc etc etc) and the myriad of options available from different providers. The first thing you should do is decide if you need insurance or not. Insurance is meant to be a source of funds to replace your income or contribution in case something happens to you. Who's depending on your income? If someone depends on your income, you need to have insurance in case something happens to you. If nobody is depending on your income, there is no reason to get insurance. Whether you have debts or not is irrelevant, unless someone is a co-signer, in which case that falls under "someone depending on your income".
Whole life is basically a mix of investment and insurance. Except for very very specific circumstances, it simply doesn't make sense to mix insurance with investment in one vehicle. If you decide you need insurance, get term life to fit your needs, then use the additional amount you would have spent on whole life, and invest it for the long term. Ultimately you'll be in the best position that way.
Big yes.... It's cheap now & you don't want to leave your family with your loans / debt. Heck, it costs 8k - 10k just to bury someone today. Also consider that you are assuring you have insurance when you may need it later down the road. I've seen people develop illnesses that are young and then you can't get life insurance or you'll pay through the nose.
Of course if you are self centered and don't care about the future, the answer is no.
Of course if you are self centered and don't care about the future, the answer is no.
Don't waste your money. The point of life insurance is to give yporu dependants money to live from when you die. Since you have no wife or kids who depend on your income you are throwing money away by buying life insurance now.
DrPizza
Administrator Elite Member Goat Whisperer
ponyo
Lifer
- Feb 14, 2002
- 19,688
- 2,810
- 126
Because he makes a higher commission when he sells whole life insurance
They have all sorts of gimmicks to make it more appealing - you can loan money to yourself, etc. I have never heard a true financial advisor give such advice - only insurance salesmen who prefer the title of "financial advisor." Essentially, whole life policies are no different than purchasing a term policy and investing the difference. Except that with the whole life policies, your options are quite limited as far as the investing goes.
Here's some advice coming from a person who has nothing to gain by convincing people to buy one type of insurance vs. another type: As stated by multiple people above, there's a time for life insurance. And, you select the amount of life insurance based on the needs of the family you'll leave behind. But, you buy term life insurance. You *this is the important part* also invest a portion of your income. By the time you're 65 and term life policies have become expensive, you should be ready to retire with few debts, and plenty of money in the bank to cover final expenses, etc. Thus, you should no longer need life insurance at that age.
Think about it for a moment. Look at those nice tall shiny new buildings the insurance companies are building. The more money you're giving them (and whole life is more expensive than term), the more money they're going to make from you. They're not in the insurance business merely to provide a service to you... they're out to make a profit. Personally, I think you can do better buy shopping around, rather than being forced to purchase your life insurance policy and do your investing through the same vehicle.[/quote]
ok well i was going to stop but i guess some people are just uninformed....
there are three ways you can get your info
1. experience-which i do everyday
2.hearsay-what is popular in the news right now(buy term invest the rest)
3.an article-usually in a magazine that was paid to write that article
so how is term a rip off... well your paying for something they is a temporary service kind of like cell phone service or cable tv... it has its place like i said.... but at the end of the day you have no cash value and also you get no dividens(return on your money) ... also if you have any problem with these (insurance sales people) that you hear so much about file a complaint if they did any wrong doing and get their license stripped let the courts decide... I have my CFP anI seld i actually dont sell to much life insurance l annuities they are a great investment... but like i said people now adays are on that slogan buy term invest the rest cause we are still in a bear market and this always comes up when we are in a bear market(for obvious reasons) ALSO WHAT DO I HAVE TO GAIN ON THIS FORUM BY TELLING YOU TO BUY (WHOLE LIFE) I HAVE NEVER AND PROBABLY WILL NEVER MEET ANY OF YOU SO I WILL NOT BE SELLING YOU ANYTHING... i LOVE PEOPLE WHO READ MONEY MAGAZINE AND WATCH CNN AND THINK THEY KNOW WHAT THEY ARE TALKING ABOUT... THESE ARE THE SAME PEOPLE I SEE WHEN THEY SHOULD BE RETIRED WORKING AT THE LOCAL SUPERMARKET AND WALMART... NOT CAUSE THEY WANT TO WORK ITS CAUSE THEY HAVE TO WORK
[/quote]
LOL. Not only you sell crappy whole life for commission, you sell crappy high commission annuities and promote them as great investments. :disgust:
Why do you say that? Annuities generally can be replaced by a much better option. They're only good for people who need special features offered with certain annuities because they're an insurance product.
Yes you are an insurance salesman, yes you stick to the highest commission items. You're probably also in violation of the CFP Board standards and practices.
im getting some from work, though i dont want it, im just gonna set it up so if i die my friends have to use it for a huge party, and then dump my body in the alley.
Is your dad the beneficiary?
I think your dad is trying to have you killed!!! :Q
Cheers,
Aquaman
I think your dad is trying to have you killed!!! :Q
Cheers,
Aquaman
Has nothing to do with self centered or not caring about the future, you have to approach it as a straight value proposition. The OP said his parents are not co-signers on his loans, so they are of not affected by loans. Further, parents would not be affected by any debts that OP leaves behind at death, so that's not an issue either. Bottom line, you only need insurance if someone depends on something you contribute (money or otherwise). Insurance is there to provide that contribution if you're not there. If nobody is dependent on you, insurance makes no sense.
"Essentially, whole life policies are no different than purchasing a term policy and investing the difference. Except that with the whole life policies, your options are quite limited as far as the investing goes."
I have to respond to that statement.
With the whole life policies that 99.9% of people have, if they die, the beneficiary gets the face value of the policy only. The insurance company keeps the cash value. If you don't belive me and you have a whole life policy then check it out.
The investment part is something your beneficiary will not get so you are paying extra for nothing.
The ability to take the cash value out for a loan isn't a good deal either. You have to pay it back plus intrest. Think about that for a minute. You have to pay intrest to use your own money. How is that a good deal?
And if you die with an outstanding policy loan they reduce the death benefit by the loan amount plus intrest.
With buy term and invest the difference your beneficiary will get both.
And if you live through the term then the investment is still yours so you are much better off than going with whole life.
Before anyone asks, yes, I can sell life insurance and I am licenced. And yes I work for a company that does not sell whole life insurance.
The company was started by a guy who watched his mother struggle after his father died and was only insured by a crappy whole life policy.
He later even worked for an insurance company for a while that sold whole life so he knew it was a ripoff. He then started a new insurance company that doesn't rip people off or overcharge and we only sell term. And we do not advertise.
In training I've seen lots of horrible policies, and there are bad term insurance policies too. One they showed us last week was shocking to say the least.
A couple had term insurance that renewed every 5 years. The price went up each renewal, but at first it didn't seem too bad. What they didn't know was that near the end of the term when they were about 60 the total cost of the policies would be about $21,000 each year. No, that is not a typo. Clearly that is a ripoff and something they would have had to let lapse because of the excessive price.
Not all term is the same and some is a huge ripoff. You need to pay attention to details. If anyone has other questions you can PM me.
The company was started by a guy who watched his mother struggle after his father died and was only insured by a crappy whole life policy.
He later even worked for an insurance company for a while that sold whole life so he knew it was a ripoff. He then started a new insurance company that doesn't rip people off or overcharge and we only sell term. And we do not advertise.
In training I've seen lots of horrible policies, and there are bad term insurance policies too. One they showed us last week was shocking to say the least.
A couple had term insurance that renewed every 5 years. The price went up each renewal, but at first it didn't seem too bad. What they didn't know was that near the end of the term when they were about 60 the total cost of the policies would be about $21,000 each year. No, that is not a typo. Clearly that is a ripoff and something they would have had to let lapse because of the excessive price.
Not all term is the same and some is a huge ripoff. You need to pay attention to details. If anyone has other questions you can PM me.
kranky
Elite Member
- Oct 9, 1999
- 21,015
- 139
- 106
You are really a CFP? How do you live with yourself? Or do you not even realize how inappropriate annuities are for the vast majority of people, let alone coming up with that weak and ineffective defense of whole life? To crow about cash value and dividends, and completely ignore the cost difference (which is where the money comes from for the dividends and cash value) is just being disingenuous.
Here's how whole life dividends work: you overcharge for the policy, then give some of the money back later. Do you buy products like that yourself?
I'd have a lot more respect for you if you just said you don't believe your own BS, it's just what you have to say to earn a living. If you truly believe what you've said, I feel sorry for your clients.
pontifex
Lifer
- Dec 5, 2000
- 43,804
- 46
- 91
say you've been paying for life insurance for several years and don't need it (no wife or kids). If I stopped paying, what happens? I don't understand how life insurance works in that aspect. Am i paying for a service, for example, say i pay $40 a month and my benefactor gets $500,000 if i die or is it like i'm putting this money towards it, like savings?
I'm thinking its the 1st option but like i said, i'm not sure.
I'm thinking its the 1st option but like i said, i'm not sure.
That is correct. Also, some whole life policies have a provision where if you don't make a premium payment they automatically pull the premium from the cash value, if there is any.
If this is the case then you will still have coverage until the cash value runs out and then the policy will lapse.
Of couse this depends on when you bought the policy. With whole life policies the insurance company keeps all money for the first 2 or 3 years. No cash value at all builds during these first 2 or 3 years.
no...other than maybe a $10000 policy to cover your funeral or something, and only if its cheap/free (work)
OP benefitted from the co-signing and used the money. It would be very sh1tty of him to leave his dad (or whoever) with the debt if the unfortunante did occur and he died. Life insurance doesn't exactly cost a lot when you buy an amount that would cover debt. I pay about $1.50 a month.
If you are thinking about life insurance at the age of 18, then I kinda want you to... well... die.
TRENDING THREADS
-
Discussion Zen 5 Speculation (EPYC Turin and Strix Point/Granite Ridge - Ryzen 9000)- Started by DisEnchantment
- Replies: 20K
-
Discussion Intel current and future Lakes & Rapids thread- Started by TheF34RChannel
- Replies: 23K
-
Discussion Intel Meteor, Arrow, Lunar & Panther Lakes Discussion Threads
- Started by Tigerick
- Replies: 12K
-
Discussion Speculation: Zen 4 (EPYC 4 "Genoa", Ryzen 7000, etc.)- Started by Vattila
- Replies: 13K
-
Facebook
Twitter