life insurance

[Ylen13]

Originally posted by: amnesiac
Here's some basic info:

- Term life: "Pure insurance" only. You pay a very minimal amount per year for 1-30 years to cover against death only. Good for high dollar amount coverage for little money. Decreasing term is good if you have a mortgage you are paying off and you want it paid in full when you die. (just one example)

- Whole Life: See wyvrn's explanation. In this case, dividends / interest are accumulated and added to the cash value of the policy , from which you can borrow from later if needed to pay off debts or whatever you want.

- Variable Life: See wyvrn's explanation, again. These are tied to the money market and can fluctuate depending on the performance of the economy.

- Universal Life: Here, the premiums you pay are "unbundled" and the interest/dividends applied for future premium payments. HEnce, you CAN accumulate cash value but at a lower rate. The main advantage is that this is the cheapest way of getting a GUARANTEED death benefit for life.

- Disability: Think of it as insurance for your income. If you are partially or totally disabled this policy can help replace part of the income lost from your inability to work.

- Long Term Care: This pays for any care you might need outside of the scope of normal health care, such as hospice and nursing home care. A very good thing to have if you are getting up in age.

If anyone has other questions I'll be more than happy to field them.

thanks for that,will need to talk to my parents to see what they actually want.

 

[Ylen13]

Originally posted by: CPA
Do they own their own business. If so, they could always take a look at a split-dollar insurance policy.

yes they owe their own business.

 

[godmare]

Originally posted by: amnesiac

Originally posted by: MercenaryForHire
One million dollars? Holy sh|t.

- M4H

One million dollars of term insurance is nothing these days.

Originally posted by: godmare
Uhh, term sucks.

Godmare, 99% of the time I agree with your posts but here you're just wrong. There's MANY good uses for term insurance because it is cheap insurance dollars getting a LOT of coverage.

I don't know a lot about life insurance, if that wasn't obvious enough already , but if you have term insurance and you lose your coverage for whatever reason, particularly if it's with an employer, you lose your coverage and whatever you've invested as well. With whole life you accrue interest with your investment and maintain your coverage when vested.
This is what I understand, am I incorrect?


EDIT:
Okay, from some of the above posts I've grasped a better understanding.
'Different strokes..." it seems

 

[wyvrn]

I don't know a lot about life insurance, if that wasn't obvious enough already , but if you have term insurance and you lose your coverage for whatever reason, particularly if it's with an employer, you lose your coverage and whatever you've invested as well. With whole life you accrue interest with your investment and maintain your coverage when vested.
This is what I understand, am I incorrect?

With term, there is no cash value. If you cancel the policy, you don't get anything back. However, term tends to have the cheapest premiums. So if you just want life insurance and put your investment dollars elsewhere, term could be for you.

Whole accumulates some cash value that will likely not be overwhelming. It can be a good option for people with other investment options. Unlike term, Whole Life policies don't expire (well unless you live to 110 or something like that), so can be advantageous if you're not sure when you'll stop needing insurance.

I think sales of whole life have gone down in recent years. Usually agents offer either term or some form of Universal or Variable Life. Typically the sales pitch will either be "buy term and invest the rest in IRA/Annuity", or "buy a bundled product like UL or VUL and take care of your insurance and investment needs in one fell swoop."

 

[JEDI]

Aflac..u know, that commercial w/the duck