Thinking about buying whole life insurance. Confused on how it works.

fuzzybabybunny

Moderator<br>Digital & Video Cameras
Moderator
Jan 2, 2006
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So I figure that at 25 it would benefit me to start buying life insurance and lock in a low rate while I can. I don't want to wait until I'm older and forced to have a higher rate.

I'm looking at a policy from Guardian Life Insurance, a type of participating life insurance that pays dividends and supposedly acts as a retirement vehicle as well. I'm in preliminary talks with my financial advisor and will get more details next week, but I'm curious now to know how it works.

Anyone else have whole life insurance? Can you comment on things you can do with it, like using it to act as a retirement device?
 
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Jeeebus

Diamond Member
Aug 29, 2006
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There is a wealth of info available if you just google "whole life vs. term insurance" - and it's probably much more helpful than anything anyone here can tell you.

If you're looking for cliffnotes, the general consensus is that whole life insurance is not worth the hefty premiums you pay and that you're much better off getting term insurance and investing the difference. Your insurance agent likely won't tell you this, however, as they get a huge, front-loaded payment in selling you whole life.

Read up. There's no right or wrong answer - but you should REALLY know all the differences before buying one or the other.
 

Ghiddy

Senior member
Feb 14, 2011
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I didn't know life insurance could also act as retirement vehicle. How does that work?
 

GuitarDaddy

Lifer
Nov 9, 2004
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Whole life insurance is a scam.

Your much better with term life and investing the difference in premiums as was stated by a previous poster.
 

chusteczka

Diamond Member
Apr 12, 2006
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Insurance is not an investment vehicle.

Do you have debts that will need to be paid if you die?
Do you have dependents that will need money to live on if you die?

Anything more in regards to life insurance is unnecessary.
 

blinblue

Senior member
Jul 7, 2006
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Get term life, invest the difference in an IRA, come out miles ahead. If you are young and healthy, term life is dirt cheap

Also, if you die, your investment in whole life disappears, they will only pay out the death benefit and keep the investment portion for them. Whereas if you die with an IRA it goes to your beneficiary.
 

Capt Caveman

Lifer
Jan 30, 2005
34,547
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Get term life, invest the difference in an IRA, come out miles ahead. If you are young and healthy, term life is dirt cheap

Also, if you die, your investment in whole life disappears, they will only pay out the death benefit and keep the investment portion for them. Whereas if you die with an IRA it goes to your beneficiary.

He doesn't need term life unless his parents need money to pay for his funeral.
 

ProfJohn

Lifer
Jul 28, 2006
18,251
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As a single person with no kids I don't see the point in life insurance.

Life insurance is mainly to help those that are left behind in case you die.
 

Rumpltzer

Diamond Member
Jun 7, 2003
4,815
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1) Don't do it.

2) If you do it, and the sales guy asks you for the phone numbers or email of 3 "friends" who they might contact to make their sales pitch; don't sell out your friends.

3) If you do sell out your friends, it's within their right to kick you in the balls... repeatedly.

You hear me Scott?! I'm talking to you!!!
 

Capt Caveman

Lifer
Jan 30, 2005
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If his financial advisor is trying to sell him whole life insurance, time to find a new financial advisor.
 

Jumpem

Lifer
Sep 21, 2000
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As a single person with no kids I don't see the point in life insurance.

Life insurance is mainly to help those that are left behind in case you die.

You at least need enough to cover your funeral expenses.
 

JimW1949

Senior member
Mar 22, 2011
244
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I agree that a single person with no dependents does not need life insurance. However, having said that, to have a term life insurance policy large enough to cover burial expenses is not necessarily a bad idea. If he has enough money saved up to cover the cost of the funeral, etc, then OK, he doesn't need any life insurance. But if he doesn't, then a small term life insurance policy will certainly be a benefit to whoever takes care of the funeral arrangements.
 

Vic Vega

Diamond Member
Sep 24, 2010
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They take your money, skim a ton off the top, and then give what's left back to you when you're older.

It's worse than that.

Say you buy a policy for 100k in PAY OUT coverage if you die.

Now, over 50 years, you accumulate 400k in the "retirement" fund and then you die.

The company pays out 100k per the contract and pockets your 400k retirement fund.

It's a fucking rip off. There's no other way to say it.
 

Jumpem

Lifer
Sep 21, 2000
10,757
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Another note for those of you just starting out, be sure to get a long term disabiltiy policy if it is not a benefit provided by your employer.
 
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DaWhim

Lifer
Feb 3, 2003
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I agree that a single person with no dependents does not need life insurance. However, having said that, to have a term life insurance policy large enough to cover burial expenses is not necessarily a bad idea. If he has enough money saved up to cover the cost of the funeral, etc, then OK, he doesn't need any life insurance. But if he doesn't, then a small term life insurance policy will certainly be a benefit to whoever takes care of the funeral arrangements.

I think a notarized letter giving authorization to whoever close to me to be able to use my credit card to pay for my funnel is not a bad idea.
 

JimW1949

Senior member
Mar 22, 2011
244
0
0
I think a notarized letter giving authorization to whoever close to me to be able to use my credit card to pay for my funnel is not a bad idea.
I am not sure it is legal to use a dead person's credit card even with a notarized letter from the dead person saying it is OK to do so. But even if is legal, who pays for the credit card bill when it comes due? Isn't having someone pay the credit card bill pretty much the same thing as having that person pay for the funeral directly?
 

alkemyst

No Lifer
Feb 13, 2001
83,967
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If his financial advisor is trying to sell him whole life insurance, time to find a new financial advisor.

"Financial Advisor" is usually the term people use for some stranger that knocks on their door peddling their wares.

Not all life insurance is bad...but most don't understand the goals.

If it's retirement, look into IRA's, 401K's, hell even long term CD's....

Life insurance can be useful if your death will cause a burden on someone else. In those cases, it's good to have at least enough to cover the intended method of your burial/cremation/etc.