LIFE insurance...

[warhawk]

hello fellow chrome domes:  i need your sly input on life insurance.  i have one at work but i will soon B doing some research on life insurance and i thought i'd post up here 2 get your advice.  a lot of people hate talking about it but i think its important especially if U want your loved ones taken care of.

so... what life insurance do U have?  or plan on having?  what type?  monthly payments?  what's your story?

WARHAWK

[jusbnme]

I don't know much about life insurance in general but what I've always been taught from an early age is that if you have the money to spare go for whole life insurance even if it's going to set you back monthly.  As long as you can afford to pay other bills off and not go broke whole is the best.  Term will depreciate over time and eventually be gone.  From the little I know anyway.  Whole will build up and eventually pay for itself to where you don't even have to make monthly payments anymore.  Then once you are at a certain age if you feel you want to burrow from it you can.  Kind of like a retirement account of sorts.  That's the little I've learned without all the technical jargon.  My wife and I started one up together about 4 years ago.  I have a certain amount on myself and she has a certain amount on herself.  She has a lower amount through our insurance company because she also has a great life insurance plan through the public school system.  I can't tell you exactly what the cost is per month without looking at a bill.  But I think all together we pay somewhere around $250 per month.  But that is all consolidated.  We use State Farm and have our car insurance, renters, and life all on one bill.  We pay a little more right now but that's because it's a WHOLE life insurance plan.  But in the end it will benefit us.  As far as I've been taught.   

[PianoMan]

I took out a term life insurance policy on myself a few years ago.  It's a 30 year policy, and the rate was much cheaper than a whole life policy.  The amount oy my premium was based on my health and family health history, and I had to submit to a blood test. Term life made more sense for my situation (vs whole) for a number of reasons. 

[Paul]

This is wild Mel, I was just looking into more Life Insurance myself and was trying to do some research into which was best.  I currently have insurance through the school and took out a small Term Life policy a few years ago.  But I too would like to know a little more on how each works and which is best.

[schro]

Check with Robmeister.
He now works for New England Financial.

www.nefdenver.com

[Timmay]

LOL..sorry, but I had to laugh.  I was in Evansville last weekend and this guy must have been pissed off at his insurance company because he was standing out in front of their office holding a sign. 

The sign read....Dont waste money on life insurance...The END is near...we are all gonna be gone!
So will your money if you keep spending it here!

LOL

[Timmay]

Who are you dudding??? who do you want to call you?  Cause I can post your number out on our marquee

[Timmay]

LOL I just called rob...told him I needed insurance for my ants...in my ant farm.  LOL

[Robmeister]

There's not a ONE-SIZE-FITS-ALL with Life Insurance.

It should be individually tailored to fit with goals, family plans, retirement plans, fears, budget, risk tolerance and more.

PM me if you have questions.

I can help folks in other states if any of y'all need help sorting it out.  Won't cost ya anything.

[Robmeister]

BTW....life ins. that we can all get through our place of employment is better than having nothing.....but if / when possible it's better to at least supplement with a policy you "OWN."

Think of it this way.  What is the main reason most of us move from renting an apartment, condo or home...to PURCHASING?

.....to have yer monthly payment BUILD SOMETHING, right?

Some people even refer to renting as "Throwing my money away when I could be building ownership.....building EQUITY"

Sure, renting is better than not having a place to live.....and renting is totally viable for temporary situations...but the 'norm' is to eventually purchase a home.

Same with Life Insurance through work, or even owning Term Insurance.....if yer budget or circumstances are such that you need the most bang for yer buck on a low monthly payment, term insurance works...but eventually ya want to start building equity and ownership in a permanent policy where you can build cash value.

[SLYinKC]

As a rule of thumb, I've always thought term to be the best use of your money.  With the low returns on whole life policies, it is best to buy term insurance and invest the difference you'd pay in premiums in sound investments and you'll come out ahead.

I have a policy through work and a personal policy through the AICPA (American Institute of Certified Public Accountants).  The rates through the AICPA are really good and they pay out a year-end dividend that is usually equal to half of my annual premium

[Robmeister]

...it is best to buy term insurance and invest the difference you'd pay in premiums in sound investments and you'll come out ahead.

In theory this is a good OPTION (again...it's not one-size-fits-all) and for certain savvy and disciplined clients, it works.  But in the years I've been in this business I've only seen a couple clients pull it off.    MOST folks end up buying term and SPENDING the rest.  For folks that ain't "financial jellyfish" this is indeed a strategy to look at.

VERY similar thing with people who want to beat the Real Estate market returns.  There's a "school of thought" out there that teaches to purposely RENT and then take the difference between what they would pay for a mortgage and invest in portfolios they think/hope will outpace Real Estate gains.

....With the low returns on whole life policies...

MANY more choices out there than just Term and Whole Life.  I 1035 exchange older Whole Life policies to better performing contracts all the time.

[Robmeister]

Lemme give ya just ONE example where it's great to have cash value equity in life insurance.

One of the advisors at my office took out life policies on her two sons when they were very young.  (This is another strategy most people can't relate to....ask me why it's a smart strategy).

Anyway, by the time the boys were in their teens, there was some very decent equity in these policies.   

Time came when one of the boys wanted to buy a car.   The advisor-mom says, "And I suppose you want me to bank it or co-sign on it."

"Well, yeah, mom."

Long Story short....my advisor friend taught her sons a valuable lesson about one of the many uses of cash value in a life contract.

Instead of coming up with a down payment...getting into an auto loan (at the time it was at 12% for someone with good credit).....they paid for the car in full with CASH from the policy....there were no tax ramifications .......no withdrawal penalties and the kid could pay himself back at 3% on whatever schedule he wanted (i.e. no late charges or late payments.)

.....and he got a MUCH better deal by bartering with CASH....

Just one example of the many benefits of insurance products.

[Robmeister]

There's a "school of thought" out there that teaches to purposely RENT and then take the difference between what they would pay for a mortgage and invest in portfolios they think/hope will outpace Real Estate gains.
 

Anyone in SLY-ville doing this?

... didn't think so......

Same amount of folks are buying term and investing the rest.