Whole Life Insurance

[adrianp89]

Any that can give some advice here? Was looking to just get some quick quotes online but it seems a lot more complicated than that.

 

[thefortunes]

Buy term instead. This is a reasonable method of calculating amount you will need:

1. Calculate obligations: Add your annual salary (times the number of years that you want to replace income) + your mortgage balance + your other debts + future needs such as college and funeral costs. If you’re a stay-at-home parent, include the cost to replace the services that you provide, such as child care.
2. From that, subtract liquid assets such as: savings + existing college funds + current life insurance.

Invest the premium difference between whole and term. Typically you will come out ahead in the long run.

 

[McMark]

Don’t use life insurance as an investment. Buy term if you need to have life insurance.

 

[adrianp89]

Not really looking for an investment just a something just in case. Whole intrigues me thought because I don't like the idea of literally throwing money away... at least with whole the money is still tangible.

If I went with a 30 year plan now and then another 30 plan year when that is up... wouldn't it make more since just to get whole?

 

[2kwik4u]

Not really looking for an investment just a something just in case. Whole intrigues me thought because I don't like the idea of literally throwing money away... at least with whole the money is still tangible.

If I went with a 30 year plan now and then another 30 plan year when that is up... wouldn't it make more since just to get whole?

IMO, you're buying peace of mind, not throwing the money away. I look at the cost of insurance as "in case shit happens" money.

Rent on the other hand drove me nuts, I bought a house as soon as I could. That felt like throwing money away.

 

[thefortunes]

Not really looking for an investment just a something just in case. Whole intrigues me thought because I don't like the idea of literally throwing money away... at least with whole the money is still tangible.

If I went with a 30 year plan now and then another 30 plan year when that is up... wouldn't it make more since just to get whole?

No.

If you aren't looking for an investment then what you are looking for is insurance, TERM insurance.

This cost of "in case shit happens" as 2k called it should be the same whether you buy whole or term.

The additional premium you pay for whole is better spent investing on your own.

 

[McMark]

Why are you buying 30+30 years of life insurance? Just buy a 20 year term policy. Long enough to get the kids out of the house. If something happens after that just make sure you have enough to bury yourself. Don’t use insurance to leave money for someone later in life.

 

[Lextacy03]

Any that can give some advice here? Was looking to just get some quick quotes online but it seems a lot more complicated than that.

The last 4 years I have been writing a lot of Whole life with the Long term care rider. Life insurance has so many factors and it boils down to what you want the life insurance policy to do, age and health. No two policies are the same nor are two policies written exactly either.

 

[adrianp89]

The last 4 years I have been writing a lot of Whole life with the Long term care rider. Life insurance has so many factors and it boils down to what you want the life insurance policy to do, age and health. No two policies are the same nor are two policies written exactly either.

Really just looking to cover my fiance (wife in November) with enough to pay off the mortgage, truck, and boat. I am 29 in great health no medical history. No kids - probably one in a few years.

 

[Beachbummer]

Whole life is two pieces...term if you die too early+ savings to pay you back when you die (sadly it's happening at some point)

Because they *know* they have to pay out the full amount, they will charge you such that they can cover you of you die early, but likely will collect from you more than you pay in, in today's money. A dollar today is not the same dollar 30 years from now.

If you do term only, you pay for the risk of early death a much smaller amount. For whole, they will give you your money back, minus their profit, a long time from now.

It may seem like a deal, but with value of money diminishing daily, you are on average always getting less than you put in (or they would go broke). That's why so many suggest term. You only pay for the risk of early death. We are going to die eventually, why should I hand over money to get it back diminished after my death?

If you have certain goals that require that money at the time of death, regardless on when you die, it may be for you, but for most everyone else, the goal is to die pennyless, except for exactly what you want to leave behind. Anything you can't spend... You can't take with you.

Term protects your family only when they depend on your income, for cheap.

Whole is guaranteed, but at a very high cost... It's like 10% insurance 90% investment.

 

[spatty99]

Absolutely avoid whole life, it is a terrible investment (except for the sales agent). Use a term life insurance search engine (like term4sale.com) to pick the cheapest term policy from a reputable company (it's a commodity, no reason to pay extra).

https://www.whitecoatinvestor.com/what-you-need-to-know-about-whole-life-insurance/

 

[Lextacy03]

I love how people always think they know everything about the Insurance industry. How they are always getting ripped off. They are always the first ones to call when anything happens. What do I know, the guy with an Insurance Degree and several designations to my license. No different then any other industry, you have the scum sales people and then the people who care and work for you. My advice is to sit down with a agent who you trust, not a 1-800 number who you are just a policy # and ask questions, get quotes.

 

[nate kennedy]

I love how people always think they know everything about the Insurance industry. How they are always getting ripped off. They are always the first ones to call when anything happens. What do I know, the guy with an Insurance Degree and several designations to my license. No different then any other industry, you have the scum sales people and then the people who care and work for you. My advice is to sit down with a agent who you trust, not a 1-800 number who you are just a policy # and ask questions, get quotes.

I agree completely I’m in the insurance industry as well... I would say sit down with a few different people and talk to them... everyone’s needs are different and so is their life style... gather as much info as you can and make an informed decision off what you need and what you can afford. I would completely disagree insurance is a commodity... your paying a person who you trust to protect your families future... you really want to leave that to a 1-800 number??? I see it all the time people buy off of the internet and end up with state minimum limits because they don’t know what they are buying and end up costing rhemselves more by being underinsured... sorry but defiantly not a commodity you get what you pay for...

 

[Gym]

Here is what the three stock indices have averaged over the last 10 years. It's important to note that these averages include the year 2008 which was the worst performing year in our lifetime.
DJIA 12.54% NASDAQ 24.52%
S&P 500 12.71% * Sources: wsj.com, bigcharts.com, treasury.gov - 8/31/18

If the difference between whole life & term life were put into an index fund you would likely fare much better while still providing protection for your family. I know I did.

 

[Beachbummer]

@Lextacy03 As a sceptical consumer, I'm highly suspicious of expensive financial products with very high commission, specially where the commission is cost dependent, as it incentivices overselling vs. Right sizing.

What's your suggestion for someone to select an agent such that they don't get ripped off by someone more interested in their own profit/commission size than in providing the best policy for the buyer?

 

[nate kennedy]

@Beachbummer while life is based off paying to determined age... so to say it’s very expensive is not accurate per say... my daughter has a 100k whole life policy that costs me less than 150/year... why? Because I started it when she was less than 1... If you buy it when your 30 of course it’s more there is less years to make the payments to get you there. I’m
Not saying one is better than the other, but they are different products that meet different peoples needs... I agree you have to be careful someone isn’t pushing you into it because of the commission... like every sales industry those people are out there... that’s why I say talk to a few different agents... maybe talk to an agent who is heavier in P&C insurance than life only agent. I know I am not the most versed when it comes to life insurance most of my life policies are buy sell agreements for commercial accounts we write with multiple owners. Ultimately you as the consumer have to be comfortable with the agent you decide to do business with... best thing I can say is talk to multiple agents get their opinions for our situation and ask friends/family/coworkers for referrals.

 

[F.M.]

I don't know that it's the best option, but my insurance agent (Alfa) sold me on it. I have a return of premium 20 year term policy on my wife and myself. It's not terribly expensive and in 20 years if I don't use it, I get a good chunk of my money back. The plan is that by the time I reach 20 years I'll have enough saved/invested and be out of debt, and I won't need life insurance.

 

[Beachbummer]

100k whole life for 149 per year sounds very attractive. I'm impressed!

 

[Murf'n'surf]

Along the lines of what Nate said.... the younger you are, the cheaper your rate is. In your 20’s you think that you are invincible and will be healthy forever.......that changes real quick! Don’t think that you’ll just buy another policy in 20 years when you are 49 because you’ll have to go through another physical and blood test AND your rates will be 3 times what they were when you were 29 even if you’re in top notch health.

 

[mark_m]

@Beachbummer while life is based off paying to determined age... so to say it’s very expensive is not accurate per say... my daughter has a 100k whole life policy that costs me less than 150/year... why? Because I started it when she was less than 1... If you buy it when your 30 of course it’s more there is less years to make the payments to get you there. I’m
Not saying one is better than the other, but they are different products that meet different peoples needs... I agree you have to be careful someone isn’t pushing you into it because of the commission... like every sales industry those people are out there... that’s why I say talk to a few different agents... maybe talk to an agent who is heavier in P&C insurance than life only agent. I know I am not the most versed when it comes to life insurance most of my life policies are buy sell agreements for commercial accounts we write with multiple owners. Ultimately you as the consumer have to be comfortable with the agent you decide to do business with... best thing I can say is talk to multiple agents get their opinions for our situation and ask friends/family/coworkers for referrals.

True. Keep the factors in mind and make the choice that's right for you. I have a whole life policy that won't cover much more than final expenses that my parents took out when I was born. It's a 10k benefit and I pay about 150 / year to keep it. It hasn't been a great investment, but in the 70's and 80's the dividends paid the premiums. I wouldn't personally use whole life as an investment vehicle. Inflation is a bummer.

When I was about the same age as the OP, I was steered toward a whole policy for around the same money 150/month, I quickly came to the realization that I was enriching my advisor more than myself. I cashed it out and bought up term and invested and haven't had any regrets. I do keep a personal liability umbrella just in case; that's probably the best and only thing my former advisor recommended that I kept.