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PMBridetobe
member
Married and it feels so good!
SBR: Life Insurance
PMBridetobe
member
We have some whole life and some term life insurance. I am trying to see which is the best way to maximize our money and long term benefits while keeping our children secure should something happen to us.
Anyone care to explain why Whole Life is better than Term or vice versa?
Married and it feels so good!
This discussion has been closed.
Re: SBR: Life Insurance
from everything i have read about insurance, this is what i've learned in a nutshell. term gets your kids thru college, pays of the house, keeps you afloat for awhile. it's normally for 30 years. term is normally recommended.
if you have a special circumstances--special needs kids or something like that, then whole life would be better. because your kids will need help after 30 years. i'm sure there are other reasons to have whole life, but that is what i got from it.
That's really succinct and helpful. Thanks!
Here's another question, how did you go about getting term life insurance?
How did you decide how much to insure yourself for?
we went thru usaa. but if we didn't, i would go with a well known company because you want them to be in business in a few decades. i know all companies have ratings (something like aaa, aa, a+ etc....) and you can google insurance ratings, i think. or you can just google "how to buy life insurance" and you will probably be able to find some good articles.
you could just call your car insurance or home insurance company and get a discount bundling it all together.
or go thru your work?
With term, once you are done with it you are done. The rate you look in now is up when the term is up and you get nothing back if you make it through the term. The beneift is that it is MUCH cheaper, and the time you would probably need that money the most is the younger years of life.
With whole life the rate you get now will not go up with age so the younger you get it the cheaper it will be. Also, after a vesting period it can become self funding or you can even withdraw a cash amount. The cash amount will be less than what you bought insurance for but you can use it in retirement. Basically you don't have to die to get money. Also, if you do keep it in there what you buy for ex: $50,000 can grow into $70,000 by the time you are 70 or so. It is MUCH more expensive but protects you for your full life and can be used a an investment vehicle.
I have both term and whole life (less whole life than term) and feel good about my choice.
Just an addition to this. Term insurance can be purchased in varying amounts.. It is the cheapest insurance because it only covers a specific period. These periods can start at 10 yrs if you just need something for short term coverage.
Whole life is what we in the insurance business like to call "permanant insurance" This insurance not only gives you the coverage if you die, but it also develops cash value. From the cash value you can pull from this if needed for something else.
I highly suggest at least getting a term policy. It is so inexpensive for people our age. For example I have a 250k/10 yr policy right now that costs me 11.00 a month!!! If you have any more questions feel free to email me at schaefer1007 at yahoo dot com
In a sense, you can?t think of life insurance as a way to maximize your money. It?s an amount you pay to insure your life so that if you die within the term period, your family gets a huge amount of money which can be used to pay off debts and allow them to live in the same comfortable style they are used to living in. In term life insurance the premiums you pay go down the drain, if you outlive the policy. In whole life insurance, which is 5 to 10 times more expensive than term, part of your premiums will go into an investment component which accrues interest. Therefore, your policy will grow in cash value over the years. While the cash value may not compare well to other investment instruments, whole life insurance does give you lifelong coverage. The cash value can be used to pay premiums ? so that premiums never come out of your pocket. You can also withdraw from whole life insurance without having to show collateral.
Most people prefer term because it offers low cost life insurance in the most crucial years of life. You may also want to consider universal term life insurance. This type of insurance begins as a cheap term life insurance policy, and is then converted to universal life insurance (a type of permanent life insurance)
Denise Mancini
Disclaimer: I work for AccuQuote and this is my personal opinion.