Life insurance.....the subject that most everyone hates.

[1carcrazyguy]

Thoughts on term, universal, or whole life policies?

We have a universal policy that is a cash accumulating account. That policy was set up through an previous adviser. Now with a recent change we have a new adviser that is suggesting a whole life policy. Of course, both claim their advise is the best route.......

[Memo]

Buy term and invest the rest. Way cheaper and you'll get a higher return on investment in the long run.

[The King]

Term

[Shorty]

I think that term is best. If you are looking for an invest there are plenty of better vehicles depending on your needs. Use term life and put the difference in something else. Or blow it on cow skin rugs, boats, and hoes.

[YALE]

You may have to convert the previous policy to whole life to preserve the equity you already have in it. What do you mean by, "universal policy?"

[1carcrazyguy]

You may have to convert the previous policy to whole life to preserve the equity you already have in it. What do you mean by, "universal policy?"

It is the name of the policy that we bought through Princor. It is a cash accumulation account. It has a set return of 3% which would make about 200k in the account at retirement. It is being claimed that if we convert to a whole life policy, we would not have premiums at retirement age and the cash accumulation would be near 800k? It does not make sense to me how. So it is better to ask dumb questions now before we get lured into something.

[BMCSean]

A good whole life policy will break even with contribution and cash value between 12-15 years. Depending on what type of policy, premiums will stop at what is in the paperwork. The whole life should have set premiums that never change and should earn 5-6% compounded annually. If you pull cash out you lose that value of death benefit, the fine print will tell you that as well as if there is any penalties or fees for taking money out.

[slow99]

I think that term is best. If you are looking for an invest there are plenty of better vehicles depending on your needs. Use term life and put the difference in something else. Or blow it on cow skin rugs, boats, and hoes.

$200k boat, $90k house. Making it train.

[2011GT]

Term life and invest the rest. Insurance salesmen get the largest commission from whole life. Remember they're salesmen and don't really care about you...

[mschmoyer]

Ditto. Search for "dave ramsey life insurance" if you want a little more detail on why. He makes no money selling term vs. whole life and might help you ask the right questions.

[BMCSean]

Term life and invest the rest. Insurance salesmen get the largest commission from whole life. Remember they're salesmen and don't really care about you...

It's based on how much the premium is regardless of what the policy type is, a whole life policy is more expensive for the same death benefit as term but the premiums do not increase like they do with term. I don't disagree with you on the salesmen part but they have to recommend based on what your needs and goals are, they will lose their license if not.

For all of you term guys, I am one, remember that once it is up you have nothing. If you have a ten year term policy, when it expires you will be getting a new policy at the age and health you are at right then which means much higher premiums and the possibility of being non insurable if you have come down with any type of serious condition or illness.

[2011GT]

It's based on how much the premium is regardless of what the policy type is, a whole life policy is more expensive for the same death benefit as term but the premiums do not increase like they do with term. I don't disagree with you on the salesmen part but they have to recommend based on what your needs and goals are, they will lose their license if not.

For all of you term guys, I am one, remember that once it is up you have nothing. If you have a ten year term policy, when it expires you will be getting a new policy at the age and health you are at right then which means much higher premiums and the possibility of being non insurable if you have come down with any type of serious condition or illness.

The point of term life is to support the family in case of your death. Most term insurance is 15-20 years. By then you should be self insured anyways.

[BMCSean]

My term is until I am 80 or I cancel it, every company has different policies. The point of term is high benefit for low premium, what it is for is up to the individual.

[Stng5Pnt8]

Each type of policy needed as well as amounts are based on a case by case scenario. Like many have mentioned, term policies do have a lower premium as you are being covered for just as its named, a specific "term"(time period). The good part is you have a fixed rate for that specified term, but also as BMCSean has mentioned should you have the need for more insurance at that point in time your policy term is up...let's hope you don't have any type of serious illness or that your rates haven't skyrocketed because of your new rated age & etc.

Whole life products are also not for all...some people however, have discipline and can take advantage of a term policy and pay the low premiums and have the extra $ to work for their future. Again, not everyone has that discipline and some people need to have that guaranteed return and possible interest to accumulate for them overtime.

I can only speak for myself and my agency, we don't sell a product for our customers just to sell it. I take pride in my career and I would be doing a customer a disservice by not properly making sure I am looking out for my customers best interest.

[Chili]

"Why don't you come by the office and we'll run some 'what ifs'.. Unless your chicken."