Life Insurance. Worth it?

[Orth0]

I just read a post about the disability insurance and that was very helpful.

What are you guys’ thoughts on life insurances?

Which one would you recommend, term vs. whole?

---

Members don't see this ad.

 

[Thehighwind87]

I mean if you have a family and stuff...yeah duh its important.

 

[Orth0]

I mean if you have a family and stuff...yeah duh its important.

Which one do you have? Term or whole?

 

[OutWest435]

Get this book and it will help you with most of your basic understanding:

Review of The White Coat Investor's Financial Boot Camp | White Coat Investor

Get on the fast track to financial freedom with my new book, Financial Boot Camp: A 12-Step High-Yield Guide to Bring Your Finances Up to Speed.

www.whitecoatinvestor.com

Side note: Term is better than whole. Whole is made for reps to sell because they make $$$$$ on it while it does not benefit you.

 

[NITRAS]

I’m solidly in Dave Ramsey on this one. Whole life is a sh*tty investment.
Get term life insurance if you have dependents like 12ish times your income. 15-20 years. Have a financial plan to invest so that in 20 years you have a bunch of money.

 

[Ivy.ch]

If someone would be financially broke without your income, you should get life insurance.

For the single, no kids, broke gentlemen like me - I guess we can count this one as a win

 

[charlestweed]

I was financially clueless (still am now after 21 years.....that's why I've worked so hard) when I bought my first house 3 months after my graduation. When the Allstate agent sold us the homeowner insurance policy, he took the opportunity to convince my wife and me to get whole life insurance. And we listened to him. My month premium is $376 and my wife’s is $308.5, which of course are much higher than if we bought the term-life insurance. We’ve had this same whole life insurance policy for 21 years and have paid around $172k in total. I’ve just looked at our policy’s statements today and learned that the combined net surrender value for both my wife’s and my policies is around $193k….not too bad.

I plan to get the cash and cancel the policy in a few years when my kids start professional schools (if they get accepted). We are both debt free and no longer need the life insurance.

 

[MD Financial Services Scott]

Buy term life insurance for the amount of benefit you need first and the duration you can afford second. What I mean is there is no reason to buy a $500k policy for 30 years if today you need $1 million but due to the cost you can't/don't want to afford $1 million for 30 years. Buy the amount you need to take care of the things you want taken care of first because having long duration but not the right amount now does not solve the problem if you pass away in the relatively near future. It becomes really hard to know what you might need or want 30 years out but you one typically knows what they need in the nearer term (10-20 years) so if money is tight then focus on amount first, if money is not an issue, then buy the amount you need and the duration you want.

 

[NITRAS]

I was financially clueless (still am now after 21 years.....that's why I've worked so hard) when I bought my first house 3 months after my graduation. When the Allstate agent sold us the homeowner insurance policy, he took the opportunity to convince my wife and me to get whole life insurance. And we listened to him. My month premium is $376 and my wife’s is $308.5, which of course are much higher than if we bought the term-life insurance. We’ve had this same whole life insurance policy for 21 years and have paid around $172k in total. I’ve just looked at our policy’s statements today and learned that the combined net surrender value for both my wife’s and my policies is around $193k….not too bad.

I plan to get the cash and cancel the policy in a few years when my kids start professional schools (if they get accepted). We are both debt free and no longer need the life insurance.

You would be sick if you knew.

Spoiler: Don’t look if you don’t want to know

You would be sick if you knew.
376+308 = 684.5, 21 years is 254 months. With a 10% annual interest rate, you have 598,896. Now consider you would have 95% of that because some of the premium goes toward a term policy within the whole life policy. (Technically, most of the them are an Annual renewable Term policy and an every year fewer and fewer of your dollars go toward investments as the insurance gets more expensive). Most of these policies don’t accrue value for 3 years (they have to pay for the commission somehow).

The real nut puncher is that if you die, you get the face value of the policy. Not the face value plus the surrender value.

Honestly, I’d get insurance in place if you need it and cash that baby out. You won’t have any taxes because your total principle payments was $173,863, which is MORE than you paid in.

Both Dave Ramsey and White Coat investor agree. Whole life is basically a terrible scam.

Spoiler: Don’t look if you don’t want to know.

[
376+308 = 684.5, 21 years is 254 months. With a 10% annual interest rate, you have 598,896. Now consider you would have 95% of that because some of the premium goes toward a term policy within the whole life policy. (Technically, most of the them are an Annual renewable Term policy and an every year fewer and fewer of your dollars go toward investments as the insurance gets more expensive). Most of these policies don’t accrue value for 3 years (they have to pay for the commission somehow).

 

[Orth0]

I was financially clueless (still am now after 21 years.....that's why I've worked so hard) when I bought my first house 3 months after my graduation. When the Allstate agent sold us the homeowner insurance policy, he took the opportunity to convince my wife and me to get whole life insurance. And we listened to him. My month premium is $376 and my wife’s is $308.5, which of course are much higher than if we bought the term-life insurance. We’ve had this same whole life insurance policy for 21 years and have paid around $172k in total. I’ve just looked at our policy’s statements today and learned that the combined net surrender value for both my wife’s and my policies is around $193k….not too bad.

I plan to get the cash and cancel the policy in a few years when my kids start professional schools (if they get accepted). We are both debt free and no longer need the life insurance.

May I ask what insurance company you went with?

 

[charlestweed]

May I ask what insurance company you went with?

Lincoln Benefit Life Company

 

[yappy]

I just read a post about the disability insurance and that was very helpful.

What are you guys’ thoughts on life insurances?

Which one would you recommend, term vs. whole?

Term. Whole life is a scam

 

[Splenda88]

DO NOT BUY WHOLE LIFE INSURANCE.

Did I make myself clear?

 

[DDS9994]

I was financially clueless (still am now after 21 years.....that's why I've worked so hard) when I bought my first house 3 months after my graduation. When the Allstate agent sold us the homeowner insurance policy, he took the opportunity to convince my wife and me to get whole life insurance. And we listened to him. My month premium is $376 and my wife’s is $308.5, which of course are much higher than if we bought the term-life insurance. We’ve had this same whole life insurance policy for 21 years and have paid around $172k in total. I’ve just looked at our policy’s statements today and learned that the combined net surrender value for both my wife’s and my policies is around $193k….not too bad.

I plan to get the cash and cancel the policy in a few years when my kids start professional schools (if they get accepted). We are both debt free and no longer need the life insurance.

Ouch!! I hate to break it to you Charles but it horrible ROI, but had you taken that same amount of money the last 21 years and put it in a Vanguard 500 index fund your amount as of today would be over 700,000. Salesman like to sell whole life as an investment, typically it has a poor return. People are always better off with term.

 

[charlestweed]

Ouch!! I hate to break it to you Charles but it horrible ROI, but had you taken that same amount of money the last 21 years and put it in a Vanguard 500 index fund your amount as of today would be over 700,000. Salesman like to sell whole life as an investment, typically it has a poor return. People are always better off with term.

That's true. We don't always make good financial decisions. The good thing is we also have other good investments that easily make up for such poor decision. It's good to have money and a stable income.....you can afford to make some financial mistakes. "I find that the harder I work, the more luck I seem to have". Thomas Jefferson.

 

[DDS9994]

That's true. We don't always make good financial decisions. The good thing is we also have other good investments that easily make up for such poor decision. It's good to have money and a stable income.....you can afford to make some financial mistakes. "I find that the harder I work, the more luck I seem to have". Thomas Jefferson.

I appreciate your transparency, whole life insurance salesman prey on young medical professionals just starting out.

 

[allDAT]

Get a 30 year level term policy for about 1.5-2M early in your career. It’s pretty affordable.

When you buy a practice or your lifestyle requires more if you were to die, you may want to get another term policy that overlaps. So you’d have 2 30 year terms that overlap in the middle or just get a new policy. The point is to be financially independent and not need the policy.

There’s a site out there somewhere … maybe terms for sale or terms4sale (check white cost investor blog) that makes it easy to shop.

Also check with AAA.

 

[DDS9994]

Get a 30 year level term policy for about 1.5-2M early in your career. It’s pretty affordable.

When you buy a practice or your lifestyle requires more if you were to die, you may want to get another term policy that overlaps. So you’d have 2 30 year terms that overlap in the middle or just get a new policy. The point is to be financially independent and not need the policy.

There’s a site out there somewhere … maybe terms for sale or terms4sale (check white cost investor blog) that makes it easy to shop.

Also check with AAA.

This is what I did when I first started a 1.5 million dollar policy cost 680 bucks a year back then.