term life insurance vs variable life insurance

[Epic786]

Hello, anyone has any advice which is better and why?

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[deleted480308]

Term, better rate.

Keep your investments seperate

 

[Epic786]

thank. you

 

[TheHungarianCPAPFS]

A term life insurance is there to strictly protect your family and replenish the income they would lose due to your untimely death. Therefore, since it is a pure insurance product, the cost is less. Variable life insurance combines life insurance with investments and accumulates cash, which you can borrow in the future. This however, is for the benefit of the insurance company for several reasons: 1) They get more money from you, which they can invest in large office buildings, apartment buildings, redevelopment. 2) When you borrow your own money, you will pay interest to them again. 3) When you request the insurance, you will not get both the life insurance portion and the investment portion. You will only received the face amount of the insurance and if you have a loan against the cash value, the face amount of the insurance will be reduced. So you were actually helping the insurance company to fund your life insurance. If you had a term life insurance and an investment account with two separate companies, you will still get the face amount of the life insurance and you would still have the investment account for the benefit of your estate. Keep investment separate from the insurance part. The insurance company wouldn't be selling this if it wasn't for their benefit.

 

[Epic786]

A term life insurance is there to strictly protect your family and replenish the income they would lose due to your untimely death. Therefore, since it is a pure insurance product, the cost is less. Variable life insurance combines life insurance with investments and accumulates cash, which you can borrow in the future. This however, is for the benefit of the insurance company for several reasons: 1) They get more money from you, which they can invest in large office buildings, apartment buildings, redevelopment. 2) When you borrow your own money, you will pay interest to them again. 3) When you request the insurance, you will not get both the life insurance portion and the investment portion. You will only received the face amount of the insurance and if you have a loan against the cash value, the face amount of the insurance will be reduced. So you were actually helping the insurance company to fund your life insurance. If you had a term life insurance and an investment account with two separate companies, you will still get the face amount of the life insurance and you would still have the investment account for the benefit of your estate. Keep investment separate from the insurance part. The insurance company wouldn't be selling this if it wasn't for their benefit.

thanks

 

[Soccer171983]

The way I look at insurance is essentially this, if you’re independently wealthy and can cover pretty much every expense for yourself and your family even after death then theoretically you don’t need insurance. Unless you’re that category of people, insurance is a reasonable thing and necessary thing to get. Term is definitely the most recommend your way to go because it’s pretty cheap and can cover you until you reach the first position I discussed. If you are going to variable or whole life understand that when you mix insurance products with investments things can get pretty ugly. Often times there is a break even point that takes very long time to achieve and most people stop before this causing it to be a loss. Even the best of best whole life insurance policies often times when converted to an annuity will have yields barely beating on inflation. That being said I would think it would be wiser to toss all this extra money you’re spending into a true investment vehicle allowing for compounding interest with much better yield. Also be very wary of people selling you these products, are they selling them to your benefit or their own benefit? Most often the crappy us products are push the hardest because the you’re the most to the sales person. Insurance/financial advisors can easily be confused and some people misrepresent themselves. It doesn’t take much education often times to be able to get to a place where you can call yourself something you’re not. Take a look at the type of requirements it takes to be a financial advisor of some sort. You Dowant to look at peoples titles such as are they a fiduciary to realize whether they’re acting in your best interest at minimum.