I have been investing for a while, and I have a fairly decent sum of money accumulated. My financial advisor is encouraging me to buy life insurance. I feel really iffy about the subject, and I wondered if anyone out there has considered it.

Right now I am active duty military, so my wife gets $500k if I die, which is plenty. However, if I get out of the Navy (with anything less than 20 years service) my military coverage stops, and even if I retire (20 years +), I still only can do something called the Survivor's Benefit Plan. With the SBP, I pay 6.5% of my retirement to ensure my wife/potential kids would get 55% of my retirement if I were to die.

Basically, my advisor showed me a lot of "investment math" that showed me how crappy that plan really is. He is encouraging me to start buying life insurance now so I can lock in a low rate that will stay the same for my whole life. (To those of you who don't know you can either pay like $100/month starting at age 30 or like $500/month starting at age 50 or $2000/month starting at age 65 for the same coverage.) Additionally, the type he is encouraging me to buy is called whole life insurance. The way I understand it, whole life insurance acts kind of like an investment, in that, even if you don't use it (ie die), you have the option to get your money back when you are older plus a certain percentage. So pretty much you are protecting yourself and diversifying your investments.

Like I said, I am iffy. I mean, I'm 28 and in great health, who needs life insurance. But what he says makes sense. At the same time, with the right person talking and throwing around numbers, the right person can make anything make sense (kind of like the selling ice to an Eskimo anticdote). I have spken with some friends who are in to investing, and they give me the whole "my investments are my life insurance policy" speech. So I dunno. Any advice? Does anyone out there actually do this whole life insurance thing? Thanks in advance.

4/30/2007 10:14:11 PM

Wait till you're 50 to worry about life insurance

just get it before you're 85

get it between those ages and you're good

4/30/2007 10:18:43 PM

not true. my mom died by freak car accident when she was 48 and life insurance helped take care of my sis and me. you can't get it too early, you never know when your time is up. especially if you've got a family to consider... check pm.

4/30/2007 10:24:33 PM

well as long as you're active duty, and you think $500k is enough for you family in case, God forbid, something were to happen to you........then don't worry about it

personally, $500k isn't crap and life insurance is cheap enough to have....the more you can give your family if you were to die is the less they would have to worry/struggle (financially) in life

but if you really think $500k is good then don't worry about it right now, but definately buy some substantial life insurance if you get out......

[Edited on April 30, 2007 at 10:25 PM. Reason : ]

4/30/2007 10:25:16 PM

Jim whatever happens DO NOT buy whole life insurance. If you really think you need insurance then go with term. I can easily show you "investment math" that proves that whole life is much worse than term.

I'd highly suggest you find a new advisor. Anyone who gets you to purchase whole life insurance is going to make a ton of money at your expense. Whole life insurance is a horrible horrible investment.

They'll go on and on about how you'll get to keep your money if you go with whole instead of term. The only problem is that these insurance salesmen fail to factor in the opportunity cost of the extra money spent on whole insurance vs term. I can go into more detail if necessary.


[Edited on April 30, 2007 at 10:32 PM. Reason : ]

4/30/2007 10:28:14 PM

Jim, I don't want to re-type it b/c I'm lazy, but here are the main differences of life insurance minus the crap u didn't need to read (i wrote a paper on it):

Which Type is Best?

In order to better protect one’s assets from estate taxes, death taxes, and gift taxes, life insurance may be purchased to help “protect” and/or pass along such assets. Life insurance can be used to achieve a variety of objectives. As with all life insurance, the cost and availability of each type of life insurance depends on factors ranging from age, health, and the type and amount of insurance that is desired. The two questions that must be answered when purchasing life insurance are how much insurance do you need and what kind of policy is best?

What policy is best?

Term life insurance offers protection only for a specific period of time. If you die within the time period defined in the policy, the insurance company will pay your beneficiaries the face value of the policy. Unlike other types of life insurance, term insurance does not accumulate cash value. All of the premiums paid are used to cover the cost of insurance protection. Term life insurance is often cheaper than other types of life insurance because at the end of the policy period, no refund is given for the value that has accumulated. This type of policy may be attractive for a young adult who can not afford a more permanent type of life insurance or wants to guarantee his/her child the ability to attend college. One of the drawbacks that is associated with term insurance is that each time coverage is renewed, the premiums increase. The reasoning behind this principle is easy to understand – as you grow older, your likelihood of dying from old age increases. As this risk increases, the insurance company passes the added risk to its customer in the form of higher premiums associated with this escalated risk. To counteract the problem of higher rates upon renewal, term life insurance may be purchased in 5, 10, 20, or 30 year level terms.

Whole life insurance policies were the leading type of life insurance sold in America a few years ago. These were popular because when you purchase a whole life policy, you generally pay a fixed premium for as long as you live or for as long as you choose to keep the policy in force. The insurance company promises to pay a set benefit upon your death in exchange for the fixed premium you pay monthly. In addition to providing a death benefit, a whole life policy can build cash value. Part of the premium that each individual pays goes toward the protection element of their policy, while the remainder is invested in the company’s general portfolio. The insurance company promises to pay a guaranteed rate of return on the portion invested in the investment portfolio, which ultimately builds the value of the insured’s policy. As they grow older and create a larger risk for the insurance company, the value of the capital that is invested often offsets the raising of premiums over time. The main drawback of whole life insurance is that even though the money in the investment portfolio is technically yours, you can’t withdraw it as needed. You either have to surrender the policy for its cash value or borrow any necessary funds as a loan against the policy. Borrowing against the insurances value is generally a bad idea because the insurance company pays a lower rate of return for the portion of cash that you borrow. The cash value of a life insurance policy accumulates tax deferred, however, if you surrender the policy, you have to pay an income tax on any amount that exceeds the premiums that you have previously paid. In summary, whole life policies have fixed premiums and fixed death benefits. While it does not provide a lot of flexibility, some people would opt to purchase this type of life insurance due to its predictability – they’ll know exactly what they have to pay monthly in premiums and exactly what their death benefits are.

Universal life insurance was developed in the late 1970s to counteract some of the disadvantages associated with term and whole life insurance. Universal life insurance (UL) is a relatively new insurance product intended to provide permanent insurance coverage with greater flexibility in premium payment and the potential for a higher internal rate of return. Universal life insurance is similar to whole life insurance in that you pay regular premiums to your insurance company in exchange for benefits paid by the insurance company upon one’s death. Similarly to whole life insurance, a portion of each payment goes to the insurance company to pay for their cost of insurance and a portion of the money is invested in the company’s general investment portfolio. Both whole life insurance and universal life insurance pay a minimum guaranteed rate of return on the investment portfolio, however, universal life insurance is very different from whole life insurance in its flexibility. For investors who want the flexibility to change their premiums or death benefits, universal life insurance is the best policy. If interest rates are high, then the dividends help reduce premiums. If interest rates are low, then the customer would have to pay additional premiums in order to keep the policy in force. When interest rates are above the minimum required, then the customer has the flexibility to pay less as investment returns cover the remainder to keep the policy in force. While this may affect the outcome of the cash value or death benefits of the policy, the idea of security and flexibility is welcomed by its policy owners. As with other life insurance policies, money withdrawn from universal life insurance policies is deducted tax-free until the amount withdrawn exceeds the premiums previously paid into the policy.

Variable life insurance provides the policyholder with the flexibility to design their own portfolio, along with the security of a guaranteed death benefit. Variable life insurance was designed with the concept of investment control. It provides the policyholder with investment discretion over the account value portion of the policy. This will allow the owner of the policy to invest according to his/her acceptable tolerance for risk. They can allocate their account value over a variety of sub-accounts ranging from stock, bonds, money market and fixed-interest options. The premiums remain constant throughout the life of the contract, however, the performance of each individual’s sub-accounts determines the growth of their account value.

Ownership Options and Other Important Advice

Insurance is only recommended for misfortunes that you can not pay for yourself. Insurance is designed to protect an individual in the case of an event with catastrophic losses/expenses. It is often more affordable to pay out of pocket expenses for any reasonable loss or expense, as the premiums for such small losses may outweigh the actual loss of a tangible asset.

When seeking insurance, try to purchase insurance that will cover more assets under a single policy. This is known as the umbrella effect and is most notable in homeowners insurance. For one flat rate, it covers the dwelling as well as the contents inside the house.

Lastly, when considering the purchase of life insurance, one must consider who is intended to be the owner and the beneficiary of the policy. If you choose to leave your spouse to be the owner and beneficiary of a policy on your life insurance, the proceeds of the policy will be subject to estate taxes. You have to make sure that your spouse is prepared to handle the burden of handling the additional responsibilities. You could also name your child to be the owner and beneficiary of your life insurance policy, however, you must believe that the child has the experience necessary to handle the responsibility. They will have to settle taxes, fees, and other expenses associated with death and will ultimately have to handle their vast new fortune. If neither a spouse nor child are appropriate to be the owner and beneficiary of a life insurance policy, the third option is an irrevocable life insurance trust. A designated trustee would manage the trust and ensure the availability of the funds should they be needed. This option is plausible because the trust is irrevocable and is the owner and beneficiary of the policy, in which case the proceeds can often escape estate taxes.

I do not feel like it is necessary to own a policy at this point in my life. I do not have any children or any other major responsibilities. Instead of buying life insurance at this point, I feel that I could put the money that I would have spent on premiums into other types of investments that may have greater potential for higher returns. I realize that in order for this approach to be superior to purchasing a plan, I would have to have the discipline to invest my premium savings on a regular basis. While greater returns aren’t guaranteed, I am willing to take on that risk at this point in my life. As I become more established and start a family and a legacy that will live on after me, I will look into purchasing a variable life insurance plan. I like the flexibility of knowing what my premiums and death benefits will be, meanwhile I will be able to determine the amount of risk that I am willing to take on the accumulated cash value. By planning my future well in advance, I feel like I can budget and plan for several generations to come.


[Edited on April 30, 2007 at 10:39 PM. Reason : ]

4/30/2007 10:32:00 PM

Thanks guys. These are exactly the kind of responses I was hoping for.

4/30/2007 10:33:59 PM

Thanks for the spaces. Read the last paragraph. Sounds good. I have no need for insurance right now either, but once I need it, I'll buy term.

4/30/2007 10:34:44 PM

glad my paper could be put to decently good use

4/30/2007 10:40:11 PM

It's amazing the different response I am getting, both on here and via pm.

I'll be honest, the main reason I am so skeptical is because I cannot stand my financial advisor. He is very pushy and at times, condescending. However, in 3 years with the company I have made about 12%/year on mutual funds, which is really good (at least for me). I realize that this is definitely a direct reflection of the economy and that most advisors can probably boast a similar return over that time period, but I still feel like I am getting good advice in the mutual funds department.

But every year, I have to go in and do my annual assessment and sure enough, he brings up life insurance every time. I tell him I am really not interested and he does some more crazy investor math and basically tells me that if I don't do exactly as he says, I am an idiot (I am embarassed and ashamed to say that last week, he even said that if I don't get life insurance, then I don't care about my wife). Yeah, he's a dick, I know. I just have absolutely no firepower to fight him with, although I feel that somehow, me buying life insurance would be hurting me in the long run and somehow lining his pockets. His crazy investor math works out though, and it turns into me saying that "Although all the data you put before me supports that buying life insurance is a great idea, I will go against all that makes sense and choose not to do this."

So please, if anyone has any solid numbers to show me exactly why whole life insurance is a bad deal for me and a good deal for him, please do tell. Flood me with websites, papers, whatever. I need facts though! Thanks again.

4/30/2007 10:55:38 PM

Tell them to post instead of pming you.

Your fin advisor sounds like a dick. How much does he charge? If you interested I have a guy at UBS that I love. I know a ton about investing but there is nothing better than have a guy to call up any time to shoot the shit, talk about why the market went up, why it went down, learn about how xyz works etc. etc. etc. 12% a year is good, but I dont think it is really above average considering the market returns the last 3 years. My turns for my roth and 401K are a little over 7% and 9% for the past 4 months.

Ok, here is an example I have seen on msn money a ton. There is a message board there called your money with a big life insurance thread. Here is one of the more recent ones I read I'm typing from memory. Woman started talking about how there was this great new whole life insurance plan. Apparently after 30 years they agree to give her back all the money she invested and it was $100 a year vs the same coverage on a 30 year term package at $50 a year. She didn't go into much detail, sorry. Any moron can see 30 * $100 is $3000 and 30 * $50 is $1500, except with this plan she gets back the $3000 after 30 years, so the shady insurance salesmen shows her she spends $0 on insurance over 30 years vs $1500. On the surface looks pretty sweet. What you fail to remember is the OPPORTUNITY COST of the money invested. Lets say you invest $50 term for 30 years. After 30 years you have spent $1500 and nothing to show for it. Except in this scenario, lets take the extra $50 you saved by investing in term instead of whole life. You invest that in a nice mutual fund earning 10% and you will have grossed 9K. Even if you put it in a crappy cd or bond earning half that, you'll still earn over $3000 making the term life insurance I much better choice.

4/30/2007 11:19:21 PM

Hah, I meant that was the amount each month not each year, but you get the idea.

4/30/2007 11:27:20 PM

I agree David, but from what I understand (it could be flawed) the whole life insurance policy pays you back your principle plus interest. Maybe the rate isn't as good as you would get in a mutual fund.... I dunno.

And the charge (I hate admitting this because I might be getting scammed and that seriously would reinforce my chosen screen name) is 5.75% of whatever I invest until I have $50k in my account. Then it goes down to like 4.5% until $100k, 3% at $150k, etc. I am getting pretty close to the $50k mark, so it will be going down soon. To me, that doesn't seem that bad. My father in law bought us a wedding gift of $1000 in stock when we got married. 3 years later, the stock was worth $700 and Merrill Lynch was taking out a fee each year for doing nothing..... we never bought/sold/anything. So I cashed out. That was frustrating. Maybe what I pay now seems more reasonable since I am doing well.

4/30/2007 11:31:52 PM

Quote :

"Maybe the rate isn't as good as you would get in a mutual fund.... I dunno. "

Ding ding ding.

Quote :

"5.75%"

Holy mother fucking jesus christ. It sounds like your advisor is buying you expensive front loaded funds. There is no way that can by 5.75% of the total account each year. If so, you are giving away half your returns each year. Damn Jim, why not just get a 5% online money market account. Same net returns with 0 risk. UBS does a managed account for 1.5% a year and Goldman Sachs is the same.

Or just do it yourself and get a nice fidelity/t row price/vanguard target retirement fund if you want.

[Edited on April 30, 2007 at 11:36 PM. Reason : ]

4/30/2007 11:34:43 PM

agreed...your financial advisor is charging way too much and giving you suboptimal advice. What company does he work for if you don't mind me asking?

4/30/2007 11:43:25 PM

No not 5.75% of the account each year.

5.75% of everything I invest. So let's say I have $50,000 in my account from years gone by, and I invest $5,000 this year. I basically get $50,000 x (1.12) + $5,000 x (1.12) x (0.9425). So what I have in the account already remains untouched.

4/30/2007 11:43:58 PM

If I were to choose never to invest another dollar again, they would never make another cent.

4/30/2007 11:45:45 PM

http://www.bpropst.jhnetwork.com/calculators.cfm?ID=123

go there...you can find a vast majority of the information in my paper along with tons of other information...that is the predominant source of my paper.

click on articles towards the top left side of the window...you will find nearly everything you need to know there.

[/thread]

[Edited on May 1, 2007 at 12:11 AM. Reason : ]

5/1/2007 12:10:40 AM

Awwww man I hate [/thread]. It's like the end, and that is sad.

5/1/2007 1:10:12 AM

use SGLI. if you for some reason need more, buy more term insurance (check USAA).

when you get out, you have VGLI and good deals from USAA.

do not buy any whole or universal life policies, and I seriously would find a new advisor.

i'll talk to you more in a couple weeks. TAD to SERE right now; posting w/ PDA.

5/1/2007 1:33:20 AM

Duke, you must be pretty damn bored if you're checking TWW from your PDA at SERE...

But YES I can't believe I didn't think of that - call USAA. Membership is free to members and they have the best customer service rating in the country out of all banks (I think). AND they have SALARIED investment advisors on staff you can call about anything just like your current guy. No pushy commissioned sales guys.

If you're in the military, at least join USAA and look around the website at all the different services they offer. I've been a member for 8 months and I must say joining USAA was about the best thing that's come out of being in the military for me!

5/1/2007 1:51:36 AM

As others said, get a new financial advisor (preferably one that charges a fee for their advice, rather than one who gets commissions off of selling you stuff - like WHOLE Life insurance).

Whole life insurance is generally a horrible idea.

5/1/2007 6:49:06 AM

I do have my homeowner's insurance through USAA. I will look into that tonight. Thanks.

5/1/2007 9:13:50 AM

What funds is this guy having you buy?

For what company does he work?

Did you receive any different responses via pm?

5/1/2007 9:17:46 AM

I fully agree with everyone who said to avoid Life Insurance as an investment vehicle.

- If you need it definitely get term life rather than whole life
- Agents make gigantic commissions on selling policies, so be wary
- Get a fee based financial advisor rather than a commision based one.

5/1/2007 3:39:09 PM

Quote :

" (I am embarassed and ashamed to say that last week, he even said that if I don't get life insurance, then I don't care about my wife). "

Insurance scare tatic. Have you ever talked to your wife about something unexpectedly happening to you? Would she continue to work? Are you planning on having kids? These are important questions too when looking at insurance. IF you died today and your wife does not want to work, then you would want a policy large enough that when invested *properly* she can live off income from the policy and never have to work again. But if she knew she would work then a policy that large is not needed. Do you plan on having children? If so you would want a insurance large enough to take of of them, fund college etc in addition. A good advisor would be showing you all of these situations and talking them through with you, not pushing you to get whole life insurance by showing you the math.

5/1/2007 4:13:24 PM

Quote :

"I fully agree with everyone who said to avoid Life Insurance as an investment vehicle"

i know this is slightly off-topic, but whatever...so my uncle has a life insurance policy for his brother-in-law b/c he lives recklessly and is quite prone to an early demise. the truth of the matter is that he can't stand the man and could care less if and when he dies. but since the odds are in his favor, he's trying to make some easy money. i thought it was an interesting idea...

[Edited on May 1, 2007 at 4:48 PM. Reason : .]

5/1/2007 4:39:28 PM

Unless he likes to play Russian Roulette in his spare time I'd just stick to investing in the stock market or real estate.

5/1/2007 4:44:07 PM

when it comes down to it, it's all gambling really

5/1/2007 4:46:56 PM

True, but the odds are quite different.

5/1/2007 4:53:52 PM

rho, 1st few days are classroom

5/1/2007 7:02:43 PM

Good advice here, definatly buy term and invest the difference, i can't beleive a financial advisor would push whole life on you.

Also, get supplemental disability, that is something everyone should have.

5/2/2007 1:15:41 AM

This is kinda funny. I used to love it when people who have very little knowledge about life insurance would tell me what was best. I am an ex-life insurance salesman. I *wanted* you to buy term because I could get you to buy more and I made more and more money off of you every year.

Whole life: more expensive but it is for your WHOLE LIFE and you pay ONE price no matter your age or health. If you reach age 100, you win and get paid whatever your policy is worth. Get laid off later in life? You can use the value of your whole life plan for loans (bank collateral), you can take a loan on your policy from the insurance company, you can reduce your policy and cash in the extra. Lose your job and can't afford to pay your insurance? No problem. You automatically reduced your policy (with all but the shittiest ins. companies) and you now have a policy that will pay $X without you having to pay another dime for the rest of your life.

Term: for a set term (you can get 1 year to 20 year although 1 year is by far the most common). MUCH cheaper BUT you're buying a one year insurance policy. Guess what happens next year! You just got older! Congratulations, your insurance premiums just went up! You'll get the same birthday present EVERY time you renew your policy. Get laid off, have a kid, buy a house, etc? Can't afford to pay your premium? Congratulations, you just lost EVERYTHING you ever paid into it and now you have no insurance. Damn, you guys are right! That definitely sounds like the way to go.

Universal/Term-whole life/etc. = bullshit. Buy either Whole Life or Term Life. Everything else is typically going to be a big screw up.

Unfortunately, my rate books are in storage. If I had them, I'd be more than happy to show you what waiting to buy insurance does. Your investments and things like that had better be DAMN good to make up for the difference in what you'll pay by waiting 10 years to get insurance.

So basically, yeah, term is by far much cheaper. Most people will pay less in total over their lifetime. Unfortunately, a HUGE majority of people that keep term life insurance LOSE it. Do you HONESTLY think you can afford to pay a $500-1000/mo life insurance premium when you're 65 or 70? The big thing to remember is that your premium goes up ALWAYS the older you get. Getting term is just stupid unless you need it for a specific reason. I often would often recommend term to my clients who had just built a new house or started a new business so that if something happened, the loans could be paid off (these loans would be paid off while they were still young and the likelihood of death was low). However, I also made them realize how important a whole life policy was as well for the rest of their family's needs afterwards.

And yeah, this guy that has been in the business and has first hand knowledge has whole life policies.

5/2/2007 2:20:03 AM

Quote :

"Do you HONESTLY think you can afford to pay a $500-1000/mo life insurance premium when you're 65 or 70?"

Unless you are still working when you are 65 or 70, then there is no reason to have life insurance.

Quote :

"Getting term is just stupid unless you need it for a specific reason."

You don't sound like a very intelligent life insurance salesman. You get term in case you die early and you need years worth of salaries paid out to take care of your wife (assuming she can't support herself) and kids. After term runs out in 20 or 30 years, you will hopefully have a nice nest egg built up, or pension. Assuming this is the case, why would you continue to need life insurance?

5/2/2007 7:28:47 AM

Quote :

"Term: for a set term (you can get 1 year to 20 year although 1 year is by far the most common)"

"Since the likelihood of dying in the next year is low for anyone that the insurer would accept for the coverage, purchase of only one year of coverage is rare."

"Much more common than annual renewable term insurance is guaranteed level premium term life insurance where the premium is guaranteed to be the same for a given period of years. The most common terms are 10, 15, 20, and 30 years."

http://en.wikipedia.org/wiki/Term_life_insurance

5/2/2007 9:17:40 AM

Quote :

"And yeah, this guy that has been in the business and has first hand knowledge has whole life policies."

which is precisely why no one should listen to your slimy ass.

5/2/2007 9:20:02 AM

Quote :

"So basically, yeah, term is by far much cheaper."

Check

Quote :

"Most people will pay less in total over their lifetime."

Check

Quote :

"Unfortunately, a HUGE majority of people that keep term life insurance LOSE it."

Check.

Three great reasons to buy term.

It's insurance, not an investment. You are insuring your salary. When you no longer have a salary, you don't need life insurance.

The equivalent to whole life would be car insurance that buys you a brand new car after yours finally dies.

Quote :

"Do you HONESTLY think you can afford to pay a $500-1000/mo life insurance premium when you're 65 or 70?"

Nope, but why would you want to?

[Edited on May 2, 2007 at 9:29 AM. Reason : ?]

[Edited on May 2, 2007 at 9:37 AM. Reason : ?]

5/2/2007 9:28:45 AM

My sister-in-law is our financial planner, so I know she would never give us bad advice. One of the first things she suggested we do was buy life insurance. Her suggestion was less than $500k for each of us, so I don't know how much money slaptit is planning on spending, but that's a big chunck of change. She said you mainly want your significant other to be able to pay for all funeral expenses and live your current lifestyle for a while until they feel ready to get back to work.

We just converted $100k each to full life b/c there was an incentive to do it now. The rest is still in term. It's also an investment vehicle b/c the money you put in earns interest, so you can pass that on to your kids down the road.

If the military would give your wife $500k, that honestly should be enough. Between term, full, and what my employer provides, I have about that much too.

5/2/2007 10:21:40 AM

What is the interest rate?

fyi: http://thewolfweb.com/message_topic.aspx?topic=457693

[Edited on May 2, 2007 at 11:22 AM. Reason : link]

5/2/2007 11:14:58 AM

Quote :

"Wait till you're 50 to worry about life insurance"

More like, wait until you have kids to provide for to worry about life insurance. You could die tomorrow, but your "decent sum of money" should cover your debts and your family won't have to worry about getting stuck with funeral costs, etc.

He has a wife so it depends on what she does for a living. If she has a job that pays her comfortably, you might want to put it off until you have kids. If she would have to struggle to get by, then life insurance is probably the way to go.

5/2/2007 11:23:56 AM

Damn, I must have missed that post. More like

Quote :

"Wait till you're 50 to worry about drop your life insurance"

5/2/2007 11:27:03 AM

Quote :

" One of the first things she suggested we do was buy life insurance."

you're married, and have a kid right?

you absolutely need life insurance.

just not whole life. the "investment" return doesn't even get you to the level of a passive index fund.

5/2/2007 12:18:56 PM

Quote :

"Unless you are still working when you are 65 or 70, then there is no reason to have life insurance."

&

Quote :

"You don't sound like a very intelligent life insurance salesman. You get term in case you die early and you need years worth of salaries paid out to take care of your wife (assuming she can't support herself) and kids. After term runs out in 20 or 30 years, you will hopefully have a nice nest egg built up, or pension. Assuming this is the case, why would you continue to need life insurance? "

Yeah because your family definitely will not have to pay your bills. Most people go to the hospital before they die. Going to the hospital = $$. Even if you still have health insurance at that age (or anything else), it doesn't cover it. My grandfather's hospital bill before he passed was over $50k for relatively minor things. And then there was his funeral which averages around $8k. So you're right, you definitely don't need life insurance at age 65-70 if you're not working. After all, you have all the money in your nest egg, right? Wait, you didn't spend that money when your wife developed cancer 5 years ago did you? After all, you didn't have any life insurance on her because it's completely unneccessary since she didn't work. So I guess the state pays it all, right? Or the hospital? Wait, I don't understand, where's that money coming from again smartass?
Most people don't have a "nest egg" when they die. Most people leave bills behind, not money. The "nest egg" is usually long gone and wasn't that big to start with.

And I'm glad you got your info from wikipedia. They are definitely the place to get it. I'm going to guess that you're upper class and white. That's the ONLY people who get a 30 year term policy. There's not much difference in premium between a 30 yr. term and WL. Around here, there's a shit ton more yearly term policies than anything else. My office maybe sold anything over a 5 year term once or twice a month and that's it.

Quote :

"which is precisely why no one should listen to your slimy ass. "

Damn, you're a fucking idiot aren't you? I would much rather listen to people that have played the game than sat in the fucking stands and don't know shit especially when they aren't trying to sell me. They tend to know more than your average idiot on TWW. And seriously, what are you? Like 5? That's a pretty lame put down.

Quote :

"It's insurance, not an investment. You are insuring your salary. When you no longer have a salary, you don't need life insurance. The equivalent to whole life would be car insurance that buys you a brand new car after yours finally dies. "

See above. Just because you're not making money anymore doesn't mean that you don't need insurance. Bills come in regardless and will continute to do so after most people die. And yeah, it is insurance not an investment but if I have a choice to make it both, I'd much rather do so. Seriously, you want to spend $50k+ over your lifetime and get nothing for it? I'd much rather spend $60k and know that I'm getting it all back or that my family will. If that's how you feel, then I'd be more than happy to take care of some of that excess money you have.

Opstand has it about right. $100k to take care of all the shit that may happen after he quits working and any nest egg is gone. $400k to take care of the loss of his salary and future earnings. Apparently the rest of you just don't give a shit about your familys, know that you won't die in a hospital ringing up a massive bill, or are just too dumb to listen to anyone other than yourselves. Damn, I'm glad that I'm not related to you.



[Edited on May 2, 2007 at 2:05 PM. Reason : forgot...]

5/2/2007 1:54:54 PM

if you put that money (meaning the difference between the cost of a term vs. whole life policy) in simple passive index funds, you'll have far more than the value of a whole life policy.

clearly, you drank too much kool aid.

5/2/2007 1:57:50 PM

^yes, you are completely correct. And not a damn one of you will do it. You don't have the money to put into the fund and if it's not a bill, you won't pull $x out of each paycheck to add it to the your fund or start a new one. I didn't drink any kool aid, I'm just smart enough to know that all the "reasons" why WL is a waste are BS at a minimum and often completely ignorant.

5/2/2007 2:07:44 PM

Get good health care and long term dissability coverage if you are worried about a lot of the stuff you listed.

If you get cancer your bills could be in the millions so a $500k life insurance policy won't even matter.

I plan to have a nest egg when I die and it sounds like Feeble has well above the average amount for his age.

Quote :

"not a damn one of you will do"

I'm investing about 30% of my income right now and I assume Bobby is investing a large chunk as well. Just because your family fucked up and didn't save doesn't mean the rest of us will.

5/2/2007 2:10:33 PM

^ yep.

My wife and I live considerably below our means.

5/2/2007 2:14:49 PM

Quote :

"And I'm glad you got your info from wikipedia. They are definitely the place to get it."

I'll get you a dozen other sources saying the same thing if you want.

Quote :

"Most people go to the hospital before they die. Going to the hospital = $$."

It sounds like you are banking on someone in your family getting a terminal disease where they live on for years racking up a ton of medical expenses. Even if this was the norm, which I don't think it is, long term dissability coverage is the way to go, not while life insurance.

5/2/2007 2:19:07 PM

Here's personal finance guru Clark Howard's take:
http://clarkhoward.com/shownotes/category/9/81/

My thought is that the point of life insurance is to provide income replacement for your spouse and kids, if you die young. At age 31, I just got a 30-year level term policy (meaning that the premiums will stay the same until I'm 61, at which time I plan to drop the policy). The total premiums for that 30 years will be under 3% of the face value of the policy. If I die in my 60s, after the policy expires, then my wife and I would already have a solid retirement nest egg (meant to support two people) that would be plenty for one person to live off of.

[Edited on May 2, 2007 at 2:22 PM. Reason : .]

5/2/2007 2:21:42 PM

i aint got no kids n no wife, no one is profiting from my death, fuck that shit

5/2/2007 2:25:11 PM