I have never had Life Insurance, nor has my wife. We are in our middle 50's. What type of insurance would be best.
Total Comments: 35
Posted: Sun Feb 10, 2008 02:01 am Post Subject:
There may be better health care and prescription drugs but they are all not within my grasp as I cannot afford these things so I look to be lucky to live past a term policy. Also it sounds like a horrific percentage of term life policies to not be used.Sounds like a great waste and great gain for insurance industry.
Posted: Sun Feb 10, 2008 02:56 pm Post Subject:
hummingbird it seems that you may have misunderstood the point I was trying to get across:
Sounds like a great waste and great gain for insurance industry.
Let's look at a family of five - Mom, Dad, 4 year-old, 5 year-old, and 7 year-old. In order to provide the maximum life isurance protection, Dad feels that he needs $250,000 in life insurance.
Dad feels that all the kids will be out on their own in about 14 years (youngest child will be 18).
The premium for a permanent $250,000 life insurance policy just will not fit into the family budget, however he can pay the premium for a $250,000 term policy.
So, he buys a $250,000 20-year term policy, which will help take care of his family if he should die while the kids are still at home.
So, if Dad dies in 10 years, who has gained the most, Dad's family or the insurance company?
As far as "buy term" and "invest the difference" - no one in my 20+ years in the insurance industry has shown me a way that a person can accumulate $100,000 in cash in 20 years. The last time I checked, the compounded interest rate would have to be something like 25%.
So, term life insurance in the right situation is an excellent buy, but the style of life insurance depends on individual desires and circumstances.
PS - I don't know where the smiley faces are coming from, I didn't put them there.
Posted: Sun Feb 10, 2008 03:47 pm Post Subject:
Actually...$149 per month invested for 20 years at 9% will accumulate to $100,000. A Roth would be a great vehicle for this.
11% ROR will reduce the required monthly payment to $115. If you are earning 7%...the monthly payment will increase to $195.
So it's not as tough as you might think. Naturally, a mutual fund will create some taxes for you. And the beauty of this is...if you stop or skip payments...you don't run the risk of losing everything.
Posted: Mon Feb 11, 2008 01:48 pm Post Subject:
Sorry, I was having a brain freeze on the last post and didn't make myself clear.
When I made the statement:
As far as "buy term" and "invest the difference" - no one in my 20+ years in the insurance industry has shown me a way that a person can accumulate $100,000 in cash in 20 years.
I was talking about the difference in premium of term life insurance and permanent. It my example with the person in his 50's, the term premium was $45.00 per month and the permanent life insurance was $125.00 - a difference of $80.00 per month.
Where can a person invest $80.00 per month and accumulate $100,000 cash in 20 years was actually the question.
According to MSN Money here's what it would take:
Starting with $80 and depositing $80 monthly over 20 years (at a rate of return 21%, compounded monthly and taxed at your marginal rate of 28%), you will save $107,768.
Initial balance: $80
Total deposits: $19,200
Total interest earned: $122,900
Total taxes paid: $34,412
Total Saved: $107,768
Where can a person get a guaranteed return of 21%?
Posted: Mon Feb 11, 2008 06:50 pm Post Subject:
OK ,But if a person takes a term policy because they cannot afford the permanent insurance there will be no difference to invest. What it sounds like to me is a gamble do I want to spend _amount of money for a term policy that will pay off if I die withion that term OR if I don't at the end of that term I may or may be able to change it to permanent or I may have just lost all those premiums. Am I understanding that correctly. Either you gain or the insurance company gains. BUT, if well over 90% of term policies are ever paid then the insurance compainies are making the most.
What smiles?
Posted: Mon Feb 11, 2008 09:46 pm Post Subject:
What a great conversation you guys have going on here.
Maze, I believe you have done a wonderful job thus far. I'm afraid, however, you will always run into resistance from those who have Suze Orman's picture taped to their refrigerator door.
Someone in their mid-50s are very rarely candidates for term insurance and even Suze knows that. Because she wants someone to have the money to settle her estate when she passes on, she owns a huge Variable Whole Life policy through Mass Mutual.
I do not think 30-year term policies with Return of Premium (ROP) riders are available past age 50.
If I were an agent tasked to help these people, I would have asked them the same questions you [Maze] did: Budget, needs, goals and if they want to pass money along to their loved ones when they die. If they don't, term might be the way to go and if they do, stay away from a term plan.
Pretty simple actually.
Posted: Mon Feb 11, 2008 10:00 pm Post Subject:
I'm afraid, however, you will always run into resistance from those who have Suze Orman's picture taped to their refrigerator door.
InsInvestigator, you forgot a Dave Ramsey tattoo on the rear end.
I really don't understand how some of these people sleep at night.
Too many people end up in what I call the "Term Trap", no where to go with their life insurance program.
Believe me, I am used to this argument, but no one has convinced me yet.
Glad you survived your birthday.
Maze
Posted: Mon Feb 11, 2008 11:33 pm Post Subject:
Actually...there is no right answer to these questions. Not only are there different answers to each client's needs...but situations change rapidly. Someone who needed term a few years ago may now be better off converting the contract.
There is no one fit for each scenario...despite what Johnny Cochran would like you to believe. You know...if the glove don't fit...
By the way...White Death here in the Midwest tonight. And Tuesday as well.
Posted: Tue Feb 12, 2008 01:13 am Post Subject:
Maze,
Actually there was nothing to survive. I took it easy, stayed home and didn't even drink. My wife and I flew our plane up to Reno yesterday and dropped 6 or 7 housepayments - that pretty much sucked. You can't win them all and the flight home was incredibly beautiful.
I'm back today working on the first copy of a complaint against the big insurance company that's listed in the "Currently in the Spotlight" section of my website.
My personal "Get out of Debt" plan works somewhat differently than those of Orman, Ramsey, and Jimmy Cramer. You see, as long as there are dishonest, poorly trained, or delusional life insurance agents, I have job security. The aforementioned individuals are just aiding the cause.
Posted: Tue Feb 12, 2008 04:01 pm Post Subject:
I could have thought of better ways to use that money but its your money...lol
Posted: Sun Feb 10, 2008 02:01 am Post Subject:
There may be better health care and prescription drugs but they are all not within my grasp as I cannot afford these things so I look to be lucky to live past a term policy. Also it sounds like a horrific percentage of term life policies to not be used.Sounds like a great waste and great gain for insurance industry.
Posted: Sun Feb 10, 2008 02:56 pm Post Subject:
hummingbird it seems that you may have misunderstood the point I was trying to get across:
Sounds like a great waste and great gain for insurance industry.
Let's look at a family of five - Mom, Dad, 4 year-old, 5 year-old, and 7 year-old. In order to provide the maximum life isurance protection, Dad feels that he needs $250,000 in life insurance.
Dad feels that all the kids will be out on their own in about 14 years (youngest child will be 18).
The premium for a permanent $250,000 life insurance policy just will not fit into the family budget, however he can pay the premium for a $250,000 term policy.
So, he buys a $250,000 20-year term policy, which will help take care of his family if he should die while the kids are still at home.
So, if Dad dies in 10 years, who has gained the most, Dad's family or the insurance company?
As far as "buy term" and "invest the difference" - no one in my 20+ years in the insurance industry has shown me a way that a person can accumulate $100,000 in cash in 20 years. The last time I checked, the compounded interest rate would have to be something like 25%.
So, term life insurance in the right situation is an excellent buy, but the style of life insurance depends on individual desires and circumstances.
PS - I don't know where the smiley faces are coming from, I didn't put them there.
Posted: Sun Feb 10, 2008 03:47 pm Post Subject:
Actually...$149 per month invested for 20 years at 9% will accumulate to $100,000. A Roth would be a great vehicle for this.
11% ROR will reduce the required monthly payment to $115. If you are earning 7%...the monthly payment will increase to $195.
So it's not as tough as you might think. Naturally, a mutual fund will create some taxes for you. And the beauty of this is...if you stop or skip payments...you don't run the risk of losing everything.
Posted: Mon Feb 11, 2008 01:48 pm Post Subject:
Sorry, I was having a brain freeze on the last post and didn't make myself clear.
When I made the statement:
As far as "buy term" and "invest the difference" - no one in my 20+ years in the insurance industry has shown me a way that a person can accumulate $100,000 in cash in 20 years.
I was talking about the difference in premium of term life insurance and permanent. It my example with the person in his 50's, the term premium was $45.00 per month and the permanent life insurance was $125.00 - a difference of $80.00 per month.
Where can a person invest $80.00 per month and accumulate $100,000 cash in 20 years was actually the question.
According to MSN Money here's what it would take:
Starting with $80 and depositing $80 monthly over 20 years (at a rate of return 21%, compounded monthly and taxed at your marginal rate of 28%), you will save $107,768.
Initial balance: $80
Total deposits: $19,200
Total interest earned: $122,900
Total taxes paid: $34,412
Total Saved: $107,768
Where can a person get a guaranteed return of 21%?
Posted: Mon Feb 11, 2008 06:50 pm Post Subject:
OK ,But if a person takes a term policy because they cannot afford the permanent insurance there will be no difference to invest. What it sounds like to me is a gamble do I want to spend _amount of money for a term policy that will pay off if I die withion that term OR if I don't at the end of that term I may or may be able to change it to permanent or I may have just lost all those premiums. Am I understanding that correctly. Either you gain or the insurance company gains. BUT, if well over 90% of term policies are ever paid then the insurance compainies are making the most.
What smiles?
Posted: Mon Feb 11, 2008 09:46 pm Post Subject:
What a great conversation you guys have going on here.
Maze, I believe you have done a wonderful job thus far. I'm afraid, however, you will always run into resistance from those who have Suze Orman's picture taped to their refrigerator door.
Someone in their mid-50s are very rarely candidates for term insurance and even Suze knows that. Because she wants someone to have the money to settle her estate when she passes on, she owns a huge Variable Whole Life policy through Mass Mutual.
I do not think 30-year term policies with Return of Premium (ROP) riders are available past age 50.
If I were an agent tasked to help these people, I would have asked them the same questions you [Maze] did: Budget, needs, goals and if they want to pass money along to their loved ones when they die. If they don't, term might be the way to go and if they do, stay away from a term plan.
Pretty simple actually.
Posted: Mon Feb 11, 2008 10:00 pm Post Subject:
I'm afraid, however, you will always run into resistance from those who have Suze Orman's picture taped to their refrigerator door.
InsInvestigator, you forgot a Dave Ramsey tattoo on the rear end.
I really don't understand how some of these people sleep at night.
Too many people end up in what I call the "Term Trap", no where to go with their life insurance program.
Believe me, I am used to this argument, but no one has convinced me yet.
Glad you survived your birthday.
Maze
Posted: Mon Feb 11, 2008 11:33 pm Post Subject:
Actually...there is no right answer to these questions. Not only are there different answers to each client's needs...but situations change rapidly. Someone who needed term a few years ago may now be better off converting the contract.
There is no one fit for each scenario...despite what Johnny Cochran would like you to believe. You know...if the glove don't fit...
By the way...White Death here in the Midwest tonight. And Tuesday as well.
Posted: Tue Feb 12, 2008 01:13 am Post Subject:
Maze,
Actually there was nothing to survive. I took it easy, stayed home and didn't even drink. My wife and I flew our plane up to Reno yesterday and dropped 6 or 7 housepayments - that pretty much sucked. You can't win them all and the flight home was incredibly beautiful.
I'm back today working on the first copy of a complaint against the big insurance company that's listed in the "Currently in the Spotlight" section of my website.
My personal "Get out of Debt" plan works somewhat differently than those of Orman, Ramsey, and Jimmy Cramer. You see, as long as there are dishonest, poorly trained, or delusional life insurance agents, I have job security. The aforementioned individuals are just aiding the cause.
Posted: Tue Feb 12, 2008 04:01 pm Post Subject:
I could have thought of better ways to use that money but its your money...lol
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