buckmanmike
Senior Member
Aren't most good term plocies guaranteed renewability. After the length of orjginal term, you can get another term policy at attractive rates, as long as policy is in good standing.
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Whole life verses term life insurance
- Thread starter Mako22
- Start date
lagrangedave
Gone But Not Forgotten
Whole life is sold by thieves............stay clear............go and pay for your final funeral expenses then save or invest if you want to leave your offspring well off...........I plan to go out dead broke..........having enjoyed the fruits of my labor while we were alive........
Artfuldodger
Senior Member
In general, whole life insurance dividends are not taxed because they are viewed as a rebate whether paid in cash, used to reduce premiums, or to buy additional paid-up coverage. There a few instances where life insurance dividends can become taxable.
They appear on the surface or are sold with the idea of being some type of an investment that pays you a dividend. If you were making money on the deal you can bet the IRS would want their share of the income you are making. Basically the money they are giving you as a dividend is already yours.
I've got one on my wife for 10,000 dollars I bought to cover her funeral. I bought it back in the early eighties. It might be enough for a cremation service with no embalming.
It cost $17.00/month.
That means I've spent roughly a bit over $7,344.00. I'm beginning to think this wasn't a good investment. What could I have spent $17.00/month on for 36 years that would have given me a better return on my money?
Granted this wasn't just for an investment as my wife could have died within 3 years of the policy purchase. Still I could have got a 30 or 40 year term for 7 of my dollars and invested the other $10 more wisely.
They appear on the surface or are sold with the idea of being some type of an investment that pays you a dividend. If you were making money on the deal you can bet the IRS would want their share of the income you are making. Basically the money they are giving you as a dividend is already yours.
I've got one on my wife for 10,000 dollars I bought to cover her funeral. I bought it back in the early eighties. It might be enough for a cremation service with no embalming.
It cost $17.00/month.
That means I've spent roughly a bit over $7,344.00. I'm beginning to think this wasn't a good investment. What could I have spent $17.00/month on for 36 years that would have given me a better return on my money?
Granted this wasn't just for an investment as my wife could have died within 3 years of the policy purchase. Still I could have got a 30 or 40 year term for 7 of my dollars and invested the other $10 more wisely.
landlocked
Member
I've been I insurance business for 30 yrs, though not specializing in life insurance, thus I am pretty unbiased. Listen to deerhunter092. Best advice on the thread so far. Whole life is great for funeral expenses, term is great for covering debts of specific durations (mortgages, car notes, income replacement in younger years).
Probably the biggest reason to buy life insurance is security....Artful, what investment could you have made that would have paid you $10,000 if your wife had passed a month after you took out the policy ($10,000 return on $17 investment is pretty darn good in my book)?
Find someone you trust, tell them what you want and let them find you the best rates. Plenty of companies out there that spank Woodmen and Farm Bureau's rates
My $0.02
Probably the biggest reason to buy life insurance is security....Artful, what investment could you have made that would have paid you $10,000 if your wife had passed a month after you took out the policy ($10,000 return on $17 investment is pretty darn good in my book)?
Find someone you trust, tell them what you want and let them find you the best rates. Plenty of companies out there that spank Woodmen and Farm Bureau's rates
My $0.02
tad1
Senior Member
Landlocked, why couldnt he just use the cheap level term life policy to pay her funeral expenses and any other expenses he sees fit?
I also agree that whole life insurance is not a good value.
tad1
Senior Member
J seph, this seems absurd, why does this 86 year old man need life insurance? Surely he is not responsible for dependents still. What does he need to cover if he passes away?
landlocked
Member
Keep in mind that people who need life insurance fall into many different demographics. One size does not fit all.
A disciplined purchaser who opts for term and invests the difference is almost always better off in the long run. But....
Many people need the forced discipline of a monthly premium in order to provide for future expenses, whether those expenses be burial expenses or the need to take out a loan against the policy cash value in a time of need.
Many times I have seen someone purchase a term policy, then at the end of the term they decide that they still need the insurance (because they haven't saved adequately, or because of some unforeseen debt that they have incurred) and are either uninsurable or simply cannot afford the new premium at their new attained age.
Some people just want to leave their kids a life policy (I don't know why), some may need a life benefit to pay estate taxes. If you want a death benefit to be paid no matter when you die (at 25 or at age 95), then a whole life (or other permanent life product) may be a good option for you.
If you are like me and plan to be debt free at a certain age and plan to put away enough savings/retirement to carry your spouse or loved ones in your absence within "x" number of years, then a 10/20/30 Year Level Term may be great for you.
A disciplined purchaser who opts for term and invests the difference is almost always better off in the long run. But....
Many people need the forced discipline of a monthly premium in order to provide for future expenses, whether those expenses be burial expenses or the need to take out a loan against the policy cash value in a time of need.
Many times I have seen someone purchase a term policy, then at the end of the term they decide that they still need the insurance (because they haven't saved adequately, or because of some unforeseen debt that they have incurred) and are either uninsurable or simply cannot afford the new premium at their new attained age.
Some people just want to leave their kids a life policy (I don't know why), some may need a life benefit to pay estate taxes. If you want a death benefit to be paid no matter when you die (at 25 or at age 95), then a whole life (or other permanent life product) may be a good option for you.
If you are like me and plan to be debt free at a certain age and plan to put away enough savings/retirement to carry your spouse or loved ones in your absence within "x" number of years, then a 10/20/30 Year Level Term may be great for you.
Throwback
Chief Big Taw
planning on being debt free at a certain age is great until life happens.
landlocked
Member
Yeah, didn't mean to sound like a jerk or anything. My plans have not worked according to schedule 
Kinda bolsters my opinion that whole life products certainly have a place
Kinda bolsters my opinion that whole life products certainly have a place
