Comments on: Choosing Life Insurance

By: Finance Services in Mumbai

Finance Services in Mumbai — Thu, 29 Mar 2012 08:30:16 +0000

Always go for double benefit plan which covers life as well as investment. Choose long term investment + insurance plan. It will always give you good returns.

By: slccom

slccom — Mon, 25 Jul 2011 19:39:42 +0000

#1 Matt, the reason to not cash out your universal life policy is because it is making money, and you may or may not be able to get or renew your term policy. If you got the universal policy young, it is almost certainly cheaper than the term policy, lasts your whole life, etc.

By: slccom

slccom — Mon, 25 Jul 2011 19:35:32 +0000

You never know what life will bring you. For that reason, I strongly urge young people to get a good universal life policy. The premiums will be dirt cheap, you won’t have to worry about becoming uninsurable, and if your spouse or a child ends up with permanent disabilities, that insurance will be the difference between poverty and a decent life. Most universal life policies offer a feature where if you become terminally ill, you can collect early and use that money to make the end of your life better.

Buying term life insurance involves a bunch of assumptions: that you will remain healthy, that your family members will remain healthy, and that you will have the opportunity all your life to build wealth. Every one of these assumptions, individually, is reasonable. Collectively, not so much.

Buying a cheap life insurance policy on your child means that they will be able to have life insurance of their own no matter what happens to them. The cost of that assurance is very low, and the life insurance for them when they are adults and have their won family even if they are uninsurable is priceless. The chances of them dying are very small, but real. The chances of them becoming uninsurable are much greater, although still small. But if that does happen, the tiny cost will be the best investment you could have made.

And no, I don’t sell insurance. I just look at what actually happens to people, and at a much longer timeframe than most people do.

By: jim

jim — Mon, 25 Jul 2011 17:56:57 +0000

Yes $5-10k is a lot of money. Sorry wasn’t really meaning to be flip about that financial burden during peoples time of loss. But if you can’t afford to pay for a funeral out of pocket then you don’t have an adequate emergency fund. Saving up for an emergency fund should be a lot higher priority than paying for insurance on a child. The chances of a child dying are very low. If you don’t have an emergency fund then you’re a LOT more likely to have financial problems from a car failure, broken furnace, medical bill, loss of job, natural disaster, etc. Child insurance is a bad financial deal for the buyer. The risks are low and the cost is too high for the risks. And as Socalgal points out there are other ways to save costs on funerals.

By: socalgal

socalgal — Mon, 25 Jul 2011 16:25:10 +0000

Roberta & Georgia, I am very sorry for your loss. I do not think the average person realizes just how expensive funerals are and both of you are examples of why we should take the time to not only plan our funerals, but also set aside some money to pay for them.

By: Georgia

Georgia — Mon, 25 Jul 2011 16:14:19 +0000

I lost the life insurance on my husband when I retired. I could keep mine, but not his. Luckily I got a part time job for about 18 months. It paid well and I teased my husband that it was his burial policy. As it turned out, it was. I had saved $5k. The funeral cost me about $5,2k and SS took care of the extra.

However, I live in a small town. I had a visitation at the funeral home, a cardboard coffin ($800) that would hold up to 665 #’s and was beautiful, and a service at the cemetery. My IL’s had bought the cemetery plots & that cost me nothing. I was able to not do a vault or liner, for which I was grateful – and not for monetary reasons.

I have no other life insurance than my retirement amount ($15k). It is listed with both my children at 50%. They are to pay for my funeral, as close to my husband’s as possible) and they get the rest. Should work.

I’ve had different types of life insurance at different times and always tried to do the best possible. I also have 2-3 $1k policies given to you by companies like cc’s. I keep track of whether they are still valid & keep a sheet for my kids to doublecheck it.

By: Roberta

Roberta — Mon, 25 Jul 2011 13:19:29 +0000

Reference #2 about funeral costs

Depends on what you consider “aren’t that high”. Our son died unexpectedly last year and we had a very modest funeral, with no visitation, and turned down all of the fancy touches and world class options, and did not have to pay for a cemetery plot, and the funeral home still wanted $10,000 on the spot. Apparently so many people walked away from their bills after the funeral that many in the industry are no longer offering extended pay plans. We could swing it with no notice but lots of families could not. Teaching point for us was that we are now in the process of preplanning our own funerals as we did with our parents. You just don’t expect to bury a perfectly healthy child.

By: RJ

RJ — Mon, 25 Jul 2011 06:06:05 +0000

Universal life have returns that are bond like around 3-5%. Some already consider them as an asset class and you can fit it in your overall portfolio as your other fixed income assets.

My term insurance will end when I’m 65. The universal has coverage until my death, so its a bit of an upside.

By: jim

jim — Sun, 24 Jul 2011 15:43:45 +0000

Don’t buy insurance for children. THeres much better ways to save money for kids like a 529, the chance of a child becoming uninsurable is remote and funeral costs aren’t that high.

By: matt

matt — Sun, 24 Jul 2011 14:26:30 +0000

if you have a universal or whole life policy with a large cash value in it, why wouldn’t you just cash that out and buy a term policy which will probably cost you 1/4 of what you were paying a month?