Life Insurance

[-9Capt]

What's the problem with whole life ???

Do not buy whole life! Know that term is cheaper and a better deal. Whole life is insurance with a slight savings/investing mix. These slick salespeople get their big paydays when you sign up for whole life. Your first years premium and 3-4% thereafter goes to commissions. Therefore, you won't see much in growth for 15 - 20 years. You would do 10X better with any good mutual fund. Don't let them fool you with claims that your investments are tax free. Its not - per the IRS its tax deferred, not tax free. And due to the extremely high commissions you won't ever see much growth. Just look up on the internet and see how many people amassed great wealth with whole life - you will find the answer is zero! What a rip off! Upon calling numerous experts, the only reason to have whole life is if you are 60-65 or above, or if you are extremely wealthy and want to use it to pay your estate taxes when you die. That is it from the worlds leading experts! Suzie Orman will tell you the same - stay away from whole life!

 

[PiratePilot]

Thank you for the replys!

 

[StaySeated]

The statement above regarding whole life commissions is not accurate. Your first years premium is not solely a commission (everyone and their brother would get an insurance license if that was the case) and the annual trailers are not any where near 3 or 4%. If you compare most life insurance products today (and a lot of annuities from respectable companies) to a mutual fund with class A shares you will find the commission structure to be very similiar. Some annuities pay more up front but there are no trailing commisions. The renewal commissions on life insurance are no where near the 12b-1 fees and expense ratios found in mutual funds. With regard to the tax free withdrawals, you can take policy loans tax free. The loans reduce the face amount of the policy and provide an income tax free. If you keep your 401k/IRA until age 70 1/2 and begin to take RMD, you will repay all of the deferred taxes in about 4 years. Every distribution after that will be gravy in Uncle Sams pocket. I do not think life insurance is the panacea to all investment problems, but it definitely has its place and todays life insurance products (like Indexed Universal Life) definitely have their merits.

 

[mavericks]

Find your local Primerica agent and he will explain everything about insurance to you. Why you should buy term and not whole life, universal, or variable. if you buy term and invest the difference in premium you are saving from not buying one of the other products you will be far better off. Every life insurance agent has term in his briefcase, but will not show it to you unless you ask him. The commision is very small on term.

 

[AZ Typed]

StaySeated,

Well Said.


Mavericks,

Primerica agents have zero training in anything but selling term, and the term they sell is overpriced to pay their multilevel payout structure. In addition, Primerica agents are trained to sell you class A share mutual funds on the investment side, which in many cases is a complete rip off to the client, but a 5% sales charge in Primerica's pocket. I've run into so many people who were ripped off by a Primerica agent's sales pitches. Their philosophy is smart (buy term and invest the diff.) for middle America, but their products and methods stink, period.

AZT

 

[Swass]

Agreed, run form Primerica sales people. What a joke.

 

[AZ Typed]

TOGA - pulling money out of a home to fund a EIL is plain stupid - sorry. That seminar you paid money to attend was plain incorrect and put on by a bunch of financial fools - no offense.

AZT

 

[SonnyD]

AZT,

Why's that?

 

[Bandit60]

28 year old / male / single/ non-smoker / good health / pilot seeks advice on life insurance. I just got off the phone with Prudential agent in Phoenix and I felt the agent was incopentent and was just trying to make a quick insurance sale. Any advice on picking a policy, what I should be aware of before I signing up, ext.... Thank You.

Does your employer have any type of life insurance for you?
If they do then great. That should be enough to cover the burial.
Since your a single guy why do you want life insurance? Do you have any dependents that need your support to survive? If you dont then I cannot see any good reason to have life insurance at your age. Take the money you would be spending on life insurance and invest it in retirement or invest it for your future. You will get a much better return on your money if you stay away from life insurance.

Just my two cents.

 

[Swass]

Sound advice so far, except, only a fool expects to get a great return on life insurance. That's not what it is for, it's to protect assets.