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This is a frustrating thread. We gave good advice to someone who paid attention to an insurance salesman amd bought a product he did not need. "Bye bye"
Thanks - yep, I have read lots about life insurance being a waste of money if you don't and never will have dependents. The only argument for purchasing it in my situation would be the burial/funeral costs if I happen to die, but I didn't want to shell out $160/month for just that! So thanks for letting me know that it's possible to purchase a separate "burial policy" that isn't a life insurance policy.
(Kinda off-topic, but this might shed some light: my controlling/abusive parents are trying to force me to purchase life insurance with them as the beneficiaries. They quoted me $160/month, which is where the above figure came from. I told them I don't want to purchase it as it would be financially detrimental to me. They are currently throwing a tantrum about it. I want to arm myself with more counter-arguments in case they persist.)
Have THEY taken out 200K in life insurance, with YOU as the payee, so you'll be enriched should they depart this earthly plane sometime soon? Just asking.
Buy a small plot of land somewhere isolated. Request a few friends plant you there, should you drop off unexpectedly in the next 10-20 years.
You'll be happy there, take my word for it, and your parents won't be around to bug you!
Thanks - yep, I have read lots about life insurance being a waste of money if you don't and never will have dependents. The only argument for purchasing it in my situation would be the burial/funeral costs if I happen to die, but I didn't want to shell out $160/month for just that! So thanks for letting me know that it's possible to purchase a separate "burial policy" that isn't a life insurance policy.
(Kinda off-topic, but this might shed some light: my controlling/abusive parents are trying to force me to purchase life insurance with them as the beneficiaries. They quoted me $160/month, which is where the above figure came from. I told them I don't want to purchase it as it would be financially detrimental to me. They are currently throwing a tantrum about it. I want to arm myself with more counter-arguments in case they persist.)
Shopping for the burial policy is tough. My father passed this fall and had one, but it had only been in place for 2 years, so it had a limited benefit. It was a $10K policy that they had worked out with the funeral home to pay for costs they'd negotiated then...as it didn't cover the $10K, they wanted $12K for the actual as of today costs less the actual payout after they'd said a month earlier he was fine and all was covered. Luckily they'd messed up, and I was able to show the guy where his contract was flawed and we negotiated to a middle point. Had Dad lived for 5 years he would have paid the policy about $14K for the $10K benefit.
Burial companies want this for two reason. The first is that life insurance proceeds are tax free. They may report the income to the IRS, but nobody else is as a double check. So, while I don't know, I can pretty easily guess what happens.
The proceeds are also not subject to estate issues. It is separate as they are the named beneficiary. As such, no matter if the person was broke or rich, they get paid without hassle.
As such, it is generally the burial companies, not the individuals, who are seeking these policies. It would be interesting to see if an actual agent can get you a better policy independently. At such a young age, I would imagine a much better deal could be made. Personally, I think it is right to make sure this is taken care of. Whoever is caring for you and your estate will be most appreciative if you've already got your plot acquired, casket picked out etc.
As to your parents, it's incredibly cynical that a parent would ask a child to get a policy with themselves named as beneficiaries. The presumption is that you will outlive them and doing this doesn't seem to put your interests at heart. Life insurance is generally for the care of dependents. If you had children, then it would pay for their care/education etc. If you had a significant other that was disabled (whether lover or just someone that has grown to rely upon you) it would be good for them. However, as an investment, it is generally not a good one. It's insurance. It deflects bad. Investments go out and grow.
I have two types of insurance. I have life insurance that will cover the main home's mortgage in the event I pass. I also have some physical gold, in case something were to happen to the dollar. I don't expect to benefit from either one, but I do expect my family to be safe. The insurance stops with me, the gold hopefully is handed down generation after generation.
I'd investigate the small policy for burial and possibly get it. It's likely too early for you to know where you want to be buried/cremated. If my parents were so ridiculous, I'd then photoshop the insurance certificate and send them some bs about them being named beneficiaries on a small plan just to appease them. Put the detail in a safety deposit box (with your real policy) and theirs in a letter explaining that there's no way in hell you'd insure their interests, but you did take care of your own burial.
I buried my father in 2004 and the cost was almost $9,000 then. That included a casket, a mass, the hearse from the funeral home to the church and to the graveyard. There was no viewing or any hours at the funeral home and the burial plot was paid for long ago. So $10,000 would not bury a king today. Maybe $100,000, but certainly not $10,000.
Make sure you have adequate burial insurance.
Rising funeral/burial costs explain why many are just going with cremation. This and or for certain persons/families allowing the (once indignity) of being buried in a pauper's grave.
Don't know anyone that does more than one (if that) day of viewing anymore unless family has that kind of money. Many are choosing one or the other; church service or funeral home, then off to burial or cremation.
And yes, it costs major money to "die" these days in the USA. It's a racket.....
Don't even think about whole life. Buy term if there is a persuasive reason why you need life insurance at all. Term is very cheap at a young age, when you have growing children to be concerned about. As they grow and your financial picture takes shape, buy a new term insurance each year, according to what you would need if you died that year.
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