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Yes, put another way, any insurance product that covers only a specific morbidity or mortality peril - e.g. cancer insurance - is usually a bad deal relative to encountering the specific named peril.
aflac was brilliant in their plan to sell single disease and accident insurance . what great profits in it . not only that but by the time odds are high you will get cancer or have more crap happen to you , it is likely you are no longer in the work place . most of us only use the aflac products while we work .
Last edited by mathjak107; 01-24-2016 at 04:08 AM..
life insurance can play different roles at different times .
i know at this stage of my life i can leave my wife 7 figures in taxable ira's , but we have no idea what will be hers to keep .or eventually i can take a smaller portion of those ira's and leverage those dollars in to a single premium life insurance policy paying a small portion in tax . now i can leave my wife 100% tax free money with no rmd's equal to the same amount of taxable money i was going to leave her .
so by using life insurance we took forever taxable money and turned a good portion of it in to never taxable money .
the kids can inherit what is left in the ira's at the end and they get to pay the taxes over their lifetime .
life insurance can be a good thing in 2nd marriages too .
since my wife and i are leaving everything to each other by leaving small policy's to our kids they get something up front from their parent without waiting for the 2nd spouse to die who may not be their parent .
on top of which you can over fund a permanent life insurance policy , never pay fees or expenses on the over funded money , get 4% or so today as a minimum rate , and later on borrow it out totally tax free and never pay it back .
so both whether you need insurance as well as the type of insurance you want all depends on the life long plan and how much you want guarantees .
LESS AND LESS FOLKS TODAY ARE WANTING TO BET THE RANCH ON ONLY HAVING FAVORABLE OUTCOMES WITH THE PERFORMANCE OF OUR MARKETS AND INTEREST RATES when it comes to their future and their spouses future .
we made the decision to hold off taking social security as long as we can just so we can cut dependency on the markets being such a large portion of our income .
like all insurances we may want , we weigh how devastating it could be for us or a spouse if we are on the wrong side of the statistic since someone has to be .
in life we only have two statistics , things either work out as statistic show or they don't
Last edited by mathjak107; 01-24-2016 at 04:27 AM..
Funeral insurance is life insurance, if you get accident insurance and die of cancer, then what. If you want to cover a funeral, get a 20K policy and then your final expenses are taken care of. Chance are you have some coverage at work that would take care of that too. I'm assuming you are young. Are you considering a family some day? If so, buying life insurance when you are young is always a good idea because the premiums are very low. Just something to consider.
Also consider SS survivor benefits. If I kick it today, my family will receive $4600+/month, more than enough to live on. (my mortgage is only $1200). I also have life insurance, but I think the 10x income rule is excessive.
Also consider SS survivor benefits. If I kick it today, my family will receive $4600+/month, more than enough to live on. (my mortgage is only $1200). I also have life insurance, but I think the 10x income rule is excessive.
The answers, types of insurance and amouonts of coverage are different for every individual situation. If you're a father or mother of two small children (ages 3 and 5, we'll say), you should carry enough life insurance to provide for them until they are grown if you were to die tomorrow. That could be more than 10x your income.
A few years ago, The Insurance Journal published survey results showing that at least 70% of people with one or more minor children are severely under-insured or had no life insurance at all. The only group that was sufficiently insured was single older adults with no debt and no dependents. Enough for a pine box and a hole in the ground is all they need, I guess.
The answers, types of insurance and amouonts of coverage are different for every individual situation. If you're a father or mother of two small children (ages 3 and 5, we'll say), you should carry enough life insurance to provide for them until they are grown if you were to die tomorrow. That could be more than 10x your income.
A few years ago, The Insurance Journal published survey results showing that at least 70% of people with one or more minor children are severely under-insured or had no life insurance at all. The only group that was sufficiently insured was single older adults with no debt and no dependents. Enough for a pine box and a hole in the ground is all they need, I guess.
Agreed, and I think other factors to look at are 401k balance, equity in the home, length of time until mortgage paid off, overall net worth, and as I mentioned, the amount of SS survivor benefits.
Agreed, and I think other factors to look at are 401k balance, equity in the home, length of time until mortgage paid off, overall net worth, and as I mentioned, the amount of SS survivor benefits.
EXACTLY! Look at the full financial picture- a total of all assets and then use Life Insurance to plug the gaps.
Also consider SS survivor benefits. If I kick it today, my family will receive $4600+/month, more than enough to live on. (my mortgage is only $1200). I also have life insurance, but I think the 10x income rule is excessive.
Which is why I sometimes wonder what certain people have life insurance for. And, personally I see it as so many people can profit from a person's death.
If a family or spouse (not one in particular but like in the general the situation referenced), has more than enough to live on without life insurance, why to they have life insurance…to be set up for the rest of their lives? Is THAT the purpose of life insurance, to have more than, more-than-enough….or to make sure there's no financially loss?
Maybe my thoughts are extreme…..
I'm SINKs, should I have had life insurance on my mom, even though there was enough to pay for any of her needs?
And I suppose, I do see a difference between life insurance that's free through work, that sort of goes with the territory…..and extra LI that one goes out and gets and pays for.
A friend's brother died and he had a policy on which she was a/the beneficiary. It's clear she did profit from his death. It's not like SHE got the insurance so that she could cash in, but the result is still the same. In my mind -- knowing I don't need the money -- it would just be macabre to get life insurance on someone. My sister dies and I'm 100K richer….I'll pass.
If two people are married and one can more than manage with out the other's income, tell me what would be the need for a quarter to a half-mill in additional insurance beyond what one might have through work? Leave my widower on Easy Street the rest of his life? I think not.
Also consider SS survivor benefits. If I kick it today, my family will receive $4600+/month, more than enough to live on. (my mortgage is only $1200). I also have life insurance, but I think the 10x income rule is excessive.
If you are adding up children's and surviving spouse benefits there are stipulations to that.
I've been thinking about my mortality since having a few near death experiences. I worry that if I don't get one my family will be left with a large funeral bill if I were to pass. So does it make sense to get Life Insurance? Or would cheaper alternatives such as accident insurance or funeral insurance be more appropriate?
If you have kids you need life insurance on yourself and the kids, that way if either of you die there won't be a significant financial outlay and in the case of you dying, the kids will have monies to survive on.
Do not buy life insurance as an investment, such as cash-value or anything OTHER THAN term life insurance. Some guys on this forum will try to "sell you" on cash-value life insurance for your "whole life" but the reality is that you don't need it for your whole life, and the returns in said policy are usually very low with a ton of bad provisions tied to them.
Term Life will be very cheap, but if you have additional cashflow, add a return of premium rider on there. So if you don't die or the kids don't die during the policy period, all of the premiums will be returned back to you.
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