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Old 10-15-2011, 03:58 PM
 
Location: Near a river
16,042 posts, read 18,991,724 times
Reputation: 15649

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Quote:
Originally Posted by MrRational View Post
Would that mean you currently own the home outright? *and* that it is in good and solid enough condition (roof, windows, mechanical, etc) to not need any substantial work (like building a tenant space?) for the next 20-30 years...

... you could probably find far better uses for that ($96 x12 x20) $23,040
(even without any yield or growth from a $1152 annual commitment)

hth
Yes to the first sentence, above.

Probably, to your second statement. However, if I take out a 10 or 15 year term policy and do kick the bucket within that term, this added amount left to my kids would be nice for them. If i don't kick off within the term, that $23K is wasted. That's what i'm weighing...hoping of course that I kick off in time if I do renew.
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Old 10-15-2011, 04:01 PM
 
Location: Near a river
16,042 posts, read 18,991,724 times
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Quote:
Originally Posted by nicet4 View Post
When I was young with the responsibility for a young family I carried $1 million.

As children became of age, mortgage paid off etc my insurance requirements dropped as premium costs rose. Today I have a single ten year $100k term policy left and that is due to expire in four more years at which time I will just let it drop. Cost is around $79/mo.
But if you can manage to kick off within the renewed term, I'm sure your heir(s) will be grateful (for the bequeathed gift, that is ).
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Old 10-16-2011, 04:30 AM
 
10,139 posts, read 23,310,304 times
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Insurance should be just that - insurance. Protection against a risk that a person cannot bear. Like the house burning down or the kids not being able to get through school. People who bet against themselves to create wealth are either pretty foolish or they know something about their own longevity that the insurance company does not know and will not find out through the application or the physical. Just saying.
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Old 10-16-2011, 07:51 AM
 
29,789 posts, read 34,889,516 times
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Quote:
Originally Posted by Wilson513 View Post
Insurance should be just that - insurance. Protection against a risk that a person cannot bear. Like the house burning down or the kids not being able to get through school. People who bet against themselves to create wealth are either pretty foolish or they know something about their own longevity that the insurance company does not know and will not find out through the application or the physical. Just saying.
It is all based on actuarial science so they win the majority of times. As you say it is not set up so you make more than you put in. One think folks are always using in their calculations is the loss turn on ROI of the money you are sending the company each month that could be invested. The insurance company is investing that money and making a profit that in the case of term is not being shared with you unless you pass. Hmmm I guess that still isn't with you!
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Old 10-16-2011, 08:43 AM
 
Location: SoCal desert
8,093 posts, read 13,242,460 times
Reputation: 14870
Quote:
Originally Posted by MrRational
Would that mean you currently own the home outright? *and* that it is in good and solid enough condition (roof, windows, mechanical, etc) to not need any substantial work (like building a tenant space?) for the next 20-30 years...

... you could probably find far better uses for that ($96 x12 x20) $23,040
(even without any yield or growth from a $1152 annual commitment)

hth
Quote:
Originally Posted by newenglandgirl View Post
Yes to the first sentence, above.

Probably, to your second statement. However, if I take out a 10 or 15 year term policy and do kick the bucket within that term, this added amount left to my kids would be nice for them. If i don't kick off within the term, that $23K is wasted. That's what i'm weighing...hoping of course that I kick off in time if I do renew.
That 23K would go a long way for maintenance, updates, and property taxes.

When you 'kick the bucket', your kids would have a place ready to move in or rent or sell - with no work needed or back taxes owed ...

JMO
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Old 10-20-2011, 05:46 AM
 
Location: Near a river
16,042 posts, read 18,991,724 times
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Quote:
Originally Posted by Wilson513 View Post
Insurance should be just that - insurance. Protection against a risk that a person cannot bear. Like the house burning down or the kids not being able to get through school. People who bet against themselves to create wealth are either pretty foolish or they know something about their own longevity that the insurance company does not know and will not find out through the application or the physical. Just saying.
While I see your point, I'm sure that many here who have been the beneficiaries of a life insurance policy have been quite happy and grateful to receive it, especially if it was from a beloved parent (maybe even not so beloved?). I know money cannot buy or represent love, but the gesture and effort to leave something (along with other assets) on death is one of genuine feeling in many cases. That's what's behind my motivation to renew. The other motivating factor is the unknown of the future of what the economy will be like years from now (if I have many years, say) in relation to my resources at the time I kick off. I want to make sure I'm buried properly and not just put out to sea.
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Old 10-21-2011, 11:52 AM
 
4,649 posts, read 6,488,560 times
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Quote:
Originally Posted by newenglandgirl View Post
My term is up next month. I checked with my home/auto agency and they ran the premium figures on $100K policy, the least they will cover. For 10 years it's $46/month, for 15 it's $72, for 20 it's $96.

I'm thinking I might do the 10 years, just to leave to the kids along with the house and some other assets, but then I'd have to kick off within 10 years. Opinions??
Get some quotes from an independent agent. To get a general idea of the cost difference you can go to Term4Sale.com - Term life insurance comparisons (over 100 companies) An independent agent can shop with may different carriers. Not to also mention different policies have different features.
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Old 10-21-2011, 05:46 PM
 
10,139 posts, read 23,310,304 times
Reputation: 8290
Quote:
Originally Posted by newenglandgirl View Post
While I see your point, I'm sure that many here who have been the beneficiaries of a life insurance policy have been quite happy and grateful to receive it, especially if it was from a beloved parent (maybe even not so beloved?). I know money cannot buy or represent love, but the gesture and effort to leave something (along with other assets) on death is one of genuine feeling in many cases. That's what's behind my motivation to renew. The other motivating factor is the unknown of the future of what the economy will be like years from now (if I have many years, say) in relation to my resources at the time I kick off. I want to make sure I'm buried properly and not just put out to sea.
That is an interesting take on this often asked question. I am changing my view on this somewhat due to my pessimism about the future. I used to assume that my children would have more than I do. Like most parents of young adults today, that is not true for me any more. So leaving assets (or insurance proceeds) has taken on a new character and a new importance.
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Old 10-21-2011, 06:15 PM
 
Location: Eastern Washington
14,262 posts, read 44,955,618 times
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I remember a PBS program on retirement, one of the main host's main points is that life insurance benefits to your heirs and assigns are tax-free, but your estate is not. He made the point that it's better to spend money on life insurance that benefits your kids (or cats, or whatever) since the money goes to them tax-free.

Not sure if you would want term insurance for this or just straight up life insurance, a policy that you sign up for and pay X per month till you die, at which time the insurance company pays Y to the beneficiary.

I have always thought of term insurance like nicet4 does - it covers a period of vulnerability, for example a young guy with a young family and limited wealth built up. As the wealth accumulates and the sprogs grow up and leave the nest, the vulnerability of the family to loss of primary income becomes less.
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Old 10-21-2011, 07:25 PM
 
10,139 posts, read 23,310,304 times
Reputation: 8290
Quote:
Originally Posted by M3 Mitch View Post
I remember a PBS program on retirement, one of the main host's main points is that life insurance benefits to your heirs and assigns are tax-free, but your estate is not. He made the point that it's better to spend money on life insurance that benefits your kids (or cats, or whatever) since the money goes to them tax-free.

Not sure if you would want term insurance for this or just straight up life insurance, a policy that you sign up for and pay X per month till you die, at which time the insurance company pays Y to the beneficiary.

I have always thought of term insurance like nicet4 does - it covers a period of vulnerability, for example a young guy with a young family and limited wealth built up. As the wealth accumulates and the sprogs grow up and leave the nest, the vulnerability of the family to loss of primary income becomes less.
Life insurance proceeds payable to a named beneficiary and owned by the decedent (99% of all insurance fits this description) are includible in the gross estate and taxable just like the other estate assets. And, worse, the tax comes out of the estate and the benefits are not paid to the estate so the estate beneficiaries are the losers.

The means around this is an irrevocable life insurance trust whereby a trust is formed, the grantor gives a gift equal to the insurance premium to the beneficiaries, who decline it in favor of the trustee who then pays the premium. When the grantor dies, the insurance is paid to the beneficiaries and not includible in the gross estate.
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