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I have a couple … one is 2x annual salary and one about 1-1/2 … Plus good savings from long term employment …
Do you carry Life Insurance?
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Patman
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I have a policy that pays out $200,000 to my son that I pay $20 a month for. I initially got this policy when I was 32 years old and am now 48. The price would be much higher if I tried getting this same policy today. Lucky for me I'm locked in at this price forever. My wife and I looked into getting life insurance for the mortgage on our new home and it would be about $500 a month! At that price it's not worth it, if one of us dies, the other one will just sell the house, pay off the mortgage and downsize.
Originally Posted By: csandste
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I keep seeing more and more insurance as investment spiels, if I seriously looked into these, my mother would probably rise from the grave and hit me with a fund prospectus from 1963 "insurance isn't an investment, dummy"...
Has anyone actually used insurance as an investment vehicle? My suspicion is that such products are fraught with large, hidden fees. My girl friend fell for a bunch of annuities and I was shocked at how much money for the agent was hidden in there. Still....am I missing something?
I would not look as investments.
Last I checked their projections where 6%,9%, 12% on a good year. (while others in the market where doing 20-25%).
I would look as having some money grow tax-free (depending on product and company offering it....)
A broker would be best for something like this because of comparing/cross-shopping.
With the other, you will find out the rest when you sign the 39+ pages....
To find out more, look for the financial literacy free classes in your area. they usually will have guests from major companies and answer questions.
Your local YMCA or elder community center may have free classes once a year also.
Also, for your girlfriend case, I would call the company with the policy in front of you and get them to explain ALL benefits, fees and obligations to you.
...
I keep seeing more and more insurance as investment spiels, if I seriously looked into these, my mother would probably rise from the grave and hit me with a fund prospectus from 1963 "insurance isn't an investment, dummy"...
Has anyone actually used insurance as an investment vehicle? My suspicion is that such products are fraught with large, hidden fees. My girl friend fell for a bunch of annuities and I was shocked at how much money for the agent was hidden in there. Still....am I missing something?
I would not look as investments.
Last I checked their projections where 6%,9%, 12% on a good year. (while others in the market where doing 20-25%).
I would look as having some money grow tax-free (depending on product and company offering it....)
A broker would be best for something like this because of comparing/cross-shopping.
With the other, you will find out the rest when you sign the 39+ pages....
To find out more, look for the financial literacy free classes in your area. they usually will have guests from major companies and answer questions.
Your local YMCA or elder community center may have free classes once a year also.
Also, for your girlfriend case, I would call the company with the policy in front of you and get them to explain ALL benefits, fees and obligations to you.
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Yes I have a permit to carry!
I did get my GF away from a mercenary (who should have his license pulled) and into a Schwab dealer. I've consolidated various Vanguard and TRP accounts with Schwab and they are even cheaper than Vanguard-- although the line I've read on Bogleheads is the difference in cost would get you a ham sandwich after twenty years.
Interestingly the Schwab guy had never sold an annuity in his life, had to refer to San Francisco. She did get things changed over to another annuity that was much cheaper but they're hard to get out of without big tax consequences. I'm lucky to have a pretty good retirement system from sucking at the nipple of working in government my entire life. I suppose old style retirement plans operate a bit like annuities so I never needed one.
About all I'm doing is moving additional funds from my regular IRA to my Roth to avoid even more pain in the future. Advice to anyone young-- take the match on any 401/403/457 and put as much as you can into a Roth. I know a lot of people who have fallen for the old line that your tax rate will be less in retirement--it may not.
Been to a lot of investment, money courses and seldom learn anything new-- other than I don't learn anything new.
Interestingly the Schwab guy had never sold an annuity in his life, had to refer to San Francisco. She did get things changed over to another annuity that was much cheaper but they're hard to get out of without big tax consequences. I'm lucky to have a pretty good retirement system from sucking at the nipple of working in government my entire life. I suppose old style retirement plans operate a bit like annuities so I never needed one.
About all I'm doing is moving additional funds from my regular IRA to my Roth to avoid even more pain in the future. Advice to anyone young-- take the match on any 401/403/457 and put as much as you can into a Roth. I know a lot of people who have fallen for the old line that your tax rate will be less in retirement--it may not.
Been to a lot of investment, money courses and seldom learn anything new-- other than I don't learn anything new.
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Originally Posted By: ffhdriver
Also remember a good way to reduce after death costs is to pre-pay/arrange your funeral. Prices really go up each year.
For younger people:
Pre PLAN ......YES
Pre PAY ....... NO
Reason: For alot of people, too many things in life can change, you may not want to be locked into one Funeral Home.
I think most people would benefit from having an Emergency Fund they can use throughout life.
But you might want to PRE Pay if you were getting up there in years.
To answer the OP question: No Life Insurance for me.
Also remember a good way to reduce after death costs is to pre-pay/arrange your funeral. Prices really go up each year.
For younger people:
Pre PLAN ......YES
Pre PAY ....... NO
Reason: For alot of people, too many things in life can change, you may not want to be locked into one Funeral Home.
I think most people would benefit from having an Emergency Fund they can use throughout life.
But you might want to PRE Pay if you were getting up there in years.
To answer the OP question: No Life Insurance for me.
I have life insurance of $500k. It really is not that much considering the lost income but at least pay off the mortgage and leave a cushion for wife/3 kids for two years of lost income.
Originally Posted By: MasterSolenoid
Originally Posted By: ffhdriver
Also remember a good way to reduce after death costs is to pre-pay/arrange your funeral. Prices really go up each year.
For younger people:
Pre PLAN ......YES
Pre PAY ....... NO
Reason: For alot of people, too many things in life can change, you may not want to be locked into one Funeral Home.
I think most people would benefit from having an Emergency Fund they can use throughout life.
But you might want to PRE Pay if you were getting up there in years.
To answer the OP question: No Life Insurance for me.
Agree entirely, although sadly I prepaid about 25 years ago. You'd be surprised at the difference in price for a cremation urn at the funeral home vs. Amazon. You can find people of shake and bake your ashes pretty cheaply these days and you don't need the help of a funeral home to put on a pretty nice memorial service. I think watching several years of "Six Feet Under" made me cynical-- funeral directors and insurance salesmen-- avoid 'em both.
Originally Posted By: ffhdriver
Also remember a good way to reduce after death costs is to pre-pay/arrange your funeral. Prices really go up each year.
For younger people:
Pre PLAN ......YES
Pre PAY ....... NO
Reason: For alot of people, too many things in life can change, you may not want to be locked into one Funeral Home.
I think most people would benefit from having an Emergency Fund they can use throughout life.
But you might want to PRE Pay if you were getting up there in years.
To answer the OP question: No Life Insurance for me.
Agree entirely, although sadly I prepaid about 25 years ago. You'd be surprised at the difference in price for a cremation urn at the funeral home vs. Amazon. You can find people of shake and bake your ashes pretty cheaply these days and you don't need the help of a funeral home to put on a pretty nice memorial service. I think watching several years of "Six Feet Under" made me cynical-- funeral directors and insurance salesmen-- avoid 'em both.
Sam_Julier
$50 Site Donor 2024
I carried whole life, term life and disability insurance while working (about 30 years) and took out a long term care policy 18 years ago. As the children graduated from college and provided for themselves the whole life was cashed in and the term life terminated. The disability policy was terminated when I retired. The long term care policy is still in force. The value of our assets plus pensions will carry us after my wife retires in 3 years. We plan to move to SC or NC which will reduce our expenses significantly. We have no debt or mortgage.
As far as "avoiding insurance salesman": I have a number of friends who lost a spouse when they had young children. Those with insurance managed to educate their children well and lead a prosperous life. Those without significant insurance struggled, some terribly.
Sam
As far as "avoiding insurance salesman": I have a number of friends who lost a spouse when they had young children. Those with insurance managed to educate their children well and lead a prosperous life. Those without significant insurance struggled, some terribly.
Sam
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I get it through work...about 3 times my salary and then a little extra, around 300K and about 500K in 401k, but when I hit 55 this year, this premium will go UP. Just got the house paid off, so I'll drop it down some. Wife is 6 years younger than I am and is a RN. I'll keep some, but I'll be danged if I'm going to leave her a rich widow!!!LOL.
Absolutely do not carry a price on my life, and never will.
Once I retired I no longer carried term life insurance. My wife who's still working still carries term life insurance but that'll stop when she retires. Our philosophy is life insurance is for use of lost current & some future income. No salary, no insurance.
Originally Posted By: PeterPolyol
Absolutely do not carry a price on my life, and never will.
Is anyone dependent on you?
What would they do if you were to die unexpectedly?
Absolutely do not carry a price on my life, and never will.
Is anyone dependent on you?
What would they do if you were to die unexpectedly?
Originally Posted By: Astro14
Originally Posted By: PeterPolyol
Absolutely do not carry a price on my life, and never will.
Is anyone dependent on you?
What would they do if you were to die unexpectedly?
I agree with both of you...
Advice that I give the young engineers when they come to work and start a family is to carry income protection and life insurance...then get their affairs in order and rationalise on the insurances.
Leave your family destitute because you raced cars/bikes on the weekend and died...you're not a very good provider.
Only life insurance I (we) carry is incorporated in our superannuation schemes. Prvides a few hundred K for death/permanent disability.
Re income protection, I've accrued 2 years of paid sick leave...and a year of long service leave. I can get sick, get sick and die, or take a few months to change careers without impacting the family. (no debt helps too).
If I left and got another job, I'd think about income protection, as I've got 10-12 years before I can touch my retirement stuff.
Originally Posted By: PeterPolyol
Absolutely do not carry a price on my life, and never will.
Is anyone dependent on you?
What would they do if you were to die unexpectedly?
I agree with both of you...
Advice that I give the young engineers when they come to work and start a family is to carry income protection and life insurance...then get their affairs in order and rationalise on the insurances.
Leave your family destitute because you raced cars/bikes on the weekend and died...you're not a very good provider.
Only life insurance I (we) carry is incorporated in our superannuation schemes. Prvides a few hundred K for death/permanent disability.
Re income protection, I've accrued 2 years of paid sick leave...and a year of long service leave. I can get sick, get sick and die, or take a few months to change careers without impacting the family. (no debt helps too).
If I left and got another job, I'd think about income protection, as I've got 10-12 years before I can touch my retirement stuff.
As I'm sure others have mentioned, you buy life insurance to replace your income only for a time when it is needed and you are not yet self-insured (meaning that your 401K/IRA/investments could generate the same income as your working income).
Term insurance is a great product when you purchase it for say a 30 year level term when you are younger, have a family dependent on your income and are not yet self-insured. At retirement age, you should have all your dependents gone (except your spouse!!), be out of debt or nearly so, saved enough over your working lifetime to retire and have that nest egg generating the income you need for your foreseeable life expediency. A very small portion of those same funds would pay for your funeral.
Research "The Theory of Decreasing Responsibility" to see better how this should work. Make sure you also have a will in place (and some states require you to file it with the State) and a written down plan for what you want at your funeral "just in case", i.e., please just cremate me, a celebration of life, etc.
Barring having those things taken care of at the proper time, life insurance can fill the gap as needed and ONLY for a specific time frame. Having life insurance for your entire adult lifetime is amazingly wasteful (i.e., read stupid) despite what some goober life insurance salesmen might tell you.
Term insurance is a great product when you purchase it for say a 30 year level term when you are younger, have a family dependent on your income and are not yet self-insured. At retirement age, you should have all your dependents gone (except your spouse!!), be out of debt or nearly so, saved enough over your working lifetime to retire and have that nest egg generating the income you need for your foreseeable life expediency. A very small portion of those same funds would pay for your funeral.
Research "The Theory of Decreasing Responsibility" to see better how this should work. Make sure you also have a will in place (and some states require you to file it with the State) and a written down plan for what you want at your funeral "just in case", i.e., please just cremate me, a celebration of life, etc.
Barring having those things taken care of at the proper time, life insurance can fill the gap as needed and ONLY for a specific time frame. Having life insurance for your entire adult lifetime is amazingly wasteful (i.e., read stupid) despite what some goober life insurance salesmen might tell you.
Only enough to plant me.
Originally Posted By: cashmoney
Absolutely no need for life insurance as you age and kids are gone assuming you have built a reasonable retirement fund and have the house paid off.
^^That^^
As long as your debt free, paid for home and your spouse either works or you have a reasonable retirement account, why give your money to an insurance company?
Results vary depending on your age.
Absolutely no need for life insurance as you age and kids are gone assuming you have built a reasonable retirement fund and have the house paid off.
^^That^^
As long as your debt free, paid for home and your spouse either works or you have a reasonable retirement account, why give your money to an insurance company?
Results vary depending on your age.
carried close to 1 mil for many years but then had a very old universal (guaranteed 6% int on the CSV, yeah an old policy) I was still paying on 2,400 a year for 300,000 of ins. decided I no longer wanted to pay so got company to quote me how much life I could get with no more premiums. So, stopped premiums last year, have 233,000 but I have to make a decision at age 75, that is when the CSV will start to drop significantly each year and by age 85 all ins will be gone. So at 75 I can get about 75,000 of CSV out of policy or let it ride and be out of CSV and life ins at around age 85. At age 75 will look at health and make a decision to keep or cash in no mtg, age 72 this week
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