What Is The Best, Inexpensive Whole Life Insurance?
Posted July 15, 2009 – 4:41 pm in: structured settlements FAQWhat is the best, inexpensive whole life Insurance I can get for myself and my daughter. She is 1, and i am 19. I really need it to be on the cheap side, but have great coverage!
Tags: Best, Inexpensive, Insurance, Life, What, Whole
10 Comments
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http://free-best-life-insures-comparator-usa.blogspot.com/
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Whole life insurance is much more expensive than term life insurance. If cheap coverage is what you’re looking for then term is the way to go. Agents will tell you that the disadvantage is no cash value, but the cash value builds up so slowly that you’d be better off pocketing the difference in premium or even better investing it (you want tax deferred I would advise a Roth IRA). There is also refund of premium term where if you make all your premium payments for the life of the term, 15-30 years, then you’ll get back every penny you’ve paid.
Whole life is more meant for older people who want to tax shelter funds for their estate. If you’re young term is the way to go, it’s dirt cheap.
Term life + Roth IRA = long time financial security.
She is 19, so whole life wouldn’t be expensive for her. Just add on a child rider that will cover both you and your daughter. You might also see about getting a cost of living rider added on so that the death benefit can be increased yearly as well.
A whole life policy will build up equity, Ask about a non participating and a participating policy.
A participating policy earns dividends and this increases your cash value, which can be used later down the road to help with premium payments or will add to your death benefit.
nonparticipating is cheaper than the above, as your cash value will never be more than is listed in the policy.
Later on when you get financially settled, you can supplement with a term policy, but the problem with any term, is that the premiums go up after the level period and are generally not affordable and then you may not quailify for an insurance policy if you’ve developed a sickness or disease. This way with the whole life policy, your premiums are set for life & you know exactly what the outcome will be.
Whole life insurance is very expensive. You won’t find any place that sell cheap whole life insurance. Why? Its because whole life insurance also builds cash value. This cash value allows you to borrow from it, but you pay a loan interest of 5-8% on it. But if someday you die while there’s a loan balance due, this amount will taken off from your death benefit and the rest will be paid to your beneficiary.
In the first 2 years, no cash value is accumulated. Its because all your premium payments is used to pay the agent a huge commission. After the first 2 years, it will grow at a steady rate of around 1-4% per year.
If you die someday, all the cash value in the policy goes toward the insurance company. They will pay your beneficiary the death benefit. So my question why pay so much money for 2 parts in one product and be only be able to get one back?
An alternative solution is term insurance. Its simple and it doesn’t build cash value. Therefore, its also way cheaper than whole life insurance and also provide more coverage. Why term insurance is right for you?
1) In the beginning years, you probably have debts to pay or will be having lots of debts to pay such as a mortgage or student loan, you probably don’t have much money saved, and your child is dependent on your income. So you need lots of coverage.
2) In the later years, say 30 years down the road, you probably have little or no debts to pay, you better have lots of money saved since you are not that far from retirement, and your child will be 31 years old.
So you are facing 2 challenges in life. You are either die too soon or live too long. Term insurance can solve the problem of you dying too soon. It provides lots of coverage for a low amount of cost. With a large coverage, it can pay off your debt and provide temporary income to your family. But what if you outlive the term period? Then you better be saving money now. I personally believe no one needs life insurance forever because in 20 to 30 years from now, if they keep saving their money every month, they should have a large amount of money put away.
This is what you should do: Get a 30 year term insurance with coverage that is at least 10 times your annual gross income (eg. If you make $40k/year, you need at least $400k in coverage). If you want to get life insurance on your child, add a child rider of $10k to $25k in coverage. You only want enough coverage on your child to cover funeral expenses.
Whole life for kids, is a major ripoff.
There is no one single ‘best’ ‘cheapest’ company. Depending on how much insurance you want on you, and how healthy you are, and how much you weigh, it’s probably going to cost around, oh, $75 a month for a $200,000 policy for you. But for your daughter, it’s going to be maybe $10 a month, for a $5,000 policy. For kids, it’s only about BURIAL costs. And, it’s a ripoff, as it’s pretty rare for a child to die.
The best way to answer this question is to recommend that you contact a LOCAL agent, and have him/her do a free Financial Need Analysis (FNA), or other Total Need Program, to help YOU determine what type and how much life insurance YOU need to accomplish YOUR short and long-term goals ans objectives. YOU decide, after you have gained additional knowledge through the FNA.
If an agent or “financial planner” on this forum, or anywhere else for that matter, suggests you buy this type of life insurance or that, or this much or that, without doing a personal FNA for you, he or she is not being professional, but is doing you a disservice. Remember, it’s YOUR plan and NOT theirs. ONLY YOU can decide what’s best for YOU, after the FNA program has been completed.
When you do purchase life insurance, you can have a Children’s Term Rider (CTR) added to the policy, which will cover any and all children born or adopted to you under the age of 18, but will cover them to age 25. At that time each child will have a guaranteed right to convert their policy to whole life, regardless of health, up to 10 times the original amount of CTR, depending on the policy or insurance company.
When you have the FNA done, it will also help you determine if you need Disability Income Protection, to provide an income should you be hurt or sick and can’t work. It will also help you determine if you need an Individual Retirement Account (IRA) to help you save for retirement. (All that will be there when you get there is what you send on ahead.)
According to statistics, disability is a greater risk than death prior to the age of 65.
Best wishes.
The following is my response to others that I have cut and pasted and was ranked the best answer. It’s important for you to understand life insurance in order to know what you, and only you, feel is the best choice for you and your daughter. Here’s my response:
There are two types of life insurance: Term and Permanent. Term is temporary insurance and permanent is Whole Life or Universal Life. Term Insurance is only for the period of time you’re insured – 10 years, 20 years or 30 years. Whole Life and Universal Life are for your whole life.
The advantages of Term insurance is in your younger years you can get a large face amount for a very low cost. The disadvantages of Term insurance is when your term period is up and when need it most in your later years, the cost is extremely high and unaffordable. At that point the policyholder cancels the Term. Another disadvantage of Term insurance is the risk you may become uninsurable due to health issues such as diabetes, heart problems, cancer or a number of things that will cause an insurance company to decline renewing your policy.
The disadvantages of Whole Life or Universal Life insurance are the initial cost is higher than Term. The advantages of Whole or Universal Life are: the initial cost is fixed, it’s permanent coverage whether you become uninsurable or not (as long as your premiums are paid), it builds cash that you can either withdraw or borrow, you don’t pay taxes on the money taken out of the policy (as long as the policy stays in force), it’s a forced savings you otherwise would not have put away for yourself. Another advantage is the fixed cost is far less than Term in the later years, the time when you need life insurance the most. The best time to purchase Whole or Universal Life is in the younger years.
Purchasing life insurance is a personal matter. No particular type of insurance fits all. Everyone has a different family situation requiring the proper financial plan. I’m a California licensed agent for 10 years. You may e-mail me with questions at mob442ins@yahoo.com.
go 4 reliance term plan .in this plan the premium is very low and life is covered to the sum assured till the policy alive.
if no claims in the policy period then then the whole premium will be refunded.
for more detail u can plz contact me at pdjdpj_2001@yahoo.com
Find an agent and discuss what options you have, I’d suggest New York Life Ins. Whole life gives you tax benefit, and it wouldn’t be expensive anyway because you’re only 19.
Try this sitehttp://linsurance.notlong.com
here you can get quotes from different companies in your area so you can compare them and get the best one for you.
Whole life is much more expensive than term insurance. Term is best for most people.