Home     Forum     401k     401k Rollovers
    Register   Login   Members   Search   FAQs     Recent Posts    



What about Term life insurance

Reply to topic
Money Talk > Investing, Stocks and Bonds

Author Thread
jerryjose
Member


Cash: $ 2.80

Posts: 13
Joined: 06 May 2012
Location: India
What about Term life insurance  Reply with quote  

Term life insurance are told as the best form of life insurance which offer high life cover with small premium. It has only insurance value, no investment value. Can we mix up insurance and investments? Is it profitable?
Post Sun May 06, 2012 3:34 am
 View user's profile Send private message Visit poster's website
coaster
Senior Advisor


Cash: $ 1626.30

Posts: 7990
Joined: 11 Oct 2005
Location: Wisconsin
 Reply with quote  

Insurance and investments are two totally different concepts, addressed to serve two totally different needs and sold and marketed by two totally different sets of organizations with two totally different approaches, goals, and aims on your money.

Those who mix the two are just plain not understanding the above paragraph, trying to kill two birds with one stone (when one is a turkey and the other is an eagle), or trying to mix alcohol and caffeine or sugar and salt. Oops, scratch those last two. People do that nowadays. Laughing

I hope you get the point. Mixing two completely different products produces something less than the whole.

~Tim~
Post Mon May 07, 2012 5:17 am
 View user's profile Send private message
littleroc02us
Moderator


Cash: $ 384.35

Posts: 1891
Joined: 09 Feb 2009

 Reply with quote  

I bought a Term Life Policy last year and did a lot of research on different types of insurance. The result is, I'm not sure why anybody would mix investments and life insurance. #1 the fees are very high with Whole life insurance are typically 100% of the costs for the first year or two and the premium alone can be around $100 a year.. My costs with Banner Life Insurance for my 500k Term Policy is under $50 for a 20 year. #2 the cash value is subject to tax if you borrow from it, whereas if you simply invested i Roth IRA's you've already been taxed on that money and when you retire you withdrawl the funds tax free. #3 the rate of return stinks in the end because of the fees, taxes and ROI. You can invest with a Vanguard Index fund and get a 9% ROI tax free. #4 if you die and still have a Cash Value investment, they take it and your heirs don't get a dime.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Mon May 07, 2012 2:27 pm
 View user's profile Send private message
jerryjose
Member


Cash: $ 2.80

Posts: 13
Joined: 06 May 2012
Location: India
Insurance and investment  Reply with quote  

Yes you are correct. When we try to mix both insurance and investment. Insurance lost its risk cover nature and when we try to mix investment with insurance, the earning will be very less and the investment concept is very much less.
Post Mon May 07, 2012 5:13 pm
 View user's profile Send private message Visit poster's website
ganesh6789
New Member


Cash: $ 1.05

Posts: 5
Joined: 14 Apr 2011
Location: India
Term life insurance  Reply with quote  

I think term life insurance is for risk cover and not for investment.I think everyone should have at least 1 term life insurance.Investment comes after it.
Post Tue May 08, 2012 3:39 am
 View user's profile Send private message Visit poster's website
littleroc02us
Moderator


Cash: $ 384.35

Posts: 1891
Joined: 09 Feb 2009

 Reply with quote  

quote:
Originally posted by patcassidy
It should also be bought by people in higher income brackets who can afford the more expensive premium as compared to term life insurance's affordable, even cheap premiums.

Pat Cassidy
Disclaimer: I work for AccuQuote and this is my personal opinion.[/url]


Can you explain this sentence please? So are you saying that wealthy people should spend more money on Whole life just to spend more money, instead of saving money on Term Life and get a ton of coverage?

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Thu May 10, 2012 1:06 pm
 View user's profile Send private message
sethm
Member


Cash: $ 3.80

Posts: 19
Joined: 07 May 2012
Location: United States
 Reply with quote  

That's possible actually. But take note that term policy is life coverage only. Whole life insurance, on the other hand, combines a term policy with an investment component. The investment could be in bonds and money-market instruments or stocks. The policy builds cash value that you can borrow against.
Post Tue May 15, 2012 4:32 pm
 View user's profile Send private message
noah herman
Member


Cash: $ 2.40

Posts: 11
Joined: 19 Mar 2013

 Reply with quote  

Hi.. jerryjose,

I think, Term life insurance provides coverage at a fixed rate of payments for a limited period of time,after that period expires, coverage at the previous rate of premiums is no longer guaranteed and the client must obtain further coverage with different payments or conditions.

Thanks Smile
Post Mon Mar 25, 2013 10:55 am
 View user's profile Send private message
littleroc02us
Moderator


Cash: $ 384.35

Posts: 1891
Joined: 09 Feb 2009

 Reply with quote  

quote:
Originally posted by sethm
That's possible actually. But take note that term policy is life coverage only. Whole life insurance, on the other hand, combines a term policy with an investment component. The investment could be in bonds and money-market instruments or stocks. The policy builds cash value that you can borrow against.


Exactly, life insurance is to protect your family should something happen to you and that's it, it shouldn't be an investment tool. I can invest all day long and don't need and insurance tool with high fees to accomplish my end result. Keep those ideas separate and you'll be find.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Wed Mar 27, 2013 6:00 pm
 View user's profile Send private message
mac205
Member


Cash: $ 3.50

Posts: 15
Joined: 20 Feb 2013
Location: VIET NAM
 Reply with quote  

As with most insurance plans, with a term life plan the insured will still have to undergo a basic physical exam conducted by a nurse (including blood work) to make certain they are insurable. The policy will remain in effect for as long as the premiums are paid. Term policies come in many varieties. However, the most popular models are annual, 7-year, and 10-year policies. Annual term policies carry a premium that increases slightly each year, while 7-year and 10-year term policies carry premiums that remain the same for 7 or 10 year periods at a time.
Post Thu Mar 28, 2013 2:38 am
 View user's profile Send private message

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      


Money Talk © 2003-2021