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steve terplak

Member
some questions...for those who know...as i am at a loss
i purchased myself a variable whole life policy 2 years ago, w/ my policy i pay a premium for 10 years and then owe nothing on top of that.
i am young -28 right now.
my job (teacher) gives me a guaranteed life insurance - 3x salary - in addition
got married this year and my wife is looking to invest for the future (no retirement at her job) and possibly get info
we have had 2 financial people over to sell us stuff and low and behold - each one says that the other one's system is a rip-off and we need to invest with them...which is what i figured would happen

couple other factors - no mortgage (inherited house eventually), low debt - some student loans

should we, in any of your opinions,
a) keep my life and get her a whole life too
b) get rid of my whole life and both of us get term
c) keep my whole life as an insurance + investment, and get her term as cheap coverage and invest the difference more in her retirement.

thoughts?
 
Buy term for exactly what you need and no more...like to pay off a mortage in case of your or hers untimely demise. When you no longer have a need for insurance, don't buy any. If work gives it to you, fine.
 
Your on the right track debt wise -- zero debt is best. The single best thing you can do at any age is to pay off debt but particuarly in your younger years and you will retire ahead of the pack. Since you have no significant debt you may have better options than term life on your Wife, term life is basically designed to replace lost income in the event of one wage earners death. Whole life as an annuity is a good, conservative, long term investment with income advantages at retirement and also protects lost income if the unthinkable occurs. At your age the investment advisors should have steered you both to Roth IRA's, find a good Roth fund and look at it. Company 401ks are mostly good, especially up to the limit of matched contributions but not to be relied on to heavily because of the fact that the 401k is entirely controlled by congress and the tax implications are subject to change at any time. Savings, CDs, tax free municipal bonds, local real estate, nothing flamboyant here but liquid and under your direct control, in my opinion, even at a young age 30-40% of your savings for the future ought to be cash. You might see a good deal on some land or development property through the years that will pay off at retirement.
 
I have quite a bit of whole life, I bought it when I was young and healthy. My policies had a guaranteed purchace option so I could buy more at certain birthdays, when a child was born, etc. This is so if you become uninsurable you can buy more, regardless of your health. You buy life ins. to protect your family in case something happens to you. To pay off bills, take care of the wife, and put the kids through school. I had kidney failure at 30 years old. So every time it was offered, I bought more.

Now if you have few bills or obligations such as mortgague or kids. Buy enough term to put you in the ground.

Whole life at one time was really a poor investment. Investment is the key word. But with low interest rates now, some whole life policies had a guaranteed 3% or 4% return, so it proved to be not such a bad deal.

I think the key is to examine your needs, your bills, and your family situation. Buy enough term to pay the bills and replace your salary for 4 to 5 years if you get hit by a truck. If you can afford it, but a little whole life also.

But above all, start a regular savings or IRA account. Social Security will not be there to protect you.

Over the past 40 years I just paid the ins. premiums and forgot about it. I checked not that long ago and have almost $60,000 cash value that I can draw on tomorrow if I want. I was pleasantly surprised to say the least.

Good luck, Gene
 
Get a bunch of term for both of you - longer term the better. Life insurance is not an investment - its insurance wouldnt confuse the two.
 
Stay away from whole life. It is the best thing for the seller, not for you. Buy some term if you need it, make your investments apart from your life insurance. If you continue with low debt and smart living you will have money and will not need the insurance. Dave Ramsey explains this all very well. I am stuck in a whole life policy and have health problems so I have dropped my payment to just cover the insurance part without the savings part.
 
Back in the late 70's I bought a whole policy with Prudential. When the stock market was booming, I thought about cashing it in and putting it in the market. About that time, Prudential notified me that they were going public and I would receive 60 shares of their stock valued at $30 per share at that time. Sounded pretty good to me so I kept the insurance and they set up the stock account with no fees or charges as long as I didn't go over 100 shares. Later they gave me the option to buy more so I bought another 40 for $19 at that time. At one point, they were worth over $10,000, until 2008 anyway. The last time I checked they were around the $65 range. So for me, life insurance was a good investment. My policy still has cash value and I get a dividend every year also.
 
I took out a whole life policy with Northwestern Mutual back in the 80's....last year I was looking at some property to buy, so I cashed in the policy with a pretty decent ROI. I'm not sure whole life ROI is that great right now, but it worked out well for me. I now have term life for the same $$$ but of course the rates are not locked in. In a couple of years I will drop it as I am debt free and have several 401K funds I can cash out if I have too.
 
Steve, STOP! Stay put for now! There is a Reason for every type of Policy made and Time and Application for it.
Please Do not listen to the Sore Heads here on Forum who DO Not Hold Life license and barely have a concept on why and when a various policy should be used.
A Term Policy is good in a # of Applications But it is not Perfect. There are Gotchas with it.....
It is Cheap a young person like yourself can get 1Million in coverage for pretty cheap premium the problem it is not Permanent! 30 yrs is max you can get.... age 28 + 30 = 58 not long enough to get your kid out of the house and pay for other major purchases you and wife may get through your like! Or at least you will need to red do @ some point to keep you covered till age 80 just over the average age Most men pass! (70-75)
Also at redo time you will be significantly older .....What if you have health issues then???? That will complicate matters, Tobacco use, Hi BP, Heart Attack, Stroke, Cancer, etc, etc,.
The buy term Crowd never stopped to consider the variables at redo time an what if you can't get the same policy again????
Whole Life since you are young And you have a VWL policy,,DO NOT CANCEL IT!!!! it is more of an Investment vehicle. This policy is a different rig than most It requires a Securities License to sell. Your agent will be monitoring it as the yrs go along I will bet. I am NOT a Securities broker or life agent of this type of policy. My understanding But check with your agent!
A whole life will ALWAYS be there even at age 100. Yes it will gain cash value a good Whole life policy can be a great vehicle to generate cash for later yrs Do not be misguided here,....Why did Prudential get called on the Carpet about 15 yrs ago for selling retirement programs,,, they Didn't tell the purchasers they were using their Whole Life policies to do it with. They were making their people a boat load of money but failed to mention that little fact.
YES Seniors still need Life coverage to pay for Final expenses and odd bills. I Specialize in This type coverage. Seniors at age 60 to 80 are inquiring and buying insurance every day. The only type of policy that will be there when they really need it when they out live the run of the mill crap that quits by age 85 will will be a Whole Life of some variety.
Whole life policies have a basic 2 fold purpose
1 cover you if you die too soon!
2 cover you if you live too long!
The problem is we do not a good crystal ball to tell us when and where that will be!
You asked what You should do???, IMO.....
Option C is your best choice NOW your VWL is an investment vehicle, get a VERY,Very large Term policy to make the wises transition from married to single easier and simpler if you just leave out one morning and don't make it home for supper. It should also cover College for you kids and pay off of ALL debts, and provide your family with an monthly income.
Check around with folks in your community you respect their opinion on who they are using for investments ans advice. Your portfolio should have a nice mix of all kinds and types of coverages.
I add this I usually agree with Dave Ramsey but disagree on the Insurance point for more times than not his advice is for folks who are needing to get out of debt before they start building wealth, that does not apply to you here. I believe that cash in the bank is best left there and even the cost of final expenses is best left to a whole life policy of some sort. Transfer the Risk to a Ins policy instead of being on your personal finances. W.L. policies are always there it will not change or quit by virtue of you having a birthday(term)! Remember There is mountains of wealth built every year with insurance either by growing money or receiving a death beneft. Death benefits are not taxable under current tax laws in most situations unless you are like Donald nnalert rich!
Hope this helps
Later,
John A.
 
You say you are a teacher yet you come on a tractor site and ask questions about life insurance little strange isnt it.
 
The key word in your post is "invest". Buy insurance for insurance, not as an investment.

Do you need your wife's income, in the event she dies? Do you have or intend to have kids? In either case, she needs to have some form of life insurance. But for investment, you need to be putting some money away in some sort of tax-deferred savings account: IRA, 401k, SEP, etc. If you buy from a local insurance agent or "investment counselor", a good percentage of your investment will go to the agent right off the top. Consider investing in no-load mutual funds offered by a reputable company. Personally, I recommend T. Rowe Price, but they are certainly not the only reputable company out there. Go out to the sites of several investment firms; they all have lots of information on setting up an IRA or Simplified Employee Pension plan.
T. Rowe Price
 
ALL WHOLE LIFE POLICIES ALLOW THE INSURANCE COMPANIES TO RAPE YOU.
I informed an insurance agent of this and he wasnt happy in my thinking.

With that being set in your brain waves the ONLY real affordable Life insurance is----Term Life. I have a 20 year policy through Farm Bureau. I pay a bill once per year and my wife is covered until I am in my late 50's.

You said that you have 3x your salary already. Then all you really need is to have a small to medium term policy, like a 15 year 100k policy. Remember you dont want your wife to get too rich upon your death. (too much of an incentive to knock you off)
 
i teach during the year and bale hay in the summer.
it is tough to find good advice...and i find this site to have a wide variety of people with a variety of life experiences whom i have seen offer some excellent advice to people in various circumstances...
so yes, i came here for advice.
 
What ever type of policy you get... read it.Not like me.
When my children were under 1yo I had the Insurance agent in and told him I wanted a policy which would expire in 15 years years so I could use the receipts for their education.You would really think the Agent could be trusted.
When the missus scarped it with the nippers I cancelled them, then found out he had written Two Whole of Life policies. That must have been where the highest commissions were.
 
I have insurance thru work, and I have term on my wife and myself. The best financial advisor is education. Read up on it, and do it yourself, it's too important to leave to some insurance salesman, who basically sees you as a meal ticket.
 
I'd say both of the financial 'experts' were right about the ripoffs.Why anyone would listen to these Huksters after what happend back in
08 and 09 is beyond me.If you want some good free
advice from someone that was RIGHT last time and called the stock market/real estate meltdown 2years before it happpened go the the Euro Pacific website owned by Peter Schiff.
 
(quoted from post at 23:32:40 01/06/11) Steve, STOP! Stay put for now! There is a Reason for every type of Policy made and Time and Application for it.
Please Do not listen to the Sore Heads here on Forum who DO Not Hold Life license and barely have a concept on why and when a various policy should be used.
A Term Policy is good in a # of Applications But it is not Perfect. There are Gotchas with it.....
It is Cheap a young person like yourself can get 1Million in coverage for pretty cheap premium the problem it is not Permanent! 30 yrs is max you can get.... age 28 + 30 = 58 not long enough to get your kid out of the house and pay for other major purchases you and wife may get through your like! Or at least you will need to red do @ some point to keep you covered till age 80 just over the average age Most men pass! (70-75)
Also at redo time you will be significantly older .....What if you have health issues then???? That will complicate matters, Tobacco use, Hi BP, Heart Attack, Stroke, Cancer, etc, etc,.
The buy term Crowd never stopped to consider the variables at redo time an what if you can't get the same policy again????
Whole Life since you are young And you have a VWL policy,,DO NOT CANCEL IT!!!! it is more of an Investment vehicle. This policy is a different rig than most It requires a Securities License to sell. Your agent will be monitoring it as the yrs go along I will bet. I am NOT a Securities broker or life agent of this type of policy. My understanding But check with your agent!
A whole life will ALWAYS be there even at age 100. Yes it will gain cash value a good Whole life policy can be a great vehicle to generate cash for later yrs Do not be misguided here,....Why did Prudential get called on the Carpet about 15 yrs ago for selling retirement programs,,, they Didn't tell the purchasers they were using their Whole Life policies to do it with. They were making their people a boat load of money but failed to mention that little fact.
YES Seniors still need Life coverage to pay for Final expenses and odd bills. I Specialize in This type coverage. Seniors at age 60 to 80 are inquiring and buying insurance every day. The only type of policy that will be there when they really need it when they out live the run of the mill crap that quits by age 85 will will be a Whole Life of some variety.
Whole life policies have a basic 2 fold purpose
1 cover you if you die too soon!
2 cover you if you live too long!
The problem is we do not a good crystal ball to tell us when and where that will be!
You asked what You should do???, IMO.....
Option C is your best choice NOW your VWL is an investment vehicle, get a VERY,Very large Term policy to make the wises transition from married to single easier and simpler if you just leave out one morning and don't make it home for supper. It should also cover College for you kids and pay off of ALL debts, and provide your family with an monthly income.
Check around with folks in your community you respect their opinion on who they are using for investments ans advice. Your portfolio should have a nice mix of all kinds and types of coverages.
I add this I usually agree with Dave Ramsey but disagree on the Insurance point for more times than not his advice is for folks who are needing to get out of debt before they start building wealth, that does not apply to you here. I believe that cash in the bank is best left there and even the cost of final expenses is best left to a whole life policy of some sort. Transfer the Risk to a Ins policy instead of being on your personal finances. W.L. policies are always there it will not change or quit by virtue of you having a birthday(term)! Remember There is mountains of wealth built every year with insurance either by growing money or receiving a death beneft. Death benefits are not taxable under current tax laws in most situations unless you are like Donald nnalert rich!
Hope this helps
Later,
John A.
Click to expand...


John
There are other ways to transfer risk without using expensive whole life insurance policies.

Dave
 
I usually listen to Marketplace Money on the weekend. They usually recommend going to a fee only financial planner. You will pay up front for a consultation, BUT they will not be trying to sell you one product over another. If you talked to two different "financial" people and got different answers both were probably commissioned based. Also, read and understand the fine print. All of the different insurances were created for a specific purpose. They could be good or bad depending on you individual situation and how well it aligns with the intent of the original vehicle.
 
I would assume that if you are 28, your wife is about the same age or a bit less.

The purpose of life insurance on you, is to protect her and your children in case of your demise. If your are looking at 10 years of insurance to do that, I might have a simpler solution.

Get your wife to join a health club. If she continues to be very nice looking, you can be sure that if you decide to die, some fellow would be willing to take your place. If that health club membership was a bit more exclusive, that might mean that her possible suitors would be a bit more affluent.

A side benefit would be her continued beauty next to you daily, or at least until you move on to the next level of existence.
 
It was always drilled into me that whole life was neither very good insurance (too low a death benefit for the money) nor a good investment (usually a fixed rate, you could do a lot better investing yourself). But might be worth a second look now, because of very low rates of return on investments at present. You pretty much need enough insurance to pay off your debts, but not enough that the Mrs. can retire at age 45 and eat bon bons while watching soaps. Maybe a combination of the two.
 
Steve---you were told---"Steve, STOP! Stay put for now! There is a Reason for every type of Policy made and Time and Application for it.
Please Do not listen to the Sore Heads here on Forum who DO Not Hold Life license and barely have a concept on why and when a various policy should be used."

IMO-----that was the best advice you were given on this topic.......if you "had someone over to sell you something", did you call them beforehand and tell them that you wanted to buy something....?

You should take a more holistic approach to all your finances, including ALL your insurances, ALL your investments, ALL your assets/liabilities including pensions, social security, etc.

Write down your goals and objectives, both personal and financial,protect your assets, expect the unexpected and develop a plan that encompasses all of this. Make sure all your plans are flexible enough to adjust to lifes changing circumstances and stick to the plan. Review it often enough so that it is current.

Remember, there is no such animal as "the cookie cutter approach" for everyone.....all of our circumstances are different, and they constantly change.

If you want a simple rule to live by, try this for starters.

Work as hard as your circumstances permit, always save a part of your income, LIVE BELOW YOUR MEANS, and don"t do anything stupid (and we all do)....

Work with a professional that really understands your circumstances, goals, feelings---someone who asks you more questions than telling yu about product solutions.

Tim
 
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