Life Insurance

[Bruce]

Any insurance experts out there???  Universal vs
Whole Life vs Term Life?   Trying to get this aspect of our lives in order / want to make sure our family is well taken care of in the event of a mishap. 

[BC]

am not an expert but:

Universal.. just another catchy term.  

Term Policies - usually 'set' for a number of years and insurance value if you 'expire'  For example 100k for 5 years.. If you expire in the 5 year period your family would get 100k.  Insurance agents do not like to sell these since premiums are low and the agents 'cut' is very small.

Whole Policies- are the same as Term except they are usually 'set' for longer period of years.. i.e. when you retire.  If you have not expired by the end of the term your policy will be worth something.. sort of like term mixed with a savings plan. Agents will try to sell you these type policies since the premiums and their 'cut' is alot more.

If you are already saving money with other savings plans term might be the way to 'bridge' the gap until your property/savings etc would be enough for your survivors.

Look at various financial review sites that rate insurance companies and their plans.. It can get quite confusing, but all are basically term or life policies with various options built in.

[Goombah]

Previous poster summed it up.  If you have a problem saving yourself, you can pay the insurance company to do it for you - and buy whole life.  If you can manage your own finances, buy term-life - and just pay for the insurance you need.  If you opt term-life, there are companies that will help you shop like selectquotes.

I would suggest tracking down selectquotes or one of their competitors and giving them a call.

Kevin

[deden]

The real difference between term and whole is the cost.  As one poster stated with whole you end up with something at the end.  However, that savings will be next to nothing in real terms when the policy matures.  When you look at the difference in premimum you will pay and what you could have invested that difference between the cost of whole life and term yourself, You will end up on the short end by buying whole life.  This is exactly why insurance agents tend to push it as part of those higher premimums and rate of return you should have been making on the extra your paying, goes to pay the agent and broker nice annual residual income.  With term, you are only paying for the insurance (not the savings) and it can be any number of years.

The thing to remember about insurance is you are insuring your income to protect your family during the time your assests are to small to do it.  As time passes and you invest prudently, pay down your mortgage, your children grow up so there are fewer years you'll need to protect them, etc. your need to insure your income dimishes.  By then, your investments should have grown which will take over the income protection as your liabilites will have reduced.

Most people view insurance as a way to protect your assests.  Assests are self insured so its actually the other way around when it comes to life insurance.  You need insurance to protect your liabilities (unpaid mortgage balance, monthly bills, underfunded future college needs for your children, etc.)

Buy term and invest the difference, you'll be way ahead of those who buy whole life.  The key is to make sure you do invest the difference and more if possible!  Also you need to look at your needs.  You may need term for only a few years or if you are young with young children, maybe 20 years.  Again, insurance is only temporary until you can be self insured by your assessts. 

Used to sell insurance years ago!  Man, that was almost like being a used car salesman (probably worse).

[Bruce]

Guys thanks for the advice.  There is alot of great experience on this board.