Which Life Insurance Should i buy
Author: eujay
Posted: Sun Jun 05, 2005 6:08 pm
Post subject: Buying Life Insurance
Hello,
I am currently looking for life insurance.
After browsing around a lot of different web sites I am beginning to wonder if the product I am looking for exists.
My take on Term life insurance is that it's a legalised theft. By the way I have a term life insurance policy but keep it as a security blaket for the wife in case "something" ever happened to me.
The way I see it Term life is something that I will pay in to for the term, (20 yrs), if I die during that time then OK my wife get 20 grand and everything is paid off. Now chances are that nothing will happen to me, I won't die anytime in the next 20 yrs so when the term is up what will I have? Nothing. I will have faithfully paid into the fund for 20 years and will end up with absolutely nothing to show for it.
In a worst case scenario my wife might outlive me and my kids might get the 20 grand when I die but since this will be a long way into the future they will likely be set up in their own lives and for them the money would be a welcome windfall.
So I am looking for a policy that is part life insurance and part annuity, or part life insurance and part retirement. Does such a thing exist?
Is it possible to get a policy that converts part of it's cash value to some kind of retirement benefit? If it's out there where can I find it.
Thanks for your help
Eugene
Author: nixuzer
Posted: Mon Jun 06, 2005 10:46 am
Post subject: Purchasing Annuities
and Other Types of Insurance
eujay wrote:
Hello,
I am currently looking for life insurance.
After browsing around a lot of different web sites I am beginning to wonder if the product I am looking for exists.
My take on Term life insurance is that it's a legalised theft. By the way I have a term life insurance policy but keep it as a security blaket for the wife in case "something" ever happened to me.
The way I see it Term life is something that I will pay in to for the term, (20 yrs), if I die during that time then OK my wife get 20 grand and everything is paid off. Now chances are that nothing will happen to me, I won't die anytime in the next 20 yrs so when the term is up what will I have? Nothing. I will have faithfully paid into the fund for 20 years and will end up with absolutely nothing to show for it.
In a worst case scenario my wife might outlive me and my kids might get the 20 grand when I die but since this will be a long way into the future they will likely be set up in their own lives and for them the money would be a welcome windfall.
So I am looking for a policy that is part life insurance and part annuity, or part life insurance and part retirement. Does such a thing exist?
Is it possible to get a policy that converts part of it's cash value to some kind of retirement benefit? If it's out there where can I find it.
Thanks for your help
Eugene
Actually I'd have to disagree with you here about term insurance. I have an Annuity (which I purchased during a time when I didn't really understand investments) and here is the low down.
The annuity has mutual funds and $100,000 insurance, it costs me just under $100/month. After 5 years the mutual funds have grown to over $5,800 and I still retain the $100,000 worth of coverage. Let's look at the returns from the policy. If I die at any time (lets say I live to the point where I get to be 55 years old...20 years from now...and the mutual fund portion gets up to $50,000) guess how much my wife gets: $100,000. Who is the recipient of the mutual fund proceeds at any point if I die, the insurance company. At the same time I purchased the Annuity I also purchased an additional $700,000 of term insurance, guess how much that is costing me (on a 70 year Term which is way too long but again live and learn) $66/month.
To contrast if I get $100,000 of Term Life now over a 30 year term (the longest I could look up online) it will cost me $134.00/year. So for a 1 1/3 months of my current Annuity premium I can buy an entire year's worth of term insurance. Take the remaining $1,000 per year and putting that in a mutual fund that earns lets say 8% over 30 years guess what I'll have in 30 years $83,566. So I won't have a life insurance policy at the end of 30 years but I'll have $83,566 that is mine to keep...at that point I'd be self insured for $83,566 and wouldn't need another policy. What happens if I die in year 19. My wife would get the $100,000 plus approx. $36,000 in the mutual fund. So which one of the two above scenarios would you say equates to theft: The Annuity or the Term Life using the remaining proceeds to purchase Mutual Funds
Plus I'll probably pay lower fees to the mutual fund that I purchase myself since Annuities usually have high fees as well as the penalities you'll incur if you decide to withdraw mutual funds at some point.
Posted: Sun Jun 05, 2005 6:08 pm
Post subject: Buying Life Insurance
Hello,
I am currently looking for life insurance.
After browsing around a lot of different web sites I am beginning to wonder if the product I am looking for exists.
My take on Term life insurance is that it's a legalised theft. By the way I have a term life insurance policy but keep it as a security blaket for the wife in case "something" ever happened to me.
The way I see it Term life is something that I will pay in to for the term, (20 yrs), if I die during that time then OK my wife get 20 grand and everything is paid off. Now chances are that nothing will happen to me, I won't die anytime in the next 20 yrs so when the term is up what will I have? Nothing. I will have faithfully paid into the fund for 20 years and will end up with absolutely nothing to show for it.
In a worst case scenario my wife might outlive me and my kids might get the 20 grand when I die but since this will be a long way into the future they will likely be set up in their own lives and for them the money would be a welcome windfall.
So I am looking for a policy that is part life insurance and part annuity, or part life insurance and part retirement. Does such a thing exist?
Is it possible to get a policy that converts part of it's cash value to some kind of retirement benefit? If it's out there where can I find it.
Thanks for your help
Eugene
Author: nixuzer
Posted: Mon Jun 06, 2005 10:46 am
Post subject: Purchasing Annuities
and Other Types of Insurance
eujay wrote:
Hello,
I am currently looking for life insurance.
After browsing around a lot of different web sites I am beginning to wonder if the product I am looking for exists.
My take on Term life insurance is that it's a legalised theft. By the way I have a term life insurance policy but keep it as a security blaket for the wife in case "something" ever happened to me.
The way I see it Term life is something that I will pay in to for the term, (20 yrs), if I die during that time then OK my wife get 20 grand and everything is paid off. Now chances are that nothing will happen to me, I won't die anytime in the next 20 yrs so when the term is up what will I have? Nothing. I will have faithfully paid into the fund for 20 years and will end up with absolutely nothing to show for it.
In a worst case scenario my wife might outlive me and my kids might get the 20 grand when I die but since this will be a long way into the future they will likely be set up in their own lives and for them the money would be a welcome windfall.
So I am looking for a policy that is part life insurance and part annuity, or part life insurance and part retirement. Does such a thing exist?
Is it possible to get a policy that converts part of it's cash value to some kind of retirement benefit? If it's out there where can I find it.
Thanks for your help
Eugene
Actually I'd have to disagree with you here about term insurance. I have an Annuity (which I purchased during a time when I didn't really understand investments) and here is the low down.
The annuity has mutual funds and $100,000 insurance, it costs me just under $100/month. After 5 years the mutual funds have grown to over $5,800 and I still retain the $100,000 worth of coverage. Let's look at the returns from the policy. If I die at any time (lets say I live to the point where I get to be 55 years old...20 years from now...and the mutual fund portion gets up to $50,000) guess how much my wife gets: $100,000. Who is the recipient of the mutual fund proceeds at any point if I die, the insurance company. At the same time I purchased the Annuity I also purchased an additional $700,000 of term insurance, guess how much that is costing me (on a 70 year Term which is way too long but again live and learn) $66/month.
To contrast if I get $100,000 of Term Life now over a 30 year term (the longest I could look up online) it will cost me $134.00/year. So for a 1 1/3 months of my current Annuity premium I can buy an entire year's worth of term insurance. Take the remaining $1,000 per year and putting that in a mutual fund that earns lets say 8% over 30 years guess what I'll have in 30 years $83,566. So I won't have a life insurance policy at the end of 30 years but I'll have $83,566 that is mine to keep...at that point I'd be self insured for $83,566 and wouldn't need another policy. What happens if I die in year 19. My wife would get the $100,000 plus approx. $36,000 in the mutual fund. So which one of the two above scenarios would you say equates to theft: The Annuity or the Term Life using the remaining proceeds to purchase Mutual Funds
Plus I'll probably pay lower fees to the mutual fund that I purchase myself since Annuities usually have high fees as well as the penalities you'll incur if you decide to withdraw mutual funds at some point.
posted by CardRatings.com at 12:38 PM
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