Shopping around for life insurance

[RealJimmyJames]

Zhao +1

[max_boost]

So I should cash out? Lol take the $47k and put it on black?

1. Single. 36. No commitments
2. Condo paid. Investments maxed
3. ????
4. Profit

[zhao]

I dont know what your plans are (or even why you thought you needed life insurance forever in teh first place). I mean, for all anyone knows in 2 years you could have a kid on the way, and then find out you have something that instantly denies you for any future policy ( = might be a good idea to have life insurance). I have 2 friends with families that can't get life insurance because of medical conditions (one has lupus, the other has ITP).

But me personally, I wouldn't have signed up for life insurance if I were you. I'm married, your age, with probably a ton less networth than you and I can't think of one reason for life insurance for myself (If I end up wtih a kid on the way there is nothing stopping me at the moment from getting term life insurance). I wouldn't keep that policy. I wouldn't even consider term insurance unless you have a kid on the way. And if I died tomorrow my wife would be 100% fine financially.

[bleu]

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So I should cash out? Lol take the $47k and put it on black?

1. Single. 36. No commitments
2. Condo paid. Investments maxed
3. ????
4. Profit

Life throws curveballs. You never know what can happen in the next few years. It is amazing how much things can change.
Do you need this money? You've already had this policy for nearly a decade, if not longer, most likely without even giving it a second thought. Actually, I bet this thread just reminded you that you even had it. LOL

[Sugarphreak]

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[Tik-Tok]

I agree with your take on single people, but why would you lump DINK's in with them? You wouldn't want your spouse to not have to worry about paying the mortgage if you died unexpectedly? Let alone funeral costs.

[TYMSMNY]

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So I should cash out? Lol take the $47k and put it on black?

1. Single. 36. No commitments
2. Condo paid. Investments maxed
3. ????
4. Profit

cash out. cash is king. Just like you.

[GOnSHO]

Zhao, you have an interesting take on life insurance.. again, ive replaced so many whole life policies, there are wayyy better options..

Single and life ins is just as important as if married or have children. When you die you have taxes, debts and many other things most people dont think about that becomes a burden to family members if you dont have insurance..

[TomcoPDR]

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cash out. cash is king. Just like you.

And no king should ride without a stallion

[Tik-Tok]

I thought the group buy was for Porche's?

[zhao]

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Zhao, you have an interesting take on life insurance.. again, ive replaced so many whole life policies, there are wayyy better options..

Single and life ins is just as important as if married or have children. When you die you have taxes, debts and many other things most people dont think about that becomes a burden to family members if you dont have insurance..

eh? When you die as a single person your debt dies with your estate. You dont inherit your brothers CC debt or back taxes just because he died and left you everything (never cosign anything you dont want to pay off yourself). The only reason you'd want life insurance is if you have so many debts that your assets may need to be liquidated to pay the debts, and the assets are something your beneficiaries actually want to not be liquidated (maybe a cool car? maybe a farm that's been in the family forever, whatever). If its all just stuff for monetary value and holds no value beyond its cash value, whats the point of life insurance in that case?

Spouses dont marry each others debt either (same with assets. Just because you married someone with a 200 million dollar condo tower doesn't mean you are entitled to any portion of that place). If a dad passes away with a line of credit only in his name, that debt is not the responsibility of the kids or wife. If the dad has no assets or estate, that debt dies with him. My wife and myself have mortgages in our joint name (they follow the property anyway), but all our other debt is person specific. Car loans are only in one name. lines of credit only in one name. CCs only in one name, except for a low limit joint CC. (not that we keep a balance on CC or lines of credit anyway, and not that i'd have so much debt any liabilities couldn't be cleared by liquid assets).

The same goes for divorce. Just because one spouse takes out 30g in debt in her name 2 days before you divorce doesn't mean you are responsible for any of that.

As far as I am concerned when you die if your debts > your assets, that's the creditors problem. Cheap furneral, executor gets paid before creditors, trinkets for sentimental value are usually worthless, and job done. No financial burden to be had there. You can't will a debt to someone and a creditor can't collect from someone who didn't sign for the debt.

[zhao]

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I agree with your take on single people, but why would you lump DINK's in with them? You wouldn't want your spouse to not have to worry about paying the mortgage if you died unexpectedly? Let alone funeral costs.

my take on why your average DINK shouldn't have life insurance, or at least a significant amount.

Funeral costs can be under 1g for a cremation, and if your funeral costs more than 25g I'd say that's a personal choice/problemr. There is generally no reason one person can't survive on their own with a single income. If she can't afford the house on her single income then downsize. Liquidate the house and buy a condo/townhouse/lane home/etc that she can afford. DINKS should be extremely flexible with how much money they need to survive because fixed costs are low. You dont have 2-3 kids with food, clothing, transport, school costs. Yes, the standard of living will go down but we're talking what makes financial sense here, and statistically you are extremely unlikely to die young, and that means you will be paying more then you collect from a life insurance policy. If life insurance gives you piece of mind on a minute chance you'll win the dying young lottery, get life insurance, but the math and statistics say its not financially prudent for your average person.

In the unlikely event one DINK couple has one making say 200k and the other 20k a year, then you might want to consider life insurance on the 200k a year person. Especially if the low income earner is disabled/has some reason they can't earn a salary that they can survive off of comfortably. However imo most DINKs do not have income gaps that are very far apart. If you dont have a house and all that, IMO you have nothing to lose and dont need life insurance also. Life insurance shouldn't be looked at as a windfall because the math says you would be making a better financial decision by not buying life insurance and investing that same money yourself.


What is more likely to happen with a DINK then dying is divorce, and you dont buy divorce insurance do you (well some people do because that is actually a thing....)? Divorce is a harder hit financially than dying is because you lose the income (same as a death), and half the assets (new expense), and have lawyer fees (potentially worse than funeral costs).

As I said in the above post as well, spouses dont marry debt either, so if you separate your debt to person speicfic only you can let most of your debt die with your estate and not worry about passing that burden on to your wife.

Thats my opinion, and why my wife and myself do not have life insurance beyond our 'free' work 25k or 50k policies. If I die my wife would be perfectly fine, although she would probably end up liquidating our house because it would be too big for her and would probably end up moving in to one of our income properties living mortgage free.

[KPHMPH]

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Zhao, you have an interesting take on life insurance.. again, ive replaced so many whole life policies, there are wayyy better options..

Single and life ins is just as important as if married or have children. When you die you have taxes, debts and many other things most people dont think about that becomes a burden to family members if you dont have insurance..

Why is there such a hate on for Whole life ? I have it but maybe I just don't understand ....?

[RealJimmyJames]

Have you ever met anyone who doesn't sell whole life but reccoemends it? It's really popular with the guys selling it because they get such great kickbacks

[blownz]

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After 12.5 years of paying into my policy, I'm close to break even should I cancel. Total payments made =49,500 but my cash value is around $47K (checked my paperwork) so $2500 for 12.5 years of insurance coverage is reasonable if you don't count the time value. With that said, in a few years my cash value will be higher than the payments and it'll keep growing. In this case, say at age 65, my total payments will be about $166k but should I cancel and take the money, all the dividends etc. added up the cash out should be $300k. Now is that $300k subject to tax? Or I stop making the $330/month payment and they just subtract it from my cash value.

Anyway, I have considered canceling it several times but the agent always talks me into keeping it.

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Why is there such a hate on for Whole life ? I have it but maybe I just don't understand ....?

I would personally look at it like what is the difference in cost between term and whole life and generally if you just invested the difference you would be better off with term plus investments.

For maxboost, not sure what your policy was for but if you could have saved close to $300 per month on your insurance and instead invested that extra money, you might have made more. And if you could have had a term policy all these years for $30/month and spent ~$4,500 for term life and then invested the other ~$45,000 you should have been able to make more than that what you have so far.

Insurance companies typically invest your money in funds they own with very high management fees. Much worse than you would even pay on bank Mutual funds.

[max_boost]

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I would personally look at it like what is the difference in cost between term and whole life and generally if you just invested the difference you would be better off with term plus investments.

For maxboost, not sure what your policy was for but if you could have saved close to $300 per month on your insurance and instead invested that extra money, you might have made more. And if you could have had a term policy all these years for $30/month and spent ~$4,500 for term life and then invested the other ~$45,000 you should have been able to make more than that what you have so far.

Insurance companies typically invest your money in funds they own with very high management fees. Much worse than you would even pay on bank Mutual funds.

Eggcellent post dude!

If invested that $300 per month compounded at 5-7% for 12 years easily around $60k instead of the current $47k.

With that said I think I'll just keep the policy for now since I have already committed a dozen years but your post is definitely what someone looking into it should consider.

[ExtraSlow]

This summary explains my gripe with whole life perfectly. It's not a great investment, and it's usually not that much coverage in case if unexpected death.
My term life policy is 750,000, which met my needs when I had a new mortgage, a wife on maternity leave, and two small kids.
When it's time for renewal, my needs will be less, so I will reduce my coverage.

[Tik-Tok]

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This summary explains my gripe with whole life perfectly. It's not a great investment, and it's usually not that much coverage in case if unexpected death.
My term life policy is 750,000, which met my needs when I had a new mortgage, a wife on maternity leave, and two small kids.
When it's time for renewal, my needs will be less, so I will reduce my coverage.

As it stands, you're just giving your wife a good reason to off you, lol.

[ExtraSlow]

Only if she can get away with it. We've both watched enough criminal tv shows to know they always suspect the spouse.....

And on a more serious note, it sounds like a lot, but all it would do is pay off the mortgage and pay for kids expenses until they are eighteen. It's no windfall for her. Unless she also kills the kids.....

[Sugarphreak]

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