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MrsKellyBride
Mommy of 3!
Member since 8/06 1617 total posts
Name:
Kelly
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Financial Advisors: Permanent vs. term life insurance
I keep hearing controversy surrounding permanent life insurance but my husband's financial advisor keeps bringing it up. Thoughts?
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Posted 8/16/10 12:12 PM  |
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Long Island Weddings
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snowprincess
My happy babies
Member since 3/06 3428 total posts
Name:
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Re: Financial Advisors: Permanent vs. term life insurance
we have a mix of both and after talking to a firend i am adjusting what i have to have a mix of permanent and mix of term for different amount of years 20 30 40 based on my projected needs for my spouse and kids
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| Posted 8/16/10 12:15 PM |
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Pray4Baby2010
<3 Cutest Giants Fan
Member since 10/09 5796 total posts
Name:
MB
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Re: Financial Advisors: Permanent vs. term life insurance
I'm not a financial advisor but I can tell you what we did, in case its helpful
We have each of a policy of both... our term policies are for the amount of our mortgage and good for the remainder of our 25 year term so that if something happens to either of us- the other can pay the mortgage
then we also each have a whole life policy because we were told that if we bought it now the premiums would be a lot less than if we tried to later and were older. This is money that would send our kids to college/bury us.
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| Posted 8/16/10 1:17 PM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: Financial Advisors: Permanent vs. term life insurance
We have term. It's to cover our mortgage and burial expenses.
We have investments separate from insurance. Right now, whole life policies don't make sense. We use other vehicles for investing.
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| Posted 8/16/10 1:27 PM |
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ali120206
2 Boys
Member since 7/06 17792 total posts
Name:
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Re: Financial Advisors: Permanent vs. term life insurance
Posted by Blu-ize
We have term. It's to cover our mortgage and burial expenses.
We have investments separate from insurance. Right now, whole life policies don't make sense. We use other vehicles for investing.
Same here.
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| Posted 8/16/10 3:11 PM |
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KLSbear
LIF Adult
Member since 1/06 1908 total posts
Name:
Karen
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Re: Financial Advisors: Permanent vs. term life insurance
Posted by Pray4Baby2010
I'm not a financial advisor but I can tell you what we did, in case its helpful
We have each of a policy of both... our term policies are for the amount of our mortgage and good for the remainder of our 25 year term so that if something happens to either of us- the other can pay the mortgage
then we also each have a whole life policy because we were told that if we bought it now the premiums would be a lot less than if we tried to later and were older. This is money that would send our kids to college/bury us.
DH is in the business and this is what he advises his clients - term to cover short term declining debts like mortgage and whole life for long term. Whole life is not an investment instrument (though sellers of whole life universal or whole life variables will try to sell it as such but because they are investments you risk the insurance). Whole life is a guarantee that you will have insurance for your whole life - it never expires like term insurance does. Whole life does build cash value so you can cash it out at a later point in time if you have a need, and enough other insurace that you are comfortable liquidating it.
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| Posted 8/16/10 7:18 PM |
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MrsMick
Baby #2 debuts in March 2016!
Member since 9/09 1977 total posts
Name:
Michele
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Re: Financial Advisors: Permanent vs. term life insurance
I work in Financial Services for a GIANT insurance company.
Term is the way to go. It is simple and cheap and covers a mortgage or is just a death benefit. Benefit amount is laid out based on your needs. And, the best part it can be converted later on when it expires to a universal life or a VUL which is typically an investment. But, even if it does expire, you still have the death benefit.
Whole life in my opinion is a waste of money.
Go with the Term. It is always best for the proposed insured in the long run.
Message edited 8/16/2010 8:14:54 PM.
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| Posted 8/16/10 8:13 PM |
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MrsKellyBride
Mommy of 3!
Member since 8/06 1617 total posts
Name:
Kelly
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Re: Financial Advisors: Permanent vs. term life insurance
THANKS SO MUCH!
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| Posted 8/16/10 9:06 PM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: Financial Advisors: Permanent vs. term life insurance
Posted by MrsMick
I work in Financial Services for a GIANT insurance company.
Term is the way to go. It is simple and cheap and covers a mortgage or is just a death benefit. Benefit amount is laid out based on your needs. And, the best part it can be converted later on when it expires to a universal life or a VUL which is typically an investment. But, even if it does expire, you still have the death benefit.
Whole life in my opinion is a waste of money.
Go with the Term. It is always best for the proposed insured in the long run.
I feel the same way. After the mortgage is paid why carry such a large whole life policy if your retirement accounts are funded and you have planned accordingly?
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| Posted 8/17/10 9:02 AM |
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2girlsforme
LIF Adult
Member since 8/06 3071 total posts
Name:
XXXXXXXXX
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Re: Financial Advisors: Permanent vs. term life insurance
Posted by Blu-ize
Posted by MrsMick
I work in Financial Services for a GIANT insurance company.
Term is the way to go. It is simple and cheap and covers a mortgage or is just a death benefit. Benefit amount is laid out based on your needs. And, the best part it can be converted later on when it expires to a universal life or a VUL which is typically an investment. But, even if it does expire, you still have the death benefit.
Whole life in my opinion is a waste of money.
Go with the Term. It is always best for the proposed insured in the long run.
I feel the same way. After the mortgage is paid why carry such a large whole life policy if your retirement accounts are funded and you have planned accordingly?
I'm with you. And many moons ago, I was licensed to sell insurance.
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| Posted 8/17/10 9:10 AM |
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Kaitlyn747
LIF Toddler
Member since 6/10 399 total posts
Name:
Kaitlyn
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Re: Financial Advisors: Permanent vs. term life insurance
IMHO--I listen to Dave Ramsey a lot. I may not agree with everything he says, but he is usually spot on.
Dave says to NEVER get whole life insurance. Everything that I have read is that you DONT need insurance after a certain age. You NEED life insurance to protect your family in case of death. College, mortgage, living expense.
After the age of 65(ish) you dont have the same needs as if you were 40.
Watch this video and make your own choice. But do some research BEFORE buying whole. It makes the agent a LOT of money and YOU could invest that SAME money and get something out of it.
http://www.daveramsey.com/article/term-life-vs-whole-life-insurance/lifeandmoney_insurance?atid=davesays
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| Posted 8/17/10 10:15 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Financial Advisors: Permanent vs. term life insurance
Posted by MrsKellyBride
I keep hearing controversy surrounding permanent life insurance but my husband's financial advisor keeps bringing it up. Thoughts?
Because they earn more commission selling whole life. 
Just go with term.
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| Posted 8/17/10 10:18 AM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: Financial Advisors: Permanent vs. term life insurance
Posted by 2girlsforme
Posted by Blu-ize
Posted by MrsMick
I work in Financial Services for a GIANT insurance company.
Term is the way to go. It is simple and cheap and covers a mortgage or is just a death benefit. Benefit amount is laid out based on your needs. And, the best part it can be converted later on when it expires to a universal life or a VUL which is typically an investment. But, even if it does expire, you still have the death benefit.
Whole life in my opinion is a waste of money.
Go with the Term. It is always best for the proposed insured in the long run.
I feel the same way. After the mortgage is paid why carry such a large whole life policy if your retirement accounts are funded and you have planned accordingly?
I'm with you. And many moons ago, I was licensed to sell insurance.
Me too..licensed for health, life & disability.
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| Posted 8/17/10 10:49 AM |
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charon54
My two boys!
Member since 5/05 7279 total posts
Name:
Rebecca
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Re: Financial Advisors: Permanent vs. term life insurance
I think you should discuss it with your financial advisor. I don't always think only term is helpful depending on your situation.
We have universal life with a no-lapse guarantee. It's through Prudential, I would suggest you research it. It's more money, but we consider it as really a savings account which will guarantee DS money someday.
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| Posted 8/18/10 6:21 PM |
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MrsMick
Baby #2 debuts in March 2016!
Member since 9/09 1977 total posts
Name:
Michele
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Re: Financial Advisors: Permanent vs. term life insurance
Posted by charon54
I think you should discuss it with your financial advisor. I don't always think only term is helpful depending on your situation.
We have universal life with a no-lapse guarantee. It's through Prudential, I would suggest you research it. It's more money, but we consider it as really a savings account which will guarantee DS money someday.
Universal is great too. More money, but a good product. But for now, I think the term is great for them. Then after 20 or 30 years, they can convert it. Or they can get a 10 year term with plans to convert. But the 20 or 30 year terms are always better IMO.
An agent is always going to push the more expensive products on their clients. They get 30% or less of your annual premium! So, the more expensive the product, the more commission they get.
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| Posted 8/18/10 10:04 PM |
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KLSbear
LIF Adult
Member since 1/06 1908 total posts
Name:
Karen
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Re: Financial Advisors: Permanent vs. term life insurance
Posted by MrsMick
An agent is always going to push the more expensive products on their clients. They get 30% or less of your annual premium! So, the more expensive the product, the more commission they get.
That's a rather wide sweeping assumption and paints all insurance agents with the same brush to say they are ALWAYS going to push the more expensive product. Rather insulting too for that matter. I know my DH trains his agents to do what's right for the client, and that's often to go with term or a mix of term and whole life. Maybe you've just been dealing with the wrong people.
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| Posted 8/18/10 10:08 PM |
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MrsMick
Baby #2 debuts in March 2016!
Member since 9/09 1977 total posts
Name:
Michele
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Re: Financial Advisors: Permanent vs. term life insurance
Posted by KLSbear
Posted by MrsMick
An agent is always going to push the more expensive products on their clients. They get 30% or less of your annual premium! So, the more expensive the product, the more commission they get.
That's a rather wide sweeping assumption and paints all insurance agents with the same brush to say they are ALWAYS going to push the more expensive product. Rather insulting too for that matter. I know my DH trains his agents to do what's right for the client, and that's often to go with term or a mix of term and whole life. Maybe you've just been dealing with the wrong people.
I worked in the insurance field for over 7 years now at 2 companies. It is usually the same thing- Agents often push the more expensive products to make more dough...
Message edited 8/18/2010 10:16:06 PM.
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| Posted 8/18/10 10:13 PM |
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lullabella
LIF Adult
Member since 5/05 2246 total posts
Name:
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Re: Financial Advisors: Permanent vs. term life insurance
We went through this process and in the end went with 30 year term and a small universal policy so we had something permanent. Whole Life is expensive and since we have our own investments it didnt make sense for us.
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| Posted 8/19/10 9:45 AM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: Financial Advisors: Permanent vs. term life insurance
Posted by MrsMick
Posted by KLSbear
Posted by MrsMick
An agent is always going to push the more expensive products on their clients. They get 30% or less of your annual premium! So, the more expensive the product, the more commission they get.
That's a rather wide sweeping assumption and paints all insurance agents with the same brush to say they are ALWAYS going to push the more expensive product. Rather insulting too for that matter. I know my DH trains his agents to do what's right for the client, and that's often to go with term or a mix of term and whole life. Maybe you've just been dealing with the wrong people.
I worked in the insurance field for over 7 years now at 2 companies. It is usually the same thing- Agents often push the more expensive products to make more dough...
The commissions used be 95% of the first years premium. Not sur if it's the same. That's a nice commission.
I used to sell whole life for lots of reasons. Mostly to protect assets, for a partnership or wealthy couples who wanted to protect assets with second-to-die policies.
Every now and then it made sense for the average consumer who really wanted something perm and wanted to have a large death benefit or for a disabled child that they had to provide for long after they were gone.
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| Posted 8/19/10 10:27 AM |
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budget09
LIF Zygote
Member since 11/09 46 total posts
Name:
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Re: Financial Advisors: Permanent vs. term life insurance
Get 30 year term. By and large whole life does not make sense for most people.
Pure and simple insurance agents sell whole life policies over term policies solely due to the commission they get for selling it.
It is a utter conflict of interest and YOU (the consumer) are the ones getting screwed by it. You have probably heard the saying "Insurance is sold, not bought." this is what they are talking about.
Don't have you agent convince you otherwise.
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| Posted 9/4/10 10:19 PM |
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KLSbear
LIF Adult
Member since 1/06 1908 total posts
Name:
Karen
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Re: Financial Advisors: Permanent vs. term life insurance
Posted by budget09
Get 30 year term. By and large whole life does not make sense for most people.
Pure and simple insurance agents sell whole life policies over term policies solely due to the commission they get for selling it.
It is a utter conflict of interest and YOU (the consumer) are the ones getting screwed by it. You have probably heard the saying "Insurance is sold, not bought." this is what they are talking about.
Don't have you agent convince you otherwise.
Something like 95% of all term policies expire before every paying out. It's like your homeowners policy or car insurance. You hope you never have to collect on them but you're paying money for something you never collect on. Whole life, on the other hand, does build up cash value which you can draw on if needed and it is guaranteed to pay out to your heirs so it's a way of passing on assets outside of your estate so it's often used in estate planning, but it shouldn't be considered an investment. Anyone that says whole life is a "bad investment" is looking at it the wrong way because insurance should be used to INSURE - it's not a gamble like investing where you could see your investment go up or it could go down. You don't buy insurance as an investment, you buy it to cover a need if you're not alive to cover it yourself and if you want that to extend for your whole life, beyond the time when a term policy would expire, consider whole life.
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| Posted 9/5/10 8:19 PM |
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Re: Financial Advisors: Permanent vs. term life insurance
Posted by Blu-ize
We have term. It's to cover our mortgage and burial expenses.
We have investments separate from insurance. Right now, whole life policies don't make sense. We use other vehicles for investing.
Same.
We do have whole life policies for our children though.
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| Posted 9/5/10 9:10 PM |
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MrsBlueSash
Love my sailor
Member since 6/05 5793 total posts
Name:
Christian
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Re: Financial Advisors: Permanent vs. term life insurance
I think you have to assess your goals and work backward. Are you trying to protect yourself from uncertainties or have a long term investment?
The argument in favor of term life is that you can purchase affordable insurance and make other retirement investments that will deliver a return that are often higher than the value of the death benefit.
The case for whole life is that buying a policy that combines insurance with a savings or investment component protects, which depending on the investment vehicle is typically a much lesser return that traditional investment vehicles for retirement and savings but is guaranteed.
Another key point to whole life is that if you want to buy a whole life, universal life, or other cash value policy, plan to hold it for at least 15 years. Canceling these policies after only a few years can more than double your life insurance costs.
We only have term for the duration of needing to care for our kids and cover our long term goals with multiple other financial vehicles.
Message edited 9/6/2010 3:12:42 PM.
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| Posted 9/6/10 3:11 PM |
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CookiePuss
Cake from Outer Space!
Member since 5/05 14021 total posts
Name:
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Re: Financial Advisors: Permanent vs. term life insurance
Posted by Blu-ize
Posted by MrsMick
I work in Financial Services for a GIANT insurance company.
Term is the way to go. It is simple and cheap and covers a mortgage or is just a death benefit. Benefit amount is laid out based on your needs. And, the best part it can be converted later on when it expires to a universal life or a VUL which is typically an investment. But, even if it does expire, you still have the death benefit.
Whole life in my opinion is a waste of money.
Go with the Term. It is always best for the proposed insured in the long run.
I feel the same way. After the mortgage is paid why carry such a large whole life policy if your retirement accounts are funded and you have planned accordingly?
Not necessarily true...Life insurance is used to provide for legacy trusts, pay estate taxes, provide protection for life estate transfers should one pass early, etc.
I don't think that there is any cookie cutter answer. There are many reasons why one would need life insurance past term limitations. If there is any possibility that you may need life insurance past the age of 70, you need some type of permanent insurance. There are some UL policies that are priced like term but provide protection through the age of 120.
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| Posted 9/6/10 8:18 PM |
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