My parents have had a life insurance policy on me since I was young.

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PostPosted: Wed Feb 20, 2008 5:28 pm   Post subject:   

It's a little disturbing thinking of what COULD happen. What ifs and shouldn't ofs can turn into nightmares. My parents have had a life insurance policy on me since I was young.



I believe it was only a $20,000 policy but every bit can help.

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PostPosted: Thu Feb 21, 2008 1:01 am   Post subject:   

Good answer...



"Life insurance generally makes a lousy investment, in large part because of high fees that drag down returns. This view doesn't make me anti-insurance; quite the contrary. I believe life insurance coverage plays a crucial role in any family's financial plan.



But that role isn't to provide an investment opportunity. Rather, the reason you buy life insurance is because it's the one financial product that can replace income if a breadwinner dies, which allows surviving family members to maintain their standard of living.



But this principle rarely applies to children. After all, unless your daughter is an incredibly precocious entrepreneur or making big bucks doing commercials for disposable diapers, you're not relying on earnings from her to support your family. So while your daughter's death would obviously be a personal tragedy, it wouldn't be a financial one.



In short, it makes little sense for you to devote your money to something that doesn't make it as an investment and that provides life insurance protection for someone who doesn't require it.



So what should you be doing to give your daughter a leg up financially?



Plan for your future

Well, the single most important thing you can do is to make sure your own finances are in shape. After all, the more precarious your financial situation is, the more difficult it will be for you to give your daughter all the things I'm sure you want her to have: a good education, a nice home, a chance to experience the wider world and, perhaps most important, a sense of security and stability.



You can begin building that solid financial foundation by stashing away enough money in a money-market fund or savings account to cover about three months' worth of living expenses. This sort of reserve will allow you and your family to weather emergencies such as unexpected medical problems or financial setbacks like a layoff with minimal disruption to your lifestyle."

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PostPosted: Sun Jun 15, 2008 4:38 pm   Post subject:   

Quote:
Answer: Let me put it this way. I think almost anything you would do with your money, outside of buying lottery tickets or playing the ponies, would be better than sinking it into a life insurance policy for your daughter.




This person is against life insurance investment. I have the answer for this. It is good to invest on other things that can make your money grow much bigger. You can invest it on stocks, personal business, real estate or in anything, but spare even a small amount for life insurance. Life insurance investment is not for wealth accumulation. You will not earn money much money for it. But it can give what other investment cannot provide. And that is protection. Life insurance investment is all about wealth preservation. Life insurance should not be the source of your income, but it is very essential for the financial protection of the family.



Now about the question of is it good to invest on life insurance for kids, then my answer is Yes. Life insurance for kids can be considered as a forced savings for the kids' future. The cash values are built up plus it earns interest and dividends on the case of participating plans. Money placed here can serve as an emergency money in the future. It can be surrendered if the child needs money for school. Or it can be a lifetime protection if he or she has his or her family in the future. I am not telling you to invest all your money in life insurance. Invest on other forms of investment that can give you greater return, but never disregard life insurance investment.



It is really good to start on an early age. The premium is low and the interest accumulation would be higher because of the time value of money put into the life insurance policy.



Just a simple reminder: Life insurance is a product that you can buy when you don't need it, but cannot be bought when you needed it most.
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PostPosted: Mon Jun 16, 2008 9:56 pm   Post subject:   

Joven222: Do me a huge favor; NEVER use the terms "life insurance" and "investment" in the same sentence. In most states, there are specific insurance codes which clearly dictate the differences between those two products.



If you are an agent licensed to sell life insurance in America, trust me, the last thing you want to be part of is an investigation into the possible misrepresentation of life insurance products you've sold and the terms you may have used to do so.



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PostPosted: Tue Jun 17, 2008 3:21 pm   Post subject:   

Oh, sorry I don't know about that. I am from the Philippines and we treat life insurance as one kind of investment.



Quote:
the last thing you want to be part of is an investigation into the possible misrepresentation of life insurance products you've sold and the terms you may have used to do so.




This is really interesting. Can you explain more about that. It really gets my interest. Wink You don't treat life insurance as an investment? Why is it that there would be a possible misrepresentation of life insurance products. I am interested on the laws you have their about life insurance selling.



Thanks in advance.
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PostPosted: Wed Jun 18, 2008 9:04 pm   Post subject:   

Hello Joven222,

Unfortunately, there isn't any sort of boiler-plate answer when it comes to using life insurance an investment. A clear benefit of insurance products is the tax-deferred treatment of the cash accumulation part of the policy. Of course, the higher your tax bracket and the longer you have until retirement, the more valuable this benefit can be. However, a very important disadvantage of using life insurance as an investment is the high fees and expenses that make it difficult to compete with the returns of even ordinary security instruments, such as mutual funds.



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PostPosted: Thu Jul 31, 2008 4:28 am   Post subject:   

I am of the view that protection comes first before investment.



Life is full of uncertainties and it is important we have some form of assurance in life so that we can manage crisis more effectively. Insurance provides sum assured upon occurrence of specified events such as death, disablement, crtical illness etc.



I also believe at some point in time, insurance may not be an option but a requirement especially when we borrow loan to purchase properties we need insurance as collateral.



If that is the case, it makes logical sense to get kids life insurance. In fact the best time to insure is always before a person gets older and as a person gets older, generally he/she is prone to sicknesses. Normally kids have advantages in terms of their age and health conditions when applying for life insurance.



When addressing protection needs and investment needs, protection needs should be a more important priority.

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PostPosted: Thu Jul 31, 2008 1:14 pm   Post subject:   

Quote:
Normally kids have advantages in terms of their age and health conditions when applying for life insurance.
Very true indeed!!!

That is one good reason why you should have life insurance for your kids.

Apart from that we need to introspect & extract some hidden facts in line with today's fast-paced world.

If we are investing on educational policies keeping the future expenses in mind...don't we need to teach them that their lives are valuable & that they should start saving in bits-n-pieces! I believe that should come before the other things.. Smile

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PostPosted: Thu Jul 31, 2008 3:38 pm   Post subject:   

in my opinion, i think the money is better spent if it is put into a college savings account. this is an investment in their future. i don't believe in using life insurance plans as an investment. i think a college plan is money better spent and saved.



my father bought me a solid life insurance plan when i was in my early 20s. he paid the premium on it for several years and then when i got married i took it over. the premium is still low and it is a gift that he did that for me at such a young age. i will do it for my kids when they get to that point as well. but in the meantime, i'm growing their college savings and looking forward to a long life with them filled with joy. i tihnk that the last thing i'm going to be interested in if something were to happen to my kids would be the amount of money i'd get out of their policies.



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PostPosted: Fri Aug 01, 2008 12:20 am   Post subject:   

Quote:
i tihnk that the last thing i'm going to be interested in if something were to happen to my kids would be the amount of money i'd get out of their policies
Of course you wouldn't be interested in that, and I understand what you are saying...Here is what I did with the kids and the grandkids....My fear was/is God forbid something happen to any of them the last thing in the world I wanted to deal with was not having the money to take care of the arrangements...for that reason I had (have) modest policys on all of them about 20k I think on the kids, and maybe 25k on the grandkids (it was cheaper) actually my kids might be only 15k I honestly don't recall...anyway that was my logic...


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