by hummingbird » Wed Jan 16, 2008 02:52 pm
Can anyone explain what term life is and whole life. I wanna compare life insurance policies and know how to choose the best out of them. What is your opinion of either of them.Thanks
Posted: Sat Jan 19, 2008 10:48 am Post Subject:
quote (But the whole life plan also accumulates a cash value, which the policy holder or the beneficiary can receive at the expiration of the policy. )
If I bought a whole life policy ,how would I collect a cash value at the expiration of that policy?Would not I be dead? Would it not expire only if I were dead? I thought you said a term policy was for a term of time but whole life is for ,whole life). I'm confused here.
Sorry to create the confusion. Well, lemme try to clear it off. For the whole life plan the insurer put a portion of the premium paid in the market. The insurer shares the return earned on this investment with the policy holder, this is the ‘cash value'. It keeps on accumulating as long as you run the policy.
I was right, when I said that the whole life plan covers you through out your life. And the policy need to paid off it order to collect the accumulated amount on the policy, though it may depend upon your policy clauses. However, the whole life plans allow the policy holder to borrow against the ‘cash value'. The death would be paid off to the beneficiary upon the death of the policy holder, along with the accumulated amount. But you can any point of time make the policy a ‘paid off' one and collect the benefits yourself.
Some plans also allow the policy holder to stop paying premium at any time during the tenure. And the policy will stay in effect as long as the accumulated amount will work as a source of fund for the policy.
Straight life?Whole life term life?How many types of life insurance are there? No wonder i a confused.
Term life, whole life and universal life are only the broader categories of life plans. I bet you will encounter with more forms if you research little more. Someone has mentioned it quite correctly….there is a wide verity of life policies available in the market now. You need to understand your specific needs and shop accordingly.
Please let me know if can be of any further assistance.
Regards,
Juanita
Posted: Sat Jan 19, 2008 11:28 am Post Subject:
The nice thing about here is that everyone is entitled to their oppinion, LOL
Posted: Sat Jan 19, 2008 11:38 am Post Subject:
The nice thing about here is that everyone is entitled to their oppinion, LOL
You are absolutely right :D and that's the purpose of the forums. Forums allow everyone to vent their heart. No matter whether you are an expert or a learner.......you should come up with your opinion. We always welcome healthy interactions between the members.
Hope you all keep enjoying your participations in this community.
Regards,
Juanita
Posted: Sat Jan 19, 2008 12:13 pm Post Subject:
Key word, "healthy interaction" LOL, great response Juanita.
There is some great discussion going on here, I like it when there are different opinions, you get a lot more information that way.
Posted: Sat Jan 19, 2008 02:59 pm Post Subject:
Thats terrible. I guess if I get life insurance I will get it from some place I already know or have insurance through. This has made me insurance shy...lol What if I was 50 and got a term policy for 30 years.Would I be sure or most likly to die in that time frame. Then it would pay, right? I would have gotten it at the price of term instead of whole life ,right?
Posted: Sat Jan 19, 2008 06:52 pm Post Subject:
hummingbird, You are absolutely correct. If you are 50 and qualify for a traditional term plan (without any return of premium options) you MUST die within that time frame for anyone to benefit from it. So whatever you do, don't live to be 81.
According to some, the "perfect" plan would be to NOT spend $100 per month on a $100,000 policy that would last you until you died (whenever that might be) so that you could spend $50 per month on a 20-year term plan and put the other $50 per month into some sort of an investment vehicle.
20 years later, you've invested $12,000 and earned around $8000 in interest. At that point, the IRS's rule for minimum distribution kicks in and you'll need to start withdrawing money from your investment.
Sounds great because you can use the whole $20,000 (minus any applicable taxes) to supplement your retirement.
On the other hand, there are those who missed out on Suze Orman's Global (one size fit's all) Life Insurance Manifesto. These poor chaps decided on their own to pay $100 per month for a permanent life insurance policy that would be "paid-up" (requiring no further payments) in let's say 30 years, and THEN using any cash accumulations OR leaving the entire $100,000 to their beneficiaries.
"My God," A.L. Williams would say, "why in the world would anyone want to do something as stupid as that?" Even "The Coach" was entitled to his opinion.
Posted: Sat Jan 19, 2008 07:15 pm Post Subject:
LOL, you better die before you are 81, you will probably live to be 106 hummingbird.
Posted: Sat Jan 19, 2008 09:07 pm Post Subject:
Knock it off erb!
Posted: Sun Jan 20, 2008 02:59 am Post Subject:
Thanks all.I feel like I opened a can of worms with this question.I doubt I will live to be 106.If I do I probly won't like it cause by then I won't be able to move my bones...lol I may just go with the 30 year plan and die before I'm 80.That sounds like a plan to me. I'll never be rich anyway.
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