Comments on: Plan, Prepare, and Take it Easy with Term

By: Money Skills 204: Building a Legacy | Homeland Estate & Financial Services

Fri, 03 Mar 2017 20:29:27 +0000

[…] life insurance works – There are a lot of terms, like whole, term, universal,… learn about the different life insurance policies and which one is best for […]

By: Peach

Peach — Fri, 06 May 2016 14:05:17 +0000

In reply to Charles from Groton MA. Yes Charles, you can stack plans like that if you would like. However I think a much better plan is to focus on getting out of debt, saving money, and building well while you have term life insurance in place. Great question :)

By: Charles from Groton MA

Charles from Groton MA — Wed, 27 Apr 2016 17:26:02 +0000

Great article, thanks for explaining the differences in life insurance plans. I am 26 and have not thought about this stuff at all, but it may be worth looking into. Is it possible to have multiple plans? Like, can I get a 30-year term now, and another 30-year term when I’m 36? By the time I am 56 (when the first plan expires) I may have children/family and I don’t want them to lose out if I die at 57. Thanks!

By: Peach

Peach — Mon, 21 Mar 2016 14:01:57 +0000

In reply to Michael Sparks. Hi Michael, I have a feeling that you sell insurance for a living, which is why you mention the tax savings. I am not mad at you at all - you believe in product and you also must sell the product to provide a living. I have heard all the tax savings crap over and over again, however insurance agents are always quick to point out the tax savings and forget to mention the ridiculous high fees and the depressingly low average returns. I'll pay more in taxes all day long....and also pay about 1/10th of the premium for Term Life vs Whole Life and invest the other 90% savings in anything else besides Whole Life. Sorry Michael, but I think we are going to have to agree to disagree here.

By: Michael Sparks

Michael Sparks — Sat, 19 Mar 2016 21:36:03 +0000

In reply to Peach. Tax savings alone are a major reason for whole life, that is unless you like to pay more taxes.

By: Peach

Peach — Tue, 02 Feb 2016 14:21:06 +0000

In reply to Mike.

Thanks Mike for the in-depth reply! However we are going to simply have to agree to disagree he, because you nor anyone else is going to change my opinion on whole life being garbage. The fees are high, the returns are lousy, and the only people pushing these awful policies are insurance agents – and I don’t blame you, you have to make a living also. The number one thing insurance agents hate to hear, is “buy term and invest the rest”. You’re 100% right, Jenny in the above example will have a tough time getting a 30 year term when she’s older, but if she never bought whole life garbage and invested the difference of the premium for whole life vs the premium for term, she would have accumulated wealth.
I know you and I are not going to agree and that’s fine. What I’ve learned over the past few years is you are not going to change insurance agents mind about whole life. Period. Not to worry, about 70% of Life insurance policies that are sold are whole life. Chris Peach from Money Peach is not going to change the minds of enough people to affect the insurance industry. However, Kiplinger, CNN Money, Dave Ramsey, Suze Orman, David Bach, and all the other giants out there who say whole life is garbage might…

By: Mike

Mike — Sat, 30 Jan 2016 22:52:04 +0000

You are leaving out some important points on the whole life (permanent) insurance. It is a type of “forced” savings, which allows for a loan or a withdraw against the interest and/or dividends paid to the policy owner. And most plans, at least from the reputable companies, will actually pay out the extra money earned. And while I agree to disagree with you also, as I do see the value in permanent life insurance, there are a couple keys to remember. 1) Death benefits are tax free as opposed to other accounts like this because the government wants your life to end with your debts getting paid. This puts money back into the economic flow. 2) It doesn’t matter what kind of plan you have, all that matters is when you die, there is one in place. That is the correct plan for you. The death benefit is paid out no matter what plan you have, if the death is not excluded by the contract. 3) The earlier either type of plan is bought, the cheaper it is per month. A whole life plan bought at age 3 can be $10 a month, and earn more per year for a 34 year old man than he pays in (I know this from 1st hand knowledge, as I earn more than $120 a year from my plan). 4) The term plans could and are very good plans. I encourage them often. I also encourage people to look at the entire option they have. A term plan in your example above may only cost $11 a month now, but when Jenny is older and is closer to death, she’s not getting a term or perm plan for that price, and instead has spent all that money with $0 return, which is less than the 1.1% you quote. And now her bill, even for term, is going to be 10 times more per month. And many places won’t give her a full 30 year term plan at that age. However, if she has a good insurance agent and plan, they will over a conversion in that term to help. 5) This is key…if every person in the USA had a life insurance plan in place at the time of their death, the entire country would be debt free in about 2 generations, based on most speculations.

I agree to an extent, for the love of everything, get SOME kind of coverage now. Worry about the change when you can. But protect yourself. I just want to explain there is a major difference between the information you have supplied and the information I have. Yes, I am an insurance agent, and I love your site. I just want to give a 2nd opinion.

By: Peach

Peach — Mon, 02 Nov 2015 20:24:07 +0000

In reply to David – beaconlifefunds.com.

Hi David!

Thanks for the comment, but we are going to have to agree to disagree here. Here is why I think Whole Life Insurance is 100% Crap: Life insurance is there to take care of your family in an event of a premature death. Whole Life agents will sell you on the idea of “Well, look what else our plan can do for you via all these cool bells and whistles”, when in reality all of that extra garbage is just that….garbage. I don’t buy hot dogs at gas stations because I feel they should remain in the gas business. I also don’t buy investments through insurance companies because they should remain in the insurance business. Plus, I can always get better returns investing on my own or through a broker than I can after paying the ridiculous fees through the whole life policy. Lastly, YOU DON’T NEED life insurance for your whole life if you get out of debt, build wealth, and save. This is the point where you are self-insured. But, while you’re getting out of debt and building wealth, why not purchase 10x less expensive Term Life policy (vs Whole Life) for the next 20-30 years until you arrive. As far as the tax-free piece – I try to stay away from horrible financial products even if it offers a tax break. Thanks fo the comment and for letting me take part in this discussion with you. 🙂

By: David - beaconlifefunds.com

David - beaconlifefunds.com — Mon, 02 Nov 2015 15:04:12 +0000

Term life insurance has a great benefit of the insurance which we are looking for. You are right, whole life insurance tends to be more expensive because of its investment value, however, if you are looking for a safe investment, why not? And it is tax free too right?

By: Peach

Peach — Mon, 27 Jul 2015 22:31:59 +0000

In reply to Meg.

Meg,

It actually depends on whether or not there was growth on your Cash Value Policy. When you cash our or “surrender” your policy for the cash, the gain on your policy (if any) is subject to income tax. This is a great question – thank you for asking it 🙂