I'm 37 married with one child. I'm considering taking out a life insurance policy. Something like a $2mm policy over next 20 years. If you have invested in life insurance, what's your perspective? Thanks. Please, constructive answers appreciated.
I have taken 1m policy, universal index life. Returns based on S&P roughly 6%. Can withdraw/ surrender after 10 years, Growth money taxed on surrender. Flexible premium payments. Any life threatening illness, payout is 85% Max of the policy. Can take loan on the policy which need not be payed back, will be deducted with interest from payout on death.
Why not the one through Google benefits?
life insurance as an investment is a scam
We both have a policy plus whatever I get through my employer (can't remember if it's 1x or 2x salary ...). Seems worth it to me. If I get hit by a bus or something the last thing I want my family to worry about is money.
That’s not usually sufficient considering your family is counting on 20-30 years of income
There are at least 2 major kinds of life insurance: term and whole life. First is cheaper, say $80 per month, second is $800 per month. If you didn’t die during your term, you get nothing. Term is what you get through employment too. Usually to get life insurance after that period, which will be close to your retirement, the rates will be per month what you paid per year before, so most folks don’t bother. Whole life insurance locks your rate when you start and pays no matter when you die, even after 100 years. The catch - most people bail out after 3 years unable to pay so much and you won’t get much back after so little time passes, assume you won’t get anything after 3 years. The point when you break even on whole life in terms of what you can take out will come after 15-20 years. A midway solution is to take a convertible policy - it is a term life insurance that will lock you health vitals (not rate) that can be fully or partially converted to whole life at any point during your term without having to do medical re-evaluation.
In my opinion, whole life is bad, cheap term life is ok. Whole life tends to be full of fees. For high earners you just need to make it to 50 or 60 to have financial independence.
There are no fees in whole life. Please explain “full of fees”. I would be curious as to your take on whole life insurance fees
Insurance companies don't operate for the public good. Basically, whole life is a wrapper on an overpriced mutual fund. Where do you suppose they make money?
Don’t be fooled. Most people do not understand how life insurance works. There are no fees with a traditional whole life insurance policy. IUL is a different story. I have my retirement in life insurance. I’m not taking the risk of extremely high taxation in a 401k years down the road. Government has to increase taxes at some point.
Is life insurance not taxed?
No it is all after tax dollars that are invested. The Death Benefit if you were to pass is tax free. And if you access your cash value in whole life insurance contract it is tax free and does not count as income
PayPal do you research before investing in life insurance Just like every business there are good companies and there are bad companies. Investing in life insurance is a great option for retirement planning. Lowering your taxable income in retirement and getting to a 0% tax bracket in retirement is ideal. I’m a big fan of term insurance to protect your child. At 37 it will still be fairly cheap For you. But what you should really look at is whole life with a mutual insurance carrier. Getting out from under the government is key. If you have 0 taxable income in retirement then the government cannot tax your social security either. Taxes are at historic lows and markets are at historic highs. Bad bad mix if you are dumping money into 401k type plans. The next 8-10 years are prime and optimal to invest into life insurance. I can send you to a good website that explains it and really walks you through the process without being forced to buy anything and they really educate you on how life insurance works
What's the website?
@chris55 Can you pls explain this in more details, or provide good website to walk though this process? Thank you!
@kv16jra. Completely not true. Please clarify “high fees”. 98% of term policies never pay out. That’s an expensive buy. Whole life insurance is time tested. So when the market is down and you depend on that income source and taxes are high where are you going to turn to to take a distribution ? Your 401k? Don’t listen to people who arent experts in the life insurance industry. Those who understand the contracts can show your “average pleb” how investing in life insurance will almost always be a better option.
Most life insurances do not have investment element. Try to get one with an investment element. They are worth it even though the RoI will be less compared to shares.
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Is the one through PayPal insufficient?