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Money Matters
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Old 10-31-2013, 02:14 PM   #1
Mike Larry
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Whole life insurance

I've been reading about whole life insurance policies, mainly because I've maxed out my tax-deferred avenues (401k and IRA). I've been doing some reading on the subject, but I'm not really sure I understand the main pros and cons.

Is this a good idea for someone like me, who's young, healthy, and has no dependents? If it makes a difference, I'm not even remotely close to getting married and I'm not sure that I ever want to start a family.
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Old 10-31-2013, 06:46 PM   #2
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I've been reading about whole life insurance policies, mainly because I've maxed out my tax-deferred avenues (401k and IRA). I've been doing some reading on the subject, but I'm not really sure I understand the main pros and cons.

Is this a good idea for someone like me, who's young, healthy, and has no dependents? If it makes a difference, I'm not even remotely close to getting married and I'm not sure that I ever want to start a family.
No.

If you need any insurance, buy term. It is much cheaper but only pays out upon death.

You can get like $100k for your funeral, parents, friends, etc. for like $25 per month if you are healthy.

Whole is really for a family that may need to borrow against it later or plans on keeping it for 50 years.

JMO - I am not in the insurance business.
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Old 11-01-2013, 03:55 PM   #3
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whole life can be good if you get it young. it is more expensive than term insurance, but.....if you get sued, they can't take the equity and if you go bankrupt or get a divorce that can't figure in the equation.

consider it asset protection.

it is also another way of forced savings.
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Old 11-01-2013, 03:58 PM   #4
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Whole life policies are a total rip off. Don't listen to the marketing crap on this bogus product. Buy cheap term life insurance and invest your extra cash in the market or real estate (or paying down debt if you have any).
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Old 11-03-2013, 08:18 PM   #5
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Re: Whole life insurance

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Whole life policies are a total rip off. Don't listen to the marketing crap on this bogus product. Buy cheap term life insurance and invest your extra cash in the market or real estate (or paying down debt if you have any).
This. The only people who are for whole life policies are the ones selling them. Whole life only pays the death benefit. Term is cheaper and all you need. When you have dependents, get 8-10x your income in term.

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Old 11-04-2013, 10:42 AM   #6
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Whole Life can be useful in estate planning, but for a young person with minimal obligations it's not the most cost effective vehicle.
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Old 11-04-2013, 10:52 AM   #7
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Health wise how are you? Do you smoke? Age? I can run you a term quote right now. Don't do Whole Life. You're young, invest the rest in a regular brokerage acct.
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Old 11-04-2013, 04:29 PM   #8
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Re: Whole life insurance

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Whole Life can be useful in estate planning
How so?



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Old 11-04-2013, 07:56 PM   #9
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whole life can be good if you get it young. it is more expensive than term insurance, but.....if you get sued, they can't take the equity and if you go bankrupt or get a divorce that can't figure in the equation.

consider it asset protection.

it is also another way of forced savings.
Quote:
Originally Posted by 5ynd1cat3 View Post
This. The only people who are for whole life policies are the ones selling them. Whole life only pays the death benefit. Term is cheaper and all you need. When you have dependents, get 8-10x your income in term.

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Quote:
Originally Posted by evolved View Post
Whole Life can be useful in estate planning, but for a young person with minimal obligations it's not the most cost effective vehicle.


Quote:
Originally Posted by 5ynd1cat3 View Post
How so?



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Old 11-05-2013, 02:07 PM   #10
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How so?



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If a wealthy person/couple know that they are going to have a large, taxable estate they are better served by purchasing permanent insurance (such as WL) to place in a vehicle called an irrevocable life insurance trust (ILIT) which serves as a wealth replacement tool. If it is estimated that the couple will owe, say, $2mm in estate taxes upon the 2nd death then they could purchase a 2nd to die WL policy with a death benefit of $2mm, place it in an ILIT and it will transfer outside of the estate (tax free) to the beneficiaries and replace that $2mm that was paid to the IRS for estate taxes.

Term can accomplish this, but it's not permanent.
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