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Life insurance


IBTG81

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Since I'm getting married soon, I guess it's a good idea for me to get life insurance.

Anyone know of any good company to go through? I keep getting offers through HSBC. For 30 year, 250k, it's like $45 a month. Is that good?

 

Thanks.

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That sounds high if it is term. IIRC, I pay $28/month for the same term coverage. State Farm.

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Look into whole life rather than term life.  A term policy, you pay for it, and after the end of the term you have nothing.  Whole life acts more like an asset; it annuitizes, and you can actually draw against it later in life before you die (e.g. you can borrow $100k against a $500k policy that you've fully paid up).  Whole life costs more than term...but it'll only get more expensive as you get older, and as young as you are you might actually be able to afford it.  I don't know ALL the details - it's been a while since I looked into it - but it's something to at least research.

 

Or, if you want to go REALLY cheap, just pretend you have life insurance.  Just like you pretend a woman's interested in you.

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Whole life is not a good investment. If you want insurance and an investment, purchase them seperately. You can get much cheaper term insurance and use the $ you save to invest in quality mutual funds. You pay very high expenses and compromise your investment performance if you try to combine your insurance and investments in a whole life policy. I am a Registered Rep and sell both investments and insurance. Whole life pays very high commisions and that is why many reps talk it up.

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Whole life is not a good investment.  If you want insurance and an investment, purchase them seperately.  You can get much cheaper term insurance and use the $ you save to invest in quality mutual funds.  You pay very high expenses and compromise your investment performance if you try to combine your insurance and investments in a whole life policy.  I am a Registered Rep and sell both investments and insurance.  Whole life pays very high commisions and that is why many reps talk it up.

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Absolutely agree – as you age and accumulate assets your need for life insurance is not as great as when you are young and have minimal assets. Buy term life insurance and invest the difference in a good mutual fund.

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Here's where he's only partially correct. Insurance is also income replacement. What if you die and your income goes with you. How will your wife be taken care of?

 

Ok Chef Jim, then explain it to me. If all I want is $1 mil for the other person, if my wife or I die, and $2 mil to our son if we both die, what should I buy?

 

I don't care all that much about doing anything with the policy (borrowing from it etc.), and I am soon signing up for a policy wherein if either my wife or I die, our existing home mortgage would be paid off. I also have my employer;'s policy (with disability insurance, so that I'd be covered in the event of an illness that causes me to miss a bunch of work time).

 

Thus, my question is what to buy, given my stated objectives.

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I'm going to throw in another benefit of life insurance - life insurance is paid out very quickly after death with no strings attached. This gives your family some money so that they don't have to worry about bills while they are trying to cope. It's also a benefit if a lot of your assets are not easily converted to cash but your estate will have significant taxes to pay.

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Ok Chef Jim, then explain it to me.  If all I want is $1 mil for the other person, if my wife or I die, and $2 mil to our son if we both die, what should I buy? 

 

I don't care all that much about doing anything with the policy (borrowing from it etc.), and I am soon signing up for a policy wherein if either my wife or I die, our existing home mortgage would be paid off.  I also have my employer;'s policy (with disability insurance, so that I'd be covered in the event of an illness that causes me to miss a bunch of work time). 

 

Thus, my question is what to buy, given my stated objectives.

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Don't have enough information to answer that. But I will ask you this. If you or your wife die and the mortgage is paid off, then what? How will the survivor pay the other bills that required two incomes? Not to mention by paying off the mortgage you lost your biggest tax deduction. If you're concerned about your son getting $2mill if you both die, my question is: why don't you have a trust?

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