Just doing some quick calculations, assuming keeping your $1200/yr policy that means that you could invest $1,980 per year to make up the difference. Investing at this rate and assuming an 8% rate of return over 20 years you would end up with about $95k. At 10% this would grow to about $125k.
my other $.02 cents for life insurance. always make sure you get the face amount you need. that's #1. if you have a sound financial plan in place, good retirement strategy, and some liquid cash, then i like limited pay whole plans. if you're young enough, and can afford it, then its a great way to have life insurance, create some value, and pay you back in dividends. i'm not a big fan of traditional whole life plans, but if you can swing the accelerated limited pay stuff, then its better in every way.
what would you invest in? lets say you had 50k for an even number. lets forget about life ins. for now.
:down: Uhm, last time I checked....life insurance is pretty damn important to have especially considering the game we play.
Life insurance can be tailored to fit each persons goals and financial objectives. Term is not appropriate for everyone, neither is whole life, variable universal life, or universal life. If you have one person trying to sell you one thing, look for another agent. That being said, universal life does have its place and not all contracts are variable. Some are invested in the general fund of the insurance company and will offer a minimum guaranteed interest rate. The key to the success of these policies is to be sure they are funded properly. They offer the flexibility in both coverage and premiums that some people find attractive. What people have to remember though is: FIRST AND FORMOST THIS IS LIFE INSURANCE. There is a cost to provide coverage. Buying term and investing the difference is a really good approach - if the person actually follows the advice. I would suggest that a person purchases a term contract that is convertable to permanent insurance. Health and circumstances change as the years go on. You may be considered a preferred rate class when the contract is issued, and then uninsurable a few months from now (yep, thats me). While I don't expect to need the same amount of coverage at the end of the term period, it's nice to know that I have that feature that I can continue the coverage if needed. Dawn
Life Ins Most good carriers won't cover racers w/o a premium. Stick w/a triple A mutual if you can. Buy the cheapest term (annually renewable)for now w/them, you won't race forever, later you can re-con for lower rates when you don't race...time flies, you can convert to perm later if you want w/o proof of insurability, whole a good investment? never had a client call and complain it was loosing money, always moves forward, every year is better, when your an old fart it should look great, Kris says a policy that pays up quickly is good, yes and no, most agents won't tell you you can design WL w/a long pay period but can overfund if you wanted (more to cash value less to agent) these can grow very fast again never had a guy complain he had too much cash in his policy...great tool if understood, not in most racers current budget, so, term for now is good. Premium return is not recommended. Good book on cash values..."Becoming Your Own Banker" by Nelson Nash. Lastly, folks w/permanent death benefit when older don't have to live off interest only which buy term invest the difference corners them into, they can spend their assets and know that "spend down" gets replaced at death. A person pays for no perm life insurance one way or the other. Living off of interest only instead of some amount of spend down of assets is a lost opp cost by having a lower income, the income difference is a cost. Food for thought.
I'm new to the life insurance business but live in your area so if you have any specific questions and want to sit down and talk let me know. I can get you quotes for different options. A regular term policy will be your cheapest option and investing the difference between that and a cash building policy may be a good option for you. A whole life or cash building policy will have level premiums(albeit higher than a term policy) for your entire life and will create a cash value you can access later in life. *I ride a gsxr600 and a monster 750.
And that's the key. My wife is not a saver. 20 years ago I made sure I had coverage for both of us through my employer. We also bought a small ($100k) whole life policy that builds up a cash out value. Is it an expensive way to save? You bet, but it's better than where we'd be without it.
Yea it's structured so you have to put something away every month. That helps a lot of people use whole life to save. The larger mutual owned providers will also more than likely have a dividend that helps as well.
i'll help you if you want through pm's. i dont sell insurance actively, but i do have my license. i got it so i could write my wife's life and disability stuff, as well as my own and get paid for it. so i learned a lot just handling our own stuff. i also wrote it for another racer, and know a lot about how underwriting will rate you for mc racing too. if you just have general questions, fire away.
That maybe true, but I've never heard anyone, other than an insurance salesman, think anything but term is the right way to go. Financial magazines also recommend buying term life insurance.
i'm sure we could get into a long debate, but i'd rather not. i know that term insurance makes the most sense for most families, simply because thats what they can afford. but when you look at very wealthy individuals/couples, they often hedge their estate tax issues with whole life. its very common. since my wife is a physician, i talk to a lot of wealthy folk...they almost all have whole life. why? cause it at least does create a return on an otherwise common expense. financial magazines you say? like Forbes maybe? i do know malcom forbes owned more whole life insurance than anyone i'd ever read about. so maybe he didnt do what someone else wrote about in his magazine. i dont know.
