Why Is Term Insurance Better Than Whole Life Insurance?

I never understood how a wire that is true I believe I believe we can whole life until I ended up buying policy for each of my three kids and I have a universal policy for my mom and my three kids attend pay policy if it's only fifteen or Twenty Thousand for Harris boxer it for a minute okay.

There's two kinds of insurance as you mention there are cash value insurance centers term insurance on average runs about one-twentieth the cost of whole life or cash value insurance and what you could have bought that same policy instead of spending $100 you bought you a month or whatever it was what she was a hundred with an example then you'd spend $5 a month so what does the extra $95 that you're going to what does it go to okay.

Well it goes to build up a savings account inside the policy called cash value does that sound familiar to you and that's why you bought it cuz that's awesome alright.

The problem is not that the problem is that the rules or the guidelines that happened to what happens to the money in the savings account on average it's making about one to one and a half percent Oregon rate of return number one number two if you want your money out of the policy, you either have to cancel the policy or you have to borrow your own money that you put the money in there but when you take it out on a loan you pay them interest to borrow your money take money out of a savings account and borrow borrow it from the bank you know and give them interest to borrow your own money back not if you're smart anyway and then put the worst part of him in the fees are really high the cash value doesn't build up for many, many years.

But after two or three years finally, it does start building up just really heavy loaded fees on the front end in the worst part that was this he got a $15,000 policy on this kid what's the cash value in one of those as an example.

 I'm sorry I don't even know what the cash value in any of them right now if you close the policy that they get $5,000 right and you were just established that you've paid extra for that $5,000 to be in that policy she has a savings account inside that policy right side a lot more for this of these policies then you would have for the same amount of term insurance a lot more now so that it's your money the problem is it if the person of the insurances on dies they.

Don't pay the 15,000 Insurance plus your savings they pay the 15,000 surance what happened you're safe and the only way you get the only way you have a prepaid insurance policy are the only way of a 10 pay policy is that that's not paid up it just means prepaid cuz here's the deal if you're an insurance company and you are issuing life insurance as long as that person is alive or as long as that policy is in force there is a cost to cover them because there is a statistical probability of their death that that's after 10 years the statistical probability of that person's death did not go away right have a cost associated with keeping that policy on the books even though you've already got it paid up but all you did was just prepay it so you double paid and triple paid to pay in advance for many years to come and that's how it gets paid up that's the only way they're so there's no such thing as paid up insurance it's just means prepaid now they call it paid up.

Cuz that's the phrase they want to use so what would I do if I were in your shoes well if the people need life insurance to let's get life insurance on them.

Make sure the life insurance is there and then I would close these policies and now if they're ill and can't get life insurance then you're stuck and you know you're there stuck in the policy because their health situation doesn't allow them to change because they've lost their health since they got the policy but if they have a need for life insurance and can get life insurance then buy the life insurance to replace it and then cancel this stuff and put your Investments and something.

E else that when you die they don't keep your money so you just don't want to go there it's just a really really bad place so that's why it's just inordinately expensive it is one of the worst Financial products on the market today the car lease the whole life life insurance policy and the credit card are the three things that are keeping the middle class in the middle and if people just where they're just getting messed over I mean when you crunch the numbers on any one of the three of those things it makes you go ballistic about how bad they are about how rough a consumer is being treated.
Why Is Term Insurance Better Than Whole Life Insurance? Why Is Term Insurance Better Than Whole Life Insurance? Reviewed by Admin on June 08, 2019 Rating: 5

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