Post: #1

Gentlemen -

Do any of you (preferably self employed) have life insurance coverage?

Thinking of purchasing some term + whole life. I believe when someone dies, people should not mourn they should celebrate. Someone should benefit off your death instead of leaving behind only bills.

Again, this is purely theoretical. If you live a long life, it could be a waste of money. Thoughts?

Post: #2

(10-16-2017 06:47 PM)Ballr Wrote:  Gentlemen -

Do any of you (preferably self employed) have life insurance coverage?

Thinking of purchasing some term + whole life. I believe when someone dies, people should not mourn they should celebrate. Someone should benefit off your death instead of leaving behind only bills.

Again, this is purely theoretical. If you live a long life, it could be a waste of money. Thoughts?

This is a plus. I try to enjoy my life to the fullest. But the only times I have stopped and thought about death is not about death itself but about what would happen to those who you love and depend on you if you suddenly cease to exist. Are they going to be OK financially? Are the going to be able to cover the bills because of your passing? Funeral, cemetery lot, and medical bills can put your family at a crossroads once you are gone.

Look at it this way. For only 300 USD/year you can get a 250,000+ Life Insurance Policy that will allow you to sleep peacefully and don't brake the bank in case your moment comes knocking.

Cheers!

Post: #3

This is my mind as well, but I don't know what to do. I guess I should meet an insurance broker next time I'm in North America, but I'd like to understand it independently beforehand.

It's a complicated topic and I know you can use insurance to offset taxes and some insurance generates an investment return, etc.

Post: #4

If you have a wife or kids, or others that depend on your income, then life insurance is a good thing. Otherwise, why get it?

But get term rather than whole. Whole claims to be an investment vehicle but is more expensive.

Two considerations when getting life insurance. First, eventually as you age it will get more difficult to get a policy or to increase, because they'll do a medical exam. If you have been hospitalized or your family has a poor medical history, it will be expensive for you. So there is a benefit to getting while you are young provided it is renewable without a medical exam. Second, you might want more than you think you'll need. My salary has tripled in the past 15 years when I first got mine.

Post: #5

Term is short-term, though. Good for like 20-30 years. I can see it working if you're around ~50

They say to get both in case for assurance. Term is for "accidental" death while whole is for when you die of old age etc.

The quote I'm receiving for both term and whole is going to run me $3840/YR. In my late 20's now. Across the next 50 years that's about $192,000 spent for a $400K policy. The ROI is not so bad, but I would rather not bleed that cash. That's what cashflow is good for in business. Planning on leaving behind multi-millions for my offspring through actual income made.

Which is the better route to take?

Post: #6

Discipline is the key here.

Term insurance and "invest the rest" (what you would have additional to put in for the whole life) works if you stick to it. Invest more when you can in a tax deferred vehicle, less when you can't, but keep paying the term premiums for the amount of coverage you need.

This strategy offers lower fees and the flexibility of not being locked into a whole life premium.

Those who are looking at the investment opportunities of a whole life policy should know that that there are way less investment choices in those type of policies.

Post: #7

(10-17-2017 10:28 AM)Ballr Wrote:  Term is short-term, though. Good for like 20-30 years. I can see it working if you're around ~50

They say to get both in case for assurance. Term is for "accidental" death while whole is for when you die of old age etc.

The quote I'm receiving for both term and whole is going to run me $3840/YR. In my late 20's now. Across the next 50 years that's about $192,000 spent for a $400K policy. The ROI is not so bad, but I would rather not bleed that cash. That's what cashflow is good for in business. Planning on leaving behind multi-millions for my offspring through actual income made.

Which is the better route to take?

Working on a 5% rate the present value of the money you're paying is ~70k and the present value of the payout is ~35k. So it's actually a pretty terrible investment.

The only good reason to get life insurance is you have dependents that will need it should you die before you can generate enough wealth to not need it anyway and it's a serious impediment on generating that wealth in the meantime.

There's a reason that every financial adviser and insurance broker pushes these products so damn hard, they're so profitable for the insurance company that the commission on them is more than generous to get people to sign up.

Post: #8

Just buy real estate.

While you live, you collect the rental profits.

If you pass away, your wife can either sell it and get a payout, or continue to manage it if she's still of sound mind and body and would like to.

Infinite payout.

Alternatively, if she's not of sound mind and body but the property/properties is/are still providing a solid yield, one of your children can then run it and use the funds to help take care of the younger children and your widow, in perpetuity.

That said, accidental death and dismemberment policies are fine, if only for peace of mind. The other kind, I'm not really a fan of.

Post: #9

Sweet Jesus. I just went to dinner with some jackasses trying to sell me financial shit. Life insurance was their big product. Every other word was "the product." A product is something I can pick up and hit you with , not this bullshit.

Aloha!

Post: #10

whole life insurance has lucrative commissions so they push it as an investment.

but will the insurance company be he 30 years from now?

Post: #11

(10-17-2017 05:01 PM)Spaniard88 Wrote:  Just buy real estate.

While you live, you collect the rental profits.

If you pass away, your wife can either sell it and get a payout, or continue to manage it if she's still of sound mind and body and would like to.

Infinite payout.

Alternatively, if she's not of sound mind and body but the property/properties is/are still providing a solid yield, one of your children can then run it and use the funds to help take care of the younger children and your widow, in perpetuity.

That said, accidental death and dismemberment policies are fine, if only for peace of mind. The other kind, I'm not really a fan of.

I'm all about the rental real estate, but there are tax consequences on your death (at least in Canada, but probably similar in other places).

There's a hefty capital gain if you've owned it for a long time (rental properties don't get the primary residence exemption), so your wife and children would be stuck with a big tax bill.

I've heard you can use a life insurance policy to offset that, i.e., insurance payouts are tax-free so your policy covers the tax hit on your wife/children.

Another thing I've heard of is critical illness insurance, which covers things like cancer, etc. and you can get the premiums back if you don't make a claim.

I hate taking advice from guys like Kona's jackasses, who are looking for a fat commission, but it's a boring and complicated subject to do your own research on.

Post: #12

There are 4 or 5 rating agencies for insurance companies. Pick one that has financial strength and has been around a long time. Might cost a little more but you'll have more confidence in the solvency of the company.

(10-18-2017 05:15 AM)Hypno Wrote:  whole life insurance has lucrative commissions so they push it as an investment.

but will the insurance company be he 30 years from now?

Post: #13

Disability insurance is very important. I think it's more important than life insurance if you don't have dependents.