I just got approved for $7.5 million life insurance that can be scale-able to $10 million. After reading I am having second thoughts. I am 34 years old so I got preferred status but I don't know what my health will be going forward and I have a baby on the way. I currently have $1 million whole life insurance which I pay $20k per year - I had this policy for about 4 years now. Am I getting ripped off? I need the life insurance to protect my assets and my family. Do I get whole life and spend $200,000 per year or term for $10,000 per year? I was leaning towards whole life now I don't know.
Whole life policies serve a purpose but they're just not for everyone. Just depends on your objectives. I would hope with something of that level you were speaking to some type of financial advisor who took account your entire situation to explain why that may have been a good call. If he was just a guy at Allstate or Statefarm looking for the quick commission then yeah, you may need a second opinion--cuz that person probably made 25k off you.
It's actually was presented to me from my best friends (who also sold me the $1 million policy). I already have my financial adviser looking into it and also my CPA. If there was anytime for me to do this now would be the best time.
Lol, yes that's what I'm trying to say. It's not too excessive when your kid has to go to college (unless you have a 529 plan already set up) and your wife has to pay the mortgage so they won't have to get foreclose when your dead. Like what I said, it should be able to supplement the lost income of the dead person for a few decades to ensure the family won't be financially burdened. Term insurance for someone like you (young and healthy I'm guessing) should be fairly cheap for a multimillion policy --- less than $50. And lol to the Clorox statement.
I did calculation on two term options for me, one raising premium but no return payment (so just paying less upfront, more later), and one constant premium, get all your money back. I needed to get something like 6% post-tax return on the savings, and then the non-return option was better, for me. If I didn't think I could get that, better with the return option...
I think people tend to over insure with those big policies. I have enough to pay off all our debts. My wife will soon be an RN. I think my wife will be able to squeak by on an RN salary, 2 houses, & 0 debt.
A modern permanent life insurance policy which pays a death claim has returned a great value.... pennies on the dollar. Very few people reach a status where a large infusion of tax-free cash would not benefit their heirs GREATLY. It LOOKS expensive in the beginning. It is INexpensive towards the end and it is invaluable AT THE END.
Again, you just have to do the math. The term and invest guys will tell you if you just put it (the difference in cost between the permanent policy and a term policy for however long) in an ETF for 30, 40 or 50 years, assume say a 8% return post-tax, then you'll end up with a much large "death benefit". To the question of tax-free to your heirs. Well, how many people will be passing along estates that have large inheritance tax components? But I do think the positives/negatives are very close... which is why I got some permanent life insurance.
