Comments on: Do I Need Insurance?

By: George

George — Mon, 05 Dec 2011 19:14:54 +0000

I like the “playing Santa” tip.

By: Zatari

Zatari — Sat, 11 Jun 2011 18:25:47 +0000

Boy, this blog never misses a chance to make a hackneyed, right-wing joke, does it?

By: Sam P

Sam P — Tue, 12 Apr 2011 15:29:48 +0000

Good article, a lot of people overlook life insurance or do not look into a policy until later when it becomes more expensive.

By: Dan

Dan — Fri, 12 Mar 2010 21:59:34 +0000

You bu life insurance for the same reason you buy any other insurance: To insure against loss. In this case, the financial impact of the loss of life.

My life is worth a predictable amount of dollars every year. If I die, my wife and kids would need to replace my income. I owe it to them to provide for that through life insurance. I can calculate what amount I would need to buy to replace my income (less my annual expenses).

When I get old and no longer have any income, I no longer need any life insurance, as my death would no longer put any great financial hardship on anyone. This is lucky, since at an old age life insuranc gets pretty pricey.

Bottom line, evaluate what you need life, or any insurance, for, and purchase with that in mind. Oh, and never buy whole life, just term!!!

By: Kristine

Kristine — Thu, 11 Mar 2010 21:56:31 +0000

We bought whole life insurance in 2004. Our financial adviser educated us on the differences between term vs. whole life insurance.

I know term premiums are cheaper than whole life policies, but as you grow older those premiums only increase with age and health related problems. Once you buy your whole life policy, the premium is locked in…which also stands against inflation for the future.

There are many living benefits to whole life insurance. The cash value grows at a guaranteed rate every year. It is not affected by the declining market. The cash value grows tax advantaged. You receive dividends each year that are not taxable events because it is a return on your premium (kind of like a tax return – you’re getting your money back). You don’t have to “qualify” to borrow against your cash value like you would for a HELOC or to pull the equity from your home. You just ask for it. Your cash value is protected from creditors as well.

So you are able to provide a death benefit to your family, along with living benefits during your life. That’s a win/win situation for me.

By: Mike

Mike — Thu, 11 Mar 2010 21:43:10 +0000

@ Stacey, got your point now. Totally agree that when you depend on your employer’s insurance, things can turn sour quickly!

@ Ms Clear, I guess this is what happen when you work in finance all day! But seriously, I just see any joke as what it is: “a small to a long time of laugher” !

By: Liane

Liane — Thu, 11 Mar 2010 20:50:46 +0000

Well, we recently cashed in my husband’s whole life policy that he’d had for the past 20+ years and put those funds into both a ROTH IRA and a money market fund. We then shopped around online for a new term policy. We decided to make a change from our long term company because my husband does have a medical condition and our company was not willing to increase the coverage from $75,000 to $100,000. We found a 10-year $100,000 term policy for about $130 cheaper (per year) than what we were previously paying. A nurse came to the house and gave my husband a physical, he signed a release form to have his doctor’s office release some info and we’re very happy.

It certainly does pay to shop around. More coverage for less money. And lets face it, insurance is that intangible that we must have in case the unthinkable happens.

Great post!

By: Ms Clear

Ms Clear — Thu, 11 Mar 2010 20:42:10 +0000

Boy, this blog never misses a chance to make a hackneyed, right-wing joke, does it?

By: Stacey

Stacey — Thu, 11 Mar 2010 20:36:51 +0000

I guess the point that I was trying to make, but didn’t… if you buy house insurance before your house catches on fire, you’re set. They won’t cancel your insurance if you pay the premiums. But you can lose your health insurance if you lose your job, through no fault of your own – and if you’ve got a pre-existing condition, you’re in trouble because you probably won’t be able to buy a new policy. Sorry to be so off-topic.

Kids, don’t play with matches. :) You’re right though, there are a lot of variables in both situations.

By: ctreit

ctreit — Thu, 11 Mar 2010 19:49:35 +0000

I have an old whole life insurance policy that is all paid up. I am not happy with it at all, but at the time I could easily afford the payments which gave me coverage to pay off the mortgage. It is kind of nice to have some cash value with that insurance now, but the returns on my money have been dismal. One other annoying thing is that none of the agents or reps at MetLife, where I have this policy, could ever tell me what the return on my money was. I had to figure it out myself.

Since then I have bought only term life insurance to make sure that my loved ones are ok in case I die. I would hate to go out worrying about my family. Whole life insurance only makes sense for estate planning purposes if you have a bit of money, but for the majority of people term life is the better way to go.