buy term life insurance – Suze Orman on Term Life Insurance Versus Whole Life
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If you love Suze Orman then you might want to understand more about her stance on Whole Life Insurance. Here is a conversation with a guest calling in which will shed some light on her thoughts on Term Life Insurance vs Whole Life.
A caller has phoned in asking Suze’s advice on whether to purchase a whole life policy recommended by a friend. The annual premium is $14,000 for $500,000 of whole life coverage. Caller states that this policy was supposed to also be an investment for the future as well.
Suze Orman: “Oh sweetheart that’s not a friend that a sn….I don’t even know %#*#)$! You know, it gives me dandruff I think. Listen, you can get a half a million dollar term policy for 20 years at your age for approximately $25 or $30 per month. OK? That’s $300 per year. Now, if you really want to make an investment you could take all those other $1000s of dollars and take that money and invest it where? In a retirement account, a piece of real estate, in stocks, bonds, whatever it may be where it absolutely makes sense to you.”
Why doesn’t Suze Orman like Whole Life Insurance (also known as Permanent Life Insurance / Variable Life / Universal Life)?
For the amount of death benefit one can purchase Whole Life, as life insurance is way overpriced.
- $500,000 worth of Whole Life Coverage = $14,000 per year
- $500,000 worth of Term Coverage = $300 per year
Difference of $13,700 extra you are paying to get Permanent Life coverage.
What is the difference between Term Life Insurance vs Whole Life Insurance?
Term Insurance is for a set term or time period from 1 year and usually up to 30 years.
Whole Life is life coverage for the rest of your life PLUS an “investment portion” held by the life insurance company.
With Term Coverage there is no investment portion. Like car insurance it is pure insurance. That’s it.
Do you ever see an auto insurance agent try to add an “investment” to your automobile coverage? No you do not. It doesn’t make sense at all. What for? It is the same thing with life insurance. What for?
With Whole life coverage it is Term insurance + Investment Portion with you paying premiums for the rest of your life.
1st thing’s first. What do you need life coverage for?
You need it to protect your family that depends on the breadwinner’s income whether it be the husband working, the wife working or both parents working to bring money in to take care of the family. Life Coverage is there so that if something happens to the income provider the income can still come in and the family isn’t financially devasted.
Once the children are grown up and making their own income they are no longer dependent on the parent(s) income. At that time you no longer need it for that purpose.
So why keep paying premiums for the rest of your life?
Some people believe that it will make their family rich but that is further from the truth. Don’t throw away your money like that. You are better off buying term coverage only for the time period for which it is needed.
Besides, the older you get, the premiums are going to skyrocket. You only purchase it when you need to protect your family.
Save your money and/or invest it wisely.
But what about the investment portion when you buy whole life insurance?
It is sold to you as an investment for retirement / children’s college fund / emergency fund in which it will grow while being held by the company and you can “BORROW” from it and pay it back with interest.
BORROW from my investment? Isn’t it my money?
No, as long as your policy is active you can only borrow from it AND pay the life company back with interest. They call it CASH VALUE. Sounds like a catchy and wonderful phrase right?
The real ripoff? You first year of premium payments you get NO CASH VALUE. That’s right. The money that was supposed to go to your investment portion only starts the 2nd year. The first year it goes to the insurance agent commission and the insurance company. Your money? Yeah right. Their money.
BOTTOM LINE? Buy Term Coverage only when you need it (ONLY when you have dependents)
Take the money that you would save and put it into a retirement account which YOU CONTROL 100%. Your money fully controlled by you to invest it anywhere you choose or just leave it in cash.and STAY AWAY from Whole Life / Permanent / Universal Life / Variable Universal Insurance or any type of life insurance that has a savings or investment tied to it.
Take your savings a step further by comparing Term Life Rates online.
Evan Povich is a representative of BaseQuotes.com Insurance Comparisons Site.
We agree with Suze Orman ’s opinion of the purpose of life insurance and what it should be purchased for.
BaseQuotes.com offers life insurance quotes comparison from over 100 of the top insurance companies offering life insurance quote / life insurance quotes, car insurance quotes, health insurance quotes, homeowners insurance quotes and Long term care insurance (LTC Quotes).
Article Source:
http://EzineArticles.com/?expert=Evan_Povich
Getting A Cheap Term Life Insurance Quote
The pressure of buying an insurance policy can now be greatly lessened with the help of the internet where you can simply get a life insurance quote from insurers online. This greatly accessible service helps your decision on what policy to buy and on what terms, just after a few clicks you can have the life insurance quote you need. In so much less time, you can finally access all the information that can help you in deciding on what kind of life insurance to acquire.
Requests for an online life insurance quote are free and you can make requests to different companies to compare and find the best deal. Each company will require you to fill out forms regarding personal information, all assuring rights of privacy, and they usually respond with a term life insurance quote in 24 hours after submission.
The usual required information in these forms are age, occupation, medical history and whether the interested party (you) smokes or not, and if ever, the length in years of how long one has been smoking. This information should be provided as they are the prime factors that affect the term life insurance quote. It is also a fact that a younger person will definitely get a much lower premium than someone older because of the chances that the person dying within the term of the policy is lesser.
Your occupation also has an effect on the term life insurance quote. Insurance companies always look into the risks and hazards involved in your work, the workplace and the projects you undertake. If one works on a dangerous occupation, it is most likely that the company will have to hand in a settlement on the insurance before the term ends.
When seeking the best term life insurance quote, you need to be honest and be factual with the information you provide to the insurance companies. There had been cases of cancellation of policies because of unclear and dishonest entries required in acquiring a life insurance. So if the insurance company requires a medical history, provide them with it. Same as when requested for a term life insurance quote, indicate any history of an illness or otherwise provide a doctor’s certification to give the insurance companies a better picture of your health. Remember, when the insurers later on learn of a false claim regarding your health, one is li
1000
kely to end up with no policy and your payments for premium will amount to nothing.
Also, remember that when getting a term life insurance quote, there are specified terms such as 10-year, 15-year or 20-year and so on. If still alive when the term ends, you do not collect any money from the policy at all. Make sure you understand such stated provisions in the term life insurance quote sent back by insurance companies.
Indeed, when you’re seeking to seal the best deal to protect your loved ones, the fast and informative details you get from a term life insurance quote online will help you make the right decision.
By: russelroyan
Article Directory: http://www.articledashboard.com
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