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

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I know this has been asked before but there wasn't any good information given about it.

I recently joined AILife's Co-py discount program as well as signed up for their accidental life insurance. I do not work for them.

Is this really worth it? I don't pay anything for the discount program so I'm not losing anything but we pay almost $40 a month for the life insurance.

Cristy

Hosuton Texas

Good Question Cristy!

You might probably not think that often about getting yourself a life insurance. But without it, any financial plan would be worthless. If you haven’t organized yet any monetary plan, purchasing life insurance is a great place to start with.

A term life insurance calculator helps you determine how much of coverage is appropriate for you and your family. It is usually found in most life insurance company websites and it is very easy to use. Generally, you will be required to enter some basic information which refers to the following:

Your Resources. These may include your assets and coverage. Your assets may include cash and items that could be easily converted to cash such as stocks or bonds. Your coverage can be both your personal life insurance and that provided by your employer or group.

Your Debt and Expenses. In this portion of the term life insurance calculator, you need to enter some relevant information concerning your mortgage or your unsettled loans of your primary residence, your like credit card balances, automobile loans, student loans, personal loans etc. Your final expenses plus unpaid bills such as medical care or taxes are also being asked. $10,000 is generally the minimum amount of final expenses.

Child/ Dependent Care Expenses. These can be your spouse and children or any persons you care. You should also enter your dependents’ total monthly expenses including but not limited to clothing, food, day care etc. and the number of years that the funds for these expenses will be needed. If applicable, total estimated costs for the education of all your children or dependents are also required.

Your Needs. State the amount of monthly income that you think your beneficiaries would need to maintain their current standard of living in your absence. Similar to the expenses portion, you also need to input in the term life insurance calculator the length of time, in years, that your dependents would need this monthly income.

Tina

Dallas, TX.

Tina,

Just because you smoke or use tobacco does not mean life insurance is not affordable. Usually, when you are applying for life insurance, the agent or application will inquire about your smoking habits, and ask you if you are or have smoked in the previous 12-72 months. Typically you will be asked if you have used tobacco products, including cigarettes, cigars, dip, snuff and chewing tobacco during this time period. If you enjoy a good cigar from time to time or smoke just two cigarettes year, you are a smoker by insurance standards, even though the nicotine traces won’t show up in your required urine test.

Therefore,smokers  life insurance is a very competitive business these days. Consumers have more information than they used to with TV ads and internet life insurance company websites. You have choices, and because of this, a little competitive shopper can help you find the best available rates for your situation.

Interesting question Tina.  Hope you have found this website able to answer your question.

Gene

Houston, TX.

Gene,

Just because the life insurance company does not complete a full examination before they issue the policy, it does not mean that they will not dig through your medical history and verify the accuracy of your answers on your application after you die. In most states, life insurance companies have the right to investigate the accuracy of your application if you die within two years of purchasing the policy. When you sign the policy, you give the company the right to investigate all of your personal records (medical, government, employment, etc). Just because they streamline things upfront doesn’t mean they aren’t going to do everything in their power to avoid paying a $100,000 life insurance claim.

Be careful,  making sure you check your policy thoroughly, and don’t forget to disclose even those small details to your insurer, as forgetting to tell them something as simple as whether you smoke or have been having aches, pains and pins and needles could cost you dear when it comes to making a claim.

Very good question. Thank you for asking. Hope this website helps your situation.