whole life or term policy?
Mom is 78 still healthy. I was quoted by a friend of my sister that she should take out a whole life policy on my mom for $50,000, at $275/mo
I found a 10 year Term policy with the same benefit that’s about $75 less.
Mom currently has no life insurance on her. Which one should I pick? It’s for final expenses and some small debts.
The benefit amount would cover final expenses along with cover all liabilties.
don’t care about investment
I read somewhere that for whole life, if the person dies within the first 3 years, depending on the policy, benefit may not be paid. Is that true?
I understand that the first couple years of the whole life policy, premiums generally go to cover commissions, cost…etc. and really no cash value is built.
Viola
August 26th, 2008 at 3:18 AM
Daniel
what do u do if mom lives more than 10 years, the whole life policy goes on till death as long as u make the monthly payments, what r u going to save 75 a month, is it worth it if she makes it 10 years and 1 month, the difference over 10 yrs is 9000 for 50000, do u really need to think about this any more, the yearly premium is 3200 mom would have to live at least 15 years for you to lose money on the value of the policy not counting the whole life value and interest, if its a reputalbe company GO WITH THE WHOLE LIFE,
August 26th, 2008 at 9:14 AM
Sally
Good question. Whatever the person, paying the premiums, feels comfortable with. Did you look into a “final expense” policy?
…Or just saving (investing) $275 / month???
August 27th, 2008 at 5:02 PM
Anna
Donald, above, in entirely correct.
You have got to do the right thing.
Because of the divisible surplus (if the policy is from a mutual company) you will probably be able to see a small return that could handle the last few years of her protection.
Medical insurance premiums, incidentally, could be covered by her dividends…simply put, there are more advantages than the so-called savings.
All term policies terminate.
All whole life policies endow at age 100.
If she has the term policy, and it terminates prior to her demise, it can be a real problem at a time when families do not need additional problems.
Further, the whole life policy is almost certainly going to be less expensive (because of cash values and dividends) than a silly term policy.
Two things:
1. Consider whole life.
2. Then hope she outlives the policy!
August 29th, 2008 at 9:15 AM
Brian
trust ulips they are better. for detailed info contact
September 1st, 2008 at 7:14 PM
Jonathan
When does the term insurance expire? Where I am from most Term insurances expire at age 80, which means you are betting $200 a month that your mom will die in 2 years or you get nothing by going with Term.
As for policies paying out, whether it is term or whole life, they will generally investigate any death claim within the first 2 years. It doesn’t matter if it is term or whole life.
For the extra $75 a month, whole life is a far better option.
September 1st, 2008 at 9:03 PM
Steven
Had your mom been younger, I would have recommended you take her to a Primerica agent. Seems as tho you have done your homework regarding term vs permanent insurance. Term policies will terminate around 90 or 95, depending on the company. Have you looked at 15 or 20 year level term?
What is the cost there? Compare these to whole life. Find out the total cost for both. Completely forget the cash value, that has no bearing unless the term insurance is less expensive. If there is a savings, I would ask you to take the savings and pay down the debt. The debt is more important to get rid of, even with insurance. If she doesn’t care about that, but there is a saving compared to whole life, take the saving and invest it into mutual funds. She will make far more than what she could in the whole life stuff, even paying commission to person who sets it up.