AndrewRoche
Expert
- 50
I was sold a a whole life insurance policy by a NWM agent about 8 months ago. After a little research I'm not sure if it's something I should hold on to or not and was hoping for some input from some experts.
Hi Scattered Rubbish,
Quick question for you and a few observations. If a family member did not present you this product, do you think you what have sought it out and/or would you have bought it from a stranger?
I ask this because it seems that you were sold a life insurance policy as an investment and the need for death benefit protection is an afterthought. You're 24, may get married in a few years, buy a house and have a few kids. Your young and healthy and most all of us who are a half century old are jealous of you...but that aside I don't understand the rationale behind the purchase.
It was a RESPONSIBLE and SMART move buying life insurance now while you are young and healthy. You will probably have group life ins through your employer but that is unreliable so the individual policy is the way to go.
A $500,000 guaranteed thirty-year term policy is about $35.00 a month and a $200,000 guaranteed age 100 universal life is about $60.00 monthly. These types of products meet the criteria of life insurance being affordable, certain and without risk. You locked in a great rate and you'll never have to worry about the security of your future family.
41 years is a long time. 492 payments of $300 and a total outlay of $147,000. In these years you'll go through good times and bad times. Maybe a job loss, maybe a family member will be in need, maybe you'll open your own company, maybe you'll hit the lottery...who knows. Now that the life insurance is done wouldn't it make more sense to have a rainy day fund of maybe year or two of your expenses and then start putting money away for the future? That two hundred dollars a month your saving in insurance premiums would be a great start.
My personal opinion is never mix your savings needs with your life insurance needs. There are many products that you can use that provide the same tax deferred growth without risking your coverage. Keep it simple and buy life insurance to protect your loved ones and meet with a certified financial adviser to set up your savings and investment plans.
Thoughts?