Comments on: Life Insurance Questions & Answers

By: Doug

Doug — Fri, 22 Aug 2008 17:35:12 +0000

I am 52, in excellent health and a nonsmoker. I am 5 years in to a 10 year $400,000 term policy. The premium is about $400 per year. If I were to renew it at the end of the term my premium would be roughly $7500. I’m not sure what to do now … convert to whole or universal life – what are the pros and cons of each? What about extending my current term policy now instead of waiting until it expires?

By: Money Smart Life » Personal Finance Review - School’s Out Edition

Money Smart Life » Personal Finance Review - School’s Out Edition — Fri, 01 Jun 2007 12:11:01 +0000

[...] -Five Cent Nickel has a tip for saving money on life insurance. I’ll have to remember this as I look into our life insurance options. [...]

By: Money Smart Life » Personal Finance Review - Backup Your Data Edition

Money Smart Life » Personal Finance Review - Backup Your Data Edition — Sun, 27 May 2007 15:46:25 +0000

[...] – I’ve been giving additional thought to life insurance recently so this article on golden eggs and geese made sense to me. [...]

By: The Sunday Review #22: It’s Been Declined! It’s Been Declined! Edition

Sun, 27 May 2007 14:01:47 +0000

[...] Life Insurance Questions & Answers by Ben @ Money Smart Life. Ben gets answers for 8 questions about life insurance basics from his insurance company. Of course, you need to do your own research before following an insurance company’s advice – Ben plans on doing just that. [...]

By: Bcoy

Bcoy — Wed, 23 May 2007 22:08:38 +0000

David, you’re right so long as you view life insurance as it was originally intended: insurance against unexpected financial loss because of your death. However, whole life insurance is an entirely different beast, and acts more as a savings account … that is, once you’re old and nobody’s depending on your income, you can withdraw funds from your whole life policy to pay for medical bills, vacations, or whatever you want. This is an entirely different application of life insurance, but it’s one way that older people use it when it doesn’t need to be income replacement for their dependents.

By: Ben

Ben — Wed, 23 May 2007 13:05:16 +0000

Good points David, glad to have you as a reader As I’ve started looking into life insurance, it sounds like a 20-30 year term policy might be the best for me, it would cover my family during the time period you mention. Now I just have to decide, 20 or 30 years, and the amount of coverage to buy.

By: David

David — Tue, 22 May 2007 21:03:46 +0000

Long time reader, first time commenter =)

To expand on question 3, young and healthy is exactly when you need life insurance, not when you are old. This is assuming, of course, that you are paying a mortgage and supporting a family. Life insurance provides financial stability for those that depend on your income. By the time you are old, you are closer to having your mortgage paid off and your children are financially independent, so there is less of a need for life insurance. Similarly, if you are young and don’t have a family or aren’t paying a mortgage, there is less of a need for you to get life insurance. Also, the agent was correct about buying now to lock in the price — if you buy a 20 or 30 year policy now, your rate will be much lower and will not change over the course of the policy.