Universal life insurance - yay or nay

[Sunriz]

Does anyone have any thoughts on Variable Life Insurance? I was told the main advantage is that it's tax free once claimed. Thanks.

[Dr.Brian]

It's essentially the same thing. I have a high income career. Term life provides low cost coverage to keep my family living comfortably in the event of my unexpected death. I have a 20 and 30 year policy. I don't need permanent insurance because I will have ample money to support myself and my family when I retire. These investment/insurance products are very expensive and don't provide anywhere near the level of coverage I need in the first 1/2 or so of my career. Everyone's needs are different, but my understanding is that these plans are really better suited to the estate planning needs of the very wealthy, though they're pushed into many who would be better served with term insurance and investments. Do some critical reading outside of what your insurance salesman gives you and make your own determination.

[locutus49]

This is so true.

An example is long term health care insurance (LTHCI). When I worked for the government, in 2003 or so there was a big push by government agencies to get employees to buy LTHC. Policies started at $500 a month for a single person, more for families.

Well, it was good for the government and health insurance companies, not so much for policy holders. Studies show they cover very little due to loopholes, and the terms of the policies.

My mother in law has one that she has paid into for 15 years or so, and she is 96 and they found every reason in the book NOT to cover many expenses.

YMMV.

Originally Posted by Star Ferry

If it sounds too good to be true...

My stance is that, ideally, a man would purchase term life insurance throughout middle age, all while accumulating savings. When he reaches an advanced age, and term life becomes more costly, he can stop buying life insurance if his savings would be enough to suppport his spouse.

I'm somewhat skeptical of whole and very skeptical of universal

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[rr-nyc]

This is a topic I've been looking into myself.

Now that I have a child, my wife and I both added term policies on top of the 2x's salary policies we have through our respective companies but am considering other options





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[Sunriz]

Originally Posted by Dr.Brian

It's essentially the same thing. I have a high income career. Term life provides low cost coverage to keep my family living comfortably in the event of my unexpected death. I have a 20 and 30 year policy. I don't need permanent insurance because I will have ample money to support myself and my family when I retire. These investment/insurance products are very expensive and don't provide anywhere near the level of coverage I need in the first 1/2 or so of my career. Everyone's needs are different, but my understanding is that these plans are really better suited to the estate planning needs of the very wealthy, though they're pushed into many who would be better served with term insurance and investments. Do some critical reading outside of what your insurance salesman gives you and make your own determination.

I was told that the variable life insurance (VLI) was typically for the wealthy as well. My friend was mentioning that if I were to start one for a 10 year plan (the minimum time frame) whatever accrued (principal with profit) would be tax free 100% once claimed. I was thinking of it as a savings account given that if I were to put the same amount over time in a bank I wouldnt get as much (potential) return as I would with the VLI. If I decide to keep going after 10 years that would be ok as well.

But yeah, I will def have more to read up on. Thanks for the advice.

[brandrea]

Everyone's situation and needs are different. Insurance maybe be necessary for some and not for others.

I personally don't have life insurance, never have. My family will be taken care of in the event I pass. I focused on savings and building a steady stream of investment income at a young age. I also worked very hard to eliminate all debt including mortgage.