Life insurance

Term Life Insurance Prices Drop by Half

by Jack Speer

November 30, 2006

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November 30, 2006

With economic inflation, most prices tend to go up, not down. But there are always exceptions, including term life
insurance. It now costs 50 percent less than it did 10 years ago.

Copyright © 2006 National Public Radio®. For personal, noncommercial use only. See Terms of Use. For other uses,
prior permission required.

RENEE MONTAGNE, host:

Inflation, even fairly moderate inflation, means that over time the prices of most things will go up. There are always
exceptions - life insurance for example. In the past ten years, the cost of term life - the most popular kind of life
insurance - has fallen by 50 percent. Here's NPR's Jack Speer.

JACK SPEER: Not long ago, 68-year-old John McCrate(ph) would've had a difficult time finding reasonably priced life
insurance. His age would've been a factor -he's older than the traditional life insurance customer. McCrate owns his own
business, a management consulting firm in New Canaan, Connecticut. He and others in the firm felt he needed to be
covered.

Mr. JOHN MCCRATE (Own of Management Consulting Firm in Connecticut): We looked at where we were and where
we were heading. And I realized, that if anything would happen to me, that the obligations of my firm might fault my
family.

SPEER: McCrate figured he needed about $3 million worth of life insurance, and was surprised to learn he could afford
it. David Woods is with Bass Mutual, and sold McCrate his policy.

Mr. DAVID WOODS (Bass Mutual, Sold McCrate His Policy): The younger people are surprised at how inexpensive it
is. The older people are just surprised they can get it all, and that they can afford to get it. I would say that there's a
growing awareness on the part of consumers, but it certainly is not widespread.

SPEER: Term life insurance, like McCrate bought, pays a fixed sum when a policyholder dies. It's generally less
expensive than other kinds of life insurance, and it's seen the most dramatic price declines in recent years. There are a
number of reasons why term insurance rates have been falling. Woods says one of them is obvious: people are living
longer.

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Mr. WOODS: Two 65-year-olds - husband and wife, for example - there's a better than even chance that one of them will
still be alive at the age of 92.

SPEER: When people live longer, they pay into the overall insurance pool for a longer period. The company meanwhile
pays out fewer claims than anticipated and has more money to invest. All those things have allowed life insurers to
reduce premiums. Kevin Ahearn(ph) follows the insurance industry for Standard and Poor's.

Mr. KEVIN AHEARN (Follow Insurance Industry for Standard and Poor's): At the end of the day if there's a recognition
that the probability of death during a period of five, 10, 15, 20 years, which is normally what the term period covers, that
clearly can drive down the costs.

SPEER: The death rate for those in the 25 to 44-year-old age group - the biggest buyers of term life - fell 10 percent over
the last decade. There are a number of reasons why people are living longer. There are advances in medical technology,
early diagnosis of disease, and more effective medical treatment.

And then there's the technology that has nothing to do with your doctor - the airbags in your car, for instance. The
Internet too, has played a role in pushing down insurance premiums. Neil Doherty is a professor at the Wharton Business
School.

Professor Neil Doherty (Wharton Business School): It's become much easier to shop for insurance these days. You can
go online and typically get a number of quotations and then comparison shop.

SPEER: And because consumers can now compare insurance rates online, Dockerty says many insurance companies
have had to lower their rates. As to how long life insurance rates will continue to come down, analysts say there's no
simple answer. The prediction from the industry is life insurance rates will fall by another four percent next year.

Don't be too quick to rush out and spend all that money you're saving, though. The cost of health insurance will likely
keep going up in coming years.

Jack Speer, NPR News, Washington.

Flexible, Affordable, Quality Term Insurance -and a New Calculator to Determine How Much You
Really Need

SPRINGFIELD, Mass., Sept. 13 /PRNewswire/ -- Massachusetts Mutual Life Insurance Company (MassMutual) today
announced the launch of Vantage Term(SM), an innovative term life insurance product line that provides policyholders
with high value for their premium dollar, affordable options, and increased flexibility in meeting their protection needs.
MassMutual is also debuting a new online calculator that offers a more comprehensive picture of how much life
insurance is needed to replace the income and services he or she provides to loved ones.

The Vantage Term portfolio features both a 10-year and 20-year level premium product, as well as an annually
renewable term product. The new product line boasts a significant advantage: the option to convert to MassMutual's
entire line of permanent life insurance policies without the need for a future health assessment – meaning no physical or
additional medical questions asked.

"Term life insurance with an option to convert to permanent solutions addresses the reality for many people in that the
need for life insurance doesn't disappear, it may just evolve," said Melissa Millan, senior vice president, U.S. Insurance
Group, MassMutual. "Vantage Term provides a cost-effective coverage option for younger families just starting out, as
well as the opportunity to achieve lifelong financial protection as people age and their financial needs change.
Convertible term insurance enables you to keep your policy with the same financially strong company that you started
with, while providing the benefit of lifelong coverage that may offer additional advantages, such as a guaranteed death
benefit, cash value build-up and the potential to earn dividends."

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The new Vantage Term product line includes an optional rider:* the Waiver of Premium Rider, which guarantees that the
policy will stay in force even if the insured becomes disabled. It also includes an Accelerated Death Benefit Rider,**
which provides the policyowner an advance on death benefits, should he or she become terminally ill.

To coincide with the roll out of its Vantage Term product line, MassMutual is also launching the Lifetime Economic
Value tool, an easy-to-use online calculator which uses a sophisticated formula to estimate the total economic
contribution a person will earn for his or her household over the course of his or her working life. This figure correlates
to the amount of life insurance a person may need to replace those earnings by factoring in an individual's total income
earned before retirement, as well as employer-provided retirement and health insurance benefits. The tool also accounts
for the value of personal services the person provides for his or her family – everything from lawn care and snow
removal to filing the annual tax return. The calculator is available on MassMutual's website:
www.massmutual.com/planningtools/life-value-calculator.

"If your family relies on you financially, it's critical to determine how much life insurance you may need to help protect
your and their financial future," said Damon Bates, vice president, U.S. Insurance Group, MassMutual. "Yet, many
Americans don't know how much they may actually need. Instead of relying on any rules of thumb, the Lifetime
Economic Value tool provides as effective a measure as possible to help you determine your life insurance coverage
needs. From there, you can design a strategy that's best for you, which may include a mix of term and permanent life
insurance coverage to provide what you need today with options for the future."

Visit www.massmutual.com to learn more or to contact a qualified financial professional.

About MassMutual

Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and
participating policyholders. The company has a long history of financial strength and strong performance, and although
dividends are not guaranteed, MassMutual has paid dividends to eligible participating policyholders every year since the
1860s. With whole life insurance as its foundation, MassMutual provides products to help meet the financial needs of
clients, such as life insurance, disability income insurance, long term care insurance, retirement/401(k) plan services, and
annuities. In addition, the company's strong and growing network of financial professionals helps clients make good
financial decisions for the long-term.

MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and
its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its
major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate
Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, Inc.,
member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.

*Available at an additional cost.

**Included at no additional cost at issue. If you become terminally ill, as the insured and the policy owner, you can
receive an advance of policy death benefits. These funds may be used for any purpose; for example, to pay medical and
everyday living expenses. There will be administrative and interest charges upon exercising the rider. Not available in
the state of New York.

Vantage Term Life Insurance Policies (Policy Form TL-2009 and ICC09TL in certain states, including North Carolina)
are participating, annually renewable term life insurance issued by Massachusetts Mutual Life Insurance Company,
Springfield, MA 01111-0001. Dividends are not expected to be paid.

8 big life insurance mistakes to avoid

By Amy Danise, Insure.com

Last updated Oct. 28, 2010

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Life Insurance Calculator: Find out what's the right life insurance for you.

What do you want your life insurance to provide?

(Check all that apply)

• Extra income to my family

• Money for funeral costs

• An inheritance for my heirs

Interested in using this tool on your site? Contact us at partnerships@insure.com

Life insurance is an important monetary investment, and you don’t want to buy an unsuitable policy or discover that
you’ve purchased too much or too little. But if the fear of making a bad life insurance decision is stalling your effort,
know that failing to buy life insurance at all can be one of the most costly mistakes you can make for your family.

“The data is clear,” says Jack Dolan, spokesperson for the American Council of Life Insurers (ACLI), a trade group.
“Americans are underinsured and they're not buying coverage in amounts that equal their needs.”

An August 2010 report by LIMRA, an insurance research organization, revealed that ownership of individual life
insurance has fallen to a 50-year low in the United States: 30 percent of households (35 million) have no life insurance
coverage at all.

But ditching an inappropriate policy after paying premiums for several years is a terrible waste of money. We asked a
variety of insurance experts to tell us the biggest mistakes people commonly make when shopping for life insurance.

Mistake: Grossly underestimating a family’s life insurance need and the “value of human life.” Marvin Feldman,
president and CEO of the nonprofit Life and Health Insurance Foundation for Education (LIFE), says that people often
substantially underestimate the amount of life insurance they should buy. There are numerous online calculators to help,
including calculators from the LIFE Foundation and Insure.com’s life insurance calculator.

Mistake: Undervaluing a non-working spouse. In addition to underestimating the cost of replacing the income of a
working spouse, life insurance buyers often neglect to place correct value on a non-working spouse. Feldman says it
takes about $117,000 a year to replace that person, and “most people don’t understand the impact of what a stay-at-home
spouse saves a family.”

Mistake: Buying a life insurance policy with premiums that increase over time. Too often, life insurance buyers find
that they can’t afford the ever-escalating premiums and must let the policy lapse, says Amy Bach, executive director of
United Policyholders, a nonprofit dedicated to insurance education and consumer rights.

Mistake: Insufficiently reviewing all types of life insurance available. Dolan says that “term life insurance for young
people in particular typically provides a greater bang for the buck than whole life insurance. . . . However, the lifetime of
level premiums that comes with whole life insurance is unappreciated by too many people who think in the short-term.
Whole life insurance, with its cash value, also promotes savings.”

James Hunt of the Consumer Federation of America, a consumer advocacy group, cautions against cash value policies in
general because so many buyers ditch them in the early years of the policy. “This is not to say that cash value polices

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can't be decent investments when held at least 20 years, preferably a lifetime,” he says. But when people lapse whole
life insurance policies, the “excess of premiums paid over term [life insurance] premiums . . .is lost.”

A 2009 report from LIMRA on life insurance lapse rates shows that close to 12 percent of whole life policies lapse in the
first year, 10 percent lapse in the second year and almost 7 percent lapse in the third year of ownership. By contrast,
lapse rates for term life insurance were around 7 percent in years one and two and about 6 percent in year three.

Mistake: Buying a complicated cash-value life product without understanding its terms and payout conditions.
Even if your financial situation indicates that whole life insurance serves your needs, Bach points out that buying a
policy you don’t understand is a financial blunder.

Mistake: Being talked into terminating or reducing -- or not maximizing -- contributions to retirement accounts.
Hunt warns not to short-change your tax-reducing retirement accounts at work, such as a 401(k), in order to afford a cash
value life insurance policy.

Mistake: Sticker shock that prevents you from buying life insurance. Feldman says most people think life insurance
is “too expensive” because they don’t understand the true cost of insuring a life. He points out that life insurance is
generally less expensive today than it’s ever been in the history of life insurance products.

Mistake: Allowing an agent or broker to complete and submit the application for you. If you don’t fill out your own
application, Bach advises you to check it thoroughly to make sure the agent recorded the right answers.

When in doubt about life insurance

Your family’s financial picture likely has many moving parts – income, retirement savings and investments that need to
be balanced against mortgage payments, college tuition needs and other financial obligations. When in doubt about a life
insurance purchase, consult a professional agent, advises Feldman. An agent can make a recommendation based on your
situation -- “they’re not just selling you the lowest cost policy,” he says.

How are Term Life Insurance Premiums set?

Published May 27, 2010 | Bankrate.com

advertisement

When it comes to term life insurance, changing jobs, getting healthier and adopting new hobbies can all work to your
advantage. Those are some of the criteria insurance company actuaries use to decide how high your premium should be.

Term life insurance gives your beneficiary a predetermined death benefit if you die within a certain period of time,
usually 10, 20 or 30 years. Annual premiums depend on the classification you're assigned.

"Classifications are pools of policyholders who represent different levels of risk," says Chad McCloskey, president of
Vivo Livre, a financial planning and consulting firm in Newbury Park, Calif. "The more risk you represent, the worse
your classification will be and the higher your premium."

Standard and preferred had been the only term life insurance classifications and now are largely universal, although
different insurance companies have their own vernacular. Still, many factors affect which underwriting classification
you're assigned.

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"Many companies have ultra tiers like super preferred and preferred plus, and use names like Table 2 or Table A for the
less favorable classifications," says Adam Sherman, CEO of Firstrust Financial Resources in Philadelphia. "More
classifications exist now because of the competitiveness of the market."

What affects your classification

Guidelines used to determine your term life insurance classification include age, tobacco use, height, weight, family
history, and cholesterol and blood pressure levels. Other guidelines are driving record, hazardous occupation or
activities, military service, foreign travel or residency, felony criminal activity, and whether you have heart disease,
diabetes or cancer. Basically, if you are in good health, don't use tobacco products or engage in hazardous activity, you'll
be charged less than someone who does.

If you spend your time mountain climbing, parasailing or hang gliding, or as a weekend pilot, Sherman says you'll pay a
larger premium. Likewise, if your daily work puts you at risk, insurance companies will consider you a greater liability.

Although gender doesn't affect your classification, it does affect premiums because women tend to have a longer life
expectancy so they pay less for the same coverage than a male of the same age and classification, says McCloskey.

For example, a 40-year-old man with coverage at $500,000 and a term of 20 years will have the following annual term
life premiums for these classifications: preferred plus, $375; preferred, $475; standard plus, $625; and standard, $760,
says Byron Udell, founder of AccuQuote, a term life insurance brokerage in Wheeling, Ill. For a woman of the same age
with the same coverage, she'd pay: preferred plus, $311; preferred, $407; standard plus, $533; and standard, $638.

"The very best health rate you could get in 1994 was $995, so the cost for term life insurance has gone down
considerably," says Udell.

The good news is once your classification is set, you can never be put in a higher risk category even if you start smoking,
develop cancer and gain 50 pounds, says Udell. On the other hand, if your health improves, you lose weight, your cancer
goes into remission or you get a less risky job, you can reapply and potentially qualify for a lower rate class that will
save you money on your insurance, Udell says.

"Revisit your policy every two years to see if you can be upgraded and if the term of your policy is in line with your
current needs," says Sherman.

Read more: http://www.foxbusiness.com/personal-finance/2010/05/27/term-life-insurance-premiums-

set/#ixzz1HRJHk9QX

The Basics

8 ways to wreck your life insurance

Experts tell where people are most likely to go wrong when they try to properly protect their families. (The biggest
mistake would be not buying it at all.)

[Related content: insurance, life insurance, insurance companies, insurance rates, policies]
By Insure.com

Life insurance is an important investment, and you don't want to buy an unsuitable policy or discover that you've
purchased too much or too little. But if the fear of making a bad decision is stalling your effort, know that failing to buy
life insurance at all can be one of the most costly mistakes you can make for your family.

6
 Life insurance
Life insurance for seniors

"The data is clear," says Jack Dolan, a spokesman for the American Council of Life Insurers, a trade group. "Americans
are underinsured, and they're not buying coverage in amounts that equal their needs."
• Check insurance rates for thousands of cars

An August 2010 report by LIMRA, an insurance research organization, revealed that ownership of individual life
insurance has fallen to a 50-year low in the United States: 30% of households (35 million) have no coverage at all.

But ditching an inappropriate policy after paying premiums for several years is a terrible waste of money. We asked a
variety of insurance experts to tell us the biggest mistakes people commonly make when shopping for life insurance.

Mistake: Grossly underestimating a family's life insurance need and the "value of human life."
Marvin Feldman, the president and CEO of the nonprofit Life and Health Insurance Foundation for Education, says that
people often substantially underestimate the amount of life insurance they should buy. There are numerous online
calculators to help, including one from MSN Money.

Mistake: Undervaluing a spouse who has no income. In addition to underestimating the cost of replacing the income
of a working spouse, life insurance buyers often neglect to place correct value on a non-earning spouse. Feldman says it
takes about $117,000 a year to replace that person, and "most people don't understand the impact of what a stay-at-home
spouse saves a family."

Mistake: Buying a life insurance policy with premiums that increase over time. Too often, life insurance buyers find
that they can't afford the ever-escalating premiums and must let the policy lapse, says Amy Bach, the executive director
of United Policyholders, a nonprofit dedicated to insurance education and consumer rights.

Mistake: Insufficiently reviewing all types of life insurance available. Dolan says that "term life insurance for young
people in particular typically provides a greater bang for the buck than whole life insurance . . . however, the lifetime of
level premiums that comes with whole life insurance is unappreciated by too many people who think in the short term.
Whole life insurance, with its cash value, also promotes savings."

James Hunt of the Consumer Federation of America, a consumer advocacy group, cautions against cash-value policies in
general because so many buyers ditch them in the early years of the policy. "This is not to say that cash-value polices
can't be decent investments when held at least 20 years, preferably a lifetime," he says. But when people let their whole
life insurance policies lapse, the "excess of premiums paid over term (life insurance) premiums . . . is lost."

A 2009 report from LIMRA on lapse rates shows that close to 12% of whole life policies lapse in the first year, 10%
lapse in the second year and almost 7% lapse in the third year of ownership. By contrast, lapse rates for term life
insurance were around 7% in years one and two and about 6% in year three.

Continued from page 1

[Related content: insurance, life insurance, insurance companies, insurance rates, policies]

Mistake: Buying a complicated cash-value life product without understanding its terms and payout conditions.
Even if your financial situation indicates that whole life insurance serves your needs, Bach points out that buying a
policy you don't understand is a financial blunder.

Mistake: Being talked into terminating or reducing -- or not maximizing -- contributions to retirement accounts.
Hunt warns not to shortchange your tax-reducing retirement accounts at work, such as a 401k, in order to afford a cash-
value life insurance policy.

Mistake: Sticker shock that prevents you from buying life insurance. Feldman says most people think life insurance
is "too expensive" because they don't understand the true cost of insuring a life. He points out that life insurance is
generally less expensive today than ever before.

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 Life insurance
Mistake: Allowing an agent or broker to complete and submit the application for you. If you don't fill out your own
application, Bach advises you to check it thoroughly to make sure the agent recorded the right answers.

When in doubt about life insurance

Your family's financial picture likely has many moving parts -- income, retirement savings and investments that need to
be balanced against mortgage payments, college tuition needs and other financial obligations. When in doubt about a life
insurance purchase, consult a professional agent, advises Feldman. An agent can make a recommendation based on your
situation -- "they're not just selling you the lowest-cost policy," he says.

This article was reported by Amy Danise for Insure.com.

Published Dec. 10, 2010

How much life insurance do you need?

The answer depends on your health, income, age, savings and whether you have a spouse, kids or mortgage. Here's a
simple way to calculate an actual dollar amount.

[Related content: insurance, life insurance, insurance rates, marriage, children]

By Kiplinger's Personal Finance Magazine

Unpredictable investment and job markets are rough on savings and retirement planning. They also complicate the issue
of how much life insurance is right for you and your family and what kind you should buy.

• Do you have the right kind of insurance?

Standard formulas -- such as buying coverage equal to eight to 10 times your annual income -- are inadequate shortcuts.
Online calculators are apt to tell you to raise your coverage by $1 million even if you already have insurance. The truth is
that life insurance is a personal affair. Two couples may earn equal salaries, but it's silly to say that someone with four
young children should have the same coverage as empty-nesters with no mortgage and a substantial retirement fund.

Life insurance for seniors

Low inflation and a recovering stock market may tempt you to lowball your life insurance needs. But other financial
realities, such as puny yields on reinvested lump-sum benefits, may require that you have more coverage, not less. And
you'll likely experience life events that call for changes in your insurance: marriage, parenthood, homeownership,
college expenses and retirement. Instead of relying on rules of thumb, you're better off taking a systematic approach to
figuring your life insurance needs.

That's easier than it sounds, as you'll see from the following process, because it "truly is an art as well as a science," says
Tim Maurer, a financial planner in Hunt Valley, Md., and co-author of "The Financial Crossroads."

A simple strategy
The purpose of life insurance is to allow your family members to pay the bills and live their lives as planned despite your
absence. That's why some experts and most online calculators sponsored by the insurance industry seek to figure the
chunk of investment capital it would take to replace all of your income for 20 years or longer, held securely in Treasury
or municipal bonds and certificates of deposit. With savings yields low and the prospect of longer life expectancies in
retirement, this approach tends to aim high, especially if you assume raises and promotions.

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"You can find people who are extremely minimalist with insurance recommendations," says Maurer. "But I see an
overabundance of people who end up justifying more insurance than I think is reasonable."

Instead, he offers a simple strategy to calculate how much coverage to buy and to form a plan that's easy
to update. The idea is to assess whether you need extra coverage or different policies only after you project your life
insurance needs as the sum of four categories.
• Final expenses. A funeral, burial and related expenses tend to cost $10,000 to $20,000. Your beneficiaries may
be able to get the tax-free proceeds from insurance faster than if they waited for money from your estate. Use
$15,000 as a ballpark number.
• Mortgages and other debts. Total your mortgage balance, car loans, student loans and any other debts that
would be a heavy burden on your survivors. They may choose not to retire the mortgage, especially if the
interest rate is low, but the money should be available so that they won't face the prospect of being forced to
sell.
• Education expenses. This calculation can be tricky, because you need to consider the cost of college at the time
your kids enroll. But Maurer devised a simple solution. College costs have been rising by about 5% a year,
which is the same rate he conservatively expects life insurance proceeds to grow over time. He recommends
looking up current costs for colleges you're considering, deciding whether you want the insurance to cover all or
a portion of the tab, and adding the amount in today's dollars to your life insurance calculation.
• Income replacement. Once you cover funeral expenses, debts and education, your family won't need to replace
100% of your income -- and that's where the art part of the calculation comes in. Maurer recommends covering
50% of current pretax earnings until retirement. You can translate this into a target lump-sum benefit by
dividing it by 0.05. For example, if you earn $100,000, divide $50,000 by 0.05, which works out to $1 million.
That assumes the insurance benefits will earn 5% a year over the long haul, a conservative back-of-the-envelope
figure.

Add all four categories to estimate how much life insurance is appropriate, then tweak the number to reflect personal
circumstances. You might increase it if you don't have a pension, but you could decrease your coverage if your spouse
earns a substantial salary. If you or a family member has a troublesome medical history, add $100,000 or even $250,000.
If you're the one with the medical condition, you'll find it tough to buy additional coverage later at a price you can afford.

For most families, this exercise will work out to an amount in the high six figures, possibly even $1 million or more. But
don't be frightened. With term insurance, boosting your death benefit by hundreds of thousands of dollars should cost
just a few hundred dollars a year.

For example, a healthy 40-year-old male nonsmoker might be considering a 20-year, $500,000 term policy for $360 per
year. But he could buy $850,000 of coverage for $576, or a $1 million policy for $645, says Byron Udell, the owner of
AccuQuote, which represents dozens of life insurers. Women pay less -- just $311 per year for $500,000 in coverage and
$558 for $1 million. It's not as easy as it used to be to qualify for the absolute lowest rates. You can get prices from
dozens of companies from AccuQuote or Life Quotes.

Continued from page 1

[Related content: insurance, life insurance, insurance rates, marriage, children]

The time factor

Also consider how many years you'll need insurance. If you're in fine physical shape, you can buy a new policy and lock
in the price for 20 years. Because prices for term have been dropping, you may not pay much more to extend your
coverage if you shop again in, say, five years.

Some term policies come with the right to convert to permanent life insurance, which you can keep for the rest of your
life regardless of health. Premiums will be higher than for term at the beginning, but they usually remain level
indefinitely.

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The best reason to consider whole-life or universal-life insurance isn't the accumulating cash value, although that's part
of the deal. The real issue is whether you'll need coverage beyond 20 or 30 years -- or after age 65, when term gets
expensive. You might want permanent insurance, for example, if you need to protect kids with special needs who will
always rely on you (or your estate) for support, or if you want to leave money to a school, charity or your children and
you don't expect to afford it any other way.

You need more life insurance if you . . .

• Tie the knot. Your new spouse might depend on you even if he or she earns as much or more than you do.
• Have a child. It takes a lot of money to raise a child -- and it doesn't get any cheaper if you're not around.
• Buy your dream house. When you settle into your family's permanent home, guard against its loss in case
tragedy strikes.
• Are about to retire. No more insurance from work. If you die, your spouse could lose pension and some Social
Security income.

Term vs. permanent: Get the best of both

Term insurance is popular because almost everyone can afford plenty of it. Some young people buy the amount of
permanent insurance that fits their budget, rather than the protection they need. That's not smart.
• The basics. Term vs. whole life insurance

But it can make sense to combine term and permanent insurance with multiple policies or by buying a convertible-term
policy and making a series of conversions over the years. One advantage of a convertible-term policy is that insurers
don't require a new medical exam when you make the conversions. That essentially gives you a pass if you gain weight,
develop high blood pressure or even survive a bout with cancer.

Northwestern Mutual Life provided this example for a 27-year-old man who starts by paying $317 for $500,000 of term
insurance, and then gradually converts it to whole life $100,000 at a time. If you shift $100,000 to whole-life at age 28,
your annual premium would jump to $1,300. If you shift another $100,000 at age 31, your premium would rise to
$2,600. Your premium would gradually increase whenever you shift money to the whole-life policy, topping out at
$7,200 at age 40, for the entire $500,000 of whole-life insurance.

As long as the insurer remains strong and solvent, the policy's cash value will rise every year, as will the death benefit.
By age 65, in this example, the benefit is projected to be $990,000 and the cash value $475,000, which can be borrowed,
withdrawn or tapped to keep the policy in force without paying additional premiums.

This kind of flexibility is attractive to Nirmal Bivek, a 32-year-old banker in Atlanta, who bought slightly more than $1
million in life insurance coverage when his 3-year-old daughter, Sarina, was born. Bivek has already converted some of
the coverage to whole life and expects to convert more of it as his income grows.

He added more insurance when he and his wife, Vijal, were expecting a second child and when they bought a vacation
home. "I'm in good health now, and term is cheap," says Bivek, "so I'm buying as much as I can now and converting it
over time."

This article was reported by Kimberly Lankford for Kiplinger's Personal Finance Magazine.

Published July 30, 2010

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3/16/2011 1:45 PM ET

By Ginger Applegarth, MSN Money

Term or permanent life insurance?

How do you know if you have the right coverage? Here's a quick look at all of the options: term, whole, variable and
universal.

Related topics: insurance, life insurance, policies, family, financial planning

Few people who have bought insurance -- or even window-shopped for it -- have escaped the debate over term versus
permanent insurance.

And the wrong kind of life insurance can do more damage to your financial plans than just about any other financial
product today. So, the first and most important decision you must make when buying life insurance is: term, permanent
or a combination of both? Let's look at each.

Term life policies offer death benefits only, so if you die, you win (so to speak). If you live past the length of the policy,
you (or, more specifically, your family members) get no money back.

How to spot insurance scams

Permanent life policies offer death benefits and a "savings account" (also called "cash value") so that if you live, you get
back at least some of, and often much more than, the amount you spent on your premium. You get this money back
either by cashing in the policy or by borrowing against it.

Permanent life insurance is more expensive

As you might expect, permanent life insurance premiums are more expensive than term premiums because some of the
money is put into a savings program. The longer the policy has been in force, the higher the cash value, because more
money has been paid in and the cash value has earned interest, dividends or both.

The debate is all about that cash value. If you buy a policy today, your first annual premium is likely to be much higher
for a permanent life policy than for term.

However, the premiums for permanent life stay the same over the years, while the premiums for term life
increase. That extra premium paid in the early years of the permanent policy gets invested and grows, minus the amount
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your agent takes as a sales commission. The gain is tax-deferred if the policy is cashed in during your life. (If you die,
the proceeds are usually tax-free to your beneficiary.)

The saying you always hear is, "Buy term and invest the difference." The fact is, it depends on how long you keep your
policy. If you keep the permanent life policy long enough (and the market ever fully rebounds), that's the best deal. But
"long enough" varies, depending on your age, health, insurance company, the types of policies chosen, interest and
dividend rates, and more. The reality is that there is not a simple answer, because life insurance is not a simple product.

Guidelines to live by when buying

Even with all of these variables, there are some guidelines you can follow. The key is how long you plan to keep the
policy. If the answer is less than 10 years, term is clearly the solution.

If it is more than 20 years, permanent life is probably the way to go. The big gray area is in between. Here is where you
need an expert to run the term vs. permanent analysis for you. Of course, this assumes you keep the policy in force. Most
people drop their policies within the first 10 years, but if you do your homework now, that shouldn't be the case for you.

How to choose

Start by assessing your needs with MSN Money's Life Insurance Needs Estimator.

Categorize your insurance needs by their use. If you need $60,000 for college and your youngest child will graduate in
three years, you need $60,000 of term insurance as a short-term hedge against your death, thus insuring that your child
can finish his or her education. Meanwhile, if your estate will owe $200,000 in taxes at your death, you probably need
permanent insurance, because you're not likely to die in the next 20 years (you hope). You also may want to re-evaluate
your estate plan, but that's a different issue.

Once you figure out your needs, it's time to choose the type of policy that makes most sense for you.

Term insurance

Term insurance is relatively easy. You can buy term insurance that stops after 10 or 20 years, or that can be continued
beyond age 70. You can choose for your premium to increase each year (annual renewal term) or to remain at the same
amount for a fixed number of years.

Most term policies offer both a current payment schedule and a maximum rate for each year. With some policies, the
company reserves the right to increase premiums if company costs increase. With others, your health may be a factor in
determining rates. At certain "re-entry" ages, you may have to prove your good health in order to keep the lower
premium.

Most term policies are convertible to permanent ones without evidence of good health.

Types of permanent life

The real wild card in terms of price is permanent insurance, because most policies have guaranteed and nonguaranteed
portions. There are three main types of permanent insurance.

Traditional whole life: This type offers the most guarantees. The annual premium is guaranteed, and there are minimum
guaranteed cash values and death benefits. Most whole life policies these days are "participating," meaning that the
dividends they earn can be used to increase the cash value and/or death benefits, decrease the premiums or be refunded
in cash.

If you are a conservative investor and also have trouble saving, traditional whole life makes sense.

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Universal life: If you need premium flexibility, especially in the early years of the policy, universal life is for you.
Universal life insurance was developed in the 1970s, when insurance-industry regulations changed to allow insurers to
be more competitive with other financial-services providers.

Universal life insurance is more flexible than traditional whole life, because premiums can vary from year to year and
sometimes can even be skipped. Universal life has maximum guaranteed premiums and minimum guaranteed cash
values and death benefits. Instead of dividends, universal life policies earn interest at the credited interest rate determined
each year.

Variable life: If you consider yourself a knowledgeable and risk-accepting investor, check out variable life. Variable life
insurance has the fewest guarantees and therefore offers the greatest potential for cash-value increases.

There are required guaranteed annual premiums and a guaranteed minimum death benefit. However, there is no
guaranteed cash value, and you have to select the investments for your policy.

Buyers typically are offered a variety of mutual fund accounts, ranging from money market funds to aggressive growth
funds.

Not an investment tool

Life insurance should never be purchased solely as an investment. After all, some of your premiums are being used to
buy death-benefit coverage and to cover other expenses (including sales commissions). Life insurance should not be
purchased on children as a way to save for college, and make sure you (and your spouse) have all the coverage you need
on yourselves before you buy any coverage on a child.

When you make your purchase, avoid all of the fancy riders, but do consider the waiver of premium, which suspends
your premium payments but keeps the policy in place if you become disabled.

If you find that you cannot afford all of the permanent insurance you have decided you need, consider a combination
term-plus-permanent policy. You can quickly compare quotes online.

=====

I have mentioned this on another board, but here it goes again... This article fails to mention the third, and better, life
insurance option - a return of premium term life insurance policy. With this type of policy, you will pay about double the
premium of a standard term policy, but still a fraction of the premium of a whole life policy. The full death benefit
applies throughout the term, but at the end of the term, all of your premiums are returned. The amount is not taxable.
Example: I purchase a 20 year term policy w/ a $100,000.00 death benefit at about $13.00/month - my family receives
$100,000.00 at my death, but I receive nothing should I survive the 20 years, although I will have paid out $3,120 in
premiums. However, if I purchase a return of premium 20 year term policy w/ a $100,000 death benefit at about
$26.00/month - my family receives $100,000 upon my death, or I survive the 20 year term and receive the full amount of
premiums I have paid $6,240.00. You get the same coverage, albeit for a slightly higher premium, but in the long run,
this is at no cost to you.

I have a very big concern - I used to own a Cash Value Life Policy. I listened to Dave Ramsey's advice and I went out
and cancelled my life policy and I bought a lot of Term Insurance. A few years before my policy was about to expire, I
discovered I have cancer. I was told that it I have my old Cash Value policy, my cancer condition would be covered.
However , my term is expired and now I am uninsurable. No Insurance company will sell me a policy. My savings went
from over $750,000, but is now worth $305,000 because of the market returns that Ramsey said would be worth lots
more. There is no way that amount covers my needs, especially now that I will pass away soon. What is your advice
about how my plan worked out?

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So let met get this right, you're saying that it was a bad idea for one of my dear friends to buy a whole life policy through
a mutual company 24 years ago for $700,000 in death benefit and pay in $18,900 a year and now have a total cash value
of $1,552,737 and the policy is paid up and has a total death benefit of 1,880,955? Now he receives a little over $80,000
a year in dividends and this policy was used with money that would have gone into savings because of security of
principle. I need a lot more reasons to tell my friend to cancel this policy just because you say that whole life is a rip off.

I too have just heard about Index Universal Life Insurance. I think it sounds like a wonderful idea. I am worried that
investing in Mutual funds may not work the best in 40 years when I want to retire, but with the Life Insurance I am
promised a constant return, all my investment and insurance money when I retire then die. I want to know why it's a bad
idea.

I am 27 and in good health. If I buy a 20 year term i will be 47 when it is up and if I want to buy another product for life
insurance I will be paying more due to mortality. I do not agree with what the article is saying. If you buy whole life you
are garranteed the face value up to death (100% return) for your family. That is why it is called "LIFE" insurance. The
life insurance companies are the largest institutes in the World, even bigger than oil and that to me is a solid company to
be putting my money on rather than a stock market where you have no garranteed return on investment, especially when
the market crashes. The whole life gives you a minimum 4% interest and above, tell me where a savings account can do
that. If you invest in stocks, you might get 4% but then you have a capital gains tax. Borrowing against your whole life
with the cash value is "tax free" it is your money to take out after retirement and then you still have your cash value to
leave for your kids and loved ones. This is just a thought i am not a guru like Dave.

==

I don't exactly agree with this article. He fails to mention the fact of the possibility of death before accumulation is
substantial. Example: 28 year old couple with 2 small children. They both are teachers and want to make sure their kids
get to college if something should happen to them. Start with a lot of term and investment; the term provides an instant
nest egg while the investments grow. Once their kids are out of school then of course focus on putting more in to
retirement. That is just my opinion!

I disagree and agree with what Dave is saying. You would be foolish to buy a $125k of whole life. It would be wise for
someone to buy a $25k whole life and a $100k of term. Most term policies are 20 - 30 years. They cover you for the
mortgage, cars, kids, etc. Once that term renews after 20, 30 years, the cost will be unaffordable. You can cancel that
policy, and you still have the whole life in place to take care of death, burial needs, and then some. Some companies
offer paying a whole life in 10 - 15 years too. So, in 30 years, you could potentially be covered for all of your life needs
and not have to worry about paying it while you are at the retirement age. Life insurance isn't about investing. It's about
protecting what you have, your family, your home, your possessions. I wouldn't suggest cancelling any type of life
insurance unless you are going to replace it or supplement it with something else. Chances are the cost you are paying
now is more affordable than if you started a new policy. Your health and age all come into play with life insurance. You
would be paying the cost of a 35 year old instead of a 25 year old, if you were 10 years into it. Also, each state is
different with the cost of insurance. If you have life insurance questions, talk to someone who is licensed in it. I'm sure
they would love to talk to you and they can answer all your questions or concerns. If you need your sick, you're not
going to go to your bank right? You would see a doctor. Just a few thoughts.

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I am sorry to say, but my mother had a 100,000 whole life policy with New York Life and she had set it up to be put in a
trust tax deffered. she had 10,000 set to directly pay her funeral cost, 60 something set up to go to me and the rest went
to a loan she had taken out. So I do not understand how you people are saying a 125,000 whole life policy,is not worth it
and term is better?

I purchased 2 whole life policies whose death benefits are $20K. Both policies have been paid off. Total costs were
$4656 for one and $6048 for the other. Due to interest accrued, each one's cash value is over $10K, and death benefits
are about $22K and $25K. I'm no longer paying anything and the benefits are continuing to grow. In this case I think I
made the right decision. Because of my age (55) and medical condition, I have a $100K 20 yr term that costs $53 per
month - $8 more then both of the whole life policies.

I just learned about a 7702 used as both insurance and retirement. They state you pay taxes when you put in and then you
won't pay higher taxes when taxes go up to cover our national debt. They guarantee that your investment will not fall
when the market drops and will always gain at least 1%. The key is it will not grow more then 15% when the market is
rallying but it is always growing. I set the maximum amount and they set the minimum. Is it wise to put my money into
this type of insurance policy instead of a Roth IRA? since it is [re taxed then I won't have the same requirements to
withdraw a certain amount so Uncle Sam can tax it if I do not need the money.

Derrick March 21 2011 1:25 PM

@Bob, Dave recommends Zander Insurance for the best term life ins rates.

Dave Ramsey fan March 21 2011 10:24 AM

Could you recommend some companies for term life insurance? Say a 30 year term? Sure would suck to pay year after
year thinking you have protection just for the company to close down.

Bob March 20 2011 10:00 PM

I get tired of people of people playing on other peoples fears, whole life does that, some say that others cannot be
responsible to invest the other 93% and some say that they did and then the stock market crashed and they have nothing,
well the stock market bounced back! Insurance companies are in the business to make money, and they make a ton with
whole life and they invest in the stock market, term life companies do the same thing with far less premium dollars and
are still successful. People in reality are looking for a big check should someone die, they are less worried about a life
long financial plan.

JON March 19 2011 9:58 PM

Do the math and stop debating: An standard price for an 40 year old male, $30,000 Death Benefit will cost about $100 a
month for a WL policy. Same guy, $30,000 death benefit 30 year term will most likely cost $20. Now here the figures,
$100 times 12 months will equal $1200, now times that for 30 years, the guy would have paid out $36,000 dollars
already, he has paid more than his death benefit on this policy, and is only 70 year old. If he live longer he will end up
paying close to $100,000 and his family will get the $30,000 when he pass. Remember, they call it whole life, because
he will have to die before the life insurance will not pay out. Cash Value, the life insurance company will keep, I'm
talking about WL and UL with option A. Now why does anybody want to throw their money away to these WL
Company? Buy a 30 year term policy, the same $100 dollar, use $20 for the policy, invest the $80 per month. Even with
just 2.5% return interest, he will have about $42,998 dollar in 30 years, that is more than the death benefit, so why does

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he need to cont. with his life insurance. He won't have too, plus he's still alive. That was just a little example of WL vs
Term. The price on these might be a little off, but not much. Trust me, I have check around and you can too if you don't
believe me. I'm not talking about Whole Life with Accidental Death Benefit okay. Some agents sell the Accidental just
to make the Death Benefit look attractive so that they can fool people to buy their policy. Check a price on a true WL
policy that cover 100% of everything and it will cost a person around 40 and a DB of $25,000 to $30,000 of about $100
per month. If anyone here is reading this, use your policy and I dare you, do the math and ask yourself " Are you been
ripped off?"

ss March 18 2011 3:08 AM

I can't believe there are people still advocating any life insurance other than term. The fundamental purpose of life
insurance is to ensure the loved ones that rely on your income are covered should you die. LI is not a savings or
retirement vehicle due to the exorbitant costs and rules they come with. I am 34 years old and just purchased a 15 year
term policy with 1M coverage for $270/year When the policy expires in 15 years, my net worth will be sufficient to
cover my income for my wife and child. Anyone who suggests that any other type of insurance is beneficial is either an
insurance salesman or a financial illiterate.

David March 11 2011 11:51 PM

This concept is great in theory but in reality it doesn't plan for the catastrophic year that you need a kidney transplant,
have a brain tumor, discover you have cancer. If you happen to pass away during the term coverage period things would
be ok but if not you would have been a much more responsible parent by planning to have some permanent life insurance
in force at a young age when the premiums are less costly. Even with medical coverage, you will be exhausting your
personal resources in a catastrophic situation leaving your family with bills. I am not a life agent, just a concerned parent
who has been through life changing family medical situation.

Chris March 10 2011 6:14 AM

Kim, I feel you. I was confused to. The best thing to do is to be sure the company you are talking to is non-biased. They
should put your interests first, not their commission. It should be the insurance company's first priority to make it easy
for us.

Laura March 04 2011 11:34 AM

Bottom line insurance is not an investment. Why would you even let someone else can control when you have the option
to control it yourself. Buying Term is the smartest way to go. Unless! you think that your going to have a
mortgage,debt,children and etc for as long as you live. The problem is alot of ppl findout to late. The military sells all
TERM! Its meant to protect you while you have responsibilities people. There is no other opinion about it. Dont
complicate things. Agents want more money companies want more money its the only reason why they sell. Majority of
the agents dont even understand what they sell. There only answer is that term runs out. oh big deal. your car and
homeowners runs out to. but u renew it. but if you do your investing you wouldnt have to worry about that would you.

Marvin Green February 14 2011 10:33 AM

There are advantages and disvantages to each type of life insurance. For someone to say cash value life insurance is
absolutely the wrong way to go, needs to really evaluate how they think. The decision should be made by each individual
with the advice of a good agent. The agent should always listen to the needs and concerns of their client and recommend
which product they feel is best.

Chris February 09 2011 9:58 PM

There are advantages and disvantages to each type of life insurance. For someone to say cash value life insurance is
absolutely the wrong way to go, needs to really evaluate how they think. The decision should be made by each individual
with the advice of a good agent. The agent should always listen to the needs and concerns of their client and recommend
which product they feel is best.

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Chris February 09 2011 3:00 PM

I bought term and invested the difference. The market dropped twice and I lost big. I lost my job and have health issues.
I am still alive and my term policy is expiring. When I die, my wife looses the house. Buying term and investing the
difference doesnt always work as some may imply. To those of you that are young, I highly suggest a plan B. If this
doesnt work for you (it doesnt work for most) you are in big trouble.

Richard February 02 2011 5:19 PM

Hi All, I did some research and here's what i found: over 40% of online life insurance inquiries are done by people age
50 or older!!! Why are these people searching for life insurance so late in their life? Didn't they already buy term and
invest the difference? They should have accumulated a tremendous savings by now, right? No, they didn't. Either
because their investments did poorly, or because they never got around to investing the difference. 40% of 15 million
online inquiries is alot of REALITY as opposed to theory and speculation. In theory "buy term and invest the difference"
works. In reality it doesn't. Another fact: 88% percent of people who are married and retiring with pensions elect a
survivor pension. Now, a survivor pension is another form of life insurance. Let's ask these 88% what happened to buy
term and invest the difference? Haven't their savings grown that they no longer need any survivor pension? Again the
answer is a resounding NO! People should make decisions based upon what happens in Real Life, not in some academic
setting.

Stephen February 01 2011 1:23 PM

Jeana, Don't think that just because you bought a whole life policy that you're being ripped off. Every policy has it's
merrits. If you know you're going to want the policy to last as long as you do, you should check on it at least annually to
make sure it's going to do just that. If you know you're only going to need the coverage for a specified duration you
should start looking for term or a reduced guaranteed universal life. To get the cash out of your policy you must
surrender the policy and pay taxes on the gain. Or you can transfer the cash value to a reduced guaranteed UL via a 1035
exchange. This will allow you to transfer your cash value without incurring any penalty and it helps lower the premium
of your new policy. If you think you might need the insurance for life, call your agent and have them order an inforce
illustration for you using current planned premiums. This will tell the insurance company to print you an illustration that
will show you how the policy will perform assuming you continue to pay the scheduled premium. Best of Luck!

JW January 31 2011 11:12 PM

10 years ago my wife and I bought a 100,000 policy. Now that I am about to turn 79 my premium is jumping from
123.00 a month to 1245.00 a month It just makes me sick. I have no choice but to drop it.This policy was with AIG.

robert fellers January 18 2011 7:00 PM

Ok so I have fallen for the ridiculous rip off product. Now how do I get out without losing my shorts? What should I do
with the savings in the whole life? Do I cancel the product?

Jeana January 18 2011 8:41 AM

In response to Eric: "I'm 40, purchasing 20-year term insurance. I'm finding I can get a $1M policy for $500 -
$2500/annually. Why would I spend a penny more than $500?" Eric, you really need to compare apples to apples with
insurance quotes. Usually the quotes are based on "preferred plus", something only the most fit athlete may qualify for.
You may fall into the standard class, which is most likely closer to $1,000/year ($88/mo) in premium per year. Then you
also need to look for the history of the insurance company (how long in businee) and their financial risk picture - how is
their payment history? their payout history? etc. If the company is at the verge of default, you will not get your money
back. So going with a reputable company is preferred, even if you have to pay a bit more (think Starbucks vs
convenience store. Then there are riders, options for inflation adjustments, etc. Good luck!

Lisa January 13 2011 3:21 AM

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Wow, its amazing how much people don't do their research. Whole life is ridiculous. And no, you don't get both cash
value and benefit payout with any policy. Agents who sell this know this. Financial advisors who want a high
commission just like the agent know this as well. The point is, I'm 41 I need a minimum of $3 million dollars at age 65 to
retire comfortably with the inflation of today. What do you think your children will need if they are young now? We
don't think we will die, but those who are 26 or 30 die every day. The avg funeral is 20,000 dollars, who pays for that?
When you don't get anything from your place of work but $200 to help cover costs, what does that do? And when you're
gone, $100,000 Whole life, Univeral life, Variable life doesn't cover nearly the expenses it will take for your wife or
significant other to take care of the children you left behine. Not to mention, when you borrow "your own money" by
taking out the cash value to invest or pay bills, remember that gets deducted from the payout because you "owe" that
back to the insurance company with interest. So in a sense "your family pays that" because they never receive it with the
payout. Oh and not to mention god forbid anything happens to you the first 2 yrs of your policy, because they will not
pay you anything if you die before that 3rd year. Investing is the only way to go because right now and every, Yes, I said
every track record recorded on Mutual Funds shows 12-14% growth not 4%! Whole life stays the same if you don't
borrow on it. But you forget about inflation and that 190,000 dollar policy is by far not enough to retire on. No life
insurance should be used for retirement! I don't care that I outlive my Term Life, by the 20 yrs end of my policy I will
have more than that $3 million dollar number I needed to live out the next 20-30 yrs of my life. Remember, when you
get your payouts or start drawing on cash value, you still have 20 more yrs to live! Most don't think about that either. I
know people who blow 100,000 dollars in a 2 yr span of time then they had nothing.

Tracy January 12 2011 6:50 PM

I have $1M of variable whole life insurance since 1994. I have been using Tactical Asset Allocation techniques to invest
the cash value in my policy since 2004. I have been averaging 23% per year and have not had a down year so far,
including 2008! The death benefit is presently over $1.1M and the cash value account is worth approximately $305,000
as of today. I also use the cash value to pay my premiums so that I am not out of pocket one cent. I plan on continuing
my methodology until age 65 upon which time I hopefully will be able to withdraw approximately $100K assuming I
live to age 82 (currently 58). This is possible for anyone to do and maximize what variable whole life has to offer. It is
never as simple as "the experts" would have you believe.

JC January 11 2011 5:05 PM

I am so upset! I bought a universal life policy from Mass Mutual in the early 80's for $250,000 coverage for $50 a
month. Was told it would build up cash value, and I'd have a great savings as well as life insurance. Just got a letter
saying that now I owe them $150 a month! I called, and it seems that there is NO CASH VALUE left and the Cost of
Insurance has gone up, so for me to keep the policy, I have to pay the $150 a month, and that will continue to go up! I'm
only 56 years old. I'm so upset that I could cry, and I don't know what to do. I'm a single parent with two boys..one in
college and one in grad school, and I wanted to protect them at least until they get finished with their schooling. They are
on scholarships, and they could get loans, I suppose, if something happened to me, but I wouldn't want them to have that
burden. I need some advice badly about what to do next. I'm in good health as of today. I feel as if Mass Mutual has
defrauded me, and I don't want to ever do business with them, but I hate to let go of something I've invested in for over
30 years. The real estate market has caused me to lose all of my equity in my home, and it isn't worth even what I paid
for it 6 years ago, and my investments aren't making anything, and now I find out my life insurance is worthless. I've
tried to do everything right financially all my life, and now I find out it was wrong.

Karen January 08 2011 7:23 PM

I'm 40, purchasing 20-year term insurance. I'm finding I can get a $1M policy for $500 - $2500/annually. Why would I
spend a penny more than $500?

Eric January 06 2011 7:35 PM

Insurance agents, financial planers, loan officers, and even attorneys can and will give you bad advice. A lot of these
professionals will preach to you their philosophies with the best intentions. They are not trying to give you the wrong
advice; sometimes they get into cookie cutter mode and suggest the same plan for everyone, with out knowing your
personality or habits. Everyone’s situation is different and your Advisor should treat you and your situation as a unique
one because it is.

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Cedric January 05 2011 1:20 PM

Term insurance is a great product. I have an ample amount of Term Life insurance to protect my family in the event of
my untimely death. However I also have Permanent Insurance to cover me during the years when I will most likely die,
ages 70-100 the years most term polices will not reach. After age 75 most Life companies will not grant you Term
Insurance and if they do your premiums will be $300 - $600 per month. The question is, will most people still need life
insurance around retirement age? I believe they will. I say that most people should have term insurance for their debts
and income replacement and partner it with a smaller permanent life product for there final expenses. I agree with the
first post from Jake Stuart.

Cedric January 05 2011 1:03 PM

I agree that if you have the discipline to do everything Dave says, you shouldn't buy whole life. My concern is the high
percentage of people who will not do everything Dave says, they plan to, they hope to, but just don't. What if you still
need life insurance at the end of your 20 yr term expires? What if? The life insurance may be originally purchase to
protect income for your young family. The need for life insurance in 20 yrs may change from protecting income to
protecting debt, equally out an asset heavy cash poor estate, continuing to protect income for your spouse. Is it way out
of line to suggest that a 30 yr (who buys a 20 yr term), may still have home debt, credit card debt, business debt, young
children, car loans, medical debt, and a wife that shares income with you to pay the monthly bills still at age 50??? Is that
even possible? Seems pretty common nowadays. What if they still NEED insurance and they've developed a heart
condition, put on 40 lbs, have high cholesterol or blood pressure? IF they're insurable, their old $20/month term policy
may cost $3-400/month or more. If you do EXACTLY as Dave says, you will probably be ok, but if you miss an IRA
contribution or make a poor financial decision, or have an unforeseen health or disability condition without proper
coverage, or there's a black swan financial market event, you may be in a very helpless situation. Because of these REAL
risks, there is still a place for permanent life insurance, but it is not for everybody and should not be sold to everybody.
The key is to understand what your buying and if there's a need.

Jake Stuart January 03 2011 12:50 PM

Dave I have a whole life policy that i bought in 1987 when i was 24 years old.The policy cost me $61.80 a month. It now
has a cash value of about $19500.00 if i cash it in. If i draw on it when i am 60 years old it has a garante of $1450.00 a
month. Should i cash it in now or just keep it and draw on it later ?

mike caldwell January 02 2011 4:58 PM

Show me the numbers. Every time I do an analysis of the growth of the cash value account of a particiopating whole life
policy from a solid mutual company to a bond fund for a period of at least ten years it does very well. Of course a stock
index fund does better but that is a false comparison in that stocks have an entirely different and higher degree of risk.
Whole life in the cash/bond end of the risk spectrum of my portfolio asset allocation works for me. Yes I sell it and will
buy it myself unless some genius on this forum can demonstrate that I am wrong.

Will Harris December 28 2010 6:44 PM

To all the life agents out there we need to stop the scam of whole life insurance and do whats right for the people not for
us agents!! insurance and investments should always be separate. With whole life, universal life you are getting the worst
of both worlds.

k December 23 2010 9:34 PM

Don't listen to these comments from obvious insurance salesmen. They make virtually nothing on term insurance, but
whole life insurance first year premiums basically go straight to the salesman. What Dave says is exactly correct. Life
insurance is INSURANCE not an investment. You buy insurance to cover your family in the case you should die before
they are financially independent. Any other reason is simply insurance sales nonsense. Also, mixing your insurance and
with your investments is a sure way to have no idea how your investments are performing. Buy term and invest the
savings.

Todd December 19 2010 11:18 PM

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I appreciate the fact that Dave provides a simple method for helping people control their debt and over-spending;
however, encouraging people to purchase a product that only pays out 3% of the time is over-simplification of a very
important financial planning tool. Don't build your financial foundation on a product that fails 97% of the time! There is
a reason that term insurance is CHEAPER than whole life insurance! WOULD YOU BUY A CAR THAT ONLY
STARTED 3% OF THE TIME? One final question...How much permanent life insurance does Dave Ramsey own?

Kevin December 16 2010 2:52 PM

Considering only one 'type' of life insurance can be horrible advice. Sure....Life Insurance costs money, and right now
that money is tight. However, layering Term and another Perminant coverage are great ways to perminantly protect
families. People almost never buy term and invest the difference...and if they do that goes to probate when they die. I'll
concede that most Whole Life clears about 3% on the average...but right now, try getting a tax free CD at your local bank
for that. Another simple idea....consider that different types of Life Insurance exist...and those features (invest
subaccounts, flexible death benefits, cash value, etc) are just that - features that do affect the total cost of insurance.
Commission affects cost too, but since nobody complains about how much you make, don't complain about how much
your agent makes...especially if you need the coverage.

Brian December 10 2010 11:28 AM

Dave i do appreciate your help and guidance for the hardworking middle class individual. however i do think your are a
bit misleading in regards to life insurance. lets face it we will all die at some point whether old or young, expected or
unexpected. the needs of life insurance are not the the same for every person and although at times we need life
insurance for different reasons with out a doubt we need it at some point or another. the wealthy need it to help protect
their hard earned wealth and estate. the not so wealthy need it to replace what will be missing if they pass away, and a
family or charity can and typically always benefit from it regardless of where they are financially at the time of insureds
death. lets be clears here. both term and permanent insurance has its market. term insurance is for those that have hi
needs of protection and low financial resoures. on the other hand perm (cash value) is for people with an insurable need
and also an asset preservation need. if i am in a 30+% tax bracket would i pay more in expense to maintain my cash
value policy or in taxes of my "self insured" investment portfolio. chash value police not only protect the insured but also
the wealth that insured worked hard to realize. i am an insurance and financial service professional and i do not believe
cash value is for everyone but it does have its market and unforutnately most people who do own them dont fully
understand the pros and cons of the poloicy and its structure. IF YOU CANNOT OVER FUND THE POLICY THAN
YOU MAY NOT WANT TO OWN ONE. that an indicator that you may not be in the market for a ul, iul, or vul. but
there are rare exceptions to that rule, please consult with your financial adviser about your personal needs.at the same
time more than 98% of term policies dont pay a benefit. the best term policies on the market in my humble opinion are
thoes that offer a ROP rider. so then you can have the coverage and if it does not pay a benefit your still not throwing
money away. word of advice to the consumer is A-stop believing everything that you hear and see on the internet, radio
and tv. just because a person is famous does not make them credible for your personal financial situation. B-do your
homework it pays to have good advisers with your best interest at hand not someone who will give you the lowest
price...because trust me you are shopping for the lowest overall cost not price. c- don't butcher or praise a product that
you know nothing about. ask the right questions and all the answers will be given to you for your discernment of what is
best for your personal situation now and in the future. good luck.

Josh December 10 2010 10:31 AM

I too sell life insurance. One thing I haven't seen anyone mention is that term insurance expires at the end of the term. If
it is the longest term (sold by most companies) of 30 years and you purchase it at 30 you are without insurance at 60 if
you have uninsurable health problems. A permanent plan like whole life or universal life is a level premium that does not
go up and does not end. If you purchase this at a young age it is as affordable as term insurance. As long as you pay the
premiums you are certain of a payout on this insurance product. You don't know you will have a car wreck or a house
fire, but you know you will die. Universal life with the option to pay all the cash value plus the death benefit is available.
This policy is currently paying 4 1/4 % interest. Know any cd's paying that right now. The main reason to get a
permanent plan is to be able to keep it all the way to death and get a definite payout for the family you purchased it for in
the first place.

Charlotte Dillman December 09 2010 4:35 PM

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Its so funny that these cash value agents think they know more than you Dave! Whole life is the biggest waste of money
ever! I dont know how you cash value agents sleep at night knowing your ripping off hardworking people. What goes
around comes around!

nik December 09 2010 10:17 AM

I would appreciate an analysis of the military's survivor benefit plan (SBP) that is offered to retired military in
comparison to term life insurance. A lot of retirees struggle with this, and I'm curious as to what Dave and his staff think.

Andy December 07 2010 1:10 PM

Dave much respect for what you do. However I sell life insurance products. While your advice is true it's not whole
truth. I think you may be doing a lot of people serious damage with this buy term and invest the difference. Permanent
life insurance can solve problems no other financial product can solve. the ones of us in the finacial industry know this
all to well. If you are a wealthly man I would hope that you have some of your fortune tied up in permanent life
insurance which you probably do. For instance you say that that the family can't get the cash value in the policy when the
insured dies. This is not true. There are UL policies capable of doing just that. By listening to you I wonder if you really
do real research or are you just repeating what somebody sold you?

Maurice Kemp December 05 2010 5:09 PM

I bought a $10,000 whole life policy with an annual premium of $193.40 from Northwestern Mutual before I went into
the military in 1970. In 2010 it has a cash value of over $40,000 and a death benefit of over $68,000. That's about a 6.9%
annual return, better than the S&P 500 or the Dow 30 did over the same period, and considerably better than the go-go
mutual funds of the 70's did (they went bankrupt). There are only a handful of mutual funds still in existence from 1970,
and we all know how the new funds created in the last 10 years have done. Yes, in the long run, the market will come
back, but in the long run we'll all be dead. In which case, whole life insurance will still be the better investment.

Don November 30 2010 11:41 AM

Dave you are obviously a wealthy person and my hat goes off to you for the assistance you provide people in making
financial decisions. Regardless of how you view life insurance as a savings vehicle (not investment) do you own
permanent life insurance? You are obviously going to have some estate issues at some point in your life and I certainly
hope you are not addressing this problem with term life insurance. As for self insuring, most wealthy people created
wealth by making financially intelligent decisions and self insuring, in my opinion, is not an intelligent decision. I
understand your advice is meant to appeal to the masses but I find the statement regarding whole life insurance as an
irresponsible one on your part.

matt November 28 2010 6:18 PM

It all depends on the policy. For sure, there are some pretty bad policies out there. And there are some pretty bad agents
who sell them. The way I think about it is: who do you want to bear the risk of insurance if you die? If you buy term, of
which only about 2% of policies pay out, then YOU bear the risk, not the insurance company. In fact, buying term gets
geometrically more expensive as people get older. Permanent policies make the insurance company bear more and more
risk as you move from VUL to UL to Whole Life, because, as such, they WILL have to pay out if you die. As such,
they're nominally more expensive. That's why you buy them early in life and "lock in" a good permanent rate. In terms of
the CV investment aspect of UL and Whole Life policies, it's ideal for those who have no risk tolerance and perhaps
have cash sitting in a savings account earning close to no interest. If that person needs life insurance, then why not funnel
the cash into a policy paying 3 or 4% interest? As to the idea of self-insurance, that's all well and good to just state that
that's possible. When you factor it into retirement planning, it is no longer feasible for most people. The amount of low-
risk resources someone needs to have on hand to maintain a spouse's lifestyle is often a million to several million dollars,
especially if the person in question dies only a few years into retirement. Additionally, the joint-and-survivor insurance
that's used in estate planning by definition has to be permanent. Term is appropriate for some people, and perm is
appropriate for others. Yes, permanent insurance has been oversold by shady agents who are attracted to the higher UL,
VUL and whole life commissions. But it has a place, and can be worth exploring in a multitude of different situations.

live4divn November 20 2010 9:14 PM

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My parents purchased a modest whole life insurance for me when I was a baby ($10 a month for $30K coverage). I am
now approaching 28 and the surrender cash value is over $4,000. Of all the investments family members made on my
behalf, this is the only significant one which has doubled without diving. While I certainly won't rely on it for retirement,
I consider it a safe resting place for the money. Al November 15 2010 12:02 PM so Al has a 4000-(120*28)= 640 dollar
gian over 28 years. that is a horrible improvment.

ViroSpider November 18 2010 12:10 PM

I don't know if it has been mentioned yet, but I'll just throw this out there. There is an option that allows your beneficiary
to receive both your cash value and death benefit at death. The catch is most agents sell option A, where you receive only
the death benefit, but tell you you are getting both. They will tell families what they want to hear, but sign them up for
something else. I see it everyday. My job is to fix this crap. Before anyone thinks they have all this money built up, do
yourselves a favor and read the contract. Don't think and assume. Read the contract itself. For what you pay and actually
receive, whole life is absolutely terrible. If you believe otherwise, I'm sorry for you. I'm seen it ruin families lives first
hand. Read your contracts. Not the fancy illustrations. Your families are depending on it.

Travis November 17 2010 11:40 PM

I love Mr. Ramsey. However some of what he has written has changed. For example, there is an option that allows your
beneficiary to collect the death benefit and cash value. Plus, the cash value that is growing at 4.5% is all tax free growth.
The government can't touch it, creditors can't touch it, and with the company I represent you can take the cash any time
you want no questions asked. By no means should this be a primary investment tool, but if I can 'invest' as much as I
want with no tax consequences and have a guaranteed return, how is that bad?

Joseph November 17 2010 12:42 PM

All I know is that my dad put $110,000 into a whole life policy ten years ago and today its worth and today its worth just
over $181k. Not too shabby. Not a dime in taxes either! I'm not a banker but this sounds pretty decent to me.

Mitch November 16 2010 3:37 PM

My parents purchased a modest whole life insurance for me when I was a baby ($10 a month for $30K coverage). I am
now approaching 28 and the surrender cash value is over $4,000. Of all the investments family members made on my
behalf, this is the only significant one which has doubled without diving. While I certainly won't rely on it for retirement,
I consider it a safe resting place for the money.

Al November 15 2010 12:02 PM

A couple of flaws i see in this buy and invest strategy is most people don't have the discipline to save and generally will
put it of for oh say twenty years. After which there will still be some need for life insurance. The other issue is mutual
funds are basically gambling. There is no guarantee they will make money. Most people have lost a ton in the market.
where as people with secure life insurance have protection for their families and have had consistent predictable returns
and protection. If all you can afford is term it is better than not having life insurance. However, term is temporary. Whole
life becomes a real value as the years go by and it is for life. The mutual fund example does not consider taxes which is
also risky thinking taxes will not go up in the future. Go to http://lifeinsurancemn.org for some term comparisons and
then take a close look at whole life products. Factor in safety, taxes, etc. Don't look at possible returns on mutual funds.
Look at the inevitable death and taxes then choose what makes sense. Buy and hold or income averging is a losing
proposition for most people. What happens if you die after the market tanks? If you lost money or saw your 401's
dwindle to close to nothing in the last few years - I think you know the answer.

Tim November 12 2010 3:08 PM

What ever you do, do NOT use John Hancock! I filed 2 changed of addresses with them, never received our annual bill. I
called them after I realized this... a year later and now they want $2400 to reinstate!!! I talked to a rep and they said that
John Hancock has ON RECORD that I requested an address change TWICE. Also, my telephone number NEVER
changed. Could they call me? NO, they'd rather lose an account.. Sad. I'm a perfectly healthy young man and will take
my business elsewhere as of today. AVOID JOHN HANCOCK!!! Another thing I do is have multiple life insurance
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policies so while JH's incompetence has cost me that account at least I'm still covered by a firm that knows how to do
their job.. pick up the phone. How hard is that? Man, talk about frustrating!

Craig November 10 2010 5:22 PM

What Dave Ramsey is saying is 100% correct! Listen guys, he is the financial expert and dealing with financial experts
myself this is absolutely true. Whole Life is a rip off. Cash value is actually trash value! Did you know that your cash
value account, that you're saving for "retirement", stays with the company if you die? It's actually called "Cash Surrender
Value". Look it up! You only need insurance while you have responsibilities (i.e. Mortgage, children, debts). If you do
NOT have those responsibilities then you don't need life insurance. What you need is retirement money. Learn from the
man, he said it best!

JMarrero November 09 2010 2:15 PM

@Michelle (October 21 2010) Yes you can get a Life Term that will pay your premiums back but you will pay a monthly
premium which is twice as high, compared to a normal Life Term for the same amount of cover. That means, you risk
loosing twice as much! You will only get your premiums back, if you don't cancel the insurance. To make matters worse,
for each premium you pay, they will only provide cover until the next premium is due. So if your premium is due i.e. on
the 4th day of every month but on one occasion, the premium has only been credited on the 5th day or later or not at all,
the whole policy will instantly terminate after the 4th day of that very month and you will not get the premiums back.
You might think, that is not an issue because you will always pay on time but think twice! If your policy runs i.e. for 18
years and you pay monthly premiums, your "money back" will be at risk 12 times a year for 18 years, which means,
throughout the policy, you will be at risk to loose your "money back" 216 times! You can not pay more money than you
are due to pay and therefore can't back it up or buffer it. If, within the life term, you fall victim to card fraud or if you
have been overcharged, or if the bank canceled the direct debit or your overdraft for whatever reason, or if any other
mistakes or unforeseeable events occur, in result of which you won't be able to pay on time, you will loose everything!

IK November 07 2010 11:28 PM

What dave is saying is probably right for the type of people that need his help, what he neglects to realize that people
very rarely become selfed insured even if you buy term and invest the difference. And to note that if you did buy term
and invest the difference for the last 10 years your return would have been in the negative or break even at best case.
Term insurance is a great tool to have for certain families and so is whole life for certain families. But Dave does a very
poor job in telling this because whole insurance is not good for the market he is helping. He also never talks about
addressing estate planning issues. How does 20 year term insurance solve any problems then...

George November 06 2010 9:40 PM

Dave Like they say in the insurance industry. Sell term I can't eat but sell whole life I can't sleep. I rather sleep at night
knowing 20 years down the road the whole Life I sold implodes on it self since they are annual renewable terms and the
cost of insurance surpasses the premium paid and all the cash values are sucked out of the savings protions to pay for the
life insurance protion. Leaving a family without when they need it most. Its a win win for the insurance comapny. Not
for the client!

shazam65 October 29 2010 3:26 PM

What Dave neglects to say before he says " the savings you finally build up after being ripped off for years don't go to
your family upon your death. The only benefit paid to your family is the face value of the policy, the $125,000 in our
example" is that the UL policy in his example has a level premium and to do that it's only purchasing (cost of insurance)
insurance equal to the difference between the cash value and the death benefit. So the life insurance company is not
keeping your money or "ripping you off". And as another poster mentioned...some policies pay your beneficiaries death
benfit plus cash value. All I know is that the only thing that has made money for me over the last ten years is my cash
value life insurance (it has a 4.5% guarantee). I'm glad I didn't by only term and invested the difference. Dave you need
to narrow your brush a little bit...painting your picture, as you did in this article, looks to have been done with too wide
of brush. Everyone's situation (risk tolerance, goals, needs) is different.

turk October 28 2010 6:52 PM

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If you do not want to leave a legacy to your children, grandchildren, or charity and want more of your assets to go to the
government in the form of estate taxes and income taxes to your beneficiaries, don't buy life insurance. We live in a very
certain tax environment and we know exactly what tax rates will be in the future. And if you think term insurance makes
economic sense to someone who is at the stage of their life where they are concerned with transferring wealth to future
generations, then you are wrong. Bottom line is that the decision to use life insurance vs. not using life insurance should
be the decision of the consumer and in concert with what their family values and legacy planning goals are. No, life
insurance is not for everyone, but everyone should not NOT have life insurance.

CB October 28 2010 3:30 PM

I have been purchasing additional insurance from my job along with the insurance they provide. I don't think it's fair that
when you leave a job you can't get back what you paid for a work policy unless you continue to pay the premiums after
you leave the job. I'm talking about we should be able to get the cash value that we invested in the policy which means
the insurance is unaffordable to most of us, so we are unable to keep up the premiums -- yet we can't get back what we
invested. With private insurance a person can terminate the policy and get the cash value. If I knew then what I know
now I would have put that money in a 401K instead of life insurance.

Rosalie Parker October 28 2010 1:09 PM

OR!! You can get a Return of Premium term life insurance policy that will PAY YOUR PREMIUMS BACK TO YOU,
when the policy expires! Protection of a policy in case of your unfortunate demise and you don't have all the bills, debt,
and kids gone yet. If you live to do all that, you get your money back from the premiums you paid. Also, comparing
Term and Permanent is silly.

Michelle October 21 2010 2:31 PM

$7/month for a $125K policy on a healthy 30-year-old male sounds right on the money. I'm a healthy male in my mid-
40s and I recently bought a $500K policy for $28/month.

JoJo October 19 2010 3:44 PM

I'm not real sure where you're going to be buying a $125,000 term life policy for $7 per month. Remember, your life
insurance policy is only as good as the company who sells it to you. Buy term and invest the difference could be the
worst advice I hear. The percentage of death claims paid out on term policies is staggeringly low, because people outlive
the term, and to renew is ungodly expensive 20 and 30 years down the road. Life insurance is used to protect your
family, not your own gain in investment income. Yes, whole life and UL's do have some great cash value build. But, that
is a perk to whole life and UL, not its main purpose.

AJ October 18 2010 4:28 PM

I am a fully licensed financial advisor and soon to be CFP (hopefully) and I've enjoyed reading everyone's posts. First of
all, let me preface this by saying that I am a huge Dave Ramsey fan. However he and Ms Orman are always too hard on
permanent life insurance. They both always fail to mention a few undeniable truths. One is that cash value life is very tax
favorable. Uncle Sam can't touch a penny of any distributions until they have surpassed the premium amount. Most
middle and upper middle class Americans have too much of their money in qualified IRAs,which are tax deferred but
taxed upon withdrawal, and in mutual funds and the bank, which gains are taxed annually. Cash Value Life and Roth
IRAs are a nice tax favored way to supplement retirement. Secondly, I believe cash value is great way to attack college
funding. However, I think the policy should be taken out right when the baby is born. Cash value doesn't start
snowballing in most policies until years12-14. If your child is already over 4, please go the 529 or Coverdell route. The
primary reason it is useful for college is that cash value life is not considered an asset. When your family applies for
financial aid, none the money in cash value life can count against you. That COULD be a huge factor in a financial aid
qualifying situation. Just remember every person and every couple have a different set of financial hurdles,situations,and
goals. A rule of thumb I use with my clients: If you have to think and mull whether a ballplayer is a hall of famer;he aint;
and if you even think for a second you would have a challenge at some point paying for whole life;don't!

Rich October 17 2010 9:08 PM

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In my honest opinion, buy term invest the difference doesn't work. Why? Most people do not have the dedication or
knowledge to watch their investments and some people do not even know where to invest. What I love about my EIUL
policy is that there won't be a set time where my coverage ends and if nothing bad happens to me, I can take in tax-free
income

Patrick Au October 17 2010 8:58 PM

First Life Insurance is not an investment . . . it is life insurance. To compare permanent life to term is like comparing a
dump truck to a bus. They both need a driver and burn diesel but they to do 2 entirely different things. The next time you
hear 'buy term and invest the difference' ask them to produce one person who has done that. A young couple with
children and a mortgage needs a lot of term and a smaller amount of permanent because they are going to outlive their
need for most of the life insurance when those kids have their education and gone and the house is paid off. It is not
retirement, it is life insurance. Keep it simple and to the point.

Rick October 08 2010 2:36 PM

Some UL policies add the cash value to the death benifit so that the benifciaries get the death benifit and the cash value,
so if the policy is $500,000.00 and the cash value is $50,000.00 and the owner of the policy dies then the benifciary gets
$550,000.00 tax free.

Sal Azevedo September 23 2010 7:06 PM

It seems that everyone has their own opinion about life insurance. You have to decide what your needs are at the moment
in your life and go with what you can afford these days. Some talk about investing with WL, UWL etc. Are there really
any agentcies with agents out there that will be completely honest and compassionate about YOUR needs. They tell you
that the cash value built up in a WL policy is yours. Then why should I pay intrest on borrowing my own money and my
family does'nt get any of it when I die. Who gets it? I had a chance to become an insurance agent 30 years ago. I kind of
regret not doing it. The reason is because a life long friend of over 30 years has been an independant insurance agent for
about 14 years. His annual income is over 500k a year. And the producer of that type of income is Whole Life sales.
Term does not produce that type of income for agents. So what do you think they will push. Don't get me wrong, Term
and Whole Life have their own benefits. Remember Katrina? Insurance companies for some reason... could not produce
payments to policy holders that has been paying insurance premium for years. (I really ticks me off when they say that
the insurance company will not pay because it was an act of God.) Loop holes in policies. Where did the money go?
Pockets, and surely not ours. The wealthy will not sign anything until a lawyer reviews it. Read before you sign. Educate
yourself as best you can. Then make your decision.

Simply Politics September 22 2010 2:14 PM

To say that all Whole Life insurance is a bad investment is to not know all the companies that represent it. The #1
Insurance Company has an amazing WL product for protection and the rate of return is a lot more than what was talked
about. Also if you cash out of your insurance you get your money back...also only 1% of term insurance actually pay a
death benefit so who is really getting suckered? Also each policy should be custom fit for each family depending on
where they are at.

Matt September 21 2010 7:44 AM

Blanket statements are never a good! To say that whole life insurance is the worst investment ever is an obvious opinion
and bias. I have managed offices for both Mass. Mutual and Mutual Of Omaha. I have seen some very wealthy
sophisticated investors use it successfully and some middle income as well so it does work when set up and used
correctly. The difference between whole life and Universal are 2 different debates. More than 90% of life sales are
universal and not whole life and to paint them as one in the same is a major mistake and one that is made often.

Troy Yeaple September 20 2010 11:54 AM

Dave, I agree with you on some aspects, but I think you have it wrong here. I am a 24 year old planning for my
retirement. I fund my Roth every year, mutual funds, stocks, etc. I just purchased a U Pay 15 yr for 1 million dollars. I
will have a guaranteed cash value at 65 years old of 550k. I will pay in 240k over 15 years. I will leave some for my
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family and probably draw some on the cash value when I choose too. Also, with the dividend more than likely I could
afford to purchase an additional term with the dividend from my whole life. Does this not seem like a pretty good
addition to someone's portfolio? I'd say so.

K.Ippolito September 10 2010 7:32 PM

I am going through the process of updating my life insurance as well as disability insurance. By chance I also have an
advanced degree from one of the schools that pioneered the wiz bang stuff on Wall Street these days. So, for me, life
insurance is pretty simple. Ramsey's advice is spot on as long you are one of the 70% of the "normal" population. Whole
life is best thought of as term life (with a term longer than you need) coupled with a tax deferred guaranteed investment
contract. Those returns, like all GICs, are low, because only low returns can be guaranteed, as the last several years in
the capital markets have shown. So, when does whole life make sense? Well, if you can't save a nickel, whole life is an
easy way to save. If you can't save a nickel you are likely to make bad investment decisions so the guaranteed return is a
good choice for you. Interestingly, the other group where whole life may make sense is the loaded. If you have unique, to
the population at large that is, estate planning needs, or have exhausted all other tax deferred ways to save, whole life
might just be interesting. The GIC component to me should be an asset class of its own and is so a source of
diversification that reduces the variance in the total value of your investments. So, since I may have said too much for
many, avoid whole life unless you are dirt poor or have boatloads of money and at least 3 advisors you trust who think
whole life makes sense for you.

Charlie Goodrich September 08 2010 10:49 PM

I love one of the last comments on this article "your spouse will just have to suffer through if you die without insurance."
Isn't the point of having life insurance that the spouse doesn't suffer? I heard less than 1% of term policies pay off a death
benefit. Can't cash value life insurance be used as a generation transfer and estate liquidity tool? Does Dave really think
that cash value life insurance is the worst thing for everyone? It seems like all the wealthy people are using it for kids
and grandkids.

Paul September 07 2010 4:19 PM

Joel, I think you missed the point. Why would the family be left with debt? If you're following Dave's advice, you're
gonna be debt free. The only bills will be the bill for burial, which should easily be covered if you've saved for it with the
savings. It's all outlined in the article you've commented on.

Niki September 01 2010 6:17 PM

I am an insurance agent, and I feel the Term vs Whole debate is a silly conversation. They are not comparable; they do
different things. If I die tomorrow I need alot of protection. If I die in 40 years I at minimum need to get into the ground.
If I plan correctly I will blow all my cash and mutual funds and everything else before I go and only leave the exact
amount of tax free, probate free, pennies to the dollar life insurance to get me into the ground.

David August 31 2010 10:56 PM

I agree and disagree. Term life insurance is great and fits perfect with many people in the world today. I have to disagree
a little on his return figure on mutual funds but overall he is right. The truth to whole life insurance is that it should never
be used first as a investment tool but as a way to replace income. Whole life becomes a valuable tool at the time many
people need it the least. At retirement, whole life can be used as an asset to leverage against giving you the ability to
spend down other assets usually creating a significant cash flow increase at retirement. Most people buy one or the other,
but human life value is the most important factor and you should never create a gap in that in order to buy whole life
insurance. Listen to all the facts and the key always is to get a good advisor that can help you for your specific situation
because everyone's situation is different.

Nick Kruthaupt August 30 2010 1:41 PM

Mr. Ramsey has some good points, but is sadly misguided when it comes to the truth about whole life, universal life, and
term insurance. It may be his truth, and truths might be a little different for everyone, but it should be up to you to do
your due dilligebce and decide for yourself what works best. At the end of a 20 year term, your rates in Mr. Ramseys
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example could go from $7 per month to $300 or $400 per month on a new 20 year term, then if you don't renew your
policy and you die what will your family be left with? Debt and grief.

Joel B. August 30 2010 12:43 PM

I just signed a cash value life insurance and I am not convinced I made the right decision, plus my agent put the wrong
beneficiary in the policy. It has been a month since I signed and the policy says they give you 14 days only to change.
Do I still have any rights to cancel this policy? Please advise, I am a single mom and I think I was cheated in the process.
Your assistance will be greatly appreciated.

Patricia August 28 2010 8:52 AM

Ok your making an usumption that a person is going to save so much with in 20 years. What happens if they don't. Do
you know the percentage of persons that are able to save for thier retirement. I believe every person has thier own
individual need for term or whole life insurance and we can't go in life sterotyping and making assuptions for everyone
to have the same need. Not everyone is desipline enought to save.

Blanca August 26 2010 6:06 PM

I have what is called a Flexible Premium Variable Life Insurance. I am trying to pay off my debt and have to contribute
at $100 a month to this. Should I take the penalty and get out?

MARK August 25 2010 9:09 AM

I have two whole life Insurance policies that are over 20 years old. I have about 20,000.00 in loans against the cash
values (approximate. 10k each). Should I cash them in and buy term, I am 50 years old and fit?

John August 22 2010 8:33 PM

Buy term and invest the difference (or lose the difference as of late) is an awful idea. Whole life is not for everyone but
it's an excellent place to provide permanent death benefit protection and grow money safely in a tax advantaged way
over time. Make sure you find a good highly rated mutual company. (New York Life, Mass, Northwestern Mutual)
These mutual companies pay dividends which can be used to offset the premium or build the cash value and death
benefit. You can also buy a policy now with a specific paid-up date. In other words, you choose when the premium stops
but the death benefit and cash continue to grow. Typical rates of return after the first few years is around 5%. Where can
you get 5% returns on your safe money these days? There is about a 1% chance that a term policy will pay off. A whole
life contract is guaranteed to pay out more than you put into it. Most CPAs agree whole life is the most tax advantaged
vehicle in our tax code today. Money grows tax deferred, death benefit is income tax free, it pays a tax free dividend,
money can be accessed tax free in retirement via loans, the basis is surrendered first and in most states there is some
creditor and lawsuit protection.

Chris August 21 2010 11:49 AM

If you are only going to need term insurance for 20 years and be self insured....then why dies Dave still own it? Because
Sharon wants it! Not everyone can afford the high premiums of term at age 55 or can medically qualify. I do sell life
insurance. I am always amazed at two statements I hear: Why didn't I buy more of the permanent? I still want coverage
and my term insurance is running out. Hind sight is always 20/20 right? Amount of coverage is ALWAYS more
important than type of coverage.

Dusty August 21 2010 8:27 AM

If you are disabled then the premiums could be paid for by the policy if you have the waiver of premium ruder in it. Also
my policy has the ability to convert to a permanent policy (from term) if I am permanently disabled....and the company
pays the premium. Useful since I would no longer get a paycheck or be able to put money in my 401k for retirement.

Dusty August 20 2010 9:05 PM

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I am a 60 year old married male, who was naive enough to take out a cash value (yes - I was advised that it was the same
as whole life)life insurance 15 years ago. I didn't realize it then, but time has come for a premium change and it has gone
up 10 fold. Due to medical problems, I am on long term disability and will never be able to make such payments. What
options do I have by way of even being considered for term life insurance at this age and a medical history. To make
matters worse, my youngest has just got into college and my wife lost her job a year ago. I have to call my agent who
signed me on - so before I do call her, is there anything I should know to renegotiate to a term, if they even have that
option? Thanks in advance.

Joseph Rego August 18 2010 1:26 PM

I am a 29 year old married male with no kids yet. I am confused as to whether I should get a 20 or 30 year term life plan.
Any thoughts?

Jonathan August 16 2010 9:13 AM

Adam, you sound as if your an agent that sell that "cash Value" garbage... Last time I check the ROTH IRA grows tax
free & you can access your principal at ANY TIME for ANY REASON WITHOUT TAXES OR PENALTIES and
UNLIKE your cash value policy guess what, the client wouldnt have to pay interest to take out their own money, which
should b criminal. How would people feel if they "saved" money in the bank then when you finally want it, the bank then
says you must close the account(surrender life insurance) or pay them interest to take your own hard earned money out!
Its such a ripoff! you know who Cash value policies are a good fit for, the companies and agents that sell them, thats it!
And to answer the prior question about Universal Life(UL) someone raised, UL is closely resembles Annual renewable
term with a saving element but the problem is ALMOST ALL of them eventually expire or implode because the cash
value eventually isnt enough to subsidize/continue the policy at the "scheduled" premuim & the client loses the coverage
and all the supposed cash value!

Ed August 11 2010 3:33 PM

wow, sure is a lot of trash value agents still saying how "great" whole life is.it is garbage !!

trash value August 11 2010 10:41 AM

I own Whole Life Insurance as well as Term. If you are going to own WL, than treat it as an additional asset class.
Purchase it from a highly rated "Mutual Company." Your cash value will be based on an adjustable interest rate as well
as an annual dividend. Cash values grow exponentially over time with out the risk of Market decline or taxable gains.
For me WL is a supplement to my insurance and my overall financial plan.

Dave August 11 2010 8:55 AM

The myth of investing the difference and paying for term has now become a tale to be believed by many. In truth the
average person who buys insurance does not hold a securities license, nor do they have a knowledge of the world of
investing. Invest in what? Mutual funds, IRA's, saving bonds, trusts, MEC's? Whole life is beneficial for every family,
just as well as term is for every family. The importance of insurance is protection. The reality is that the average person
puts there trust in the insurance professional. The problem that exists is the greed of one's own self, and the lack of
compassion to solve people's problems. I have come across various income levels, and all have in some way been duped,
sold bad insurance, or have gotten bad financial advice with insurance. The insurance question should be answered by
competent agents who want to help people adequately protect themselves and their families. There are agents who do
look into policies from the past and advise how to correct it and give something greater for the future. The insurance
agent of the 21st century has to be a helper of people and not a searcher of commissions. Term and Whole life work hand
in hand, but the right agent has to give the right knowledge for the right circumstance, otherwise the foolishness of
investing the difference will continue.

Insurance Scholar August 10 2010 8:23 PM

Buy Term and Invest the Difference if you 1.) cant afford whole life 2.)are not in a 30%+ tax bracket 3.)down own
stocks or a 401k 4.) over age 45

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brian August 10 2010 12:08 PM

As a new investor of whole life, I only see the upside to a new way to invest. If anyone would study the demographics
and history of the market, the typical mutual funds and 401k investments will not survive and taxes will only go up. This
is why whole life is so great due to tax free growth and using the cash value as your own banking system to avoid paying
interest to some other institution. You can access your money at anytime where many investment vehicles force you to
wait till you are 59 1/2 unless a penalty is paid. If you can find the right financial advisor that specializes in this, you can
really provide money for your entire life and even in the worst case scenarios.

Adam August 09 2010 10:23 PM

Im in the process of reviewing my insurance policy. Im single/divorced with no kids. I have a $250,000 Term with 15
years left, Ill be 55 at the Terms end. I also have a $100,000 Universal Life. Ive had both policies since about age 30. Ive
read that the UL is not a good investment policy and I understand peoples arguments and agree...somewhat. However,
Ive yet to read anyone comment on the same idea I was thinking involving the UL. When my Term runs out at 55 Ill still
have the UL insurance to use, which I think is a good idea. I dont expect my retirement or investments to make me
weathy...Im tying to be realistic. I refinanced my house for 15 years and plan to pay it off in 10. I will be pleased if my
retirement and investments net me about $25,000/year, again being realistc. I dont think $25,000 net is bad combined
with having no major debt. Im not planning to use the UL as an investment. If I pay into the UL till about age 65 or so
and then allow the money earned in it to make the payments for me it should carry me to nearly 100. Im also in the
process of starting a Roth IRA and contribute about $200/month. Most examples given say not to use the UL but invest
the difference with a 10% return. Where can you get a 10% return? I dont think 10% is realistic. Is the idea about the UL
wrong or not?

Chris August 06 2010 10:06 AM

I fell for the forced savings Whole Life Policy almost 30 years ago and bought policies for myself, my wife, and both my
kids. We continued to pay these policies when we were trying to support a young family and struggling
financially...times were tough for a few years but we kept it going. When my daughter turned 13 she was diagnosed with
Juvinile Diabetes and is Insulin dependent...thank goodness we have a policy on her that can be upped every 2 years after
she turned 21...we have upped it 3 times and she now has the ability to increase it and have life insurance as a part of her
financial plan...without this option she is uninsureable. My wife and my policies have a cash value of about $100K and
growing rapidly and are outperforming the market which helps cover the losses of my other market investments....I wish
I had bought more earlier. We would not want all of our investments in WL but its a great add on since I am drawing a
Teamster Pension and was able to back it up with my WL and 20 year Term instead of taking a Spouse Option (spouse
gets 2/3 of my Pension if I die) on my pension. This saves me about $500 a month and the WL policy dividends pay for
the Term insurance. I'm glad I have it now and would have definitely not saved early on when times were hard.

Dirtwiz July 31 2010 11:30 PM

We are canceling our ULI insurance. It has a cash value of 27K but we also did a foolish thing an look a loan against it.
My question is what amount do we pay taxes on. Do we subtract the premiums over the years and only pay taxes on the
difference. Does the loan have an inpact on taxes?

mcl26022 July 31 2010 1:14 PM

I purchased 2 whole life policies whose death benefits are $20K. Both policies have been paid off. Total costs were
$4656 for one and $6048 for the other. Due to interest accrued, each one's cash value is over $10K, and death benefits
are about $22K and $25K. I'm no longer paying anything and the benefits are continuing to grow. In this case I think I
made the right decision. Because of my age (55) and medical condition, I have a $100K 20 yr term that costs $53 per
month - $8 more then both of the whole life policies.

Dave July 26 2010 4:49 PM

I have loved my cash value life insurance, the last quarter especially and the last three years as people had their money in
the market and were losing. I lost none of it. I am making money not losing it. I feel pretty secure with it

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George July 16 2010 6:10 PM

I am sorry to say, but my mother had a 100,000 whole life policy with New York Life and she had set it up to be put in a
trust tax deffered. she had 10,000 set to directly pay her funeral cost, 60 something set up to go to me and the rest went
to a loan she had taken out. So I do not understand how you people are saying a 125,000 whole life policy,is not worth it
and term is better?

chopps July 15 2010 8:57 PM

I have an concern my husband & I have life insurance, both whole life I believe his is worth 50k mine 25k, is this worth
holding onto? We have no children and not in debit currently and have all our funeral arrangments taken care of? any
advice would like to invest this money/ had policies for 20 years at least?

Nancy Chambers July 13 2010 3:34 PM

I went to my bank they offered very little on my money, so i bought whole life i believe, but not on my self on my just
born son, i pay $999 a year, so far its divident is slightly over 6 percent, i am doing this for his school costs, did i mess
up?

sedin July 03 2010 3:38 AM

My Aunt had a whole life policy, she had it for 40 years. It was for 10k her savings was about 8k she paid about 8k into
it. she only paid it for 20 years the last 20 years it was suppose to be no cost as we thought. When she passed away and
we filed the claim they sent us a check for 2k she did not get her savings it was forfitted... we asked what happenned to
the other 8k on the death insurance and they said it paid the last 20 years!!!!!!!!!!! So please don't tell me that wholelife
policy is good it is a total rip off all the way!!!

Luci Lu June 30 2010 12:44 PM

I am 60 year old and would like to buy a life insurance but I am very confused of that which insurance I should buy is
good for me? please advise.

Monica June 27 2010 4:53 AM

I disagree and agree with what Dave is saying. You would be foolish to buy a $125k of whole life. It would be wise for
someone to buy a $25k whole life and a $100k of term. Most term policies are 20 - 30 years. They cover you for the
mortgage, cars, kids, etc. Once that term renews after 20, 30 years, the cost will be unaffordable. You can cancel that
policy, and you still have the whole life in place to take care of death, burial needs, and then some. Some companies
offer paying a whole life in 10 - 15 years too. So, in 30 years, you could potentially be covered for all of your life needs
and not have to worry about paying it while you are at the retirement age. Life insurance isn't about investing. It's about
protecting what you have, your family, your home, your possessions. I wouldn't suggest cancelling any type of life
insurance unless you are going to replace it or supplement it with something else. Chances are the cost you are paying
now is more affordable than if you started a new policy. Your health and age all come into play with life insurance. You
would be paying the cost of a 35 year old instead of a 25 year old, if you were 10 years into it. Also, each state is
different with the cost of insurance. If you have life insurance questions, talk to someone who is licensed in it. I'm sure
they would love to talk to you and they can answer all your questions or concerns. If you need your sick, you're not
going to go to your bank right? You would see a doctor. Just a few thoughts.

George June 22 2010 1:23 PM

I'm 65 years old,getting ready to retire, (Through Aflac),I've just signed up for a 10 year term insurance policy with an
accelerated death benefit and a waiver of premium benefit. The policy has a conversion privilege. Proceeds are payable
at death. No dividends are payable. Annual Premium is $333.84. I only purchased it strickly for burial.I don't know what
to expect from the premiums if I live longer than 10 years. Was this a mistake? I am having second thoughts about
purchasing this. I would appreciate your advice. Thank you.

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Carol H. June 20 2010 11:48 AM

Is Term Life insurance necessary or would I be better off investing my premium for the next 30 years?

need advice June 14 2010 12:42 PM

So Dave life insurance does not make a good investment? Can you tell me what investment would make a good life
policy? The government is going to want their take on my estate when I die. Why not buy a whole life policy that will be
there tax free for my family?

Stu June 08 2010 9:42 AM

There is whole life insurance that puts 85% of your premium in cash value in the first year -talk to a Mass Mutual agent.
Dave Ramsey's generalist statements are false.

GRetchen June 04 2010 12:36 AM

I have a paid up whole life and a universal life. Both policies have more cash value than I've paid in especially the whole
life it grew 5.5% last year and no taxes owed. My 401K, ROTH IRA,IRA, Stocks and Mutual Funds have all had
negative return averages for the last 10 years. I'm tired of the big retun promises and zero return or negative return
actually received. I'm very pleased with 4-5.5% return on my life insurance cash values.

Greg June 03 2010 9:15 AM

I'm not understanding the reason for not liking whole life. What if you were able to have a mixture between 401ks, a
Roth, and some Cash Value Life Insurance? Wouldn't you be able to make your retirement funds last longer if you were
able to use the Cash from a whole life policy when the market was bad in retirement? You know, investing 101, buy low,
sell high. Use the cash value life insurance so you don't have to sell low. Just my thoughts.

Mike June 01 2010 12:21 PM

"Worse yet, with whole life and universal life, the savings you finally build up after being ripped off for years don't go to
your family upon your death. The only benefit paid to your family is the face value of the policy, the $125,000 in our
example." This is a half true statement. It depends. Not all cash value life insurance policies are designed that way. That
is only one way to structure the death benefit of a life insurance policy. Depending on one's goals, the policy can be
structured so both the accumulated cash value and the death benefit are payable at death. Simply select the face plus
accumulated value as your death benefit option if you want both the cash value and the death benefit. So, now you know
the REAL truth about cash value Life Insurance, Your family can have both.

Michael May 30 2010 11:08 PM

Good article, but this "buy term and invest the difference" theory is a little outdated. According to your plan, every dollar
you have invested is at risk. That's never any good. In my experience and research, cash value life insurance isn't a nest
egg, but a supplemental with a guarantee. It's safe to say that bonds are the safest of the volatile products out there. But
when the market is down 60%, bonds are down around 25%... assuming your portfolio is well balanced, you're still
losing at least 25%. Does that sound safe to anyone? And we haven't even gotten to the current tax bracket structure,
without something guaranteed to offset our retirement income tax, we're all in for a nightmare. Out of the 4 products that
can create tax-free income, cash value life insurance will provide a rate of return that blows those out of the water, and
depending on the company, Roth IRA's fall below it as well. 75% aggressive and 25% conservative is just about as
aggressive as ANYONE is going to suggest...why not invest your 25% into the product out there? Cash value life
insurance added to a portfolio INCREASES rate of return, while LOWERING risk, or standard deviation. That's a fact
you can't really argue with. I do agree that CVLI should never be anyones retirement parachute, but it should definitely
be chosen over term. 98% of term holders don't use the insurance. THAT, my friends, is how insurance companies profit
the most. On an ending note, my statements are not opinions, but fact. Type "adding cash value life insurance" into
google, and read Ibbotson's article and comparison. I bet you'll rethink this un-evolved theory.

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Buck May 29 2010 11:20 PM

I work in the senior market as an insurance agent with retirement planning on all spectrums, and have seen both the pro's
and con's on different types of life insurance. Term insurance is good because its cheaper and covers you during a time
of "hightened risk", but the percentage of people who actually die during term being in effect is less then 5%. The best
alternative is a hybrid of both, a smaller WL/UL policy that covers final expenses with a term rider to cover during
hightened risk. Like anything else, there are many different kinds of term insurance as well, be careful! Some policies
renew ever year, 5 years, or 10 years, causing your premiums to increase, and when you hit your 60's and 70's, the
premiums are next to unaffordable, not to mension if you live past 80/85/90 (depending on the policy) your term ends.
Also like many people have posted, you don't know how the market is going to do at all, and most people won't even
invest the difference as they say they will, they will blow it like everything else. Yes, whole life is higher priced, but it
never ends, no matter if you live to 120. In today's society with medicine and health break throughs the way they are,
why take the chance??? It's protection, if you look at it as a bill, you are in the wrong mind set to begin with. Life
insurance ISN'T FOR YOU! It is for those loved ones that you will leave behind when you pass.

Joel May 29 2010 1:21 PM

I too have read Patrick Kelly's Tax Free Retirement (as described by the other David in these comments) and am not sure
Dave Ramsey's right on this one. I understand what he's saying, and why he's saying it, but from a 30,000 foot level I
think Patrick Kelly's approach might be better. Just sayin'.

David May 28 2010 9:53 PM

Dave, For a married couple, wouldn't it be nice to own life insurance in retirement? To me, it makes sense that we could
spend more than interest and growth on our investments and actually get into the principal of our savings without
bankrupting each other. That's why we own whole life insurance. Term just won't last as long as I plan to live... This
strategy also let's me be more conservative with my investments. I noticed you said that mutual funds perform 12%
outside of a life insurance policy. When? certainly not on average over the last 10 years...

Heather May 26 2010 8:03 AM

IUL - Indexed Universal Life, Dave we need help what is this and what is your take? We are being approached on this as
a Term + Savings account and there is NO good information on this plan. I'm looking for guidance from Dave on this.

John May 23 2010 9:47 AM

Great article, It is very important for everyone to have health insurance.If you don't have insurance and you have to go to
hospital, you'll have to pay over $20,000.That happened to a friend of mine.I know a site that offer the cheapest possible
price for health insurance, free quotes and a lot of benefits.

carol May 22 2010 10:16 PM

So what happens when your term runs out and life has thrown you a curve ball, as it always does, and you dont have any
investments left? What if you play with mutual funds and they go down and you lose your money? Why put my money
in mutual funds when I will be taxed on any withdrawals? I can put it in my life insurance and access it tax free...And
why not buy a universal life policy that I can access while I am alive....My wife has a policy that she can access her
policy in the event she becomes terminally ill or comes down with cancer,heart attack, stroke, needs an organ transplant,
etc....I think I will keep what I have....Ive seen too many families with term end up losing everything because the TERM
ran out...

Terry Trexler May 22 2010 9:48 AM

Has anyone read "Tax-Free Retirement" by Partick Kelly. I thought I knew what to do until I did.

David May 20 2010 6:04 PM

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And if you wake up with whole life at age 80, no kids to feed, and no need for life ins...cash out your policy. Your gains
are TAX DEFFERED. Whole life isn't for someone looking to get coverage for 100 bucks a month. Its for someone
looking to diversify their retirement potofolio and avoid taxes at all cost.

Jack May 19 2010 1:35 PM

Dave, we're thinking of cancelling our whole life insurance for 20yr term insurance. My wife is a little worried that 20yrs
is insufficient because when the term is up, our premium would be very high and that would also be the time when most
of the critical illnesses come in. Should we get a longer term?

Christopher May 17 2010 4:44 PM

Karen -- Why are you paying the $2700 for the funeral expenses? You can't afford it! That's why you are using Dave's
program in the first place! Not to be crass, but I'm sure your dad won't mind a little less at his funeral. Did he not have
any money at all to pass along?

Bill May 13 2010 5:32 PM

So where do i sign up for 12% return on a mutual fund? Sounds great, but its been hard to find that kind of return in our
wonderful economy. I've always been advised to have a mixture of coverage. A lot of a term and a little permanent. I am
going to die and the cost of the permanent will be still be less than a direct funeral costs, If I happen to out live my term.
Death benefits are a tax free way to leave a legacy.

John May 06 2010 9:20 AM

Most term insurance will not be inforce when you die. And most people who buy term insurance spend the difference.

Joe May 04 2010 10:02 AM

Rhonda - if the beneficiary of the life insurance policy died before your husband, and there were no other contingent
beneficiaries, then the proceeds of the policy should go back into your husband's estate. In that case, your husband's will
would determine where the proceeds (along with all other assets in his estate) would go. If your husband died without a
will, then your state's intestate laws would determine how his estate would be distributed. Hope that helps.

Wade April 29 2010 12:19 PM

About 23 years ago, my wife & I bought single-payment life insurance on our respective lives. Now, these policies are
paid-up and the cash surrender value is equal to about 86% of the death benefit. Should we get a replacement paid-up
policy with a zero premium? We own our home debt-free and are debt-free. We also have substantial savings. From this
article, it would appear to make sense to cash out the policies and buy term insurance.

Julio April 25 2010 7:21 PM

Term is best to provide needed liquidity for dependents. But this thing known as Estate Tax is looming. With death
benefit only life insurance (minimal cash value) that can deliver 5-10% tax free rates of return at or beyond life
expectancy, what a great way to pass the baton in trust (outside of the estate) with spendthrift provisions f/b/o kids, grand
kids, etc. Using Whole Life as a savings device? it is a joke and i cannot and will not recommend it. Perhaps minimal
death benefit/maximum premium used in a variable universal life envelope can work as a deferred vehicle with good
income provisions at or beyond retirement but the fees are steep.

Kirk Hill April 20 2010 3:16 PM

my spouse passed away 3 yrs. ago yesterday. I recently found out from a letter from the ins. co. that he had another
policy, and he never changed that one and put it in my name. we were married 22 yrs. The person who is on the
benificary, also passed away. Is there any chance of me and my family to get that policy. He really had no blood with the

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one he left it to. He's divorced, no will was left. All I really know is that the day after we got married, he told me he
changed every policy in my name. I'm disabled, cant work. please help me

Rhonda April 20 2010 1:42 PM

I don't exactly agree with this article. He fails to mention the fact of the possibility of death before accumulation is
substantial. Example: 28 year old couple with 2 small children. They both are teachers and want to make sure their kids
get to college if something should happen to them. Start with a lot of term and investment; the term provides an instant
nest egg while the investments grow. Once their kids are out of school then of course focus on putting more in to
retirement. That is just my opinion!

stuart April 15 2010 6:20 PM

If I am an older person, say 65 and have an extra $15K that I would like to do something with other than letting it just sit
in my savings account. A permanent life insurance plan is a great idea. If I am planing on leaving this money to a
beneficiary why not just use this $15K to buy up a $30K policy. Life insurance is never taxed when it passes on to a
beneficiary. Savings, stocks, mutual funds, CD's, etc. will all have a tax to be paid when they are passed to another
person. Being an older person, term can not be purchased st this age. Why note use whole life ins. as a way to pass on
money to another person???

yuri April 12 2010 9:48 PM

My husband and I have $150,000 in whole and $600,000 in term. What is the best way to transition away from whole
life?

Theresa April 12 2010 3:38 PM

I am 27 and in good health. If I buy a 20 year term i will be 47 when it is up and if I want to buy another product for life
insurance I will be paying more due to mortality. I do not agree with what the article is saying. If you buy whole life you
are garranteed the face value up to death (100% return) for your family. That is why it is called "LIFE" insurance. The
life insurance companies are the largest institutes in the World, even bigger than oil and that to me is a solid company to
be putting my money on rather than a stock market where you have no garranteed return on investment, especially when
the market crashes. The whole life gives you a minimum 4% interest and above, tell me where a savings account can do
that. If you invest in stocks, you might get 4% but then you have a capital gains tax. Borrowing against your whole life
with the cash value is "tax free" it is your money to take out after retirement and then you still have your cash value to
leave for your kids and loved ones. This is just a thought i am not a guru like Dave.

brandon April 08 2010 2:07 PM

I too have just heard about Index Universal Life Insurance. I think it sounds like a wonderful idea. I am worried that
investing in Mutual funds may not work the best in 40 years when I want to retire, but with the Life Insurance I am
promised a constant return, all my investment and insurance money when I retire then die. I want to know why it's a bad
idea.

Rachael Morgen April 06 2010 8:10 PM

You never know what your going wake up with.......whole life til 80

Alfonso Freda April 05 2010 6:38 PM

Dave, Reading what everyone had to say about whole Life and Term insurance has been very helpful. The conclusion is
this to me. Buy term insurance and at the same time save so that you are insured with cash in the end.

mae April 02 2010 10:50 PM

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All I want to say is that I have listened to the gurus all my adult life and lived by their rules, and when the market
crashed at age 63 I lost 40% of all savings and retirement. I have 7 years left of a term ins policy and will not be able to
buy ins when it ends. Instead of being self-insured the way it was supposed to be, I am very concerned that we will ever
be able to survive. And the gurus sit back and say, "Sorry".

Ray Bobo March 29 2010 6:39 AM

So let met get this right, you're saying that it was a bad idea for one of my dear friends to buy a whole life policy through
a mutual company 24 years ago for $700,000 in death benefit and pay in $18,900 a year and now have a total cash value
of $1,552,737 and the policy is paid up and has a total death benefit of 1,880,955? Now he receives a little over $80,000
a year in dividends and this policy was used with money that would have gone into savings because of security of
principle. I need a lot more reasons to tell my friend to cancel this policy just because you say that whole life is a rip off.

Doug March 24 2010 9:07 AM

Rick, it is not wise to invest in a whole life plan. However, it is wise to take advice from a man who has helped and
inspired millions of people to win with money. Like the article says, you will be self insured after 20 years if you handle
your money with common sense during that time period. Thanks Dave for all you do!

Kevin March 24 2010 12:37 AM

Permanent insurance is a great product for the right people. The advice given here is aimed at those who live paycheck-
to-paycheck and have a need for a signficant amount of insurance. Term is cheaper and affordable when you can't afford
permanent/whole life insurance. When people can afford it, and understand the benefits of owning a whole life policy
with a good, mutual life insurance company, they are wise to obtain one while they are still healthy enough to qualify. I
also find it interesting that Dave recommends buying term insurance and then recommends an agent to buy it from. My
guess is Dave is being paid by this agent for the business he is sending them. A full disclosure might be proper here.

Rick March 19 2010 12:01 PM

Thanks for providing this helpful advice, I got some messes to clean up.

Mark Elliott March 18 2010 11:06 AM

If I put my money in mutual funds and the market tanks, what do I do then at 57. I do not disagree but mutual funds are
some of the most volatile investment vehicles available.

Darrell Powell March 16 2010 10:25 PM

Dave I couldn't agree with you more. I am a fee only financial planner and I have never seen a need for whole life. There
is a lack of knowledge out there about investing and insurance is not an investment. I know of insurance brokers that
don't even advise buying whole life. If someone is asking you to buy whole life ask them what else they are licensed to
sell and 99% of the time they can't sell other securities. I can put my clients in whole life and variable products but I
would never do that to them! Thanks for the informative and consumer friendly site. Bob

Bob March 04 2010 3:16 PM

My good friend H.K. purchased a term policy some years ago when his kids (and he too) were younger. As Dave
advises,he planned to invest the difference,but like most people I know,he didn't. Life got in the way and also his
earnings did not increase as much as he expected. The initial term ran out,and while the policy was renewable year to
year,wow,you would not beleive how much the rate increased each year! He continued to renew for a few (3yrs I
think),but then dropped itbecause the cost got out of hand,so now, no life insurance! He recently contacted several agents
to try to get a new policy,but his age isn't what it used to be,his health definitely isn't and approximately 20 insurance
companies flat out declined him,and the one company that would cover him was charging a very high premium rate for
the maximum they would insure him for,which was only one fortieth,yes that's 1-40th of what he had. Now he says he
wishes he had gotten a whole life policy years ago when the premium WAS more than the term policy... BUT NOT a lot

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more. I know this story well,to my shame I'm the agent who he got the term policy from. I should have been more
persuasive in presenting what was a very well valued whole life policy at the time,but i left the choice entirely with him.
What do you think ?

Jim Mc March 01 2010 9:57 PM

My father bought a whole life policy and it was the best investment he ever made! It has had an average rate of return of
6%/yr. AND it doesnt go down in value. I just used some to buy my first home.

Ryan February 23 2010 3:27 PM

Dave does not account for what can be done with paid-up additions in whole life insurance. Buy term to protect against
premature death to cover mortgage, raising kids, and replacing income, but bank on yourself with WL insurance and
paid-up additions. The best plan, in my opinion, is a mix of both. That way, when your term MAY expire someday, you
have permanent coverage nobody can take from you (especially when you probably need it the most in later years!) With
WL, one creates an immediate emergency fund (with guarantees and possible dividend accumulation), tax deferred
growth,a TAX free death benefit, and yes, one can use living benefits of life insurance to supplement their retirement
with tax free money. Perhaps after they have used the money once for their kid's college education, and paid themselves
back via a loan from their own cash value. Dave does not account for outstanding life companies like Country Life Ins
Co. Permanent life insurance from a strong company can create wealth over 30+ years with guaranteed values. If
everyone believed in a whole life insurance concept within their portfolio, our society would probably be a little better
off...

Jeff February 20 2010 2:11 PM

We bought a $100,00 whole life insurance policy in 1993 which has a projectd Termination age of 64 and has a fund
value of $5,241.20 and cost $36.25 a month for my husband who is now 45. We also bought a $119,595 policy with a
projected termination age of 65, has a current fund value of $8,055.51 and costs $47 a month. My question is what do we
do now? Should we cancel the policy which doesn't even cover us until death and use the fund values to pay down debt
and get term insurance? Or should we hold on to it and try to get somethig else to cover us until death?

Jan February 08 2010 12:49 PM

I am 39 years old and my husband is 49. We have 3 children and live pay check to pay check. We have no savings. I
pray that nothing happens but my husband is the sole provider for the family, what kind of life insurance do I need in
case something were to happen to him and me jobless?

Kelly Barnes February 08 2010 5:46 AM

I have a brother that is 19 months older than I. But He is homeless at this by his choice in another state. Would it be legal
for me to buy Life Insurance in his name with me as the beneficiary. Basically to cover death issues if it happens??? I
don't have power of attorney or anything. Also I don't know if he has any type of will made or not. I would think not at
this time!

Josie Hayes February 04 2010 3:37 PM

My husband is 68 and in poor health.Is it still to late to buy life insurance.And if it is not,where do we get it?

Doni Healy February 02 2010 2:53 PM

Do I have enough, or maybe too much life insurance? I'm 48, recently married for the first time. My wife is 36, and we
are trying to have a baby. Only one other child, my stepdaughter, who is 11 and we are raising her. I signed up for 25
year term-level insurance from USAA of half a million (about 5 times my pay). I checked on 10 times my pay, but even
though healthy and nonsmoker, at my age it gets VERY expensive for 25 year. I'm thinking maybe I should have gone
with 15 to 20 year term since that is what I hear Dave say, and the premiums would be more affordable. Some stats: our

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house is paid for, and we have no other debts. We are looking good as far as retirement benefits, 401K, college savings,
mutual funds investments.

David February 02 2010 1:32 PM

But after the term policy runs out and you have out lived it and you have all of this wealth then how does your spouse
pay the estate taxes when you die? We dont live in a black and white or utopia society.

Dewayne February 02 2010 10:02 AM

I have a very big concern - I used to own a Cash Value Life Policy. I listened to Dave Ramsey's advice and I went out
and cancelled my life policy and I bought a lot of Term Insurance. A few years before my policy was about to expire, I
discovered I have cancer. I was told that it I have my old Cash Value policy, my cancer condition would be covered.
However , my term is expired and now I am uninsurable. No Insurance company will sell me a policy. My savings went
from over $750,000, but is now worth $305,000 because of the market returns that Ramsey said would be worth lots
more. There is no way that amount covers my needs, especially now that I will pass away soon. What is your advice
about how my plan worked out?

Clayton January 25 2010 6:27 PM

I have read thru all the replies and comments. People!!! When Dave was saying buy term insurance and invest the
different. He doesn't mean to ask you to buy the insurance and then invest your money into a short term investiment(Day
trading). You actrually should do it as a long term investment as in a UL or WL, you going to pay it for a long time
anyways. In order to see the actrual differences, you have to be able to leave the money in the market for it to grow. S &
P did lose 35% in the last couple years, but actrually gain somewat around 10% over the last 10years. If you even have
some sense on investment, you wouldn't even post something about short term lost as anything short term has risk. Also,
soemone claiming paying double for 15-25 years on term insurance and would get all money you paid if you don't die. I
think this apply to some of the WL and UL also that has this feature in them. However,think twice before you do so, the
only reason why any insurance company willing to give you back the money is because they used your extra cash to
invest in the very same market.The 10 to 20 years would give them enough time to balance out the risk to get their 12%-
19% Rate of return to cover their cost. otherwise, how can the insurance company get their money?I don't think any of
them are out there try to make the poor people's life better.NO!!! They are out there try to make money off us. And last,
tax issue, in Canada where I live, we got many option to offset this such as RRSP/Tax free saving account which can do
the same thing as UL. RRSP let u lower your tax bracket and get the tax back and TFSA let you invest and not getting
tax on the gain.

Frank January 22 2010 11:01 AM

Has anyone hear of or been exposed to indexed universal life isurance?

Phillip January 21 2010 10:12 PM

Being a recent graduate of FPU,I began shopping for term only. Having sold W/L and U/L for a large insurance
company, I have both presently. In my post FPU search I have been made aware of a product called "Indexed Universal
Life". It was presented in a manner that was tax free as not only a deat benefit but also retirement income (also tax free)
in the golden years. The "Indexing" concept was explained in that I would be guaranteed a rate (presently between 8 and
12 %), if the market ever dropped below this stated rate, my growth would go flat and remain at the stated rate. No up
side benefit but down side protection, as well as all growth would be tax free. Does this sound feasible? Has anyone else
been exposed to such a product? Please respond!!!

Phillip Byrd January 20 2010 9:40 PM

If someone has me named as the beneficiary on their life insurance, will the company make it more difficult to collect
since we're not married?

maia January 17 2010 10:44 PM

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My husband and I bought our fourth and final home 8 months ago and i have been seeking insurance to cover the
mortage incase something was to happen to him . He works and I dont but the big prob here is that 2 1/2 years ago he
had trouble with depression and was admitted to the VA hosp for 72 hrs observation for sucicide and we have been
turned down for term life insurance because of this and even tho he is doing great now and takes a few meds it is still a
prob getting insurance . If we dont get declined then the monthly premium is not afforable ! Any advice ?? My fear is
something happening to him and being stuck with a 200.000 dollar house that i caint pay the mortage on and them
forcloseing before i would have a chance to sell and my credit being reuined ! Any advice would be grateful !

Denise January 14 2010 12:22 PM

We started the debt snowball on the first. We dwindled our savings down to the thousand that Dave says to do. Cut up all
credit cards and jumped on board to get things paid off. Then....last Saturday my father passed away. He left all funeral
expenses to my sister and I. So here we are facing not only the expense of making the 500 mile trip but trying to come up
with $2700.00 fory share of the expense! So here I go... Hoping to qualify for another loan. I regret using my savings!
His program has some areas that each person needs to decide if it is best for their situation to only have $1000.00 left in
savings!

Karen January 13 2010 5:42 AM

Many people are a TERM candidate and others are WL candidates. The only way of knowing who won the argument is
by forwarding life 30 years. And if we do, we will notice that we all had a very different outcome than we think today.
Buying WL doesn't mean "Do not invest". And those who are on the "buy term and invest the difference" boat... tell me
where to invest??! I have never seen a person who has actually said where they are putting the difference. I know: They
don't, they spend it, or they do it for 3 months and forget about it and 7 years later the WL person is ahead of the game.
WL is a long term project; don't buy it for less than 20 years. TERM is great, but depending on the state that you live it
might expire as early as 80 or after 60 it is too expensive to maintain. I own both, and I also invest in a retirement plan, a
stock portfolio and real estate (a little apt I own and live in), I know that if I continue in this path I will be financially
secure and not because of WL or TERM, but because I made a plan and I followed it.

finadviserNY January 11 2010 6:27 PM

Dave, No two life policies are the same. Assumptions that are made in your example do not take into account the taxes
charged to the mutual fund. Nor do they account for down turns in the economy. You do not account for the use of paid
up additions in whole life insurance. Life insurance is really no different than any other product. If you want to own your
policy( just like owning a home or a car) there is a price associated with doing that. If you don't want to own it, rent. Or
in insurance terms, get a term policy.

Rob January 11 2010 9:53 AM

We purchased a WL policy many years ago. I was educated the same way to buy cheap term ins. for insurance and invest
the difference for growth. But we realized it was almost futile to chase interest rates when you end up paying a majority
of it back in taxes. You may obtain a lead but it can be an awful ride and stressful. And estate taxes are the worst, they're
the biggest money maker for the government. So to mitigate that, we bought WL. Didn't pay anything out of pocket, only
transferred existing assets annually into it. Paid $30k annual for 13 years and had a cash value about $500k using PUA's
(Paid Up Additions to multiply the dividends paid). After that it was self sustaining and we are withdrawing $31000 a
year till age 95 to use how we like tax free. Whenever I die, hopefully in my 80's or later, there will still be $220-300k or
more left in there to pass on tax free. And with this, I don't get just the policy amount, I get every dollar in it. It
contractually accrues dividends every year at a guaranteed rate but has always done better and the past 2 years has
matched or outperformed other "safe" investments. You can't always count on what rate your other investment types will
give you but with this you always know. I don't have to fret over my investment performance and how AIG or anyone
else tanked my principal and growth or how it's going to be taxed away with little to show for it in the end and to pass
on. But not every WL policy performs like this. It must be a dividend-paying whole life "non-direct recognition" policy
and only a few insurance companies provide it or have agents that know what it is and whether they offer it. Dividends
on this are paid on the policy amount NOT just the cash value. Once the dividends are paid, they are permanently added
to your asset base and cannot be taken away. Still don't think of it as an investment vehicle. You probably should still
take advantage of 401k/403b employer matching investments and Roth IRA's, etc. But I want to mitigate taxes. I hate
them. You're not just in the calculated tax bracket based on income you know. That may tell me I'm in a 25% bracket but

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add in state, city and even county sales taxes, federal excise taxes on your landline or cell phone, federal and state
gasoline taxes, utility taxes, license plate taxes, property taxes, states that have income taxes and on and on and you're
more likely in the 40-50% or more tax bracket. And I want the easiest access to every dollar I need, enable me to provide
my own financing, and pay the least amount of tax and pass on the most possible. There!

Gadzooks January 09 2010 2:21 AM

I don't fully agree with this generalization for a myriad of reasons. First, okay, I understand the argument that term is
cheaper...I got it. But term insurance is also somewhat of a scam. You're most likely not going to die within your term
age and as an industry professional, I am constantly dealing with people in their 60's (my father included) who bought
term insurance thinking: the house will be paid off, debt will be down, the kids will be out of the house and WE WON'T
NEED THE INSURANCE - and they were dead wrong, they still need the insurance for their family. BUT, unlike whole
life insurance, which you can actually stop paying after some years and the premiums are level- term insurance
premiums go through the roof after their term ends and it becomes too expensive to afford for most people, that's where
the scam aspect comes in (you're paying for something you won't use)! How is that good advice? Even the best plans fail
and people's financial situations change, come on look at the market the last 2 years... I don't look at Life Insurance as an
investment, or a savings account, and you never should, it's insurance. However, you can look at it almost like the fixed
income portion of your portfolio; but, unlike a muni bond or a cd, whole life insurance has a big death benefit attached to
it (that's called leveraging a dollar folks) that your loved ones can use tax free! My suggestion to most everyone is to
have some permanent insurance in their planning - if for no other reason than out of respect for your survivors to pay for
burial costs. Unfortunately for everyone reading this ALL LIFE INSURANCE has been grossly mis-sold for many years.
If you have a good advisor they will work with you to build a plan that makes sense for you and your family for many
years to come. . For the consumers out there, before you buy, get advice from older people about what they wished they
did, not your peers because they can't see the future.

Tim Power January 08 2010 3:04 PM

Dave, I read your article, I liked it. I have always figured the economy to be broken into 3 areas: Banks, Investments, and
Life Insurance. Banks back mortgages, investment companies offer you the ability to participate in the common market,
and Life Insurance companies let you take part of life insurance and annuities. I know there are a lot of cross overs, but i
always preferred this simplistic model, also the institutions that do just one of these 3 are the tops in each area
respectively, "they each know a lot about a little" which I always thought was best. Since the inception of this country all
3 of these general areas/instituions have existed in some form. Now here we are in 2009, almost 10, and the government
is bailing out 2 of the 3 sectors of our economy, Banks and Wall Street. However, I found out that the government has
solicited advice on how to run a successful business from 3 of the top mutual based life insurance companies. In other
words the Fed is ASKING for help from the Life companies and bailing out the banks and investments. So I looked up a
couple of whole life policies and found an average rate of return of 5.5% tax free in just cash value alone, disregarding
death benefit over almost every 25 yr segment of history since the 1800s. I'm confused, please help! All the best and
happy new year. Rick

Rick December 28 2009 4:01 PM

How can I find out if someone has an insurance policy on me?

Lauveta Green December 19 2009 7:24 PM

I have mentioned this on another board, but here it goes again... This article fails to mention the third, and better, life
insurance option - a return of premium term life insurance policy. With this type of policy, you will pay about double the
premium of a standard term policy, but still a fraction of the premium of a whole life policy. The full death benefit
applies throughout the term, but at the end of the term, all of your premiums are returned. The amount is not taxable.
Example: I purchase a 20 year term policy w/ a $100,000.00 death benefit at about $13.00/month - my family receives
$100,000.00 at my death, but I receive nothing should I survive the 20 years, although I will have paid out $3,120 in
premiums. However, if I purchase a return of premium 20 year term policy w/ a $100,000 death benefit at about
$26.00/month - my family receives $100,000 upon my death, or I survive the 20 year term and receive the full amount of
premiums I have paid $6,240.00. You get the same coverage, albeit for a slightly higher premium, but in the long run,
this is at no cost to you.

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Jessica December 16 2009 2:43 PM

As a young couple, my husband and I went without life insurance for many years. When we turned 35, it occurred to me
that if something were to happen to him I would not be able to support myself or put my children through college, so
upon hearing one of Dave's informercials on Zander Insurance - I called and was able to purchase a 20 year term policy
for $500K for only $255 a year. A million dollar policy would have only been a little over $400 a year, but my husband
said I would try to kill him for THAT much - so we settled for the half million. I have since slept much better, knowing
if something happens my girls and I will be just fine. Buy TERM and do it as early as you can, as it is much more
affordable when you are young. No one can afford to go without insurance, and there is no better investment than to
protect one's family...

Shayne December 15 2009 9:52 PM

Are you kidding me!? My WHOLE life insurance policy has paid for itself....My cash value is worth more than I paid,
and I no longer have to pay premiums. Cash value life insurance is a great product because it forces you to save. How
many people in DEBT actually have good spending habits?? This is a way to force you to save, btw taking out cash from
your policy is not that hard at all. Cash value life insurance is a good conservative part to everyones portfolio.

jason December 15 2009 10:07 AM

Why would anyone want to buy Term and invest the difference. The S&P lost over 35% last year in 2008. So why would
I want to lose that kind of money. I can get a guaranteed insurance product of 1% when the market is down and this
product mires the S&P 500 index

alex salas December 15 2009 8:55 AM

My grandfather bought a policy out for me when I was about a year old. Now it is time for me to take over the policy.
However it is whole life insurance. The person that the policy was purchased from continues to tell me that whole life is
better in the long run. The policies death benefit is 52,000. The agent keeps telling me to not touch it or do anything with
changing the policy. What are my options? Could I put this money into an an investment instead? Should I stick with my
whole life or switch to term, considering I have had the policy out on me for so long?

Ashleigh December 14 2009 4:19 PM

I have a universal life policy that I started 10 years ago. I took out a $3000 loan against it 6 years ago and now I owe
$6300. The cash surrender is $3500, cash value $10200. The agent said I can can do a payoff that will reduce the value.
I'm just trying to find the best way to get out of this. I already have a term set up. Any advice?

tom December 14 2009 3:43 PM

What about the tax implications for your heirs. Doesn't LI provide a better means of passing wealth to your children. I
am fearful of our govt increasing the estate tax in the future. If the estate tax is 50%, is it better to invest the money on
your own, or in a LI policy?

Lp December 14 2009 2:38 AM

I hear the arguments about what type of insurance to buy all the time. In my opinion no insurance policy is bad or good.
You just have to apply them in the correct manner. Term doesn't fit every situation neither does whole or universal life.
All these products have a purpose. Buying term and investing the differnece is a great strategy. But everybody doesn't
want to become an investor. Some people prefer gaureentess over the risk of loosing. So this should be an indivitual
thing. Not one size fits all approach

Clarence December 12 2009 8:02 AM

term life makes more sense for the person that has a plan or should I say goals in life

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Robert December 10 2009 8:56 PM

I need help concerning purchasing life insurance for a irresponsible 40 yr old brother. He doesn't think he needs it right
now because he can't afford it. If he dies, I'm the only one who could afford to do anything but I don't want to have to
take away from my family to bury him because he's too irresponsible to take it out. Should I just get a pre-arranged
funeral since I think I can do that without his knowledge? I asked him if I could take out life insurance on him at my
expense and he still said he'd take care of it later. What to do?

1singingbryant December 08 2009 5:31 PM

Kim, you're right in saying the odds are against anything happening to either of you. But what if it does? Do you have
$10,000 in cash to pay for final expenses? If you are struggling to make it on two incomes how would you make on one?
Do you have car insurance because you PLAN to get in an accident? I know it's the law in most states, but would you
cancel that if it wasn't? Find the least expensive 20yr.term policy, get enough coverage to at least pay for the
debt(including the mortgage) and final expenses.

John D. December 03 2009 12:32 PM

Ok, now I maybe need to rethink our policies? Confused; I'll have to look further into ehat we have. Regardless, We are
working on paying down our debt, which is a lot. Honestly, we are struggling right now and learning to do without. So
my quiestion is, do we ditch our life insurance policies while we are paying off debt to pay oiff faster? If we are
struggling to pay bills each month, is it worth having life insurance? These policies were just set up this year, so waiting
another year or two can't make the premiums that much more each month, can it? And really, I know anything is
possible, but what is the liklihood of something happening? Also, my thinking is what good is it to prepare so much for a
life where my husband or myself dies, if we cannot take care of ourselves when we are living? Would it not be better to
get out of debt and then buy life insurance?

Kim November 30 2009 11:46 PM

My firm has very independently specialized in term life insurance for 39 years. You provide great financial advice and I
work with a number of your clients. Keep up the good work! Your statement about Cash Value Life insurance is very
good general advice. It would be nice if everything were that simple. It may be true in some or even many cases, but it is
certainly not true in all cases. For example, given the right company, the right Universal Life (other types purposely
excluded) policy, the right funding (maximum works best), and a high marginal tax bracket, a Universal Life policy can
safely outperform all comparable investment alternatives (Life insurance is not considered an investment). I and some of
my clients have done it, and will continue to do it.

Robert J. Moody November 24 2009 5:54 PM

I purchased a Whole Life policy ($58K death benefit) from myself back in 1989. I was an agent at the #1 insurance
company at the time. I put in $50 a month for 19 years, for a total of around $11,400. When I wised up and replaced my
Whole Life (investment) insurance with straight Term, I cashed it out. The cash value was around $12,000 - a net return
of SQUAT! Now I have $750,000 of death benefit for $70 a month, and invest $500 a month into a Roth IRA.

Gary Hale October 29 2009 2:07 PM

I got suckered into buying a whole life policy when I was young and stupid. Buy term. Insurance is not an investment.

I haven't even watched the video yet, b/c I have been educated on this and choose term (and b/c it's late at night and I
can't turn on the volume), but by reading this comments, it really sounds like the insurance lobby has instructed all its
agents to log on and comment against term insurance. I find it hard to believe that so many people who listen to Ramsey
would not agree with the premise that, for most people, "term is better." You would not be able to tell that from the first
page of comments. I will pay you for a death benefit and invest my own money in a market-tracking (S&P 500) mutual
fund, thank you very much, insurance companies. Sadly, no agents will make a big commission when I do that. My full

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investment will start working for me (or not, if the market is bad), but it won't be going into someone's pocket in the
form of commission and high management fees.

Jody March 13 2011 1:06 AM

@ Kay. Probably neither. At age 60, whole life would probably cost way too much and would not build up value. You'd
need to meet with a comprehensive financial advisor/planner (not just a life insurance guy) and figure out the best way to
go. Just decide if you have a permanent need for the death benefit or not, then figure out what would be the best type
(again, unlikely that it would be whole life). I was surprised to learn how many options were out there!

Stefan March 02 2011 12:02 PM

My husband and I are both 60 years old and we want to know if we should get term or whole life policies

Kay February 21 2011 7:08 AM

"I know the agents try to tell you they might not be able to get insurance if they get sick but what are the real odds of
that? If they did get sick, how far would 50k insurance payout go for their dependents anyway? Would the be able to add
more coverage if they were sick? It is a high price to pay to "guarantee" insurability for a kid! Terry December 27 2009
9:56 " I know it's an old comment, but I couldn't let it pass. My Aunt became uninsurable with Diabetes at age 14. My
(non-blood related) nephew was uninsurable at 6 months due to a congenital heart disorder. My Wife became
uninsurable with a chronic back disorder at 27. I know of another friend's child that isuninsurable due to a car accident
that caused brain trauma - she is otherwise functional, but has occasional seizures; no onee will insure her. It is against
these very things that we buy insurance in the first place! I bought a permanent Indexed Universal (probably the best
permanent type of policy on the market as far as value for your dollar) policy my children (ages 7 and 1) with a $155k
DB each. The most important part of the policy, was that I put a Guaranteed Insurability rider on the policies that allows
them to purchase $50k of additional insurance every three years starting at age 22. Why? because I love my unborn
grandchildren, and I love my sons' wives, and I want to make sure that they are taken care of even if my son(s) become
uninsurable! When I bought it I wrote a letter out to my children and stuck it in the policies with instructions on how to
use the policies. If the fairly conservative projections hold up, they should each have around $32,000 in cash value
around age 30 - not bad for a total investment of $17,000 over 24 years(on the 7 year old)while still providing a
guarantee should any chronic disease or accident happen. If they are still healthy, I instructed them to cash out the
policies when they are at about a $1 to 3 ratio, because they can probably get more insurance for similar cost. Hopefully
I will be providing them with a downpayment on a home or business. For $100 a month -which is adjustable up or down
-, to offer all of that, plus the peace of mind that comes with it, I say is FAR worth it, and a better ROI than just money.
*full disclosure - I also have a 529 plan for them, and I have a Variable insurance policy on myself, coupled with a Term
to make up the difference to match 12 times my income. I also contribute to 401k with a match. I am also now debt-free.
I will open a Roth soon - but what Mr. Ramsey doesn't seem to mention that I can find is that most Mutual Funds have a
minimum buy-in that starts around $1500-2000; I know there are some that start around $500, but those are rare, and are
usually "funds of funds" which aren't bad, but I want more options so I will wait in MM until I have a few thousand to
invest. The key is to have your money in different "buckets", anyone who is selling permanent insurance as the be-all-
end-all for retirement or any other kind of savings is a scheister, but it can, and should be, a valuable tool for many
purposes, including a retirement supplememnt.

Stefan February 10 2011 10:15 AM

My husband is 61. His term policy is up. We can convert but the premiums are completely unaffordable. He had a heart
attack 4 years ago. We are currently spending 60% of his income on health insurance premiums and expenses. I am
disabled. "Financial peace" is not possible if you are only insurable in the medical high risk pool with outrageous
premiums. We have no money to convert the term life, so will have to do without. The only winners are the insurance
companies.

KC January 18 2011 1:42 AM

This video is one of the funniest things I have ever seen. You are talking to a broad audience yet giving a blanket
recommendation. That doesn't work. There are situations where term insurance is perfect and many other times that the
benefits of a cash value life insurance contract provide so much more than you can have with a temporary term life

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policy. With the uncertainty in the economy and interest rates at all time lows how can you argue with a policy that
provides guarantees for a lifetime. Every situation is different, no one's financial situation is the same.

Dustin Hayden December 29 2010 8:50 PM

This video isn't very helpful. It's great how Jeff talks about term and why it's great and doesn't knock down whole life,
but I really want to know/read why whole isn't the smartest choice and what is really not good about it. It would be great
to still have the article that you guys had up about whole vs. term so I can clearly tell our friends the two different
options.

Jody December 17 2010 8:10 PM

Incidentally, I feel REALLY bad for the people who canceled their whole life policies 20 years ago and bought term and
invested the rest in the market. Based on the S&P 500, they would have gotten about 6.4% on their money BEFORE
taxes and fees, if they were fortunate. If you bought a whole life policy 20 years ago and canceled it today, the return you
would get on your premiums net of any fees is typically GUARANTEED to be minimum 4%. And that's if you were
silly enough to cancel a policy that likely now can pay its own premiums from now until the day you die, no matter how
far of that is.

RLF November 13 2010 6:22 AM

i do work for a life insurance company and i dont understand the whole competition between term and whole life. when i
write policies for clients i explain the difference between the two insurances. the idea some people swear by is get term
and invest the rest, yes that sounds great and all yet honestly speaking, how many people will invest it or even know how
or what to invest in. most people simply live paycheck to paycheck and dont go out of their way to "invest" the extra
money. when writing a policy i always start with small whole life, and then term insurance to cover assets like income, a
mortgage, car payments etc. so that way if they die prematurely they have the assets paid off, but if they live long they
have the whole life locked in at a young and cheap rate, and that is the only insurance that will be there during the older
years. term insurance that says renewable to age 95 will have prices so high they will make you faint. we dont normally
sell whole life as an investment although it technically can be seen that way. we sell the whole life to take care of all the
final expenses and extra little debts left behind. so all in all both term and whole life work differently because they are
meant for different purposes, so as long as my clients understand how they both work, it will benefit all as it should.
there is no scam , no BS, just benefits that have different purposes. whole life is great to get locked in at a young age and
the premiums paid will not equal the face amount so you will always get more than you put in. it is rare people die
during the 10 20 or even 30 year terms so thats why they are so cheap. i enjoy my job and i do both term and whole life.

jeff October 07 2010 8:15 PM

Steve, First,I had a whole life policy because at the time I thought, "I'm 25 and live a very active life and before I do
something to myself where I would become uninsurable", I'll get a $100K whole life policy. I too, thought, guaranteed,
for $40/mth I'll never pay up to $100K, great return on investment. However... First, with a Term policy, I get more than
twice the coverage for less than half the cost. I use the same amount of money...pay my term policy and invest the
difference in a roth. My family now will not only get the face value $250K (more than $100K) plus they'll get what I set
aside for savings in a roth IRA. So rather than leave them with only $100K, now they'll get $250, plus whatever my roth
grows to. I get the idea Steve that your family will get the $250, but so will mine...and more. Second, If I die early
(statistically before 76ish) the above scenario plays out. If I do not, we'll continue to save and build a nest egg and pay
off the house. At that point we shouldn't need life insurance. There's no one to insure my life for, kids are gone, just wife,
she's got money and no debt. At that point we can hopefully save more or spend what we used to pay for life insurance.
Third, All the insurance company is doing is buying a term policy on you and investing the difference themselves to
build up a value. Probably a little more to it than that, but that's essentially what's happening. Fourth, Lets say that you
need some cash and have to borrow some of your cash value. I can take some out of my roth at 60 tax free and penalty
free. If you borrow from your cash value, you have to pay it back plus interest and when you die, if you took out say
$50K, your family only gets the $200K less interest assuming you didn't pay it back. Fifth, Lets say you pay it all back
plus interest. They'll still only get the face value and nothing more...they keep your cash value. Lastly, remember, huge
commissions get paid on these types of policies...giving incentive to sell them. Why? They must be making money doing
so. They keep your cash value and all they earn on it while they've had it. They wouldn't offer them if not making money
doing so. Just my thoughts. Thanks for your attention.

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Mark September 20 2010 5:12 PM

I could not disagree with you more. This is a great theory if everyone too that extra cash and invested. I am an Insurance
agent and I purchased a 250k whole life 20 pay. By the time I am done I will have paid just over 90k in premium and
that 250k will be there forever. Pretty good deal if you ask me. My wife or my kids will get that money no matter what.
Most people don't die with their home paid off and all of this extra cash in the bank as I have read in your articles. Please
know that just because YOU may have the money for your plan, this is not reality for the masses.

Steve September 16 2010 1:15 PM

Can the WL folks tell me why I would want a savings plan that takes 1-3 years to accumulate any money in, averages a
little over 1% rate of return in the first 10 years (what's 4% of 0), have to borrow and pay back with interest to use it, and
if I die, my family would only get the face amount of my policy minus any loans with interest (7-8%)? Any wonder why
people don't understand their policies? Unfurl your policy and read it and ask yourself if you truly understand it. I'm
getting a term policy that is guaranteed renewable to age 95 (what's not permanent about that?) and doing my savings in
seperate investments. Gee, my family will get both the full face amount of my life insurance policy and my investments
guaranteed. Doug, who stopped paying premiums and his cash value continues to increase. Are you looking at
"Guaranteed Value" or "Hypothetical Value"? Probably Hypothetical because your premiums aren't waived, you are just
paying for them from your cash value. Hard to see an investment doubling when money is syphoning out of it every
month.

Dean August 29 2010 6:45 PM

The video clip of the Zander insurance guy makes me upset on so many levels. But I will only address one. You never
sell a premium waiver?? Do you know what a premium waiver is? For a little extra per month, you can guarantee that
your life insurance premiums will be paid if you become disabled. Now, let me think, if I am diagnosed with cancer, I
may be unable to work. If I can't work, I may not be able to afford the premium on my life policy, which I am most in
need of if I have cancer. The premium waiver is a blessing to many people who get cancer or are in a tragic accident and
the household income is cut in half, or worse yet lost completely. I have seen it work in my life and I thank God there
was a premium waiver in place, for as little as $6 per month.

Christina Smith August 26 2010 11:09 PM

We just found out our 21y.o. son bought a W.L. policy 10 months ago. He is in graduate school and really can't afford
this much less even need life insurance at all. He is single and in great health. What are the downsides of canceling at
this point? Thx.

LRH August 17 2010 12:02 PM

We must stop comparing rates of returns of stock market vs. cash value. Traditional cash value life ins. is in the safe
asset class, not risky like your stock mutual funds. It will grow at a set rate of return every year, which makes it an
outstanding vehicle to have for safer allocated moneys. And honestly, with the indexes doing -5% to -40% over the last
ten years, it's a great time to consider allocating some cash flow to safer investments.

Kayla M August 16 2010 5:50 PM

Robert Brown. You are correct in thinking you need whole life, you are 53, and you still have liabilities that will likely
need covered. BTID is not a panacea. take a look at or google bank on yourself. It is a traditional whole life with the
benefit of additional paid up riders, the ability to borrow cash within the first year and offers (not guaranteed but has the
last 100 years) given a dividend. Every single persons situation is unique. I wish you the best, I have term and WISH I
were able to purchase whole life right now...it's a great vehicle to save cash.

Clint August 08 2010 5:03 AM

I just met with my financial advisor and he is really doing some serious arm twisting to get me to buy cash value (whole
life) as a hedge to help fund our daughters college education. Everything he says makes sense, but I can't help but feel

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there is something more in it for him than if we just set up a education plan using mutual funds. I currently have $1M in
term with 6.5 years left on that contract. I am 53 and my daughter is only 18 months, so we have a ways to go before we
need to start spending on her formal education. My plan was to put $1000 away over the next 17 years with $750 going
into mutual funds and $250 toward a cash value plan. I've run the numbers, and after 18 years just in the cash value plan
we would have approximately $100,000 and only paid in $50,000. My question is, are we doing the right thing here?
He's throwing a lot of information at me that, quite frankly I just don't understand and is leaving feeling lost. I hoping
someone here can give me a little more insight as to the difference between whole life vs. term and why term is such a
better deal. Robert Brown

Robert Brown August 04 2010 6:53 PM

term is great and affordable..the only issue the insurability of the client..if they develop a serious medical condition the
chances are obtaining more life insurance are slim...what happens if your term expires and you are not insurable..how
does Dave answer that??

David August 04 2010 11:19 AM

Rick -- Yes I know about mutual funds and dollar cost averaging. In fact I have invested & still am invested in a quite a
number of mutual funds. But I can do both can't I??? I can buy a term policy & a WL policy if I want to. So much
depends on what your goals are, what your plans are, how much money you have to spend/invest, etc. From everything I
have read if you keep your WL policy more than 10 - 15 years it is very much worth while to continue to keep it -- as it
does better the longer you keep it. I started with this years ago and it is true, I didn't know a lot about life insurance back
then. I know more now. As Harold said "one size never fits all".

Wanda August 04 2010 9:47 AM

One size never fits all. What about the person who develops a health condition before the term of the term policy ends
but still needs the insurance? That person must renew at the guaranteed renewal rates and they will be much, much
higher than whole life or universal life. What about the person doing advanced estate planning? Term life is rarely, if
ever, a good choice. I'm a Certified Financial Planner and have been in the industry for 26 years. More often than not I
advise my clients to go with term insurance. However, to advise them to go with term 100% of the time in 100% of the
circumstances would be malpractice. As for "buy term and invest the difference," it's a great idea but the vast majority of
Americans buy term and spend the difference. If you're spending the difference and not saving, you're ignoring valuable
Biblical principles.

Harold August 04 2010 8:24 AM

Wanda, yes, if you were to 'play' the stock market on your own, or with a broker (and you probably couldn't with only
$43 a month) you would be taking a great risk. But perhaps no one has ever told you about Mutual Funds and Dollar
Cost Averaging. Your Investment would have yielded exponentially more than you have earned in your Whole Life
Plan. And to those you use the word 'and' when speaking of death benefits and cash values, the proper word is 'or'. You
get one if you live, the other if you die. You can't be both dead and alive. Yet you are paying for both.

Rick August 02 2010 11:44 PM

I am a Insurance Agent and a Branch Manager of a financial Institution I'm sorry to those that think other than this. Term
is better for ALL involved other then the agent and the company that tells you otherwise. Whole life you pay interest to
Borrow your OWN money That's dumb.... If you die they keep the "savings" If you take the savings the insurance
terminates! The saving difference (achieved with buying equal face amount term ins and investing the difference)even
invested in a BANK MONEY MARKET account will be more than your policy has accumulated. AND YOU GET TO
KEEP BOTH WHEN YOU DIE. You are always better Buying term and investing the difference when you are starting
off. If you are part of the unfortunate masses that has been told other wise and are stuck with your whole life policy as
now you are not able to get other insurance due to health reasons, I'm sorry that the industry let your family down. For
anybody else look in your own policy and look for the "either insurance or cash value" clause read between the lines and
inquire to the Insurance company (not the rep that sold it to you) Ask them If I die do I get the Face amount and the cash
value for a total value of $abc and give the total of your face amount example $100,000 and the Cash Value of $15,000
so my beneficiary receives $115,000 right? Be sitting down when you ask this and be sure that you give them the total

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otherwise they will answer yes. They legally can do this as the Cash "Surrender" (they skip this word a lot) Value is part
and parcel of the death benefit so all they do is reduce the face amount by the exact value of the Cash Value and give you
the face amount, this enables them to answer the weak question of "do I get both with a "YES" when the question has
been asked correctly they will answer "no" Then go find a term insurance that fits your needs. Learn about what you
really own before you get on some "blog" and whine about what "did" happen to you, or what "didn't" happen to you
'cause it did... your just not educated enough to catch them "in the act"

Corey August 02 2010 6:53 PM

1) Scottie, I am not an insurance agent, I'm an RN who is now a farm owner. 2) Yes, B, IF I had picked the "right"
investments in the stock market I potentially could have a lot more money now than I do with my whole life policy. BUT
that is an IF. Plus my husband lost over 1/3 of his investment on his retirement in the stock market during 2008. It was
an extremely large loss. I do also have investments in the stock market. But here we are talking about whole life & term
life..... not the stock market. I'm talking about what I have, not "assuming" what I could have made which is a big
assumption. 3)Chris, are you saying that your term police has a cash value of $440,000 with you only paying $20/month.
Or is that your death benefit? I also have a term life policy. My term life policy which is for the same amount of
coverage has not done near as well as my whole life policy. You have to find out all the information and decide what is
best for you. But to say that term is always best or whole life is always best isn't correct.

Wanda August 02 2010 8:51 AM

My husband and I have whole life, paying on it over 20 years with Mass Mutual. We now have a cash value of $133,000
and growing exponetially after this many years. I have borrowed against it a couple of times and paid it back because
you are paying yourself back, and not considered a debt. The cash value is added to our $150,000 policies. We are
thrilled with this investment. Cash value OR death value will be HUGE when we are ready to use it (we are now 58 and
64 and healthy and still working). Problem is, most people chicken out from the large premiums but we have paid them
faithfully and are reaping the benefits.

Patti August 01 2010 7:03 PM

Get a quote on whole life, then buy term and invest the difference! Cash value of $66,000 is a joke! I have $440,000
term for less than $20 a month. Once I'm A millionaire-----I won't need the term! Become self insured! Also, when you
die with whole life---the insurance company keeps the cash value!

Chris July 31 2010 8:56 AM

These comments are obviously posted by insurance agents. I just pulled out the projections my whole life agent gave me
in 1985 for 2010. Reality is less than half of their projections. Thank the Lord the majority of my life insurance is term.
My variable life insurance policies are the worst investment I ever made. The cash values are less than I have paid in and
would disappear if I died tomorrow. I plan to cash them out as soon as the market recovers a little better. Believe in Dave
and don't listen to these whole life agents. SAB

scotty B July 30 2010 8:56 PM

Wanda, If you would have invested that $43/month in the stock market from 1074 to the present assuming an 8% return
(which is actually lower than what was done) you would have 435,000 today. I am still a strong believer in term life and
investing.

B July 30 2010 6:37 PM

i have been fascinated by others comments, but many of them seem like questions, is there a place where someone
answers? long time listener

luke July 30 2010 4:43 PM

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My husband & I bought Whole life insurance policies back in 1974 with Northwest Mutual. I am still paying $43.00 a
month for a $50,000 life insurance policy. To date I have put $18,576 into this policy. It is worth a cash value of $66,418
& a death benefit of $128,978. I'm very happy with my Whole life policy & someone who has an older one like I do
should look at it very thoroughly before changing it out. I'm extremely happy with how mine has done.

Wanda July 30 2010 2:05 PM

As a Financial Planner I agree with everyone purchasing Term Insurance in their younger years, especially with some
guarantee options that allow them to continue the policy or convert to permanent insurance in the future. However,
blanket statements that there is NO PLACE for permanent insurance for anyone is an irresponsible and wreckless
"opinion" to be expressed in a public forum as "fact". Facts are, for High Net worth and High Income earning
individuals, Permanent Life Insurance SOMETIMES provides very powerful Cash Flow planning and Estate Planning
tools to minimize risk, maximize income planning in retirement years, and secure guarantees for retirement. Many
people who sell Permanent Insurance do so inappropriately, but you shouldn't blanket statement. I am willing to provide
actual examples to show the benefits of this kind of specialized planning for high networth and High income individuals.

Ben July 30 2010 1:35 PM

Whole Life insurance is the best long- term but there is. Term insurance is money lost because it hardly ever pays out
because the cost of it sky-rockets at later ages. You likely will need insurance after you retire - if you're successful, estate
taxes will have to be paid...if you're not successful, well, you can figure that out...

Dave July 30 2010 1:19 PM

I just renewed my whole life policy for another year, even knowing that Dave recommends term life insurance. The
quotes I got were for 20 and 30 year terms. What happens if I outlive the terms? Then I have to apply (at a much older
age) for new insurance, which wold cost considerably more at the higher age. I don't see how term insurance is the way
to go.

Jen July 30 2010 1:17 PM

My husband and I are 34 years old. We both have term life insurance policies for $1 million. In addition, we have a
Variable Universal Life Policy, this was recommended to us, as a supplemental policy and one that we can save money
in. I don't really understand the VUL that well, is this something you recommend? And if not, how to get out of it?

Emily July 30 2010 11:27 AM

Why do you need life insurance on your children? You don't. You might want a small 5,000-10,000 policy on them just
in case, god forbid they pass, just so you can bury them. But since you don't depend on them for income for the house,
you really don't need to put 250,000 on them. Dave teaches that you need insurance on you and your spouse up to 10
times your annual income. Your kids don't have an annual income so they don't need it.

Sherri July 30 2010 11:06 AM

"T is completely right. In response to those who ask what happens after 10,15, or 30 years when your term runs
out....Dave Ramsey explains that in his Financial Peace University lessons. If you have been doing the techniques he
teaches by the time your term ends you will have enough saved/invested that you will no longer need to be insured. "
Ted, if you end up with all this money won't it be mostly lost once you and spouse have passed? The estate tax may be 0
now, but not for long. I'd rather not liquidate my assets to pay the taxes, probate fees, lawyers etc. and have my heirs get
25% of what I had.

Ken July 07 2010 1:46 AM

What should I do if I have term insurance and I have accumulated, say, $1,000,000 and I'm at an age where my policy
has expired. Don't I need life insurance to pay the estate taxes and probate fees, etc? I don't want to liquidate shares of
stocks, mutual funds, and property to pay for that. I'd rather have my hard earned money and assets go to my heirs than

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the government. I just found out that a living trust doesn't do anything to protect assets from taxes and probate. Getting
confused!

Ken July 07 2010 1:11 AM

I recently purchased a $25000 whole life insurance policy on each of my two small children, $20 a month should I keep
the policy or quit paying on it.

Jason June 07 2010 7:09 PM

Congratulations to Dave and Jeff for successful businesses. Many successful sales and marketing pros use the "One Size
Fits All" strategy. I would like to hear more about using a stronger company's term policies and converting it at the end
of the term (at the insured's original's health rating) to actaully make the insurance company pay a tax free death benifit
and create family wealth even after a family is debt free. Debt free is great, self insuring is not always smart and passing
wealth to another generation is an amazing selfless act of generosity. Wonder why Prudential, Lincoln, Sun Life, John
Hancock and several other carriers are not endorsed carriers. Those small term providers are often a nightmare when
conversion makes great sense. Many people could benefit by picking up the tab on a parent or spouse term conversion.
Good chance of it being a better investment than many ROTH IRAs. Keep an open mind and open heart! Greg Chambers

Greg Chambers April 30 2010 7:09 PM

This didn't me the difference between term or cash value, but rather just said "term life is the way to go because whole
life doesn't have value to the consumer" but no reasons to back that statement up. I was not educated by this video.

Jason Barrett March 17 2010 1:12 PM

My mother is 68yrs old. She has a term life ins policy of $50.000 till age 70. My sister and I are owners of the policy.
My mother is not finacially secure. No long term care, etc. Should my sister and I consider turning mom's term life
policy into a variable universal life policy? Policy would be till age 90 and worth $50,000. Pymts would be aprox
$120.00 monthy split between the two of us.

Kim March 16 2010 1:36 PM

Do I really need life insurance and if so what should I be willing to pay for monthly premiums?

Joe March 09 2010 12:38 PM

What about estate taxes? I just came from a meeting with an attorney and he recommends universal insurance to make
sure someone else is paying my death tax.

Jeffery March 02 2010 1:45 PM

We bought into a whole life policy about seven months ago and want out of it. What are the consequences of "firing" our
insurance man today?

Kim February 25 2010 8:20 AM

My wife and I both have whole life policies. We have been paying into them for approximately 3 years. at this point
should I cancel them and focus that money elsewhere?

Brian February 23 2010 7:49 PM

I stopped paying the premiums on my whole life policy after about 9 years. Since that time the cash value has doubled
even though the premiums are being deducted from it, AND, the death benefit continues to grow, it's now twice what it
started out being 18 years ago. Between 2008 to 2009 the cash value increased by 5.5%, way better than my bank

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savings, and way-way better than my big losses in stock market investments. Cash values may not match the stock
market in boom periods, but cash values never go down, they just keep chugging along with steady returns and very little
risk. I'd say don't get into one of these policies if you're going to chicken-out after 4 or 5 years. It should be a long term
commitment or not at all.

Doug February 19 2010 10:57 PM

My husband and I were fortunate, we paid into whole life policies for years but we actually are making money by
surrendering them. We will make about $7000 from them. My question is do we want to have the federal income tax
withheld? I know we have to pay taxes on it at some point, I guess I just don't understand which way to do it or how that
works?

Deb February 01 2010 9:51 PM

I think there are some good ideas here but I get confused when I listen to Dave on the radio. I'm certain that I have heard
him say that he himself has more than 10X his income in life insurance because "SWI", Sharon Wants It. I get nervous
when I hear this b/c if he stills wants/needs it after his success. What level of success will I need in order to not need or
want it? I'm 38 with 2 young children and I am concerned what I might want when I am 58. I know I want more for my
family now then 10 years ago. If that trend continues then my current plan might not be enough down the road and my
genetics my cause health concerns in the next 20 years. Suggestions?

David January 25 2010 4:39 PM

I am 70 and haveterm life and it is about to expire what should i do can i get this money back or will i lost it

doris g January 17 2010 3:47 PM

I am so confused now. My husband has universal insurance since 1994,and we pay $50/month on $200,000. Should we
cash out now for @$3000 and switch to term insurance? He is close to 50 now, and I am wondering switching at this age
is not worth it. If I only knew then, I would have gone for term, but....Any opinion?

mika January 07 2010 11:43 PM

My husband and I bought 2 whole life policies shortly after we bought our first house. We thought we were doing
something good for our future. They company told us that the policies would be paid off after 13 years. Well, here we
are 15 years later and still paying $185 per month (combined) and still not paid off? Now they are saying "due to market
conditions, blah, blah, blah" market conditions never came up when we first bought in, convenient? Well, now I'm
wondering what we will have to pay if we cancel and take the cash to pay off our debt. What we have in cash value on
both policies would wipe out our credit cards plus a good chunk of our equity line. How much of the the cash value do
you get if you cash out?

Beverly January 04 2010 1:56 PM

Penny T.....I am also in the same place as you only the nightmare has already begin..my husband has a 20 year term for
$100,000.00 and at age 84 the rate have become unmanagable. We have decided to drop to $50,000.00 still making the
payment around $500.00 per month...There is 25 years difference in our ages and althought I still work this insurance
was going to be my only insurance for the future...I fell that any decision I made is the wrong one...so much for peace of
mind.

Vic January 03 2010 7:37 PM

To Ryan: Return of Premium Term...You would have to earn a guaranteed 6% net, after-taxes return on that extra
$13/month for 20 years to have $6000. Where can u guarantee that

Richard January 01 2010 1:58 PM

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Great discussions! Kids life...I agree with Dylnn...not about replacing income, but dealing with expenses. As far as term
insurance...it is temporary insurance. There is new term insurance out called Return Of Premium Term...you get 100% of
your premiums back at the end of your term if you are still breathing...I've just purchased some on my wife and I. I'd
suggest to younger people to purchase a small whole life policy...maybe $25K death benefit and then buy term to cover
the majority of the need. That way, when the term expires, they still have something there to pay burial expenses. And,
the dividends in that whole life policy are yours and can help increase the death benefit if set up correctly.

Steve January 01 2010 12:21 PM

Life insurance on Children is not about replacing a childs income, it is about burying them (having a service) and then
replacing the income of a parent that wants to take time off to mourn the loss of a child. Trust me I know! Now yes I do
understand the concept..if your debt free and have the savings then no big deal..you pay for the services and quit your job
and live off of savings...but for those who are not debt free...medical bills can come in fast, funeral expenses add up
(12K+) and parents are ready to return to work full-time or at all.

Dlynn December 30 2009 4:04 PM

My husband has term life that will begin to increase in premium by a significant amount when he reaches 65 (he is 62
now). He was forced into retirement at age 60 and we were not prepared for it at all. He has 2 pensions and Social
Security. I have no pension as I have been a housewife with part-time, supportive jobs all my life. I will not receive his
largest pension should he die before me. So now that term life policy has become important. However, we will not be
able to afford the premium once it begins to increase. What should we do about life insurance now? Should we let the
term policy expire and not continue to pay premiums or get new insurance?

Penny T December 29 2009 3:08 PM

To Jessica, if you took that $13 extra a month and invested it for 20 yrs, it would be worth more than $6240 probably a
whole lot more.

Ryan December 27 2009 4:58 PM

Re: Kara's kid's policies, why does anyone need life insurance on kids? Life insurance is supposed to replace the
"income" of the insured if they die so that those depending on that income can keep living. So unless they are wealthy
child actors or have really high paying paper routes and mom and dad can't live without the kids' salary, they don't need
to be insured. She doesn't mention how much the kids' policies cost but if she would have began investing only $20 per
month for them at birth at Dave's example mutual fund rate of 12%, by the time they were about 28 yrs. old, ready to get
married and have someone depending on their income, they would have over 50k saved anyway. Then, even not adding
any more $$, that would double to over 100k in another 6 years! I know the agents try to tell you they might not be able
to get insurance if they get sick but what are the real odds of that? If they did get sick, how far would 50k insurance
payout go for their dependents anyway? Would the be able to add more coverage if they were sick? It is a high price to
pay to "guarantee" insurability for a kid!

Terry December 27 2009 9:56 AM

Another good option is return of premium term life...like a term policy, the premium is guaranteed for 20 years, but at
the end of the policy term, you get all of your premiums back. This amount is non-taxable, since you have already paid
taxes on it. The premium is about double a regular term policy, but the advantages are great. For example, I can purchase
a 20 year term life policy with a death benefit of $100,000.00 for $13.00/month. At the end of 20 years, I will have paid
$3120.00, but will never see that money again. If I instead purchase a 20 year term return of premium policy with the
same death benifit of $100,000.00, I will pay about $26.00/month. At the end of the 20 years, I will get back $6240.00,
all of the money that I have put into the policy. To me, this is a far better investment than a standard term policy, and
certainly better than whole life.

Jessica December 16 2009 2:15 PM

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T is completely right. In response to those who ask what happens after 10,15, or 30 years when your term runs
out....Dave Ramsey explains that in his Financial Peace University lessons. If you have been doing the techniques he
teaches by the time your term ends you will have enough saved/invested that you will no longer need to be insured.

Ted November 25 2009 6:17 AM

The key to this is having the discipline to save and/or invest the price difference between a whole life policy and a term
policy. If someone doesn't have the discipline to do that, they probably should not switch. For someone switching from
whole life to term insurance, a good plan would be to *immediately* set up an automatic monthly bank transfer, in the
amount of the premium difference, to a savings account or an investment account. That way, they'll never have a chance
to get used to spending that money on normal living expenses. Someone still in the process of getting out of debt could
start by having the transfer made to savings, and then every so often pull those savings to pay down debt; after all the
debt is paid off, the premium difference transfers could go toward the fully-funded emergency fund; after the FFEF is in
place, the premium difference could be transferred directly into an investment account. One of the great benefits of term
insurance is that you can purchase much MORE coverage for much LESS money. So if someone dies while the term
insurance is in effect and they still have a young family, the family will be in far better financial shape than they would
have been with a smaller amount of whole life. On the other hand, if the insured person lives to a ripe old age, and saves
and invests all through those years, the spouse should be OK in the end, too.

TLW November 24 2009 7:33 PM

My husband and I have term and our kids have whole. After learning about insurance in FPU we set up a meeting w/our
agent. I will first say that he has always been more of the "teacher" type and not just a salesman. We told him that we'd
like to put our kids on a rider and cancel theirs. He said that the company we're with(Northwestern Mutual Life) doesn't
have them and he doesn't believe in them. e.g. What if the kids develop asthma or diabetes and they won't be covered
under a new policy when they want one. Their insurance doesn't just insure anyone. You have to complete blood
work(my friend couldn't get insured because he was diagnosed w/diabetes at 32). And w/whole life Dave Ramsey is right
w/95% of companies but, not theirs. He went on to explain that you do get that money and can get it tax free if you "do it
right". I guess my question is..what do we do w/our kids' insurance? They are 9&11 and have $50,000 policies

Kara November 24 2009 6:38 PM

Dave - What money? You're policy premiums? You don't get those back. You don't get them back with whole life,
either. The money you do get back with whole life is your investment/savings portion, minus RIDICULOUS surrender
charges. In fact, with your whole life policy, the money you are "investing" (I use the term looooooosely) is not even
yours upon death. So you save for 20 years with this whole life, die, and your survivor only gets the face value of the
policy. Not any of the cash value. WORST INVESTMENT IN THE WORLD. The "living benefits" sold with whole life
are that you will have cash available to use if you needed it. You have to pay the life insurance company 6-8% interest
UP FRONT in order to use YOUR MONEY, and then if you don't pay it back they reduce your life insurance coverage
by that amount. Why would you not just save the money, put it in a jar, and bury it in the back yard???? Why would you
give someone YOUR money and then be charged interest in order to use it? Why would you combine your savings with
your life insurance and forfeit all that savings upon death? And of course the argument with whole life insurance
supporters is that you'll need life insurance later on in life. Well, the industry basically creates its own market by telling
you that. If you have whole life insurance instead of buying term and investing the difference, you probably WILL need
life insurance when you're 90 BECAUSE YOU'LL HAVE NO MONEY SAVED!

T November 22 2009 3:55 PM

If you live 31 years after you buy a 30-year term policy, then even 30-year term insurance was temporary. What do you
do if the market tanks, your term runs out, and/or you're uninsurable. What if you listened to Dave on the radio the other
day when he said "don't buy Long Term Care insurance in your 50's because statistically nobody uses it until their 60's,"
you get denied for it when you try to buy it in your 60's (it's not the easiest insurance to get approved for by any means),
and you end up self-insuring for your LTC with the money that you planned to self-insure your life insurance. People are
living longer than ever, our biggest killers aren't killing us any more but they are disabling us, and Long Term Care can
easily drain an outrageous amount of money between what Medicare and Medicaid cover. "Buy term and invest the
difference" works great when the market is soaring, but there are some huge risks involved.

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David Hamilton November 19 2009 3:57 PM

What happends after the term life policy expires? Where does the money go?

Dave November 02 2009 2:42 PM

After taking Financial Peace University, I investigated several insurance companies and decided to let Zander Insurance
handle my insurance needs. When they told me that I could get better levels of insurance I wanted to see what they could
do. I have better insurance, better service, and from a company that I can now trust. After meeting with them I will let
them handle my insurance needs going forward.

Kevin Eldridge November 01 2009 1:23 AM

You are 100% correct on your assessment of term vs. whole life. And you are correct, you have to read the contract and
know the limitations of it. Get term insurance when you are young and just hold onto it.

Al Cordera October 30 2009 9:36 PM

I understand the concept of needing only term insurance. What happens when the term runs out and you are 10, 15 or 30
years older? Won't the cost of insurance be extremely expensive or maybe you have been diagnosed with a dreaded
disease and will no longer qualify for life insurance? I believe you need life insurance in place on the day you die and
term insurance doesn't always work that way. Buy term and invest the rest is a great theory...but there are many people
that will not live by that rule!

How to Save Money on Health Insurance

Ask one of Dave's health insurance ELPs if an HSA is right for you
from daveramsey.com on 02 Sep 2009
Share Email

Whether you're single or have a family, one of your biggest expenses is probably health insurance. Hey, you're not alone.
Health insurance costs seem to increase every year for most of us. According to US News, families paid an average of
almost $3,300 for coverage in 2007.

Think that high cost gives you an excuse not to have health insurance? Think again! Unpaid medical bills are one of the
biggest causes of bankruptcy. Not having health insurance isn't an option.

But here's how you can save money: consider switching to a Health Savings Account (HSA).

HSAs are great for people who don't go to the doctor often. If you're young, healthy, or have grown kids, then an HSA
can be an excellent alternative to the usual, expensive health insurance plans of PPOs and HMOs. A typical HSA can
save you hundreds of dollars a month while still providing you with quality health coverage.

How Much Can I Save?

Well, that depends on you and your needs. Here's how much one listener saved:

I just wanted to thank you for saving my daughter thousands of dollars on health insurance. Your Endorsed Local
Provider [ELP] set her up with an HSA. She's saving $350 a month on premiums for a family of four!
—Bonnie in Florida

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With the money you'll save, you can pay off any debts or invest that amount toward your retirement.

Getting Started With an HSA

Many companies now offer HSA plans along with their traditional plans. If you're company doesn't, then talk with a
health insurance ELP about setting up a private HSA for you or your family. Often times a private HSA can save you
more than your company HSA.

Just remember that your individual health needs and the area in which you live can drastically affect your options. Before
you make any change to your insurance coverage, it's best to get the advice of a health insurance ELP.

Is an HSA a good option for you? Ask one of Dave's health insurance ELPs.

Top Articles

Term Life vs. Whole Life Insurance

Four Must-Have Insurance Policies

How to Save Money on Health Insurance

Who Needs Long-Term Care Insurance?

More About: Insurance

© 2011 Lampo Licensing, LLC. All rights reserved.

Post a Comment

Years ago when I was single I used an HMO plan for my insurance. The premiums started out moderate enough but kept
increasing over time. This really started to annoy me when it came time to get married. Getting coverage for me and my
wife was way more expensive than I had expected. It costs over $350 a month just in premiums for the two of us. That's
when I decide to consider using the High Deductible HSA option offered by my employer. It didn't make sense to me to
be paying high premiums for an HMO whether or not we got medical care at a hospital. With the HSA, my premiums are
$57 semi-monthly, my employer contributes $500 yearly to the HSA account, the balance rolls over at the end of the
year and is there permanently for us to use when we need it, there is no cost for routine physicals, dental cleanings, or lab
tests. This is the best option for families that are healthy and just starting out.

AJ December 29 2010 12:29 PM

We converted to a HSA about 4 years ago and it has been wonderful for us. We are empty nesters and even though I had
some health issues for a couple of years, we have never met our deductible and I just write a check or swipe a credit card
for all my health charges, no out of pocket expenses so far. We are currently investing the surplus in our account in a
mutual fund so that we can earn more interest and hope to eventually get to the point where we can pay all of our
medical expenses out of pocket and just use the HSA as a savings account.

Jeanna November 09 2010 7:45 AM

I have had a high-deductible plan with an HSA for the past year. My deductible is $4000 for my family but I only pay
$57 bi-weekly for a premium, which is $1,476 per year. I also put $80 bi-weekly into my HSA tax-free. Even if I meet
my deductible I'm still only paying about $5,000 per year or $417 per month. My company offers two other plans with
lower deductibles ($2000 and $1000) but they cost $369 and $463 per month respectively, and that is just premium costs
alone! So, even if I rack up $4,000 in medical bills during the year, I'm still coming out ahead with the HSA plan. And
even more importantly, if I don't need much health care I'm saving a TON of money on premium cost alone. Obviously
your options will be different but give the HSA plan a serious look.

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Andy Barker October 12 2010 10:32 AM

I am a single person and have all regular checkups each year (obgyn,eyes (for contacts)& physicals, dental cleanings).
Would an HSA account through my employer save me that much money? I feel like I would be paying out of pocket
more than I would for the co-pays... any suggestions?

Nicole September 24 2010 10:28 AM

I am pretty sure you can only have a HSA if you are self employeed or work for a small company with less than 50
employees. High deductible, HSA accounts are great for healthy people. Pay smaller health premiums and pay the
difference to yourself (HSA account) which is also tax deductible another great bonus. Your deductible is a lot higher
but if you rarely go to the doctor/hospital when you do finally go you should have more than enough in your HSA to pay
the deductible. If you never go then you save thousands by not paying high premiums for health coverage you don't
need.

Jim June 01 2010 12:35 AM

The faith mission that I work for is switching from regular health insurance to a Christian Co-op plan that shares the
medical bills (health sharing plan). Should we supplement this with a very high deductible health insurance policy? We
would have to pay this out of pocket.

Keith Swartzbaugh April 29 2010 5:06 PM

My husband and I would LOVE to have an HSA and have heard Dave Ramsey talk about it many times. Unfortunately,
we both have pre-existing conditions and have been turned down for an HSA more than once. We are self employed, in
our mid 50's with pre-existing conditions, and we pay $732 month for $7500 deductible. This is reality for most self
employed people our age.

Deb Solko March 26 2010 8:22 PM

HSA is a great plan for people who are healthy. I unfortunately have two chronic illnesses, which require monthly
medications, physician visits every three months, lab work, periodic MRIs. That's when I'm in remission or healthy. If
I'm "sick" it is very expensive. My employer only has HSA coverage. It costs me a lot. For those of us who are not
blessed with good health, it is costly.

ML in Ohio December 03 2009 8:05 AM

I don't see where anyone mentioned that the contributions you make to a Health Savings Account are deductible in
determining Adjusted Gross Income.

Kelly Conway December 02 2009 2:10 PM

HSAs (with high deductible healthcare plan) can save money but the paperwork is kind of a headache compared to a
traditional PPO. Instead of paying $15 for a Dr. visit--we paid "20% of the allowable charge" (after we had met our
$3,000 deductible). We'd get a bill for an odd amount of like $12.48 for Dr. visit for which I'd have to write a check off
my HSA, mail it, save a copy of the check and bill. You are supposed to document all your withdrawls from the HSA. It
only saved our family $120 a month over the PPO option. By the time we fulfilled our high deductible--I think we were
better off with PPO because we have high healthcare cost. If it were a larger cost difference--it would be worth it for
sure.

Angela Cutter November 14 2009 2:55 PM

We as an employer are checking into a different group insurance plan for a very small company. Is HSA a possibility for
us to offer?

Amy November 10 2009 12:51 PM

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My employeer offers an HSA coupled with a high deductible BC/BS plan; this is the best deal I've had since the Army!
$25 per week for family coverage, $5850 deductible and 80/20 after that. The best part is the business contributes $4000
to a prepaid debit card that we use for the deductible! The balance we can use payroll deduction on a pretax basis. End of
year balance rolls over with no tax implication until retirement. Great idea made better by a generous employer.

Terry Lewis November 02 2009 11:55 PM

Years ago, I had insurance with my company. unfortunately, they were headquartered in Maryland, and we were in
Pennsylvania. Well, the geniuses responsible for the health insurance coverage did not have a rider on the policy for out
of state employees. Therefore, we were paying what amounted to self-employment rates for our monthly premiums. I
was paying over $734/month!! I had enough. I searched around, and found out about the HSA. I found an insurance
company that would insure individuals, and I have not looked back. My monthly premiums have dropped over $600 a
month! you really can find much better, and less expensive health insurance. Just seek, and you will find!!

Eric C. Mirarchi November 01 2009 11:55 AM

My husband's work uses a HSA. It is WONDERFUL. Our responsibility for health insurance premiums is only about
$65 per pay period (twice/month) for a family plan. His work puts $1000/yr into our HSA and we fund the rest, up to a
total of $3000. This money we put into our HSA is ours FOREVER. It earns interest. It is to be spent on healthcare
(including insurance premiums -- which we plan to use when we retire to help supplement medicare preimums -- if
medicare is still around then). We are responsible for the first $3000/year out of pocket for any health care (ie. Dr. office
visits, hospital costs, prescriptions, tests/procedures). If we spend over $3000/year, then we are covered 100% by our
insurance company. We do get one free yearly physcial and the recommended procedures/tests for our ages completely
covered each year and the children get the recommended vaccines completely covered. We receive discounts for using
provider approved doctors and hospitals (which in our area is just about all of them). If we don't use this $3000 it is OUR
money and continues to grow. We have decided to continue funding this account up to the limit each year for the time
being so we currently have over $3000 in it. I think this plan is the BEST. It encourages us to take care of ourselves, pays
for the things that would "break the bank", and allows us see what the "real" cost of running to the doctor costs. Most
people have no idea what a doctors visit costs because they only pay a $20 or $30 co-pay. But just going to the doctor
because you have a cold can have a "real" cost of $150+-- if the doctor orders a throat culture or viral culture there is
added lab test costs. People need to learn more about the "real" cost of running to the doctor for things the doctor can do
nothing about. That would also help decrease the demand for medical care so more people could actually get in to see a
doctor. We all need to be much more responsible for ourselves and stop thinking "someone else" will pay for us!!!

Patti Lanzer October 31 2009 11:24 AM

THANK YOU. WE ARE LEARNING AS A FAMILY TO USE OUR MONEY WISELY.

Who Needs Long-Term Care Insurance?

Are you at least 60 or have a parent who is?

from daveramsey.com on 30 Sep 2008
Share Email

Joe and Susie were a young married couple of equal age. They weren't always smart with money, but they worked hard
and built up a nest egg of $300,000.

Later in life, when Joe was 67 years old, he developed Alzheimer's disease. At first, it wasn't too bad. Susie used some of
their nest egg to hire a homecare specialist to help with Joe a few hours every day. But as his condition worsened, Joe
had to go into a nursing home.

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Sadly, after five years in the home, Joe passed away from old age. Susie, now 72, is healthy as can be for a lady her age
but works full time because her husband's stay in the nursing home devoured most of their nest egg.

What you've just read is sad, but it happens to thousands of people every year. However, you can keep it from
happening to you.

What is Long-Term Care?

No one likes thinking about it, but as people age or become ill, they might need help doing daily tasks like getting
dressed, bathing, and more. Long-term care (LTC) provides people with those services. Unfortunately, long-term care is
really expensive. Most health and disability insurance won't cover it but long-term care insurance will.

Why You Need It

According to the American Association of Home and Services for the Aging, 69% of people will need some form of
LTC after age 65. I'm a huge fan of this insurance. If you become ill, it ensures that your spouse will have enough
money to eat and your kids won't be burdened with huge payments. Not having LTC insurance can be a $300,000 to
$400,000 mistake.

Now you may be thinking, But Dave, won't the government pay for my long-term care? They will if you qualify for
Medicaid, the government program designed for people who truly don't have any money.

A lot of times people try to cheat the system and move all the assets out of their parent's name and get the government to
pay for LTC. Doing that is called fraud—a federal crime and the government will prosecute you! Also keep in mind that
the government is already having trouble paying for those on Medicaid. Do you really want to count on the government
to pay for your LTC? I say no way!

When to Buy It

Only buy LTC insurance when you turn 60. When you turn 60, the probability of having to stay in a nursing home
increases dramatically. On your 60th birthday, buy it immediately!

However, if you have parents who can't afford LTC insurance and you can afford the payments, then you can buy it for
them.

Where to Get It
If you're at least 60 or have a parent who is, speak with one of our long-term care ELPs. They'll answer all your
questions and help pick the right insurance for you. Find your long-term care ELP now.

Top Articles

Term Life vs. Whole Life Insurance

Four Must-Have Insurance Policies

How to Save Money on Health Insurance

Who Needs Long-Term Care Insurance?

More About: Insurance

© 2011 Lampo Licensing, LLC. All rights reserved.

Post a Comment

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Can anyone tell me the advantages that Mr. Ramsey is considering when he says wait until you turn 60? I really see no
advantage.....unless you die suddenly at age 59 after having paid your premiums for 15 years or something. What am I
missing?

MMB February 22 2011 1:47 PM

Madeline, there's nothing to ponder; you need it because there's a 78% chance that you're going to use it, likely saving
you over $200,000. Get it now while you're in good health and it's still relatively affordable.

Rob February 18 2011 12:58 AM

I have my policy through New York Life. Very very strong company that has never increased LTC rates.

clayton February 03 2011 12:29 AM

I'm torn: DO I NEED IT? or DON'T I.. I'm 67 and my husband just turned 69. He's in excellent health. Mine is ok. How
much should I expect to pay?

Madeline February 02 2011 6:38 PM

Some consumer websites no longer recommend Long-Term Care Insurance, and call it a massive fraud. Their argument
is this is not really insurance, because nearly everyone will file a claim eventually. The future claims payouts will far
exceed total premiums paid. If you are 60, by the time you file a claim, your policy will have collapsed. This has already
started. Conseco Long-Term Care is insolvent. As of January 2011, MetLife is no longer writing individual policies.
Most states have a “partnership” with long-term care insurers, and huge numbers of policies are being written, that will
never be able to cover the cost of claims. We think very highly of Dave, but this is worrisome. Could we have Dave’s
comments on this?

Alex Lechler January 31 2011 11:44 AM

I agree with the comments to consider buying LTC insurance before age 60, especially if you have a family history of
chronic diseases. My father was diagnosed with Parkinson's Disease at age 55. He did not have LTC insurance. He is
now 68 and is severely disabled and suffering from dementia. My mother must care for his daily needs because they
don't qualify for assistance and can't afford to pay for care on their own, and she is also disabled due to severe DJD in
her knees. My siblings and I help out when we can, but it is a difficult situation. I plan to buy LTC insurance as soon as I
am debt-free (probably by my mid-30's.

Melissa December 30 2010 5:25 PM

I've read of a couple of instances of insurance company's increasing premiums for LTC insurance and forcing older
people with fixed incomes to drop their polices because they could no longer afford them. Is there any concern for this?

Stephen December 29 2010 8:44 AM

In response to the person who asked at what point do your assets outweigh the benefit of long term care insurance... My
answer to that is... Would you rather pay an insurance company 150 dollars a month, or would you like to drop 300K to
400K on your spouse's long term care, leaving you in a much worse situation that you were before? LTC insurance is
peace of mind. Think of your children and grandchildren. You don't want to leave your assets to Joe Blow nursing home
owner. You want to leave a legacy for your family. It makes financial sense no matter how you look at it. IF you are still
wary about the risk of not having to use the LTC insurance, get a GOOD annuity from a trusted insurance company with
a Long Term Care rider. I wouldn't say it is a great alternative, but it serves two masters.

Jenleigh September 01 2010 8:59 AM

My husband has Parkinson's disease (age 53) so he doesn't qualify for long term care insurance. I am trying to decide if I
should purchase it for myself. The chances of him going into a nursing home before me are greater. I am also 53 years
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old. If he goes into the nursing home we will gradually lose all the money we have invested to pay the bills and I will be
left with a minimal amount to live on. What should I do?

jlh August 01 2010 6:18 AM

How much money in the bank do you need if you and your husband don't have children or any debt in order for long-
term health insurance to be a BAD idea?

Heddy-Dale Matthias, MD July 20 2010 10:27 PM

Get your LTC coverage as soon as you can afford it. If you wait till you need it, you won't be able to buy it. Buy an
inflation adjusted policy and make sure it qualifies for your state's partnership program (if offered). Oklahoma offers a
partnership program that excludes the face value amount of the policy from assets that must be spent down to qualify for
Medicaid.

FGoins May 18 2010 1:56 PM

I'm a long term care insurance agent and the comments talking about getting long term care insurance while you're
healthy is so important. If you wait to age 60 and do have your health and don't qualify you'd wished you invested in it
sooner. Plus, the costs are alot less the younger you are.

Chuck April 18 2010 10:20 PM

LTC is a great way to protect your assets. I deal in the insurance industry mostly with the senior market and when i
present they say it cost to much. My response i to give to that is the question to ask yourself ,"Can your family afford for
you not tohave it." Get when your healthy and while it is cheap. Get the inflation rider and get the return of preminm to a
beneficiary rider if you are to never use it.

darwin April 17 2010 11:13 AM

I hardly ever disagree with Dave Ramsey, but I do on this one issue. I bought LTC as soon as it became available
through my employer, when we were 50 and 52. If we were buying it NOW, we are not only older, but also have certain
health conditions that would make it either impossible to get, or astronomically expensive!

Tandy April 14 2010 4:48 PM

However, if you don't have any assets except your home, does it really make sense to purchase LTC as it is really
expensive and certainly eats into an "old person's" budget.

Patty April 14 2010 3:02 PM

I don't know how much rates/policies vary, but I looked into this for my 65 year old dad. The premiums were 169/month.
It did not pay the first three months of care, and had a lifetime limit of 109,000. This looks like a rip-off like whole life,
esp. since the average nursing home stay is 2 months.

Rex Pjesky April 14 2010 11:05 AM

I've found your money vs benefits, Bankers Life and Casualty has the best to offer.

Jim Anglin April 06 2010 11:47 AM

The longer you wait to sign up for long term insurance the more expensive it will be and more of a chance you will not
qualify because of health condition. My husband and I just got accepted at 63 and my premium is very high because of
my health. If it is offered through your employer sign up first opportunity.

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Linda Reid March 28 2010 11:45 PM

LTC insurance is a great idea for everyone. I am a hospice nurse and have seen many families struggle with the burden
of caring for a loved one. Most people think that medicare covers LTC, and this is simply not true. Many LTC insurance
policies also cover hospice, in home 24 hour care, and respite services. While the insurance is fairly expensive, it saves
much heartache and money down the road.

Erin March 28 2010 3:57 PM

I'm 53 years old and recently purchased LTC insurance. I was wondering if I should wait a few more years, but I was
amazed at how much more the premiums would increase with each year that I waited! My goal in retirement is to have as
few expenses as possible, and by locking in my premium price TODAY, I will be able to spend a lot less money on this
policy while in retirement. The money that I would have "saved" while delaying the purchase of this policy is nothing
compared to how much more I would have paid in the long run by waiting a few more years.

Mark Barnack February 17 2010 1:19 PM

OMG! Do you know how many people are declined for insurance at age 60? There is underwriting involved in
purchasing Lont-Term Care insurance. You don't just sign up for it. The thing with insurance is that you have to buy it at
a time when you think you don't need it...while you are healthy. If you wait too long, you might find yourself
uninsurable!!

Jan Sheets February 10 2010 11:39 AM

Annette, Who is the sponsor of your LTC insurance? It sounds like a good on if it's adjusted for inflation and is lifetime.

Nilsa S. December 28 2009 3:38 PM

I think 60 is way too late to buy a long term care insurance policy. If you are going to be in serious trouble it can hit you
any time. I bought mine at age 39. I was forced by my employer to have a booster of rubella vaccine, and this has caused
autoimmune arthritis. Although I am still independent now, it is nearly certain that I will need decades of nursing home
care later on as my condition worsens. I am now uninsurable and thank God I bought the policy before I was crippled by
my employer. The payment period ends at age 65. The premiums are capped at 150%. Benefits are adjusted for inflation
and are lifetime, i.e. if I need 50 years of long term care it will be paid for.

Annette H December 26 2009 2:39 PM

A lot can happen between 50 and 60 to effect insurability and premium. Make sure the decision you make is based on
your own values and your own concerns. If "premium" is the issue, do the math. Example - if you don't make a claim
until age 85, and you pay a $150/mo premium for 35 years you have paid in $63,000. About enough for 10 months of
care if you are looking for "return." If you pay in $200/mo commencing at age 60 for 25 years you pay in about $60,000.
Again - approximately 10 months of benefit, and you've saved only $3000 over the life of the policy. Consider family
health history and all of the concerns that should properly be addressed before deciding that age 60 is "gospel."

MRP December 11 2009 4:01 PM

I'm from the insurance industry. A lot of LTC plans change the underwriting requirements and require a longer
application process at age 60. Try to enroll at 59!!

April Patterson December 08 2009 10:26 AM

Ditto on when to buy. My great-grandmother died of a stroke at 53, so my grandmother purchased a policy for four
years' of coverage, which she exhausted last year following a stroke at age 83. Her current monthly expenses at a full
care nursing facility (and not a new or "pretty" place) is $7K. It doesn't take a genius to figure out what a hardship that
places on a family.

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Susan December 01 2009 9:47 PM

My only comment is that some people need to purchase LTC before age 60. My husband is a cancer survivor with
serious chronic health problems at the age of 53. We plan to take advantage of simplified underwriting LTC coverage
offered by his employer.

Four Must-Have Insurance Policies

from daveramsey.com on 14 May 2010

Share Email

Just because some aspect of money isn’t talked about much, doesn’t mean it’s not important.

It’s obvious that a budget or a debt snowball need to be checked frequently to make sure that you’re sticking to them. If
stuff like that gets away from you, it can turn bad quickly. Make sure to refresh yourself on these four insurances:

Life Insurance

If you die with no life insurance, your family will most likely be stuck in a dire situation and have to make drastic
changes, all the while grieving you. You should have eight to 10 times your yearly income set aside in a term life
policy. That way, if you pass on, your family can invest the money and, at a 10% return, replace your income.

This is something that shifts more often than you think. Every time you get a raise, have a child, buy a house or have
some other significant life event happen, you need to make sure that you have enough insurance to cover it. Don’t take
this lightly; one-third of adults in the United States carry no life insurance, and more than half a million in the prime of
their lives die prematurely each year.

Get some life insurance quotes from Zander Insurance.

68 million Americans have no life insurance at all. That's the equivalent of every man, woman, and child in the green-
colored states.

Long-Term Disability Insurance

If you die, your life insurance will take care of your family. But if you are permanently disabled, you will be unable to
produce an income and yet still need to be cared for. In that case, you need long-term disability insurance that will
provide about 70% of your income for an extended time period, usually until death or age 65.

You can usually get it the cheapest through your workplace. And you need to. About 49 Americans become disabled
every minute and three in 10 in the workforce today will become disabled before they retire. With the average monthly
benefit from Social Security disability being $1,004 a month, you can’t afford to not have this type of insurance.

Find out more about disability coverage from Zander Insurance.

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 Life insurance

In the past hour, almost 3,000 Americans became disabled. That's 49 every 60 seconds.

Long-Term Care Insurance

This isn’t necessary until you hit age 60. After that it becomes vital. A nursing home can cost about $50,000 a year per
person. If you and your spouse go into an assisted living facility with $300,000 in life savings, you’ll have it used up so
fast you won’t believe it.

If you are approaching 60, start looking at long-term care insurance. Don’t buy it before then (it’s not necessary enough
at that point) or after (it can get too expensive).

Find a long term care insurance agent in your area who Dave recommends.

Homeowner’s/Renter’s Insurance

You should never own or rent property without having yourself covered in the case of a fire, flood, burglary or some
other disaster. Renter’s insurance is relatively cheap to get, so make sure to have some.

When buying homeowner’s insurance, get one that has guaranteed replacement costs. If something happens to your
home and you have a policy without guaranteed replacement costs, you will only be covered for the value of your home
at the time you took out the policy. That’s bad news if your house has increased in value. Make sure to have your full
emergency fund in place so you can take the lower premium and higher deductible on it.

Another important aspect of a sound financial plan is to keep your Legacy Drawer up to date. Learn what needs to be
included in your Legacy Drawer, in addition to the insurance infomation abo

The Truth About Dave Ramsey – My Response to Dave Ramsey’s Article “The Truth About Life
Insurance,” Part 1
June 21st, 2010 Neil Jesani Leave a comment Go to comments

Though I am passionate about life insurance, and my career, it takes a great deal to upset me. However, when Dave
Ramsey is quoted in any article, I instantly find myself pondering his perspectives on life insurance. While I respect and
admire his advice on credit and frugality, the continued dissemination of his viewpoints leaves me concerned for future
generations – his misguided notions, if heeded as legitimate advice, could harm the financial futures of thousands of
people. I would like to spend a few weeks going line by line through a recent article of his about life insurance, to shed
some light on a subject about which Dave Ramsey is very much in the dark.

Ramsey starts by stating that “cash value life insurance is one of the worst financial products available.” In this instance,
I find myself recalling the wise words of my grandfather, who noted that every generalization is both true, and false.

Stephen Covey, in his book “The Seven Habits of Highly Effective People,” wrote that to be successful you must “begin
with the end in mind.” Only then can you decide what road to take to get you there. Whether or not life insurance is a
good choice for you is reliant upon your envisioned “end.”.Ramsey’s claim is that, regardless, cash value life insurance
is a waste of money – and this blanket claim is, to put it plainly, wrong, sharing the same inherent flaws with which all
generalizations are saddled.

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 Life insurance
In a few days, I’ll talk about Ramsey’s next comment, where he states, “Sadly, over 70% of life insurance policies sold
today are cash value policies.” What’s truly sad is that the other 30% are term life policies. And next time, I will tell
you why.

The Truth About Dave Ramsey – My Response to Dave Ramsey’s Article “The Truth About Life
Insurance,” Part 2
July 13th, 2010 Neil Jesani Leave a comment Go to comments

Last time, I started to disassemble Dave Ramsey’s article, “The Truth About Life Insurance.” I want to talk this week
about his next inflammatory comment, where he claims it is “sad” that 70% of life insurance policies sold are cash value
life insurance, while the other 30% are term life insurance.

Term life policies provide coverage for a predetermined period of time, but may not last the whole rest of your life.
Cash value policies, on the other hand, do provide coverage until the day you die, whether it be tomorrow or a thousand
years from now.

Here’s an important fact Ramsey omitted from his article, probably due to the fact that he was unaware – for every 100
life insurance policy payouts, 99 of them went to policy holders with whole life insurance.

According to a study conducted by Pennsylvania State University, 45% term life policies are terminated or converted
within the first year, 72% within three years. Only 1% end in a death claim. And yes, policy holders who owned term life
but didn’t die during that term received absolutely nothing.

So let us look at Ramsey’s argument through that lens. I feel – and I’m sure I’m not alone – that if someone offered to
take my money, then gave me a 1% chance of ever seeing it again, I’d have to pass. But Ramsey is suggesting just that,
to every person who watches his show, listens to his podcast or reads his newsletter. If every American followed his
advice, 99% of our country would die without leaving any legacy – beyond medical and funeral bills – for their children.

Next, Ramsey moves into the frequently-touted “buy term and invest the difference” strategy. I’ll show you why that
idea almost never works.

Categories: Business Owner, Home Maker, IT Professional, Life Insurance, Physician Tags: Life Insurance
Comments (5) Trackbacks (0) Leave a comment Trackback

1.

learning

September 24th, 2010 at 14:17 | #1

Reply | Quote

This is educational. So whole life is better for some people or all people? I guess that depends on where you are
financial? I’m just learning about this whole thing, and you gave me a lot to chew on here. Thanks.

2.

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Jonathan

September 30th, 2010 at 23:03 | #2

Reply | Quote

Whole life and term life don’t even have the same function financially. Term life is a protection mechanism and
that is it. Whole life has a component of protection and a component of wealth building. People like Ramsey
and Ormond make their money on POOR people those with avg income that ARE NOT financially
sophisticated. They partner with a term life insurance broker and help sell Term life policies and MAKE A
TON OF MONEY DOING IT!!!! SCAM SCAM SCAM.. while on its face it seems like good advice .. right…
cheap vs. expensive… ah… but that is where the rub is..it is easy to demonize that which people don’t
understand and flip them into purchasing something they will never get use of because its cheap. But how cheap
is it when 99 times out of 100 you may as well have thrown your money in the toilet. HUH? Yeah thats right..
throw your money in the toilet.
Ask Warren Buffet or Bill Gates or any other insanely wealthy person what type of life insurance they own. I
would bet the farm that it is WHOLE life insurance.. Now not the goofy pseudo whole
life products from Gerber Life or any of those low rent companies…. but real WHOLE Life contracts (like the
ones from companies such as Mass Mutual and The Guardian)that guarantee interest rates on your money have
tremendous borrowing provisions (can you say tax advantaged) and that represent INTERNAL AND
EXTERNAL Rates of return that will often triple what a stock portfolio will pay you with virtually no downside
RISK.. YEP.. how about that.. Most of these stock jocks and financial self help gurus are terrified of someone
who truly understands the features and benefits of Whole Life. So, they spend lots of time trashing them and
selling the cheap stuff that almost never pays out! I could go on.. but I won’t – you will just have to do the
research… I will say if you want to build wealth as opposed to pay debt the Whole life insurance should be part
of your strategy.. if you want to feel good about your impending death and your profiting off a policy that most
likely will not be in force when you die then Find a REAL financial professional with a deep understanding of
lost opportunity cost, wealth building and is not afraid to have hard and sophisticated conversations with you
about your money.

3.

Art

November 29th, 2010 at 10:25 | #3

Reply | Quote

Ramsey made two false statements in his article. First, he stated that whole life policies paid 2.6% – I have
NWML policies that have returned 5% and that return is tax sheltered (it will be received free of tax by my
beneficary). Second, he stated the tired old charge that upon death, the insurance company pays the face amount
and keeps the cash value – I can show you my NWML policy that effectively pay the original face amount plus
the cash value or more (I applied dividends purchase ‘paid up’ insurance)

4.

Dollars Not Debt

January 21st, 2011 at 20:10 | #4

Reply | Quote

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I have been following Dave Ramsey’s plan for about 2 years and I will be 100% debt free in August of 2012.
House and everything! The plan works–but only if you are focused and have self-control. I will have paid off a
total of $100K in the four years. I talk about my path to debt freedom in my blog.

Dollars Not Debt

5.

Ryan Anderson

February 18th, 2011 at 16:45 | #5

Reply | Quote

Funny, Suzy preaches against whole life and owns a policy of her own, preaches about not buying new cars and
flys around in a private jet.
If you retire in a down (2008) economy and your variable assets are worth half as much as they were before, it
would be ideal to leave the money in the market and let the assets bounce back in a year or two. That’s when
you tap into your whole life policy to protect your assets

Whole and Universal Life vs Term life. Are they a ripoff?

Posted in Life Insurance Questions over 2 years ago, 59 replies

I hear Dave Ramsey on the radio talk about how Whole Life and Universal Life are a ripoff. Is that misleading at all? He
says the best way to go is buy Term Life insurance and invest the difference into Mutual funds that average 12 % returns.

submitted by Jared in SLC, UT

It's depends on your philosophy about investments. Whole life and universal have a lot of costs and commissions built
into them. But they also have tax advantages. Buying permanent insurance can also force saving discipline on a
policyholder, since their insurance "bill" is due each month.

Another advantage for permanent insurance is for estate planning, something Dave Ramsey will ironically need to do for
tax purposes.

Overall, Dave is right that it's best for most people to buy term and invest the difference. It's important to find a
financially reputable insurance company with very good rates. The less you pay for term life insurance, the more there is
left to invest the difference.

submitted by Dan in Charleston, SC @ September 22, 2008 - 11:32 PM

Reply
As Dave would you sound (stink ) like a cash value agent!

submitted by Mann in Singh @ November 11, 2010 - 10:44 AM

Permanent life insurance policies are only good if you can afford them. Most people can't and that's why they appear to
the public as a ripout. They are actually fairly good investments, however, most people can't afford to keep them long
enough to reap the benefits.

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 Life insurance

submitted by Byron Udell in Wheeling, IL @ September 23, 2008 - 11:17 AM

Reply
Puuhleeaze.

Permanent life insurance makes less sense if you can afford it.
If you can afford that poo, you dont need it.

They plug that you build cash value.

Sure, fair enough. But you do not get the insurance PLUS the cash value when you die. You get YOUR SAVINGS plus
the insurance MINUS your savings.

So you end up paying the same Amount every year, for LESS insurance. In the last year, you will be paying say 2500 for
500 of insurance.

WEEEE.

Its only good feature is the the premium itself does not go up and it is renewable.

submitted by Orack Bobama @ August 04, 2010 - 01:07 PM

Whole Life works better the younger you buy it.

I am a strong proponent of WL for everyone (of course, if they can afford it).

Whole had many benefits. The main one being it flexible. Most people will have a dozen
unexpected/unrealized/unknown events happen in their lives over the next 30 years that will alter their financial
landscape.

*Buying a new house

*Taking out a second mortgage
*Getting a big promotion
*Getting fired
*Starting your own business
*New dependants (children and/or parents)
*Disability
*Natural disaster
*Having a child with special needs

Those are but a few things that can completely change where your financial train is rolling. Whole Life offers the
solution to the questions:

*What if I need insurance longer?

*What if I need to replace more than just my income at death?
*What if I start to worry about how much I will leave my kids?

You get what you pay for, and Whole Life (if bought through the right company), is a tremendous financial tool.

Dave Ramsey has probably saved a ton of marriages through his debt management system. However, he misses the mark
on WL. And as Dan aptly mentions, he is going to need some major estate planning down the road, and he'll wish he'd
bought Whole Life earlier.

Hope that helps.

submitted by Andrew in Greenwood, IN @ September 30, 2008 - 11:42 AM

Reply

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Whole Life Insurance is actually worse the earlier you purchase it.

The savings portion goes to the insurance company to pay out the death benifit when the insured person passes away.

For example, someone who has a policy with a death benifit of 100k and has accumulated 75k in savings at time of death
has the the 100k paid out to the benificary (less any borrowed money plus interest) but the 75k accumulated goes to the
insurance company.

So as it stands the longer you pay into that policy and accumulate cash value, the less money the insurance company has
to pay out of their pocket to the remaining person at time of death.

So many families are devistated when they realize the savings portion isn't something they can lay claim too although
they've been paying for it for whatever length of time.

Can you imagine if you had been putting money into the bank every month for 50 years and when you needed it most
were told sorry, you didn't read the fine print it's actually not yours.

The insurance industry is so deceptive.

submitted by Clayton in Toronto, ON @ April 22, 2010 - 12:46 PM

Buy Term and invest the difference. Then like most people..you will not invest the difference. Even if you did...You
probably put your money in Mutual Funds which are less than what you paid for them? Then when you retire, your
house will be paid off and your kids will all be grown and doing well so you will not need life insurance? Good luck
with that in the real world. Here are the facts: You do not know what the future holds. Tax Deferred Interest on life
insurance policies are a great way to save and access the money "Tax Free" via loans later. Using life insurance to
leverage the value of an estate is pennies on the dollar as long as you keep it in force. Most term life insurance policies
NEVER pay a claim! As long as you keep a permanent life insurance policy in force, it will.

submitted by John Y. in Ca @ March 07, 2011 - 05:41 PM

BTW, I would to see these mutual funds that are average 12%, and will continue to do so.

submitted by Andrew in Greenwood, IN @ September 30, 2008 - 04:08 PM

Reply
Hello my name is Fadeelah, I watched Suzie Orman on the Oprah show and she stay away from whole life insurance and
I have whole life insurance for me and my children and grandchildren. my question is why stay away i don't understand.

submitted by Fadeelah in Georgia @ October 11, 2008 - 12:05 PM

Reply
Life insurance can be a very difficult instrument to understand. Sometimes even harder than understanding securities like
stocks and bonds. With life insurance, there are too many hidden complications with universal or whole life. Term is
pretty straight forward. However, pretty much the only benefit to whole or universal life is that it lasts up to typically age
100. Estate planning? I would question that!

The reason term can be so much more useful is for the fact that it is much cheaper and you usually have 10, 20 or 30
years to have the policy. So if you have a policy for 20 years and you are on your 20th year then your home and other
debts should be paid off with a nice retirement account. The thinking is that you don't really need Life insurance at that
point.

Make sure your insurance agent also has a securities license so that he or she does not pressure you into a life insurance
policy as an investment. If he or she has their securities license then they have much more options with helping you. Ask
Questions and see the facts!

submitted by Tim in Ohio @ November 11, 2009 - 10:28 PM

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totally nuts !!! what an advise.

I'll tell you: take a piece of paper and compare any "recommended" cash value policy (whole life, universal, :bet your
life, executive life or any other name they use for them) and compare with plain vanilla LEVEL TERM insurance as
recommended by Ramsey, Primerica ("King of Term") and increasingly number of people in and outside the industry:
TERM Insurance WINS every single time!!!

Factor this: why do you think the insurance industry lost +4,000 "professional agents" (selling cash value!!!) just last
year 2009?

Find out about Buy term and invest the difference. You'll be wealthier down the road and your family better protected if
you do!

submitted by CITISHARK in US @ April 09, 2010 - 01:07 PM

Celebrity financial advisors have some advice that is great, and other advice that not for everyone. You will never have a
time in your life when you will not want to impact someone or something positively if/when you die. Term insurance
works out if nothing in your life will change over the course of those years in which you own it. However, you need
flexibility with your financial plan, and Whole Life offers that.

Term and Invest the Difference strategies usually end up being Term and Spend the Difference strategies.

Even if you can stick to the plan, you have to do extremely well to warrant beating the tax free death benefit afforded by
WL.

Talk to the people who are getting ready to retire....those whose lives have changed either by divorce, refinancing of a
house, buying a new house, an unexpected pregnancy, a parent who had to move in, etc., etc., etc........

They will tell you they would have loved to have bough WL thirty years ago. You need to think long term, which most
people cannot do, and which is why most buy term.

BTW, even if someone talks you into a term strategy, the WL policies on your grandchildren are excellent investments.

Hope that helped.

submitted by Andrew in Greenwood, IN @ October 13, 2008 - 01:32 PM

Reply
Suzie Orman thinks the same way and she worked for Primerica, which is essentially Citibank. So it would make sense
that she wants you to buy term and invest the difference, since then Citi can use you and your money so they can try to
make up for over $55 billion in write offs.
The first step in buying a life insurance policy is checking the company behind the policy.
There are four major rating companies that rate all insurance companies in the country:
Standard and Poor's
Moody's
Fitch
A.M. Best

These reports are not free, but any company that you are dealing with should be proud to tell you their ratings, that is if
they are a good company, with a sound financial sheet and a surplus. The surplus is Very important, what this means is
how much money they have in their "rainy day" fund. This is the fund primarily used to pay death claims. So it is
important that they have a very well padded surplus, in cases of mass tragedy when many claims have to be paid at once.
This surplus also represents what the company is doing with your money, are they investing it wisely so that they will be
there for you 20, 30, 50 or 70 years from today.

The company that I have my policy through is New York Life. They have the highest ratings from all four of the rating
companies. They also have a surplus of over $14 billion.

Standard and Poor's AAA

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 Life insurance
A.M. Best A++
Moody's Aaa
Fitch AAA

They are also a Mutual Company which means that they are owned by me, a policy holder. So...when New York Life
makes money, I make money. The opposite of a Mutual Company is a Stock Company, what this means is that the
owners of the company are share holders, not policy holders. This is quiet a conflict of interest in my opinion because a
stock companies interests are not in line policy holders interests. These companies are MetLife, AIG, Hartford, and
Prudential to name a few.
This is quite opposite from New York Life, since they are a Mutual company their one and only concern is making sure
that they are there, strong and solvent on the day where my family will need them the most. They do not take risks
without making sure that it is in the best interests of the policy holders.

The company is over 163 years old, have insured americas greatest legends:
Babe Ruth
J.C. Penny
Suzan B. Anthony
Colonial Custard
and 11 U.S. Presidents
In-fact Calvin Coolidge, pushed a button in the White House that was linked to an American Flag that unraveled at the
grand opening of the New York Life Insurance Building in New York City (1928)

Just think of that, 163 years old, New York Life was crossing civil war lines to deliver death claims. They paid EVERY
claim during the panic of 1856, the crash of '29 and throughout the Great Depression. They have also paid a dividend to
whole life policy holders for 162 years straight.

In today's world it is hard to trust anyone, but when you find a company that is build on such integrity and values it is
hard to not spread the word. Check them out if you are looking for long term promises that you would like kept.

submitted by Jason in Columbus, OH @ October 15, 2008 - 09:12 PM

Reply
What a bunch of crap..

submitted by Wayne in America @ October 06, 2009 - 07:11 PM

No wonder Primerica is kicking the whole life industry's ass. What a bunch of hog wash.

submitted by Wayne in America @ October 06, 2009 - 07:27 PM

You talk "just like" New York Life agent

submitted by Joel in New York @ July 18, 2010 - 03:20 PM

I applied for life insurance for myself and my husband. I was told by my agent to put the child rider on my husbands. He
ended up being denied and mine was completed. Now I can't add a child rider to my existing policy so our children are
not covered. My agent now wants me to do either whole life or universal life for them, he is pushing the universal life
more. It seems like more then I can afford right now. What is the best thing to do to get them covered?

submitted by melissa in missouri @ October 21, 2008 - 11:09 AM

Reply
Melisa: that is not anyone looking up for you or your family: he/she is a real crook getting inside your home.
And this ine is an old trick the insurance companies use to induce you to buy cash value. Thanks for commenting about
it!
You and your family needs LEVEL TERM insurance

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 Life insurance
submitted by CITISHARK in US @ April 09, 2010 - 01:11 PM
Melisa, I have been insurance broker for over 13 years. If you just bought your policy, the agent can reissue the policy
with the new child rider. The medical exams that were collected on your, last 6 month and the customer can increase his
or her death benefits during that time but first you have to complette an insurability questions. try to do that and open a
Mutual Funds for your childrens.

submitted by Rafael Ceara in San Juan Puerto Rico @ August 15, 2010 - 02:31 PM
Children don't need life insurance. That is waste of money. No one is dependent on their income.

submitted by ally in san diego @ October 30, 2008 - 04:37 AM

Reply
You may be right in most cases. Insurance however is for the unexpected. We lost our daughter in December 2007, just
four days before Christmas and that was unexpected. We did not have life insurance in place, I was unable to work for
the next month and we still had to provide some semblance of the holiday for our two remaining children. And lets not
forget the ongoing bills.

Maybe you have more cash on hand then we did. I had just closed my mortgage company six months earlier and was
working at a local hospital with no cash reserves.

Years ago I had sold term insurance for Primerica and over my ten years with the company had obtained the position of
Regional Vise President. The lessons that I learned there has taught me that at the time I was with them I could sell a life
insurance policy but I did not fully understand the benefits of Whole Life until years later. I am thankful for the
experience but I will never recommend buy term and invest the difference to anyone ever again for far too many reasons
to list here.

submitted by Samuel Chambers in Florida, United States @ November 21, 2009 - 05:15 PM
What most question and answers here are missing is that each individuals situation is different. Most of the time I blend
term and whole life or universal life together. Huge term death benefits while children or mortgage is around say a 30
year term and a smaller permanent life insurance for the remainder of their life. The answer that children do not need life
insurance is pure ignorance. If I have a client with children in the house I always offer a Child Term Rider that not only
provides protection in case the child dies, but also guarantees the child up to 5 times the face amount of the rider when
the child becomes a legal adult. The reason this is important is that if the child becomes uninsurable before becoming an
adult they are guaranteed up to 5 times the face amount of the term with permanent life insurance without evidence of
insurability. I see alot of answers here pushing their agenda. I always always always sit down with my clients provide an
insurance review of everything they have and ask them what their current and long term plans are. Then together we
prepare a plan that fits their objectives!!! Not my commission objectives, folks if you take care of the client first they will
take care of you with referrals and future business!!!

submitted by Don in Jacksonville, FL @ May 26, 2010 - 02:05 PM

I just finished reading a book by Patrick Kelly on universal life insurance. The title of the book is call Tax-Free
Retirement. He strongly recommend Univ. Life Insur. He states that Univ. Insurance is expense, but it pay off in the
longer run.

submitted by JAY in TX @ January 13, 2011 - 02:35 PM

You are Studid! My nephew died in his sleep at age 21 and West Coast Life paid the claim $10,000 fast to my brother
and wife who had a child rider on Her policy.

submitted by John Y. in Ca @ March 07, 2011 - 05:49 PM

It is not that someone is dependant on the childs income / it is a head start. If they are below 18 they should not need a
physical exam. And the policy will have "account value" at age 65 that is very nice for retirement. Plus they wont have to
qualify for coverage when they are older and possible unhealthy.
National Agents Alliance
htt://naablast.us
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submitted by Titus in NAA @ October 30, 2008 - 11:15 AM

Reply
Its not that they need insurance, rather could you get up and go to work the next day after your child died??? if you
could, I am glad you are not my neighbor. please dont Purchase Universal Life unless you can over fund it.. WL is a
great policy to purchase early in life for any one.. You will never be healthier and never be younger..But that tween age
you should have as much Term as you need to take care of your family. A good agent will give you all the direction you
need,,BE SURE TO ASK QUESTIONS!!
I am an agent and I am proud of the products we provide,

Gdo Bless and good luck on your purchase.. Also your agent could re-write your current policy and use the same
underwritting info if there has not been a lot of time between issue and now..

submitted by BILL in MICHIGAN @ March 14, 2009 - 09:53 AM

As an Insurance agent I am a big believer in term and a huge believer in whole life. They both have their place. It is all
based on what your clients goals are. If clients want to continue to "rent" their life insurance, I will sell them term. If they
want to "own" their life insurance, I will sell WL. If you want to know where insurance companies make their money it
is on term insurance. Maybe 1-2% of the total term policies in force will an insurance company pay a claim on. The rest
of them either go to the full term or they lapse or cancel because the client does not see value in the policy.
If the client wants to renew their term policy after 20 or 30 years their cost of insurance is going to go up every year they
choose to keep it. And if they are above 50 yrs old, good luck paying those premiums. The true WL policy premium
stays level for life.
And to those who say WL is terrible for kids, I have to strongly disagree. You are ensuring insurability. Parents are
making sure that their child can always have life insurance in place not for them, but their grandkids and future spouse.
Finally, will Wayne, his aunt Susie, and uncle Dave get off their soapbox and give their audience all the information they
need and let them make the decisions on whats best for them. Quit being so biased. You sound like infomercials....

submitted by Aron in Vegas @ December 17, 2009 - 03:10 AM

Buy whole life from New York Life. They pay a dividend which goes to your cash vale. The product is called custom
whole life, best whole life insurance policy in the business. They are A++ by all four rating companies, but yes it is
expensive. The average return on investment is 6-7% with no taxes on capital gaines if policy holder dies with the policy
inforce. This product is the best for estate planning

submitted by pm in pittsburgh @ December 28, 2008 - 10:44 PM

Reply
New York Life has been ripping people off for over a 100 years. It was started by flim flam people is still operated the
same way and even worse now. Whole Life, especially with the deliberate overcharge called dividends, is the #1 biggest
scam in North America. I was scammed by them until I found out the Truth. Check out the book "What's Wrong With
Your Life Insurance" by Norman Dacey. It blew the lid off of the whole life industry.

submitted by Wayne in America @ October 06, 2009 - 07:17 PM

Orman was born on the South Side of Chicago, Illinois, in 1951 to Russian-Jewish immigrants Ann and Morry Orman.
[6][7] Orman came from a working class background and has said that she did not "grow up with money."[6][8] She was
an undergraduate at the University of Illinois at Urbana-Champaign, from which she holds a B.A. in social work. In
1973, she moved with friends to Berkeley, California and lived for three months in a van on Hearst Avenue. She soon
became a waitress at the Buttercup Bakery on College Avenue. In 1980, a longtime customer gave Orman a loan of
$50,000 to help her fulfill her dream of opening her own restaurant. Orman invested the money at Merrill Lynch, but
four months later was broke again, after she was swindled by her stockbroker.[9][10]

Knowing that she couldn't make the money back as a waitress, and having started learning more about finances and
investing, Orman returned to Merrill Lynch and entered their training program to become an account executive. She
discovered through her training that her stockbroker had committed an illegal act and she thus sued Merrill Lynch. Suze
received the entire $50,000 back plus interest and was able to pay back her former customer. After she completed the
training, she was hired by the firm and remained there until 1983 when she left to take a position as a vice president of
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investments at Prudential Bache Securities. In 1987, Orman resigned and opened her own financial planning firm, the
Suze Orman Financial Group, in Emeryville, California. She acted as director of the firm until 1997, when she stepped
down as her writing career took off with the publication of her second book.

1. I don't see anything about Primerica/Citibank?

2. There are other products out there for estate planning other than Whole Life Products.
3. Go to any major fund company's website and you will find fund lifetime performance(10yrs+) on an annualized basis
to be higher than any whole life policy cash values(which recommended to be held at lest 15-20 years)
4. The dividends paid on your whole life policy are for overpayment of premiums. Meaning your insurance company
charged you too much in the first place. Its like getting a refund for overpayment into your escrow account on a
mortgage.
5. Babe Ruth and all the others mentioned were wealthy, not working class people.
6. If you work with a financial advisor, not an insurance agent you will get the same response you hear from Dave and
Suzie. Who have no financial gain in you purchasing term and investing the difference.
7. Whole life for kids is the worst investment. I know my parents had one for me. Luckily my grandparents set up an
UGMA/Education IRA for me at about the same time. I was able to cover my college expenses, Masters, with my
Education IRA, the $3,200 in my whole life policy after 20yrs well it went into an IRA.

submitted by CFP in Seattle @ January 14, 2009 - 07:07 PM

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I am 65 and my husband is 72 yr old. Our trusted friend and State Farm Insurance agent convinced me to buy Universal
Life Insurance a few years ago. He converted my 10-year term life insurance policy (premium was $279/yr for $100,000
coverage) to a Universal Life Insurance Policy for $100,000 coverage - NEW PREMIUM $2,616/yr. What a dope I was
to fall for his sales pitch that Universal Life was really an investment I would get back. I spent nearly $10,000 in
premiums before I realized I had been duped. If I had stayed with my original Term Policy, I would have spent less than
$1,000 and I could have invested the other $9,000. In the end I recovered about $4,000 so I LOST about $5,000. Dave
Ramsey is right. Universal Life is a RIPOFF.

submitted by AW in Austin, TX @ January 17, 2009 - 12:11 PM

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Can someone tell me where are all these people who say "invest the difference" are investing? I am looking into buying
whole life vs term insurance but what other investment GUARANTEES 4-7% returnes like some whole life companies
do. Also I was told if an investment returns 10% for the next 30 years and has one negative year (which likely will have
more than one looking at todays market) at the end you will lose more money than an investment that guarantees a fixed
rate. That is my only argument with whole life?

submitted by sean in indianapolis @ January 22, 2009 - 01:10 PM

I have a client who is 69 and her husband is 70, they are JUST NOW looking at life insurance... and her agent did sell
her a 10year term policy... that expires 2-28-09. She is now uninsureable for term and can only get whole life or UL.

She should have bought a UL policy, have the cash value taken out and made it basically a 30 year term policy for a few
bucks more each month.

Insurance is a tool, but please don't compare the effectiveness of using a hammer to tighten leaky pipes or grabbing a
nice big pipe wrench to pound nails... wrong tool. If your so smart, you must also be expert enough to do your own
dental work?

submitted by Mike in Seattle @ February 18, 2009 - 08:47 PM

The whole purpose of life insurance is to offer financial protection in the event of the policy holder’s death. It is best not
to look at it primarily as an investment plan. Term life policies purely offer death benefits during the period of the term.
There is no cash value on a term life policy. Some term life policies will offer you refund on the sum of premiums paid,
after the term is over.

I work for AccuQuote and this is my personal opinion. Many prefer an investment advantage to their life insurance plan,
but this should be considered an added advantage to a life policy, and not primarily viewed as an investment. It’s the age

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old comparison of apples with oranges. A whole life policy accrues cash value over the years. It will definitely not give
you the same kind of investment returns as mutual funds or shares but neither can investments in mutual funds or shares
give you the kind of death benefits a life insurance plan would? How many years of investment would that take?

Universal life is similar to a whole life policy except that the policy holder has more control over the investment
component. Universal life is usually chosen by people who are market savvy and want to use their life insurance as a
combination of life insurance and investment. This kind of policy is subject to market risks.

Denise
Disclaimer: I work for AccuQuote and this is my personal opinion.

submitted by Denise in United States @ January 30, 2009 - 03:24 AM

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I don't put horse shoes on my cat.

I don't make my horse "go" in a litterbox.

Both strategies have merit, the real key is selecting the plan THAT BEST FITS YOUR CLIENT. Period.

I advocate whole life, but if someone is dead set on the dave ramsey approach, I'll help them out (and in 95% of the
cases, sell Whole Life to them later when they finally realize they need it). Life Insurance is about more than death
benefit.

Anyway, I feel my job is to provide the client with as much information as possible, to give them my opinion, and then
let them decide what route to take.

submitted by Andrew in Greenwood, IN @ January 30, 2009 - 10:08 AM

Reply
Typical whole life agent. Unbelievable ignorance.

submitted by Wayne in America @ October 06, 2009 - 07:20 PM

First, I am no expert. However, I would like to echo some of the points made earlier. There is no doubt whole life is
expensive and so to is universal life. The annual premium for a 35 yo male is about $16,000/year for WL and
$10,000/year for universal for million dollar policies. This is a lot of money! But down the road, if you live to 70, there
will be a tremendous amount of cash value in either type. However, if you need 10x's annual income for adequate
coverage for a death event, and you earn 180k/year, the WL and Universal policies would fall short unless you had at
least 15-20 years of premium paid. I think every head of household should have 10Xs annual income, but you can have
more than one type of policy.

I have four policies, 2 term and 2 whole life. I can convert the term to WL at anytime as my overall wealth grows.

Other benefits are both estate planning mentioned above/tax benefits as well as protection from creditors.

Finally, for professionals, limits on disability insurance are around 25k/month. A whole or universal policy has a
disability clause that your premiums continue to be paid in-full until age 65. This will provide ongoing wealth
accruement, something you will lose with only having 60% of income once you are disabled, assuming the best possible
scenario with disability insurance.

A person is 12 X's more likely be disabled than an untimely death

submitted by Chuck in Atlanta, Georgia @ July 30, 2009 - 09:25 PM

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Unbelievable ignorance. Now I know why people cross the street to avoid insurance agents. Totally unprofessional and
uninformed.

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submitted by Wayne in America @ October 06, 2009 - 07:24 PM

Wayne,
Please make a decent point or stop typing. I have been reading through the list of comments and every time that i come
to one of yours, i get nothing out of it. If you have comments that will help people type away. If you don't, could you
please value others' time and not say anything?

Much appreciated,
everyone

submitted by william in america @ March 27, 2010 - 10:05 AM

Some interesting information. True, the buyer should beware. I was hoping for a good resource of information in order to
make a wise buying decision. I noticed Wayne in America is full of critical remarks but offers no positive information.
Wayne in America, is there anything meaningful and positive you can offer as an alternative or an insight?

submitted by Don in Green Bay @ October 19, 2009 - 06:17 PM

Reply
Wayne - who peed in your cornflakes today?

submitted by Tim in oakhurst @ October 23, 2009 - 04:00 AM

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First off term has a place in people's life especially when you are just starting off with a young family when coverage is
critical. I think the desired form of insurance though is Whole Life. It is not perfect and yes insurance companies make
money (all businesses must make a profit otherwise there is no business!). People also overlook that with Whole Life
your money is not tied up. Think about a mutual fund (or any stock market instrument) and realize that if there is a
correction it may take years to get back to "0" and your funds were never available. Also Mutual Funds only became
popular in the 80's (mainly due to the 401k), and they do not have a long track record as an industry of good returns
(funds open and close all the time, managers leave etc., by the way I am talking 30+ years). Life insurance is a contract
and I like contracts (it means the company promises something in return)! Mutual funds promise absolutley nothing at
all! Finally if you don't like Whole Life, and think the stock market and mutual funds are the way to go, then keep
drinking the kool aid junior. You'll probably being asking me for a handout when your 65+.

submitted by Josh in Louisville @ November 25, 2009 - 08:38 AM

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I think everyone needs to remember to take Dave's advice as a WHOLE. his thinking is you have term life insurance for
about 20 years b/c you want to cover all expenses and take coare of your family if you should die during their childhood
years. After 20 years.....they SHOULD be living on thir own and making a living and yo uson't need to support them.
Your house will be paid off (b/c he recommends a 15 yr mortgage) and you will have an emergency fund of 3-6 months
of expenses if anything should happen. The money you have saved investing the difference btwn term and whole has
earned you a nice nest egg and so if you die, it isn't a catastrophe that it would have been yers earlier when you had many
more things to cover with your income. Alos for those of you who think whole life pays you everything that you have
paid in premiums, think again. If you die, the insurance company oinly pays the policy value. not all the cash you paid
into it. Have some discipline and invest the difference. Also, take what Dave says as a whole, not picked apart.

submitted by Kim Uccellini in USA @ February 25, 2010 - 09:33 PM

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I don't understand why people say that kids don't need life insurance? Of course they don't have an income. However, in
the even the unthinkable should happen, the average funeral costs $7,000. Also, I would be a basket case and unable to
work for I don't know how long. There would be the loss of MY income. I may be able to take FMLA for 12 weeks, but
that is unpaid leave. That's a substantial amount of lost income.

Also, as far as buying term and investing the rest, I pay my bills each month on time. However, I am not as disciplined in
investing because I know that I can always adjust my contribution in order to buy that Playstation 3 for Christmas, etc.
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I have UL policies on each of my kids and am seriously considering converting to WL for them. It's forced savings. Plus
some diseases run in my family. God forbid that my son gets prostate cancer at age 50 and his term life expires (if that's
all he has). As we're going through with my father, life insurance at that point is impossible to afford. I'm buying WL
now, while my kids are still preteen.

submitted by Trish in Sandy, UT @ March 23, 2010 - 11:45 PM

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I also wanted to add that while I believe that Dave Ramsey and Susie Orman are bright and have the right idea, the
reality is that so many people are paycheck to paycheck. Not everyone can afford to dump everything they have into
Mutual Funds or pay off those high interest cards in a matter of months. I make a measly $40K per year. Many people
make much less, and many people make much, much more. I congratulate the college graduates and the people who
haven't had a spouse walk out on them with a newborn and a 3 year old and nothing in the bank. I congratulate people
who haven't had unforseen medical bills pop up suddenly that take everything they have.

The reality of it is, many of us just won't invest without it being a forced bill. And in my case, I will protect my credit
like my life depended on it. But although I know my life also depends on it, I like many people are not disciplined
enough to live in the slums until I build that nestegg that I'm too old or sick to enjoy when I'm suffering from
osteoporosis or colon cancer.

I dump my 6% into my 401k, but that's about all I can afford to do. And I don't do much of anything else. I'll make the
sacrifice however to make sure my kids get a WL policy while they are young and healthy and rates are realistic.

submitted by Trish in Sandy, UT @ March 24, 2010 - 12:16 AM

Both are useful products and they cannot be compared without a chrystal ball. I have seen both backfire in my 25 yrs in
the business. Most often, I see term cover a person until they get old and then dissappear. The coverage offered peace of
mind but no real value and they wish they had permanent coverage. This topic is quite complicated by the tax code also.
Whole life or UL can offer advantages to the wealthy that no other product can bring. One has to be committed and able
to pay. Ins cos prey on those who lapse policies. Whole life was the best thing my father ever bought-and from a mutual
company.

submitted by John in Maryland @ May 13, 2010 - 03:30 PM

Reply
i plan on becoming an insurance agent... what ever the case insurance.. is used at a tool..... whether it be whole life,
universal life, termlife...etc...its just a matter of informing the client and building a relationship with the client to fully
understand the situation and from there we can help them by giving them the best option in which they can afford and be
comfortable ... this is for the better interest of the client and their family.....my gf sells life insurance ... and to tell you the
truth .... she believes in whole life and universal life... it was through her experience with the death of her brother that
makes her become the best insurance agent to help all families be secure for their children and family.... tell me wha to
think peoples

submitted by island boy in hawaii @ May 25, 2010 - 04:47 AM

Reply
Life ins industry is THE biggest ($) industry on Earth. DO NOT BE FOOLED... get TERM, at upwards of 1/10 the cost
as an example below shows. Keep this SIMPLE - Whole Life is great if you want to
A. Give the salesperson a HUGE commission, (my case wanted $4k+)
B. Be confused by insurance companies
C. Waste YOUR money.

Simply put, life ins is just like car ins. Buy it only FOR THE TERM YOU ACTUALLY NEED IT!.You do NOT need
life ins for your WHOLE LIFE (hence the name). The biggest rip off is putting life ins on an infant. Life ins is to
COVER THE LOSS OF INCOME, PERIOD. Children do not have incomes.

You and or a spouse need it when you have those responsibilities (kids, mortgage etc.). The problem with this insidious,
greedy industry is they want you to put ins on your infant and then hopefully they will keep it there for 60, 70, 80+

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YEARS. Insane! A traditional funeral is approx $6-10k, creamation is 1500-2000. You buy ins until you don't need it,
then in your later years, when you have all of the money you saved by not giving it to the WL ins co., your loved ones
will just take the 1500 to 10k and bury/creamate you!

-You're told you can "borrow" on your policy for low interest. WHY would you borrow YOUR OWN MONEY-AND
pay to do it???. Don't. Did you know that IF you borrow, THAT AMOUNT gets deducted from the payout when you
die-right off the top.

Check out this simple comparison found on the Web:

For a 30 year old male in good health, 20 year term life for $500,000 of life insurance coverage is $22 per month. A
whole life (universal life) insurance policy for $500,000 of coverage is $213. That’s a difference of $191 per month!

But wait, the whole life is an investment. According to Fortune magazine, the average whole life rate of return is 2.6%,
for universal life 4.2%, and for variable life (invests in mutual funds), 7.4%. Let’s do some quick calculations:

Whole life: $213 per month at 2.6% for 35 years = $146,817.19

Universal life: $213 per month at 4.2% for 35 years = $204,225.88

Variable life: $213 per month at 7.4% for 35 years = $414,222.09

Investing: invest the difference, $191 per month at 10% for 35 years = $683,306.64

Investing: invest the difference, $191 per month at 12% for 35 years = $1,108,097.46
Save the Difference

If you take out a term life insurance policy, you can invest the difference in a high growth mutual fund and be a
millionaire at age 65. One of the quick arguments against this back of the envelope calculation is that most people do not
have enough will power to invest the difference that entire time. You can solve this problem by creating an automatic
withdrawal each month into a money market account. Have the insurance paid from the money market account and have
a monthly sweeping take the rest to invest in your choices of mutual funds or in a Roth IRA.
Choose Term Life

Unless you have complex estate planning issues, term life is the best deal for life insurance. It is far cheaper and the
investing power you have outside of it will make you “self insured” before your death – you won’t have to rely on the
insurance policy to fund your estate.
============================
and another "Top 10 Things To Know"
- Insurance is sold, not bought.

- Agents sell the vast majority of life policies written in the U.S. because the life insurance industry has a vested interest
in pushing high-commission (and high-profit) whole-life policies.

- Whole life is expensive. Policies with an investment component cost many times more than term policies. As a result,
many people who buy whole life often can't afford an adequate face value, leaving themselves underinsured.

- Whole-life policies are built on assumptions.

- The returns quoted by the agent are simply GUESSES - not reality. And some companies keep these guesses of future
returns on the high side to attract more buyers.

- Keep your investing and insurance strictly separate. There are better places to invest - and without the high
commissions of whole-life policies.

- Buy enough term coverage to fill your needs. Life insurance is no place to skimp, especially with rates at historic lows.

7. Match the term of the policy to your needs. You want the policy to last as long as it takes for your dependents to leave
the nest - or for your retirement income to kick in.

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submitted by LL in USA @ June 15, 2010 - 05:09 PM

Reply
Can you show your steps in your calculations?
For example, how did you arrive at:
$213 per month at 2.6% for 35 years = $146,817.19?

Thanks

submitted by student in USA @ July 05, 2010 - 02:14 PM

Re. steps of math $213 per month at 2.6% for 35 years = $146,817.19

The math sure is easier with a compounded interest calculator (Google it, and try a couple different ones), or in Excel.
Essentially, you have to calculate (($ paid in year 1 x (1 + interest rate)) + $ paid in year 2) x (1 + interest rate), etc for
35 iterations.

I'm no mathematician, but I did run this myself to verify, and it works out exactly as shown here if interest is calculated
annually. The math shows whole life is no deal, leaving aside how honest it is (death benefit payout = coverage -
investment!?).

submitted by Jared Stein in Springville, Utah @ February 05, 2011 - 08:20 PM

Sorry to disagree with many that have commented in here. I'm a big supporter of Whole life, Universal Life, and
Variable Universal Life. It all depends on how you use it and what you want it to accomplish for you..and at what stage
of life you are in. There is no one financial product that is right for everyone....same with life insurance. And just like
you would want to diversify your investments...you should treat life insurance the same way. "Get term and invest the
rest." Well...what happens if you are 25 years old and get a 30 year term policy and that's it?? That will give you
protection until you are 55..which you are likely to outlive. Then you are left with nothing to show for. A blend of term
plus perm is likely the wisest scenario for a younger individual with a growing family. Get what you need for the time
period you will need it in case something were to happen to you...then your spouse and kids will be covered. Depending
on your budget...for example, get $500,000 for a 30 year term...that will cost you maybe $400 a year or so....then get
$100,000 of whole or universal coverage that will last you for life. You get coverage for 30 years in case you die
early....your wife can pay off the house/debt/college expenses. After 30 years those things should be already paid off...so
you don't need as much coverage. You will still have at least $100,000 of coverage left over that will last you for life.
And that will build cash value. You can take out policy loans against the cash value up to 90-something percent. You can
take out those loans tax-free. The tax incentives are huge.

Then things you can do with life insurance are amazing if you do them correctly. Use it for a fund for you kids....set
them up with a perm policy when they are babies and you can pay a chunk of their college with it 20 years down the
road. You control how you spend it or use it..and it's tax free. These are great ideas....and you can do things with it that
an IRA simply cannot do. Fund an IRA for 10 years...if you die you wife gets that IRA cash value and that's it. Fund a
life policy wisely for 10 years and if you die your family gets so much more. If you don't die...you can still use the cash
value in ways just as you could an IRA.

So....do it all. Blend your life policy something like 80% term and 20% whole or universal or variable universal.
Meanwhile diversify your financial investments wisely. Don't put all your eggs in one basket...but don't limit yourself to
either/or.

Again, your age and life circumstances are important to look at...customize a plan that is right for you and get the most
out of your money. It is foolish to give a blind statement and say, "Get term and invest the rest." Maybe for some people
that works...but for others who understand the products better know that's not always the best road to take.

submitted by Ryan in Dallas @ July 01, 2010 - 07:48 PM

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I've been looking into getting a whole life policy, and going through the comments here I can see there are some things
that people are not considering.

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People who say: "Buy Term and Invest the Difference" might not be looking at the big picture.

First of all: Taxes.

Let's say you're earning a decent salary, and each year you max out your IRA and 401k contributions....and you still have
a couple thousand dollars left over that you don't need immediately. You could:

1. Put it into a taxable brokerage account and invest it

or
2. Buy some whole life insurance.

Assuming you keep the money invested until your are old/retired:

With the whole life insurance, maybe you will only get a 3.5% percent return. However, you never have to pay taxes on
the returns...so when you consider this, your returns are more like 4% or 5% equivalent to returns in your taxable
investment account. It's even a better equivalent return if taxes go up.

Still, that might not be the best return that you could possibly get but consider the following:

1. You have insurance for your entire life, which could be used, if for nothing else, to offset estate taxes when you die, or
you could use that money to help fund your retirement.

2. You can use that money for things like funding your child's education, and it doesn't count against the child for
financial aid (the money in the taxable account would). In that sense it's comparable to a 529 plan, but you can use the
money for any purpose if your child didn't go to school. You can't do that with a 529.

3. That money isn't going to go away when the market crashes.

I agree with the above poster (Ryan) that you should have a good mix. I think ppl should pay off debts first, then fund
retirement fully, then if they find that they still have extra cash, that would be the time to consider some permanent
insurance.

Would I put every cent that I didn't put into retirement into a whole life policy? Of course not. Is it worth having access
to money in a cash-like account and a also have a death benefit for your entire life? I think it makes sense.

Basically in my mind, it is like a tax-free cash bank account. It doesn't pay a lot of return over inflation, but the money
will be there when you need it.

It doesn't make a lot of sense unless you plan to have the policy for at least 20 years....much like buying a house doesn't
make sense if you are only going to live in it for 2 years.

submitted by A Reader in San Francisco @ July 16, 2010 - 09:39 PM

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I'm 60 + years old and I borrowed against the face value of my whole life policy and didn't pay the borrowed amount
back. The amount borrowed continues to accumulate interest, so much so that I'm afraid I won't have anything left if I
should die. I thought that money was mine but it seems ...not so...now I am going to surrender the policy and take out
term life or better yet...put the money into a death fund. At this point in time, I think life isurance is a rip -off for me.

submitted by Lynette in NY,NY @ August 18, 2010 - 08:48 AM

Reply
You know what the problem with this term vs whole argument is? you dont know the situation. A 25 year that has a
history of financial responsibility and an understanding of markets and investments would probably be better off with
term + invest. However we have a whole generation (baby boomers) with negative savings that probably should have
purchased whole life 30 - 40 years ago. Thats why its important agents do their homework. Mutual funds are not for

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everyone, neither is term or whole life, or Long term care, or E-mail. Its situation specific. The only possible outcome of
blindly trumping one method over the other is hurting your clients and their families.

submitted by Sam in New York @ August 27, 2010 - 05:17 PM

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Dave Ramsey and Suzy Orman don't know what they don't know about the benefits of different forms of permanent life
insurance. For example, anybody who is using what is known as Fixed Indexed Universal Life as a cash accumulation
vehicle has sailed right through the Financial Crisis WITHOUT LOSING ONE DIME! How many of Dave or Suzy's
followers would like to be in the same position.

The power of compound gain which Einstein said was the greatest force in the universe only works provided it is not
interrupted by compound loss.

You ever here Dave or Suzy or any of the other financial gurus ever - repeat, ever - talk about what can happen when hit
with compound loss

For people who know what they're talking about, show me a financial product that can beat the safety features and tax
advantages of a life insurance contract. It is one of the greatest wealth/preservation vehicles out there for both living and
legacy benefits.

People need to get informed. Look what the big casino selection of products pushed by all the high-profile media types
has done to this country. Enough already. There are other ways to go that will put the power of compound gain to work
while eliminating the setbacks of compound loss.

This is the age of Financial Conservation.

submitted by L Castro in Hollywood Florida @ September 06, 2010 - 05:37 PM

Reply
Here is a Real Life Apples to Orange-Apples.

I purchased a Universal Life Policy for me and my wife the year we got married. I was 24 at the time.
I pay $35 a month as a Male Non Smoker with no health problems for $150k insurance.

My friend who is now 32 just purchased a 20 year $200k Term Policy that is costing him $50 a month.

In 20 years he will have paid $12,000

In 28 years I will have paid in $11,760 (adding the 8 years to make us even on dates)

So when his policy runs out we will have paid the same amount in. Sure if we die in a car crash together his wife gets
more money! But lets say we live. And his policy stops and I cash out. Am I rich...no. But I have somthing in my pocket.
and we are both back to square one.

The flip thought is if we keep our policies, My rate is the same at the time...his will more then likely go up since he will
now be 52.

My thought was exactly that. I am locking in at what I considered a decent rate. with coverage that pays off all the major
bills for the wife. IF I need more coverage later I will add a term policy for the what if. I purchased it as a Death Benefit
that I could get out of later and not lose everything.

I keep hearing people talk about awesome term life rates, but I have talked to more then just my friend who pay as much
if not more then me for their coverage. Sure it is more coverage but I am not trying to be a lottery ticket of death! I see
comercials for like $8 a month term. But no one I know has that rate!

Plus Everyone keeps saying keep the difference and invest. Not every Adult american has life insurance. And I know not
every american is investing. It is easy to no save that $20 a month savings.

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Just my thoughts. I never claim to be right. But the example I gave is thr truth. So it makes sense to me.

submitted by Chris in Ohio @ October 05, 2010 - 04:43 PM

Reply
apples to apples?
you were 24, he was 32? Thats barely a fair comparison. In fact if he would of purchased his term at your 24, he would
of gotten it for about 2/3 the price of yours around $20. Spending about $4800 over the life of the policy. Now investing
that $15 he saved for 20 years at an agressive rate because of his age. 8%-$8894,10%-$11485,12%-$14987, all of which
would be his money, not the insurance company's. In each case recouping a lot more than he spent.

submitted by money works in america @ November 11, 2010 - 10:18 PM

I think a lot of people who advocate whole life insurance miss one crucial point: even while you are alive, you don't
"cash out" your cash value, you BORROW against your insurance. That's said, you need to PAY IT BACK plus the
INTEREST. "Fine", your agent tells you, "you don't need to pay it back if you don't want to, the money will be deducted
from your death benefit." But wait a second, what will your beneficiary gets then? Nothing, if you borrow against (or
"cash out", if that sounds more comforting to you) all the cash value/death benefit. Oh yeah, and what about your $7000
funeral expenses? You'd be thinking you are saving money for yourself each month, but no, you are just handing your
hard earned money to the blood sucking insurance company that charges mysterious management fee and commission
(for they don't disclose the allocation of your premium.)

Anyhow, I'm still quite skeptical about any life insurances other than term. Not that I think term is the best solution for
the whole mass, it is just straight forward, compares to other over packaged products, as if our lives weren't chaostic
enough.

submitted by rottenkids in so cal @ February 24, 2011 - 08:29 PM

Reply
This is worse than a discussion about religion.

First off you can buy a UL policy that has an increasing face value as the cash value increase, so in fact your heirs do get
access to the cash value of the policy

Second, there are GDIUL policies which are less expensive than a traditional UL policy, provide coverage for life, and
generate very little cash value. Think of them as perm. term.

Third, in all the calculations I have seen thus far, taxes on earnings have not been considered. This can be problematic as
the taxes on earnings may have to be funded by an source of funds not contained in the investment.

Fourth, as we all know estate taxes are back and liquidity is needed in your estate to pay taxes; this is often easier to do
with insurance that is certain to be there at the time of our death.

submitted by Maitin in PA @ March 16, 2011 - 10:47 AM

Term vs. whole life insurance... which is better?

Posted in Life Insurance Questions over 2 years ago, 114 replies

I am finally taking my dad's advice and getting some life insurance. Which is better? Term or whole life?

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submitted by ed walters in athens georgia

Ed,
No one life insurance product is better than the other and you'd
be best served to talk with a specialist who can help you to
determine what is best for you based on a variety of factors.

Attached is a chart we put together describing the differences

between term, whole, universal and variable. (Click here for the
large version of the life insurance comparison chart.)

Feel free to contact me via the contact form if you want some
help with your decision.

submitted by Ronald Belham in Philly @ July 16, 2008 - 04:01

PM
Reply
You have likely made a decision by now but in truth, Whole Life is a far better choice than term - all other things being
equal. Most Life Insurance Agents don't understand what they sell. Companies make much more money on Term
Insurance as less than 2% ever pay off. Banks and Corporations buy tons of Whole Life but Banks sell term and want
you to invest in their lousy investment products that pay minus 40%. They have done such a good job of selling this
product that even most agents don't understand the products they sell. If you want to disucss and understand what the
deal is I can be reached through my wed site johndelaneyinsurance.com - Best of Luck!

submitted by John DeLaney CLU in Louisville KY @ May 24, 2009 - 09:40 PM

whole life, universal life, flexible,universal variable is all a RIP OFF. buy term & invest the difference is the only way 2
go. level term has no stipulations its exactly what it is. ive seen slick talking insurance sellsman selling people accidental
insurance not really informing them that they have to die of an accident on the scene for the company to pay out. look up
PRIMERICA there a AA+ rated company & they do whats right for the customer 100% of the time. also you can
checkout thestreet.com it talks about the top 22 life ins. companies outta the 1400 thats in north America.

submitted by Nate Hill in Long Beach,CA @ August 31, 2009 - 03:11 AM

Nate-Unfortunately you don't know what you are talking about. Buy Term and invest the difference is such an easy
cookie cutter answer...You are trying to solve a permanent problem with a temporary answer.

It is our job as a Financial Services Professional to find out more about a person's needs and make recommendations
accordingly. How did that investing do the last 2 years for you? You are making tremendous assumptions: 1) people will
not need insurance after 20 years or they will still be able to qualify for insurance. 2) You are making the assumption
someone would have the discipline and determination to invest the difference. 3) Solving Estate Planning using term
insurance is short sighted.

Lastly, term insurance is what makes all the money for insurance companies unlike what Dave Ramsey tells you...there
are companies out there that actually increase your death benefit as well as your cash value. Insurance companies pay out
less than 3% on all term insurance policies, which is good for the individual still living, but bad because they just wasted
all their money.

Insurance is not an investment. You cannot compare apples to apples when comparing whole life cash value returns and
mutual funds...whole life is risk free (as long as you use a strong company). It grows yearly, guaranteed, tax deferred. It
is similar to using a CD...but on steroids. Mutual funds are risky...2008 could happen again...would you want to take
money out of your investments after or during a year like that?

submitted by Brian Todd in Livermore, CA @ September 01, 2009 - 02:57 AM

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 Life insurance
I compliment your chart, I wish this would be in more places for more people to see when they make the huge decision
of purchasing a policy.

submitted by Ken B in MN @ April 03, 2010 - 11:07 PM

Ron's chart is very useful. One thing to ask yourself is, "How much can I afford per year?" If your budget only allows a
few hundred dollars then term life insurance is probably best for you. Why? Because no form of life insurance is good if
you let the policy lapse because it becomes unaffordable. Permanent policies are 3x's more expensive then term life
insurance.

submitted by Byron Udell in Wheeling, IL @ July 17, 2008 - 10:18 AM

Reply
Thats also very good and prudent advice that Byron has added about budget and ensuring you can afford the policy for
the life of the policy.

submitted by Ronald Belham in Philly @ July 22, 2008 - 06:20 PM

Term Term Term. Whole life and Universal life are designed to make the Insurance companies $$ not you. The Purpose
of Life Insurance is only to provide $$ to your family to take care of your financial obligations. If no one is relying on
your income you don't likely need much. Focus on keeping your investments and your insurance seperate. If you take the
savings from Term plans over Whole or Universal for the same dollar amount and then invest the difference, you will be
further ahead financially. I know this because I used to work for these companies. Who ever sells you a Whole or
Universal policy makes a boatload of money compared to Term. This is because they make the companies much more
money.

submitted by Ryan @ July 24, 2008 - 07:15 AM

Reply
Ryan,

How much money did investors lose by buying term and investing the rest in the stock market? 20%, 30%. How much
did a person lose in their whole life policy? 0%.

My point is, only future performance of investments hold the answer to what is right, term or whole. With the volitility
of the market today, Whole Life is becoming more attractive as an asset class.

submitted by Matt in Kansas City @ February 04, 2009 - 01:08 AM

not to get into the entire debate of whole life vs. term but actually insurance companies pay out on 1% of term
policies...ie, they make their $ on selling term. they, unlike most of us, realize that we will live longer then the policies
we buy

submitted by Edwin in Providence, RI @ February 16, 2009 - 08:03 PM

I WANT TO CANCEL MY TERM INSURANCE WITH MY AGENT $635000.00 BECAUSE MY CHILDREN
HAVE GOOTEN OUT OF COLLEGE AND MY TERM WAS FOR MY WIFE AND COLLEGE BILLS / COLLEGE
IS PAID OFF. MY AGENT IS TRYING TO TURN MY POLICY INTO A WHOLE LIFE TRYING TO SHOW ME
THAT IT WILL MAKE ME MONEY. I AM 53 YEARS OLD HAVE ENOUGH MONEY INVESTED IN OTHER
THINGS . MY QUESTION IS IS THIS AGENT JUST LOOKING OUT FOR HIMSELVE TO MAKE MONEY.

submitted by RICHARD HAGGERTY in STAMFORD CT. @ March 14, 2009 - 09:57 AM

The bottom line is this...Buy Term and invest the difference. Any financially savy person will tell you that you should
always keep the two separate. For one thing, your rate of return within the savings acct isn't as good as when you invest
in other options, also...what most agents of whole life dont tell you is that the first three years of your savings goes right
into the agents pocket for their commission, also...if you die before the cash out date then you don't get both. If you die,

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the savings goes to them and you get the death benefit. Also, they make it to where your savings will usually never be
grow higher than the death benefit. So you decide. Insurance is just that..in case you die. If you are interested in saving
then do that separate! Make sense?

submitted by Audrey Collins in Boise, ID @ May 06, 2009 - 06:18 PM

Buy Term and invest the difference is the most over used over stated financial anecdote in today's world. First of all, who
does invest the difference? What a whole life, or permanent insurance policy does is force people to put themselves first.
Although you are correct that most cash values do not grow as fast as some other investments, however where is the
risk? Not in whole life! Also, even if you did invest the difference are you taking into consideration tax consequences? A
whole life policy can and will continue to grow even if you borrow or take from it...will any other investment do that?

submitted by Brian T. in San Ramon, CA @ May 28, 2009 - 01:38 PM

Your response is a very common one Ryan...but unfortunately very far from the truth. Just imagine if you owned a life
insurance company. Which would you rather your customers buy.....A policy that has a 99% chance oof NOT resulting
in a claim and you get to keep all the spent premiums (and all you were on the hook for was the risk)...or a policy in
which you are contractually obligated to return every dime of a customer's premium if they so choose to take that option
at some point in the future? If you chose option A, then I think you need to re-think your postion on term vs.
permanant.....

submitted by Josh in Macon, GA @ July 01, 2009 - 04:10 PM

All i'm saying is what fool would borrow his own money? If its my money then why do I have to borrow it from you?
"Cash value" is like having " equity" You don't own either of them. If you want them you have to borrow the money. Its
like paying for a happy meal, and having to borrow the box it came in to take it home and when your done eating, you
have to give the box back to Micky D's. That would be considered dumb and a waste of time right!

submitted by Get Real Sucka in Georgia @ November 16, 2009 - 08:39 PM

I just received in mail a whole life quote for$25.75 a month ,with no rate increases,sure it's only for $10.000 but I can
afford this when I'm 70 as opposed to the retarded rates for term, over 200.00 when at 70 yrs. old( like i could pay that
then!).
So my question is how can anyone say term life is better with these kind of fees. Maybe for white collar workers? but
blue collar workers who will be on social security need realistic insurance

submitted by BK @ February 02, 2010 - 12:44 PM

I'm really ignorant when it comes to life insurance. I've gotten some good information here. My question becomes - what
are the tax advantages? I am 45 years old and have a life insurance policy through my work. But I want more, something
to leave my son and his family. I want the most for the least amount of monthly payments. Help!!

submitted by Robin in Fort Wayne, Indiana @ July 27, 2008 - 09:15 AM

Reply
make sure what you have at work is life insurance and not accidental death

submitted by kevin in crown point indiana @ March 22, 2010 - 08:51 PM

That's the same here. I knew I wanted more insurance and that's what I did. Now I'm wondering if I made the proper
decision. I already had term life through my job. I recently updated my insurance and added whole life, did I do the right
thing? From reading the comments and reading Suze Orman book, term life is better. I probably won't get that much
money from whole life over the years worth paying for. I should just save this amount every week. I'm 40, married, and
have 2 boys 10 and 13. Please advise.

submitted by Bridgette in Memphis, TN @ August 08, 2008 - 08:57 AM

Reply

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It all depends on what you want. You get term insurance strictly for the protection / death benefit that you would want
your beneficiaries to receive should something happen to you.

Suze Orman suggests an old school train of thought where you buy term & invest the difference. There's nothing wrong
with that as long as you are confident you can make 5% after-tax doing investments. Keep in mind, the last 10 years,
stock market has averaged returns of 4%. Take out taxes and that return isn't enough to even keep up with inflation.
Unless you can really say to yourself that you're investment savvy, "term and invest the difference" probably isn't the
best option for you.

Now with whole life, you get it if you think you're going to live a long life and want the "living" benefits that a whole
life policy can give you. I'm not talking UL/VUL policies. I'm talking strictly permanent WHOLE life insurance. The
cash value accumulation will be affected by which company you buy the policy from since not all WHOLE life policies
are the same and also how much you plan on saving per month for your policy.

Now you could save the amount in a savings account, yes. But you will be paying taxes on any interest gains compared
to tax-deferred growth you can receive in a whole life policy. In addition, in today's market, interest rates on CD's and
money market accounts are laughable.

If you get a whole life policy from a company such as Northwestern Mutual, TIAA-CREF, or New York Life, you can
expect after-tax returns on average of 5%. These 3 companies have the highest possible credit ratings an insurance
company can receive out of the 1200+ companies that are out there and because of our financial strength, NYL (the
largest, oldest, & strongest mutual/private company) for example has paid a dividend to our policy-holders for the last
160 years. What does that mean to you as a consumer? It means the likelihood and peace of mind knowing you can get
an average after-tax interest return of 5%.

NYL
Financial Advisor
Series 7 & 66 Registered Investment Advisor

Final Note: Beware of "advisors" that have a 63 series license compared to a 66. 63 licensed agents have no fiduciary
duty to their clients and do not have to look out for your best interests.

submitted by New York Life Financial Advisor in CA @ September 16, 2008 - 11:56 AM
Term insurance actually makes more money for insurance companies than whole life does.........

Go with Whole Life.

submitted by Andrew in Greenwood, IN @ October 27, 2008 - 11:25 AM

Reply
A couple of facts: 1) Only 1% of term policies pay a death claim. 2) 90% of Term policies are cancelled, replaced or
converted within 5 years after purchased. Insurance companies make so much money because everyone buys term and
they hardly pay claims!!!!!!!
Now I would rather have someone buy the correct face amount rather than less amount beacuse of the product. My point
is to buy majority of term, but why not buy an additional whole life with it? $1,000,000 =Total need, so buy 750,000
term and 250,000 whole? or 900,000 term and 100,000 whole.
The best policy is to buy is the one that is in force when you die, so will you die within the next 10, 15, 20 or 30 years?
So if you know when you will die, thats the one you should go with. Or for a little more money, we can gurantee that
regardless when you die, we will pay a claim. Even better, if you dont want the death benefit, then we can give you your
money back plus something in addition to that. Just my two cents.

submitted by Michael in San Francisco, CA @ April 22, 2009 - 06:41 PM

That is horrible advice!! Do your research! Ughhh

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submitted by Audrey Collins in Boise, ID @ May 06, 2009 - 06:20 PM

Don't let the stupid people who sale Whole Life fool you!
I just did a policy The woman had 25,000 and 3 10,00 riders for the kids $80 dollars a month!
We did a new policy 250,000 3 10,000 riders for her kids $49 dollars a month Now you pick Oh they will try to give you
a better deal when they are about to lose your business, But why do you have to ask for a better deal ? that's because they
are to busy lining their pockets!

submitted by Robert in Georgia @ August 30, 2009 - 06:29 PM

Term insurance does not make more money for the company than whole life. #1 Whole life policies provide the
company with cash for 1 to 3 years from the savings of client. Which is why clients for the first 1-3 years don't
accumilate any cash in thier "Savings component" #2 Whole life agents also get residules on a "as earned bases".
Meaning everytime a client pays, agents get a small portion it. I sold whole crap and variable crap and universal crap. I
saw that families were being ruined and lives were being hendered because the savings was kept by the company, the
Borrowing of your own money, wasn't explained, and the subtraction of what you borrowed from yourself,from your
face amount! I mean damn, you'd have to be one evil person to set up something like for a family. Ironically enough, I
found that most wholelife, and cash value agents actually have term insurance! Now if you don't believe in it for your
family why would you sell it mine. I hope those Term insurance guys kick your butts!

submitted by Get Real Sucka in Georgia @ November 16, 2009 - 08:14 PM

It is my belief that if your primary goal in purchasing variable life policy is cash accumulation then I believe there are
better ways to accomplish this. Variable life has many fees and administrative charges. You can purchase a tax deferred
investment that invests into equities without all the fees that take away from earnings. With the rate of return in the stock
market being so nominal over the years I don't see the additional risk in purchasing this type of policy justifiable. The
death benefit is not guaranteed. The cash value is also not guaranteed. There is a possibility that you may have to
increase your premiums over the years due to the poor performance of the policy. Buy term insurance and invest the
difference!

submitted by Ronald Belham in Philly @ November 13, 2008 - 11:17 AM

Reply
What everyone overlooks about life insurance is this - how long do you want it to last? Term is cheap because 99% of
the time you will outlive the term of the policy, and the insurance company will keep your premiums and never have to
pay out a death claim. It serves its purpose when you have large needs and limited budget, but term gets more expensive
as you get older, and at some point you won't be able to get any more because you're too old and in poor health. Whole
life has higher level premiums up front because it builds a cash value, which yields dividends, which have the potential
to pay your premiums for you until you die. ("Whole life" lasts for your whole life, hence its name.) If you want a
guaranteed death benefit and a very efficient tax-free wealth transfer vehicle, whole life (Permanent insurance) is the
only way. Some people also use whole life as a savings vehicle to create tax-free cash flows for retirement, college, etc.
Consult a knowledgeable insurance professional (CLU, ChFC) before making a commitment, and be sure to go with a
solid company. Cheaper is not always better!

Here's another hint: so-called "independent" insurance brokers are often paid higher percentage commissions on term
from weaker companies, to motivate them to sell these products, sometimes more than 100% of the first-year premium.
Yes, we make more commission on whole life because the premium is higher, but it's better for the client in the long run.
When I represent a certain AAA-rated carrier it's because I know their products and underwriting standards, and I believe
it's in the client's best interest to go with the best company, not the cheapest, and not the one that pays me a higher
commission. And I won't be coming back in two years to replace your policy with a new one (thereby earning another
commission).

submitted by Mike in Westchester County, NY @ November 13, 2008 - 10:09 PM

Reply
I am confused with the current down turn in the economy My husband and I are 58 &59 yrs old with IRA's but no life
insurance at all Is it too late to get term or is whole life way to expensive for us at this age (we are in very good health)

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submitted by Linda in Gig Harbor WA @ November 19, 2008 - 07:46 PM

Reply
Linda,

I think life insurance makes good sense for you and your husband.

At your age, the first thing you should do is find a high quality variable annunity that works in some guareentees and
stick yoru money in there. Some VAs can actually give you the better of 7% or whatever the stock market does in a
given year. You get the better of the two.

What's more, is it can guareentee you an income for life.

DO you also have 401ks at work?

Secondly, I would probably buy some whole life insurance on your husband. To be completely respectful in discussing
this, he will probably pass first, and you could outlive him by 8 years.

Put the VA only in his name to get the highest payout, and that money will be replaced by the life insurance upon his
passing. If he outlives you, well, he is still getting an income from the VA.

All that being said, I would never give ironclad suggestions on the internet....you need to talk to a financial advisor....

Be careful though, because some of them will dismiss the life insurance, even though you may end up wanting it for
legacy reasons.

submitted by Andrew in Greenwood, IN @ November 24, 2008 - 11:45 AM

I also want to make it simple …
First of all, I agree with some of you, that everyone situation is different, and I also believe that if you want to help
someone, sit down with him/her/them and see what their situation is and decide how to do help.
I think, we should said that life insurance is not investment vehicle. Life insurance is only income replacement …
remember it is only income replacement in the event something happen to you and you won't leave something behind.

When you buy whole life insurance, indirectly, you're also buying TERM insurance.
Depends on what kind whole life insurance you bought (straight, universal, variable) you are buying: Decreasing Term
or Annual Renewable Term. What that means?
Decreasing Term means company is paying for your insurance less and less b/c your cash value is accumulating, so their
responsibility is less and less from year to year, but you still paying the same amount. People can say "yes, but I am
paying also into my investing" …. First never use word investing …. why? someone wrote down, that the second nice
benefit is cash value … disagree …. When you are buying Whole Life Insurance (doesn't matter which one) you think
you are buying Insurance+Investment …. my question is why you never received both of them: when you die you
received Death Benefit (if any) and company keeps your investment or if you will live until age 100 you received your
cash value (if any). Never both.
ART means that company renew your policy from year to year, so it goes up and up; when the policy amount is higher
than your premium company start taking money from your cash value account and keep open account until you have
money there, then your policy lapse.

I believe in term b/c in my opinion Is should have (or my family) maximum protection for less dollars for some period of
time until I accumulate enough money to spend on my retirement. Of course, it's not make sense if you only buy only
term insurance (although it's better than nothing) . I am Financial Advisor, and I saw many disclosures from insurance
companies (whole life) … people believe me it was terrible.
Moreover, usually your investments in whole life insurance are between 2-4%. If you want to take money from you
policy, you must borrow against it (usually 6-8%) !!!! It's like: you go to the bank to put money into CD for 3%; after 1
year you go to the bank … to take it but bank tells you "sorry mr/mrs but the value is ZERO"; so, you wait, go to the
bank after 5 years; bank tells you "yes we can give you money (remember your money) but as a loan with 8% interest
rate". From some of my Clients I heard that Agents told them that they do not have to pay any interest on it …. Of course
not b/c interest is adding every year to the loan, so if you take a loan for $10,000 with 8%, then after the year you loan is

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$10,800, after 2 years $11664, and so on … of course you do not have to pay interest. Then when loan exceeds the value
of the cash value, the policy lapse (you have a chance to pay it back in 30 days).

Guys, there is more and more, and more …. It's not a simply case.
If anyone needs help, let me know: info@ezconsultingcorp.com

Investment: it's another case …

"buy term and invest the difference" … means invest for your retirement, so long run.
In long run investment is always good. Always remember, keep eye on it. This is your money, nobody else … always
check statements at least each 3 month and at least know what's going on the market. If you are not sure, call your
advisor and ask him/her. Most people lose big bucks b/c they portfolio was design not appropriately at current situation
… that's all.
If you do investment remember that you should have: long term bucket, medium bucket and emergency bucket … Start
from long (retirement); then medium (3-5 years for some purpose); emergency (in the event something happen and you
need money right now). I can write, and write … if someone needs help, let me know.

One more word to the person that wrote:

Final Note: Beware of "advisors" that have a 63 series license compared to a 66. 63 licensed agents have no fiduciary
duty to their clients and do not have to look out for your best interests.

Everything is based on your ethics … for me it doesn't matter what license someone have, b/c if you are not a good
person nothing will help you. Of course, it's not a NON-PROFIT Organization, but for me always is: First - Client,
Second-Commission. That's my opinion.

submitted by Daniel in New York @ February 24, 2009 - 12:25 AM

Would you please go into detail about death benefit, cash value guaranteed and tax advantage? I saw that whole life
provided all those(from the chart)but I have no idea what they mean??

submitted by Vicki in Ft. Dodge, IA @ December 16, 2008 - 02:03 PM

Reply
Whole Life Insurance has a guaranteed death benefit. The death benefit would not be effected by interest rates, mortality
or any other factor. The cash value that accumulates inside the policy is tax deferred until withdraw. At that time any
profit (premiums minus cash value) would be taxed at the policyholders tax rate. Whole Life Insurance is designed to
provide permanent protection and a long term means of accumulating cash.

submitted by Ronald Belham in Philly @ December 16, 2008 - 02:29 PM

Reply
well, still somewhat(lots) confused. In whole life, no or less interest earned on premiums for frst two yrs, have to pay
interest on my own money if borrowed and less cash value if i die. Also so much of term insurance i've heard and read
on the internet that its cheap and invest the difference. Would i be better off by investing my self if i have term or should
i be letting the whole life insurance company do that if i buy whole life at higher premiums? please suggest if i've written
clear enough, appreciate it. i'm 43 yrs, married and have two daughters 11 and 9.

submitted by Paul in Vancouver, B.C. Canada @ December 27, 2008 - 08:12 PM

Reply
The main purpose of whole life insurance is to provide permanent life insurance protection for your entire life. Term
insurance cannot accomplish this. The cash value of whole life insurance is can be very beneficial if measured it in the
long run. You may then accumulate significant values that are tax deferred.

submitted by Ronald Belham in Philly @ December 29, 2008 - 02:27 PM

Reply
Bottom line, you need to determine what insurance company you buy insurance from, because it does make a different.
Saying that there's no difference between insurance companies is like saying all car companies are the same. Whole life
insurance yields pretty high returns over the course of 10 - 30 years depending on what company you go with.
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Northwestern Mutual, New York Life, Mass Mutual, and Guardian are 4 companies that will probably yield between 5 -
9% returns depending on the company you choose. The cash grows tax deferred and can be taken out tax free if done
properly. For the older folks, it can be used not just as life insurance but as a tax shelter for your money. Imagine, by
paying high premiums, you're building up your cash values quickly. If something unfortunate happens, the family gets a
much higher return than what you put in. If you live strong and live long, the cash builds up significantly and you've
successfully protected a large amount of your assets. But out of 1200 companies, if you go with any of them aside from
the 4 mentioned above, you might as well buy term and invest the rest.

submitted by Alex in St. Louis @ January 19, 2009 - 11:23 PM

Reply
I bought a Term 100(with values) 10 years ago for both myself and my husband monthly payments of $85.00 per month
for life! with the Westbury Canadian Life Ins. At this point in my life I'm asking if I bought into the right policy! or
should I cancel and buy into a term policy with another company. I've been told by many that I would have been better to
have bought into a term and placed the remaining amount into rrsp'. What should I do! would it be pointless at this time
to cancel the polocies after paying into it all this time!

submitted by Renata in Ontario Canada @ December 04, 2010 - 04:22 PM

When purchasing Whole Life or Universal Life insurance the company you pick is extremely important to your long
term cash accumulation. I would also consider Prudential and John Hancock in the group of companies to consider.
When withdrawing cash from a life insurance policy be careful of the interest rate charged by the insurance company. If
your policy lapses your withdraw may be considered taxable. Always consult with an accountant.

submitted by Ronald Belham in Philly @ January 20, 2009 - 01:08 PM

Reply
The idea that "buy term and invest the difference" is the right choice for everyone, no matter what their situation is, is
ridiculous. There is no "right or wrong" kind of life insurance. Like many others have said, it depends on your situation.

A good example for those who may be somewhat confused is that whole life is like owning, where as term is like
renting. Both serve a purpose. Buy term and invest the difference became popular when stock brokers became able to
sell insurance due to deregulation.

Imagine if your stockbroker could suddenly sell (and rent) real estate and explained to you that you should sell your
home, rent a similar apartment (from him of course, so he would get paid for it) and take the difference between your
mortgage and your rent and invest it in the stock market. Naturally the stock market should give a higher rate of return
over the long run than your primary residence, so why pay a mortgage when you can get a higher rate of return on your
money elsewhere?

You would never do this because rate of return does not dictate every decision in your life, even when it comes to
financial planning. You buy a house because you want to own it, pay it off, and have an asset to call your own. The rate
of return is a nice aspect of home ownership but not the primary concern.

Whole life is very similar. People buy it because they want the death benefit to be permanent and guaranteed to pay off
at death. The cash value is a nice secondary benefit (although you do want the highest possible, hence the importance of
a good company as others have mentioned).

People who say term is always right (Orman et. al) have a very simplistic view to the financial planning process and
probably are much more focused on making money for themselves than they are the well being of their "clients" or the
people they "serve".

submitted by Ed in Pittsburgh, PA @ January 27, 2009 - 09:45 AM

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I agree with Ed. Everyone is different. Whether you purchase term insurance, whole life, variable life or index life
insurance, I believe the most important aspect is getting the proper amount of coverage for your family. Do not sacrifice
cash values for life insurance benefits. Sometimes individuals will purchase a whole life policy for 100,000 when they
should have purchased 250,000 of term insurance.

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submitted by Ronald Belham in Philly @ January 28, 2009 - 01:51 PM

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Make this simple.
Term life insurance gives you a death benefit for a specified amount of time, and you should cover specific needs with
specific insurance. For example, you purchase a house and take $100,000 loan for 30 years. A 30 year term for $100,000
would cover that need, so why overpay on a whole life to cover a specific need? If you have a 4 year old and want to
cover college expenses you will not have that need in 20 years so term works well.

On the other hand, the need to replace income never goes away, funeral expense never goes away. These are the types of
events that should be covered with whole.

The best way to set up your life insurance is a blend of term to cover specific needs and whole life to cover needs that
never go away. In all reality, you should really look at your life insurance probably about every 4-5 years as your needs
change over time.

I am not a believer in equity (cash value) building life insurance, you can get whole life that is guaranteed insurance for
your entire life with no equity growth, which is lower premiums and accomplishes your goal of a lifetime of insurance.
One thing you must understand about cash value in whole life policy....unless you have a policy that adds the cash value
to the death benefit (which is much more expensive), you do not get the cash value when you pass away. You have a
$200,000 policy with $50,000 of cash value at death, the insurance company pays out the $200,000 and the $50,000 goes
away, so why do you want that money associated with the life insurance?

The word "investment" should never be used with life insurance. If you want to accumulate money, do it in an
investment product. If you want to guarantee no market downturns, look into equity indexed annuities.

My advice...don't pick term or whole, if you do a solid analysis of your own personal situation, the analysis will tell you
how to set up your life insurance. To be properly set up, most of the time a blend of the products is the way to go.

Email me if you have questions...dhorsey@myclearview.com

David J Horsey Jr, CLTC

Clearview Insurance & Finanacial Services

submitted by David Horsey in Springfield, MO @ February 06, 2009 - 10:37 AM

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Term insurance, return of premium term insurance, whole life insurance, variable life insurance, indexed life
insurance.....there are so many different types. Everyone is different. Everyone has different needs. There is no wrong or
right. The type of insurance you purchase depends on your individual situation. I would never say that whole life is bad
for everyone nor would I say that term insurance is bad for everyone. The only bad decision is the decision not to
purchase life insurance.

submitted by Ronald Belham in Philly @ February 06, 2009 - 02:33 PM

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The type of life insurance policy a individual purchases should not be based on what type of insurance is most or least
profitable to the insurance company. Your purchase which is based on your needs should be the primary focus. Term
insurance is popular for a reason. Cost and coverage are the primary reasons why.

submitted by Ronald Belham in Philly @ February 17, 2009 - 12:35 PM

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In reply to Tim's question, The death benefit that is paid to your family is the 13,618.00 This policy has accumulated
dividends over the years which are paid at death.

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submitted by Ronald Belham in Philly @ February 23, 2009 - 05:20 PM
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I also want to make it simple …
First of all, I agree with some of you, that everyone situation is different, and I also believe that if you want to help
someone, sit down with him/her/them and see what their situation is and decide how to do help.
I think, we should said that life insurance is not investment vehicle. Life insurance is only income replacement …
remember it is only income replacement in the event something happen to you and you won't leave something behind.

When you buy whole life insurance, indirectly, you're also buying TERM insurance.
Depends on what kind whole life insurance you bought (straight, universal, variable) you are buying: Decreasing Term
or Annual Renewable Term. What that means?
Decreasing Term means company is paying for your insurance less and less b/c your cash value is accumulating, so their
responsibility is less and less from year to year, but you still paying the same amount. People can say "yes, but I am
paying also into my investing" …. First never use word investing …. why? someone wrote down, that the second nice
benefit is cash value … disagree …. When you are buying Whole Life Insurance (doesn't matter which one) you think
you are buying Insurance+Investment …. my question is why you never received both of them: when you die you
received Death Benefit (if any) and company keeps your investment or if you will live until age 100 you received your
cash value (if any). Never both.
ART means that company renew your policy from year to year, so it goes up and up; when the policy amount is higher
than your premium company start taking money from your cash value account and keep open account until you have
money there, then your policy lapse.

I believe in term b/c in my opinion Is should have (or my family) maximum protection for less dollars for some period of
time until I accumulate enough money to spend on my retirement. Of course, it's not make sense if you only buy only
term insurance (although it's better than nothing) . I am Financial Advisor, and I saw many disclosures from insurance
companies (whole life) … people believe me it was terrible.
Moreover, usually your investments in whole life insurance are between 2-4%. If you want to take money from you
policy, you must borrow against it (usually 6-8%) !!!! It's like: you go to the bank to put money into CD for 3%; after 1
year you go to the bank … to take it but bank tells you "sorry mr/mrs but the value is ZERO"; so, you wait, go to the
bank after 5 years; bank tells you "yes we can give you money (remember your money) but as a loan with 8% interest
rate". From some of my Clients I heard that Agents told them that they do not have to pay any interest on it …. Of course
not b/c interest is adding every year to the loan, so if you take a loan for $10,000 with 8%, then after the year you loan is
$10,800, after 2 years $11664, and so on … of course you do not have to pay interest. Then when loan exceeds the value
of the cash value, the policy lapse (you have a chance to pay it back in 30 days).

Guys, there is more and more, and more …. It's not a simply case.
If anyone needs help, let me know: info@ezconsultingcorp.com

Investment: it's another case …

"buy term and invest the difference" … means invest for your retirement, so long run.
In long run investment is always good. Always remember, keep eye on it. This is your money, nobody else … always
check statements at least each 3 month and at least know what's going on the market. If you are not sure, call your
advisor and ask him/her. Most people lose big bucks b/c they portfolio was design not appropriately at current situation
… that's all.
If you do investment remember that you should have: long term bucket, medium bucket and emergency bucket … Start
from long (retirement); then medium (3-5 years for some purpose); emergency (in the event something happen and you
need money right now). I can write, and write … if someone needs help, let me know.

One more word to the person that wrote:

Final Note: Beware of "advisors" that have a 63 series license compared to a 66. 63 licensed agents have no fiduciary
duty to their clients and do not have to look out for your best interests.

Everything is based on your ethics … for me it doesn't matter what license someone have, b/c if you are not a good
person nothing will help you. Of course, it's not a NON-PROFIT Organization, but for me always is: First - Client,
Second-Commission. That's my opinion.

submitted by Daniel in New York @ February 24, 2009 - 12:30 AM

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Of course WL shouldn't be looked at as an investment, however, when it comes to estate planning needs, a permanent
life insurance product is the best tool to use. Perhaps in your financial planning you haven't done a lot of estate planning
so you haven't come across the need for this. Just a comment from someone who's family has been screwed by uncle
sam.

submitted by Brian in Middleton, WI @ February 25, 2009 - 01:52 PM

I am a financial advisor with a major wealth management firm. I recently completed an analysis of a NYL Whole life
illustration, that I would be happy to share. If you look just at the guaranteed portion of the illustration, it came out to
earn 1.17% in the first 10 years and 2.9% in years 10 to 36. Compare that to a 10 year T-Bill rate of 2.78% and a 30 year
rate of 3.49%.

I would be wary of any non-guaranteed portion of a Whole Life Illustration. Especially in light of the current economic
environment, when so many financial companies are having to cut their dividends because of market losses. Even if your
agent says "We've always paid around 5%" You may want to see if that's the guaranteed dividend.

submitted by Blair in Georgia @ February 25, 2009 - 02:29 PM

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Comparing Whole Life to other investments must be done apples to apples.

Firstly, INTENTION is important in the illustration. If I am using WL as an investment tool, whereas I plan on retiring
on my Cash Value and Dividends, then yes, putting the money in the stock market makes more sense.

I would never recommend a client do that.

If my objective is RETIREMENT planning for myself and my spouse and my hiers and my charities, etc., then DEATH
BENEFIT needs to be my calculus, NOT cash value (though they are tied together, DB is always higher, unless you have
a MEC).

Also, it is not just that my investments equal my death benefit, but also that they beat it. Investment monies are taxed
(outside of the Roth), while WL death benefits are exempt from Income tax.

So, when it comes to making sure my wife and I can live it up on our savings (investments), that she is taken care of after
I die, and that our children, grandchildren, and other charitable organizations are taken care of after she passes, we buy
WL.

Also, dividends in long standing mutual companies are historically sound. I will not speak to other's dividend history, but
my company has paid dividends since 1865. Policy owners during the Great Depression recieved not only their
gaurentee interest, they also recieved yearly dividends.

As a pure, money making investment, WL is like buying a bond. As a financial planning tool, it is the bedrock
foundation.

submitted by Andrew Burks in Salem, IN @ March 30, 2009 - 01:24 PM

By converting your term policy to a universal life policy you will guaranteed life insurance protection for the rest of your
life. Do you need life insurance forever? Is your estate large enough where you will be subject to estate taxes. If so, life
insurance would be a wise purchase. If your term insurance purchase was based on sole purpose of providing protection
while your kids were in college than maybe you should cancel the policy.

submitted by Ronald Belham in Philly @ March 16, 2009 - 03:29 PM

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All the questions I've had for years have just been answered! Thanks for a very good web site.

submitted by Wanda Sobota in Hilliard , Fla. @ April 12, 2009 - 10:33 AM

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I enjoy this site because the questions are real life situational questions that are asked every day. The answers are direct,
varied and give the consumers objective advice. I believe this type of site is more informative than most.

submitted by Ronald Belham in Philly @ April 13, 2009 - 04:50 PM

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Why is term so cheap? Think about it. If you're paying $300 a year for a $1 million term policy, do you think there's a
bat's chance that the insurance company expects to pay out on your policy? Definitely not. Of course, we still buy it
because it's cheap and you never do know whether your time is going to be up tomorrow or 50 years from now.

Why would I buy a term policy during my working years when the likelihood of death is basically 0%, then drop it
during retirement when the likelihood of death during retirement is 100%? If I'm going to buy insurance, I might as well
make sure it's going to be in force when I actually need it, right? Otherwise it's been a waste of money.

Here's something interesting to chew on. Assuming you're 35 years old now and you want to have $1 million of life
insurance in force until the day you die (assume age 85):

-Buying 10-year term policies, then renewing every 10 years until age 85, will cost about $375,000.
-Buying 20-year term policies will cost about $380,000.
-Buying a combination of term ($700,000) and whole life ($300,000) that totals $1 million, then decreasing the term
insurance benefit as the whole life increases in value (so you maintain a steady $1 million of benefit up to age 85), will
cost around $370,000.

Which is the most expensive? Hard to say. Insurance costs - when measured over a lifetime - are generally the same
across all policy types. The difference here, though, is the flexibility you'd have if you bought the whole life. Dividends,
guaranteed death benefits, guaranteed premiums, guaranteed cash values, flexibility to use cash values to pay premiums
when I need to, availability of using dividends to offset premiums in the future, etc. There are a lot of reasons.

I spend a lot on whole life insurance every year, and I grin every time I write out a premium check because I know it's
safe and secure, and I'm already making more in dividends and cash value increases than the amounts I write in
premiums. Guaranteed returns. No risk. Can we say the same for our mutual fund accounts these days? No way.

submitted by JB in Denver @ April 21, 2009 - 04:58 PM

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Term is so cheap because they do not pay alot of death claims. The likelihood is STILL there that a death could occur,
the chances being more than 1%. Why not purchase a large term life insurance policy during the families growing years
and then later in life convert your term insurance to whole life or buy a new policy. You may not even need life
insurance when you retire, Why make that decision now. Term insurance is not a waste of money. The protection and
low cost are invaluable!

submitted by Ronald Belham in Philly @ April 22, 2009 - 04:22 PM

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Term is an expense, thats money paid to an insurer and is not returned to you. Loss 100%!
Ofcourse in some situations it does make sense.

Whole life is an investment, the money you pay in comes back with dividends.
Whole life doesnt care why you bought it, when you retire and dont have the need for insurance then you can use it for
anything else that you want...eg. leverage your other assets, take the pressure off other assets to perform. Putting other
assets at lower risk mean your chance of success is greater.

The presence of whole life in your portfolio provides you with options. If you had to live through retirement just on your
other assets, theres pretty much one choice and one choice only...live off the interest.

Life insurance should be permanent and forever. Cash values can only go in one direction...UP!

submitted by Sabre in NYC @ April 22, 2009 - 10:06 PM

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Term is for you if you are of modest means and expect your income to remain relatively stable. You simply need
economic replacement of your life in case of a catastrophic loss; this is the essence of all insurance. An insurance
company is willing to be on the hook for hundreds of thousands in death benefit for a very small premium because they
know there is a miniscule chance a claim will be paid. Permanent insurance, specifically whole life, has an actuarial cost
with the assumption of a much greater chance of claim; hence its higher cost. It has multiple benefits no other financial
instrument possesses: Creditor protection, liquidity and tax advantages. I would argue that its rate of return is
competitive. If you have a linear 5% rate of return tax-free and your tax bracket is 35%, you'd be hard-pressed to find an
investment that could return the equivalent taxable return on a linear basis (between 7&8%) that shares the above
mentioned benefits.

submitted by Axel in Houston, TX @ May 11, 2009 - 11:54 PM

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I dispute the idea that term insurance is only for people with modest means. I personally know alot of people with
incomes over 250,00 that purchase term insurance. You do not always need economic replacement of your income for
your entire life. Situations are different. I firmly believe that any reference to a whole life policy as an investment
product is wrong.

submitted by Ronald Belham in Philly @ May 12, 2009 - 01:25 PM

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Term is excellent coverage for working families with children. Yes, there is only a 1% chance that it will pay out
over..say 20-30 years. But the amount you are willing to give up is very small compared to whole life over those years.
The point of life insurance is to provide for those who need it in the small chance that you die. If I die at 75...well I do
not think my family needs an infusion of hundreds of thousands of dollars. I already saved for retirement(money that
would have gone to a whole life policy) and that money is there for them.

If I die at 60(worst case scenario)..before retirement and a few years after Term as been cancelled.. then there is no death
benefit for me(unless I have group through a job). However, the need for a large death benefit is gone. Children are
grown...house should be paid off..should be very few bills, and the retirement saved up to that point should be sufficient.

Of course it would make sense to look at your situation every few years and perhaps decide to decrease term coverage
instead of cancelling. Decrease it to your needs at the time. If you get cancer and will probably die sooner, then
obviously you wouldn't want to cancel since your need has just increased with medical bills.

But remember...all of the money you would have paid for whole life...could be in savings account ready to go when
needed any time.

submitted by Chris in Texas @ May 22, 2009 - 10:07 AM

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There are many choices when deciding what is the proper type of life insurance for a person to buy. Is the correct
answer: term insurance, whole life insurance, variable life insurance, indexed life insurance or universal life insurance.
There are many different ways to approach the solution without any answer being wrong. The most important decision,
is the decision to purchase a policy. The second most important decision is to buy the correct amount of coverage.
Everything else depends on your own finances, and what you want out of the program.

submitted by Ronald Belham in Philly @ May 26, 2009 - 03:30 PM

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The financial advisor (also an independent agent) who is working with us wants us to only contribute up to the match in
our 401K and use the rest for whole life insurance. We are both in our 50's and have been maxing out on our 401k's for a
few years now. I feel very uncomfortable with not maximizing the 401k first before investing in life insurance. I don't
understand the logic....Also he thinks my husband should take out the single annuity pension when he retires because
we'll have the whole life for me...Does this make sense?

submitted by Mary in DC @ June 01, 2009 - 11:08 PM

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Regarding the decision to maximize 401K contributions, our advisor gave us the same advice. The rational was the lack
of flexibility for use of the funds inside the 401k (i.e. penalties for withdraw, etc) plus the potential higher tax rate at
retirement. When he crunched the numbers, considering the future tax liabilities, the return did not look that great for
funds invested over the company match.

submitted by REA in York, PA @ June 04, 2009 - 10:55 AM

In regards to your decision to either maximize your 401k contributions or paying premiums on a whole life policy I
believe the better choice is to maximize your 401k contributions. We are not making a fair comparison. The 401k
(pretax) contributions will out perform the whole life thereby giving you a larger nest egg! No comparison!

submitted by Ronald Belham in Philly @ June 02, 2009 - 04:32 PM

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Ron,

I respectfully have to disagree, based on re-thinking what exactly we are comparing.

This is a multi-hour discussion I will try to boil down to this:

When ever we have the nest egg strategy, we are told to live off the interest of the principal. If my wife and I retire at age
65, there is a 50% chance one of us will make it to at least age 90 (probably her).

That's 25 years.

Has the market consistently gone up EVERY year over the last 25 years?

Has it ever done that in ANY 25 years stretch?

No, eventually, you have to touch principal, especially when a market like this or 1987 hits (those are within 25 years of
each other) , which reduces the size of our nest egg.

Remember, we are scraping cream off that top (interest), and then it is getting taxed at what will be a much higher rate
for EVERYONE in the future (so what's the point of pre-tax?), but that is another thought.

So, we have our bad year, and now the nest egg is less. The market rebounds next year, but our interest is based on a
smaller principal. We may have to touch our diminished principal again in order to keep up our standard of retirement
living.

Additionally, we may want to consider living on LESS than the full interest amount, as we will need to GROW our nest
egg DURING retirement AS WELL.

If you retired in 1985, and your retirement income DID NOT increase for 25 years, you would have a terrible time living
on 2010's prices.

Further, what is around today that was not around in 1985? No one had a cell phone in 85, but could anyone reading this
imagine their lives without one now? Anybody keep the black and white 18'' TV from their childhood? Or did more
people on here go out and buy a 42'' plasma?

The point is, things will continue to evolve, and new products will emerge. Should you limit your lifestyle (and let's face
it, right now, you probably currently do not), just because you locked yourself into the "nest egg" situation?

So, our 401k's give us a tax break now, but the TRUE rate of return must be measured against increasing taxes, inflation,
and lifestyle.

Now, let's see how a Whole Life policy gives us a pass to use our 401k account more freely.

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WARNING------WHOLE LIFE ADVOCATING------WARNING!!!!!!!!!!!!!!!

Our 401k is less than in the first example, because we used part of our money on the premium dollars for a whole life
policy.

(quick aside, Whole Life is funded after tax.....so, we are paying taxes on the money right now.....that money in a 401k
enjoys tax deferred growth, but the money in a whole life policy is NEVER taxed as income.....which is better depends
on your situation and tax bracket.....for most people, tax free in retirement is the way to go.....so, even if you hate my WL
talk, at least STOP putting money in your 401k after the match is meet, and plug it into a ROTH)

Whole Life becomes the PERMISSION SLIP for you to go out and spend down that 401k account. No longer do you
have to live on interest, BECAUSE WE BOUGHT WL ON BOTH SPOUSES.

We are free to spend down our retirement accounts, because when one person dies, the other has a large influx of cash
they can use to live on the rest of their lives.

But what if we spend the assets before we die?

Simple answer. If you have a QUALITY WL policy, you should have accumulated a decent amount of Cash Value.

This Cash Value is available for you to borrow against the policy......this is money we never intend to repay, as we can
safely allow the interest of that loan to compound inside the contract, at which upon death it will be paid back, with the
balance going to the beneficary.

As a matter of fact, you could use one of the spouses policies for this very purpose IMMEDIATELY when you retire.

Why?

Now, instead of pulling $40,000 out of your 401k to live on, and having it taxed in the 22% bracket, you can pull 20k out
of your WL and 20k out of your 401k.

You are now in the 15% tax bracket (only the qualified money is taxable), and the other 20k comes to you tax free, as it
is in the form of a loan on the contract.

Moreover, your actually get to have more money with the second strategy, because you have a smaller amount that is
taxable at a lower rate than in the first example.

EX.1---about $31,000 after taxes

EX.2---about $37,000 after taxes (the 20k from the WL policy is tax free)

It's a beautiful thing.

That was a lot of information, and I'm afraid it is just the tip of the iceberg on the Whole Life story.

Here is some recommended reading:

http://www.lifetax.com/webdocuments/The%20Whole%20Story%20of%20Whole%20Life%202005.pdf

Basically, this is the most diverse financial tool available, and it should be the "bonded" part of an individual's portfolio.

I appreciate anyone who took the pains to read this far.

Andrew Burks

submitted by Andrew Burks in Salem, IN @ June 05, 2009 - 12:34 AM

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Andrew,
I could not have said it any better myself!!! Like I said earlier, anyone who believes buy term invest the difference has
not compared WL products vs investment, and/or does not fully understand the flexibility that a WL product has. One
more thing, say you get that term insurance...say you are 45 now and you get that 20 year term...do you think you will be
in the same or better health when you are 65? Also, are you guaranteed your investments will still be there...subtract
$30,000 after a year like 2008 and that could equal more than what you originally planned for when needing money for
your retirement.

Believe it or not just because you average 10% a year for a number of years...it matters greatly what the returns are each
and every year! Suze Orman's of the world and the cookie cutter answers they give do a disgrace to the Financial
Services profession.

submitted by Brian Todd in San Ramon, CA @ June 07, 2009 - 12:31 AM

After reading a lot of the posts, I only have two comments that I want to make clear:

1.) When speaking about whole life, there are only about 4 companies that are even worth mentioning. Otherwise, term
is the way to go. Can we clarify that? Because in that case, I wouldn't mind talking about WL as an investment. A 30
year yield of 7-10% sounds pretty good to me. Let's be honest....if I'm putting a piece of the pie in WL, I'm not looking
for short term gains so who cares what it does in the beginning?

2.) Can we stop bringing up guaranteed values in WL and how low they may be? If you actually want to compare, I'd
rather have guarantees in an "investment" than no guarantees at all! Putting the money in the market has 0 guarantees. I
love how no one brings this up when they address guaranteed values in WL.

Bottom line...if you put all your money in the market, it's not that intelligent and that can be seen by the multiple baby
boomers who have to work longer because the market tanked. If you put all your money in WL, it's also not that
intelligent because you're denying yourself gains that could allow you to retire on time if not earlier. All in all, both
products provide value in and of themselves. It's how you position each one to maximize your portfolio in order to retire
on time and reach your financial goals.

submitted by Alex in St. Louis @ June 17, 2009 - 01:45 AM

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I have both Whole and Term,my insurance agent says I need both,my financial advisor says I need one. I want my family
taken care of when I die but don't want to waste my money getting there. I'm 41 and am more confused than ever.

submitted by Gary in Mississippi @ July 17, 2009 - 05:36 PM

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Boy, you can really tell what companies each of these people work for. First of, I love the fact that there are certain
people here the will actually recommend something over the internet with such limited information....that's crazy.
Anyway....where do you earn higher commissions? Whole Life, Universal, Variable Universal....or term? Be honest.
You know that the first 3 all pay higher commissions. You can't look at it simply like 1% of term pays out and all of
Whole Life pays out. Here's a question. Where does all your money go in Whole Life? If 1% of term pays out because no
one dies when they are young and you take out whole life when you are young.....where does it all go? Obv., it goes to
the insurance company and the agent. And as for people saying the market has averaged 4% over the last 10
years.....heres a good question for the "advisor" who is really an agent. What has it averaged over te last 20....or last
30....because no good 'advisor" will put you into the market if you only have 10 years to invest. Have your "advisor" run
a side by side including all fees and tax implications based off of your actual tax rate. Aslo have them disclose the
commission. There's nothing wrong with asking this and they should have no problem telling you. Everyone gets paid
some how...but it will help you get perspective.

submitted by JW in Lansing, MI @ July 20, 2009 - 12:55 PM

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I honestly believe I could make more money selling term. It is such an easy sell, a person could turn out a thousand apps
a year no problem.

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First off, as Ron mentioned, the worst decision is NOT to purchase life insurance. I write plenty of TERM on my clients,
because they need X amount of protection, yet can only afford Y.

We protect first and foremost.

However, I work diligently with people to convert their term to WL as soon as it is economically feasible.

When you buy WL with a solid, dividend paying company. When your WL policy allows those dividends to buy more
insurance, increasing both the Cash Value and Death Benefit.

When the Cash Value is a COMPLETELY liquid source of cash that can be accessed with policy loans that NEVER
HAVE TO BE REPAID.

When it allows for tax deferred accumulation AND (if done correctly) TAX FREE withdrawls.

When the cash value is exempt from creditors, lawsuits, etc.

When the death benefit is income tax free.

And when that income tax free benefit allows a person to actually access and enjoy their wealth, spending down their
retirement accounts, rather than merely hoping they make enough interest so they do not have to touch the principal.

THEN, I can easily recommend it....forget commission, it's what's best for the client!

The retirement game is NOT "How much money do I have to retire on?"

It is "how much money can I access in retirement?"

WL is the key to enjoying that hard saved monies, without worrying about leaving your spouse without means after you
pass, or leaving a legacy.

Ask the retirees.....they'll tell you. They either wish they had WL, or are happy they bought it years ago.

submitted by Andrew Burks in Salem, IN @ July 21, 2009 - 01:40 PM

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Buying term insurance and investing the difference may not be a good stragegy for some people. If you have not been
able to accumulate savings, retirement or other substantial assets your long term need for life insurance may be the same
after retirement as before retirement. Your spouse may only have life insurance to fall back on. In this scenario whole
life insurance would be appriopate.

submitted by Ron Belhan in Phila Pa @ August 31, 2009 - 04:46 PM

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Whole Life insurance has been in existence for many decades. I do not believe that all of those policyholders were
"ripped off" by their agents. Term insurance can give you a greater death benefit than whole life for the same premium
but there are other benefits that whole life offers that might benefit the owner.

submitted by Ron Belhan in Phila Pa @ August 31, 2009 - 04:56 PM

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I think I understand what has been said so far but I got some questions for you knowledgeable guys....This might sound
dumb but Why is cash value more secure than investing on your own? I mean, the return the insurance companies (i.e
New york Life) get on the premiums you pay are made by investing right? So isn't the risk the same as you investing in a
mutual fund yourself? Furthermore, why do people say whole life cash value only becomes worthwhile after a extended
period of time (15+ yrs)? and finally, wouldn't it be best to have term till you are in your 40s (so you can "invest the

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difference") and then switch to whole life to have a guaranteed death benefit for the rest of your life? I am not picking
sides, just trying to understand this better.

submitted by Joe in Phila @ September 10, 2009 - 06:14 PM

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The cash value in a whole life policy and investing on youir own is not the same. The cash value of whole life is derived
from the general asset account of an insurance company..all of its assets combined. When you are investing on your own
your investment is based soley on that particular investment..more risk. I believe it is better to have term insurance when
you are young and purchasre whole life insurance later in life. It is very difficult to do financial planning for life
insurance 40 years in the future.

submitted by Ron Belhan in Phila Pa @ September 15, 2009 - 03:03 PM

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Ron, when you say that you believe it is better to have term insurance when you are young, what age do you mean? Is
switching to whole life tough in your 40s or should it be done at a younger age? and why do people say whole life's cash
value only becomes worthwhile after a extended period of time (15+ yrs)? Finally, would you guys advise people to buy
term and invest in the difference considering the current economic climate and returns it could yield in the future (if
people were to start investing now)?

submitted by Joe in Phila @ September 15, 2009 - 10:54 PM

First and foremost Joe, what is important most is what is right for the client. The bottom line is doing what is right, and
what is right is what the client can afford, and what the client is doing currently. There is no right or wrong answer, but I
can tell you I would never want to try and make a client stretch to be able to afford the coverage his family needs.
With that in mind, there is definitely a place for Term and Whole life in a plan. I totally believe in Whole
Life...especially from a mutual company, but how good would whole life be if the client doesn't keep the coverage? If a
client is able to do it...WL all the way....so many advantages with so little risk. Investing is sexy...returns are what you
take home to mom and realize it is what's best to marry and have a life with.

submitted by Brian Todd in Livermore, CA @ September 16, 2009 - 12:27 AM

So my financial advisor says I should buy term and invest the rest. My insurance agent says I need to keep my VUL that
I have at 1Mil. I am 32 years old have 4 kids under 6 years old and do very well for myself as an employee in the 25+%
tax bracket currently (the government loves me). As of now I max out my 401k as does my working wife to reduce our
taxable income. Obviously I don't qualify for a Roth. Now what do you do? Who do I trust? Both the financial advisor
and the insurance guy make money off me, but the only one putting money in the game is me.

submitted by JSK in Nebraska @ September 15, 2009 - 05:32 PM

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JSK,

It sounds like you don't trust either one of them.

Beware of the 401k game....you may be robbing Peter to pay Paul on those taxes.

Traditional 'wisdom' says you will be in a lower tax bracket upon retirement......based on the way our last two presidents
have spent money (that we WILL have to pay back someday), I would hate for you to save money pre-tax in your 25%
bracket, and then wake up in retirement in some sort of ungodly 43% tax bracket.

Question: If you could get into a Roth, would you? (Combine income limits for couples are $140,000).

submitted by Andrew Burks in Salem, IN @ September 16, 2009 - 10:53 AM

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OK update here on my problem. Last year my tax rate was 28% the year before that was 26%. This year for 2009 I am
going to go even higher as my W2 salary climbs closer to $230,000. So Roth is out for me as much as I want it. As I said
Uncle Sam loves me. Would that change anything as far as your recomendations.

submitted by JSK in Nebraska @ September 17, 2009 - 10:07 PM

When purchasing a VUL policy or Variable Universal Life, the death benefit is most likely guaranteed for life. Before
purchasing a Variable Universal Life policy an individual 32 years old must take into consideration many variables that
may effect the purchase negatively. The time value of money (future death benefit) and the implications of withdrawing
funds from the polciy are only two reasons why someone would not purchase this type of insurance. Purchasing a term
life insurance policy and investing the difference might be a better choice.

submitted by Ron Belhan in Phila Pa @ September 17, 2009 - 12:44 PM

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Term Life insurance is a horrible way to go. If you buy a twenty year term at thirty years of age, you'll probably still be
alive at fifty so the small premium that you have been paying will disolve. Not only am I an insurance agent, but I also
had my father pass away at the age of fifty three. I recieved three hundred and fifty thousand dollars from a whole life
policy he had bought in his twenties. I also recieved, notices from term life policies stating that his policies were no
longer active. Buy Term Life if you would like waste your money, if you want to protect your family, whole life is the
way to go.

submitted by Sara in Texas @ October 01, 2009 - 08:59 AM

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I can't believe that the millions of people that purchase term insurance every year are wasting their money. If you need
protection for your family, have a limited budget or need lots of protection then term life insurance is very appropriate.
Term life insurance is an important part of financial planning for most growing famalies.

submitted by Ron Belhan in Phila Pa @ October 02, 2009 - 04:44 PM

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See the article for an interesting comparison of the two options: http://www.savingtoinvest.com/2009/03/life-insurance-
whole-versus-term-and.html

submitted by Gail @ October 02, 2009 - 11:16 PM

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To me, it comes down to a philosophical approach of life insurance and money for retirement years in general. This will
then determine what my approach will be: Term or Whole.

My philosophy has always been to view life insurance as just that, an insurance policy designed to cover those years of
risk to meet our family financial goals, if I were to die. Therefore, the years of risk are during the years that I am working
accomplishing those financial goals and building a proper nest egg for the family. After that, at 65 or so, the risk, and
therefore the need for life insurance, should go away with the nest egg being complete.

In other words, I don't want to have to rely on life insurance for my family after 65 so Term is the way to go for us. The
philosophy behind Whole Life is designed for permanency, something that I think Life Insurance does NOT need to be
nor has to be.

submitted by Jeff in Columbia, TN @ November 09, 2009 - 01:55 PM

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I am fortunate to have an occupation which currently has a salary of 600k. I am the only employee of my own company.
Although i may not make 600k per year indefinitely, ill likely always make above 400k. Although i have considerable
economic expenses for my children's health and education,i am trying to determine how best to plan for the future. My
financial advisor has recomended a qualified retirement plan which is made up of an annuity and whole life as well as a
401k profit sharing plan. Does this seem reasonable? The whole life is for 2 million and ill get some additional term

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insurance. The thing that started to bother me about my financial advisor is that he also recommends separately from the
above over funding a whole life policy in order to pay for education.

submitted by rex @ November 25, 2009 - 09:53 AM

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boy after reading this whole page... i think its best to save my money in the savings account this way i can always take
out without have to borrow or anything in commision percentage to pay back... i mean why would i have to pay back my
own money? its cruel and money scheme money making company acts like they own our money .. well guess what i
dont have an insurance and i have alot of money in savings and i always pay my savings back without any commision
and im happy!! this pages is so confusing back and forth on the term versus whole disagreements... it sucks basically the
bottom line is the old fashion way works save!!!

submitted by GJ in usa @ January 30, 2010 - 02:45 PM

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100.000 whole life plan face value or death benifit.
90.000 cash value,dividends,intrest or proceeds. (Whatever they call it)
insured dies, never borrowed from policy
How much can the ben collect?
I have read that you cant collect both.
Only the 100,000 or the 90,000 usally the highest amount.
Some say the 90.000 is to fund the increase cost of the policy.
Can anyone answer this clearly? Thanks

submitted by james in michigan @ February 02, 2010 - 03:33 PM

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The beneficiary collects the death benefit, not the cash value.
If there were a loan, the beneficiary would collect the sum of death benefit minus amount of outstanding loans.

submitted by Dennis in Austin, TX @ February 15, 2010 - 12:55 AM

okay.... I've read this whole page and is quite disgusted with alot of whats being said on here.I am a primerica
agent(whole life worst nightmare)and we believe in buy term and invest the difference. Listen people need to know the
truth! You need 5 to 10 times your annual salary in life insurance to protect your family.In WL you pay for two and get
1, 100 percnt of the time. Lets be honest there is no risk in investing. The WL company gives you 2 to 4 percent on your
so called investment and invest your money in a higher return. This is why they charge you to take it out because it is no
longer your money. since you want to give stats, The federal trade commision released that on average WL policies yield
1 to 2 percent even considering the fact it is essentially tax free.So in closing, why in the blue world would you trust an
insurance company with investing your money?

submitted by LeQuan King in Atlanta,Ga @ February 03, 2010 - 02:03 AM

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LeQuan,

"There is no risk in investing"?

If you have a license, go turn it in, right now. If you have EVER said this to a client or prospective client, you have failed
as an ethical agent, and should be terminated from PFS immediately (and if you were caught saying that at any
_reputable_ agency, you would be already).

There is a very real place for Term insurance in financial planning and protection, but to blindly insist that ONLY Term
or ONLY Permanent insurance is correct for every client is not only irresponsible, it is stupidity and a failure of your
fiduciary responsibility to the client.

Participating Whole Life from a strong company can provide very nicely for the conservative portion of a person's
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investment portfolio. It stands up very well to other conservative investment types, assuming dividends are regular. It
also allows for access to liquid cash assets in cases of emergencies, as well as long-term growth with negligible risk of
loss (assuming reputable company). Universal Life or Variable Life policies may also be used for this, but their risk and
return factors seem (to me and to many other reputable advisors) to be less optimal than WL.

That said, you should also not put all your investment money into WL (or ANY single financial vehicle). Depending on
your age, income, and other factors, an evolving percentage of your investment portfolio should be in higher risk-higher
return investments, such as equities and securities. The percentage in each will vary depending on your unique situation,
which should be investigated by and discussed with a reputable (preferably independent) financial advisor.

Tax status is also a HUGE consideration. When it comes to IRAs (or RRSPs in Canada), I am reminded of the old "apple
seed" adage. Consider this: If you had a bag of apple seeds, and were determined to become an apple farmer, which
would you rather do?

1) Pay no taxes on your bag of seeds now, but instead pay 25-50 cents per apple on every apple you grow, for as long as
you live.

2) Pay a tax of 25% of your bag of seeds now, but never pay taxes on any of the apples you grow.

Which do you think would be more worthwhile to you in the long run?

When looking at the claim that "by 65, you're self-insured" by your investments, one must consider several factors.

1) What if you turned 65 in 2008? How "safe" do you feel now?

2) What if you are diagnosed with a dread disease (Cancer, MS, Heart Attack) at age 55, and have to dip into your
investments to cover the extra costs incurred? You're now "uninsurable" in most cases, and can't buy more insurance,
and your investments just took a major hit. Can they recover by age 65?
3) Again, Taxes and/or fees/penalties (if your investments were in IRAs/RRSPs).
4) Accessibility at time of need. Pulling funds out of investments takes time (and often costs you money - see 3, above).
If you have some Cash Value in a Permanent life insurance policy, a single phone call and/or letter is often all you need
to access your funds in a short period of time.

It all comes back to this: Get a reputable financial advisor to advise you. If you can, get two. Be honest about your
situation, your goals and your risk tolerance, and have that advisor draw you up a program for reaching your goals. If
you don't like the advisor's advice, and they're not a "good fit" for you, GO GET ANOTHER ONE. It's OK. There are
lots of us out there, and we (clearly) don't all agree on philosophies. Find one who is honest with you and with whom
you're comfortable.

I like Whole Life, I like securities. I use Term insurance to cover off short-term needs and as a stop-gap for those who
don't (yet) have the cash-flow for WL. I also use Term for those clients who are rabid believers in "BTID," though I can
usually convince them (in rather short order) that they need at least SOME perm. coverage. I don't like "funds" so much
as an investment vehicle, but still, in Canada, over 55% of RRSP money goes into Mutual Funds every year. They have a
place, as do ULs, Term-100s, stocks, bonds, and seg. funds.

For most people, the best advice is this: "Go talk to an advisor."

If any of you wish to talk to me, you can reach me at the email address below. No guarantees I can help (license
restrictions being what they are), but I can certainly try.

Regards,

Jos
Associate Advisor
Jos@clfcalgary.com

submitted by Jos in Canada @ March 17, 2010 - 07:51 PM

If any person says Term Insurance is the only logical choice, they are being foolish and probably selling just Term
insurance (which over 90% of all Term poilcies are never paid out) Also, if someone tells you there is no need for term

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and will only advise whole life as well may be trying to push their own agenda. It is very important that you meet with a
Qualified Financial Planner who will take a look at each individual situation to determine what Type of Insurance is
needed and affordable. If a person had the money to purchase whichever Life Insurance they wanted...9 times out of 10
they would all buy Whole Life.

submitted by Stephen in Ohio @ March 02, 2010 - 12:49 PM

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I agree with Stephen's response in that a financial planner should look every individual's situation differently. There is no
one policy that fits all. Affordability, and amount of coverage or the two most important factors in determining the
correct coverage.

submitted by Ron Belhan in Phila Pa @ March 04, 2010 - 11:58 AM

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ANY life insurance is meant to protect your income while your responsibility is at its peak, when your family is young,
when your mortgage is fairly new, when you have a ton of debt (if any), just in case you die prematurely and your
dependents cant fend for themselves!! After 20, 25 or even 30 years, your mortgage SHOULD be paid off, your debt the
same, your investments grown (mutual funds), and your kids out of the house!! A death after that will not be financially
devastating to your family since you did the right thing, Buy Term And Invest The Difference!!!

submitted by crusader in california @ March 12, 2010 - 02:04 PM

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I have a $1million dollar term policy for my wife and myself (each). We are both 33 yrs old with 2 kids. Well 1 (age 1.5
and another on the way in June). We both have a pension plan through our jobs. We are looking to invest money for our
retirement, and our childrens education. We currently, metaphorically speaking, put our money under our matress and
don't collect much interest on our money. Should term life insurance be our primary investment if it is within our means.

submitted by MDH in Philadelphia, PA @ April 14, 2010 - 10:06 PM

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"The devil is in the details."

Once upon a time, I recall reading that compounding interest gives:

v = ((1 + r) ^ n - 1) / r

where

v : future value, relative to amount per period

r : interest rate per period
n : number of periods

Let's add a factor "f":

f : factor of (1 - t)
t : tax rate

i.e., "f" indicates how much money one keeps after taxes.

Assuming that one funds an investment with after-tax money, and non-taxable appreciative earnings, we now have:

v = f * ((1 + r) ^ n - 1) / r

because "f" serves to reduce the effective amount of each contribution. i.e., we earned amount "1" in pre-tax dollars, but
can only contribute "f * 1" due to "t" being spent on taxes.

Yet we also obtain the same formula for deferred taxes and non-taxable earnings. In said case, "f" is a multiplier for the

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nominal future value (as opposed to each contribution), but the end result is the same; cf. associative property of
multiplication.

Nota bene:

This write-up ignores the possibility of changing tax rates. Such is why people are advised to "play the odds" with
respect to anticipated tax changes: It's obviously preferable to maximize "f", which means attempting incur the hit from
"t" when it is at a minimum. A more thorough analysis, taking into account different tax rates over the lifetime of the
contributions, would require a spreadsheet; it cannot be treated by a simplistic equation.

Ditto variable premiums. This simplistic model assumes constant premium pricing.

Time for a curve-ball:

Everything thus far assumes a 100% likelihood of collecting on "v". If one knows that one will never collect "v", then it's
actually worthless... right? Using standard risk-benefit analysis, let's say that:

w=v*p

where

w : weighted -- or "probability-adjusted" -- form of "v"

p : probability of collecting the future-valued "v"; comes into play with term life

Now, then:

Go play with the numbers, and try to maximize your "v" and/or "w" as you see fit! As you can see, the math works out
differently for known "v" with unknown "n" and unitary "p", versus unknown "w" with known "n" and estimated "p".

Disclaimer:

I'm not an insurance agent. I'm not a financial advisor. I'm just a propeller-head entrepreneur, who some years ago
enjoyed his Engineering Economy class a bit more than most of his classmates. ;-)

submitted by Ed in Kansas @ April 18, 2010 - 03:42 AM

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The "tax paid per apple grown" in the orchard analogy implies tax paid on interest earned. A tax-deferral situation would
be paying tax on each apple harvested for consumption. It's also unclear how much each apple is worth.

Furthermore, the example makes us tend to think in terms of total taxes paid, instead of total yield. If I make $1,000,000
per year gross, I'll pay more taxes than if I gross $100/year. That's fine. Sure, I'd like to pay as little tax as possible... but
what I _really_ care about is how much money I have when all is said and done. Would I reduce my income by
$1,000,000/yr to save $350,000/yr in taxes? (If you would, please send that $1M/yr my way, and I'll pay your $350k/yr
tax bill.)

submitted by Ed in Kansas @ April 18, 2010 - 04:44 AM

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What many insurance salespersons won't tell you about whole life/cash value/universal life, etc. is that the "investment"
portion of the policy is kept by the insurance company upon the death of the beneficiary. Even if you borrow against the
cash value in the policy, and the beneficiary dies before it's paid back, the difference owed is deducted from the death
claim. So, who are you really investing for when you buy whole life, you or the insurance company?

submitted by Phil in Orlando @ July 21, 2010 - 09:24 PM

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TERM INSURANCE IS THE BEST WAY TO GO! TRASH (Cash Value) Value policies allow you to pay for all three:
Protection, Accumulation/Cash Value, and Retirement Income...But guess what? You can only exercise one feature at a

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time. Examples of these policies are...whole life, universal life, flexible premium adjustable life, paid up life, adn
educational life (they all pretty much have a savings account built inside the policy). Simply put...Trash value policies
promise to save your money for you with very low interst, but what they fail to tell you is that if you borrow your money
you will have to pay back interest on YOUR money. In addition to that if you were to die your family will never recieve
both the savings amount and face amount (only the higher of the 2) So what happens to the money you've been saving
ALL YOUR LIFE...thats right, it goes right back to the Insurance company! Wow....now is that right? No! Wouldn't it
make since to invest your own money with companies that have track records of much higher interst rates? If something
were to happen to you your family would get both the face amount and the savings!!! Don't let slimy agents fool you into
buying Trash value policies! Trust the commission for them is much higher. 9 times out of 10 they have Term Insurance!
Most of them don't even know the what they are selling! It cost weigh more money and it costs your family even more
money when they are left with these type policies! Do your research, read the fine print...LEAN NOT TO YOUR OWN
UNDERSTANDING! TERM is definetly the way to go!

submitted by Shawntae in South Carolina @ July 21, 2010 - 11:24 PM

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I spent an hour reading everything on this page and I can say that I am no closer now than I was before I started, in
determining whether whole life is a good move or not. Even if I go to a financial adviser, I fear that his answer might be
just one person's opinion and that 5 financial advisers will have 5 different opinions on what is right. If this were the
1990's, I assume most would opt for term, due to the bullish market, and the belief that any extra money would be better
served in stocks, but it is not and thus the right answer evades me at this point.

submitted by ken in new jersey @ July 25, 2010 - 10:14 PM

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I agree, it seems if you ask 5 people, 5 different answers; I do know that if you go with Term (i.e., 20 years)and once it
terms out, and you are still 53, with a wife and 10 year old, but still do not have 1M of whatever you believe your famliy
would need, now you need to purchase 20 more yaers.

submitted by Rich in Knoxville @ July 30, 2010 - 11:03 AM

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I am looking at life insurance needs for my husband and myself now. We are 31 and 36, respectively, and have a 4 year
old son. We make a combined annual income of around $55,000. We have a lot of bills right now (home, 2 cars,
insurance for home, cars, daycare, utilities, etc.) and can't afford much more. I just want an insurance that if either of us
kicks the bucket in the next few years that the other can pay off the house and vehicles and maybe put about 20 or 30,000
up for our son's college. What sort of life insurance would work best for us. Please keep in mind that we don't make or
have a lot of money. We have no savings and really can't afford life insurance but we're at an age that I really don't want
to be without it either and I want our son and the spouse left behind to not have to worry about the bills or college.

submitted by Not Wealthy in Anytown @ August 23, 2010 - 03:48 PM

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Term.

submitted by JDE in San Diego @ August 29, 2010 - 02:35 PM

I just read all of the posts here and it seems like there are a few educated responses but a lot more uneducated and one
sided responses. People a taking their turn on the soapbox, trying to spout facts and figures about how insurance works,
who makes more commissions, etc... Are these facts really important? I would say no... I would say that because
competition exists in the insurance marketplace, it takes care of most of these things people are worrying excessively
about and you should just focus on whats relevant to you.

So which is better? (I am ignoring Variable Universal and Universal Life because that is not really part of the question) I
would say both. I say that because everyone's insurance needs are NOT the same. A rich person has different needs than
a poor person, an older person has different needs than a younger person. I will say this about Term, it does a very good
job of what it is designed for. It is inexpensive and reliable. But that is where the discussion on term ends and the
conversation on whole life starts. Term is for a specific amount of time. If you die during this time it is the best
investment you ever made because you have created a legacy to pass on to your beneficiaries that literally cost you

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pennies on the dollar. But what happens if you live beyond your term insurance? Can you afford the new premiums
which will be super expensive? Will you have developed a smoking habit? Have high cholesterol, diabetes or heart
problems? And by the way, what if you invested the money you saved by buying not whole life and put it into
investments that did not perform the way you thought they would? The answer is you are effectively screwed. 1. Your
new premiums are going to be very expensive, more expensive then if you had bought whole life to begin with, 2. You
just lost 20 years of investments because you were "fat, dumb and happy" thinking that your investments were going to
bring you security and 3. If you can't afford the new premiums, you don't have any insurance.

If it sounds like I am making a case for whole life, I am. But let me repeat what I said earlier. Insurance is not supposed
to make you rich. It is supposed to protect and secure your family's future buy replacing your future earnings if
something should happen to you. Here is a good point for Whole life. While it is more expensive than term in the short
run, in the long run it is less expensive and it gives your more options in the future. What do I mean by options? 1) It
creates a cash value, that grows the longer you have the policy. 2) At some point, somewhere around the fourteenth year,
you will have recouped every dollar you ever spent on the whole policy 3) At a certain point, your policy will have
enough cash value that it spins off enough dividends so that you will never have to pay another premium for the rest of
your life. That bears restating.. With whole life, your cash value means you have insurance even if you live to 125 with
premiums. 3) Let's say you are only making 1.0010 % in a CD as in today's market... you put that extra money into your
whole life policy and earning 4% tax free. Why not? You can still put money out when you need it. and 4) Its a safe
guaranteed, asset class as part of you overall financial portfolio.

If you think that you should put all your discretionary money into term or whole life insurance, measure its performance,
count on it for retirement, etc... you need a refresher class on financial planning. Insurance is not going to make you rich.
When you are rich, you might not need insurance but in the meantime, have something in place in case the unexpected
happens. If you can't afford whole life, buy term. If you can afford whole life, you will be happy that you did. If you are
like some of the supposedly smart people that are posting here, I bet they are trying to buy term insurance the day before
they die. They would be super smart!

In closing... buy insurance for "just in case" if you have people you love that you want to take care of or if you owe
money on a mortgage, etc.. The term or whole life option is moot if you can't afford whole life today. Term is cheap, it
covers you if you die but people need insurance when in the later years not when they are 65 or 43 or 21. Its less
expensive to buy Whole Life when you are younger and gives you those options I talked about earlier. It covers you for
your "whole life" it creates as asset class with guaranteed returns that aren't sexy (4%),

The "buy term and invest the difference" people had their chance. If you are still subscribing to this thought, you haven't
been in the market for the last fifteen years and haven't seen its crappy performance. If $200 or $300 dollars a month is
what you are considering, you aren't an investor anyways so don't use that inaccurate axiom for your insurance decision.
Buy what right for you. Term and whole life have a place in everyone's portfolio but affordability and tolerance for risk
have their place too. If you are like me and can't see the future, I like whole life.

submitted by JDE in San Diego @ August 23, 2010 - 04:35 PM

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I agree completely. Younger people that need more protection (kids college funds, mortgage) should have a large term
amount to cover the potential of a devastating loss of a primary wage-earning parent. However, getting a smaller (1-year-
income) whole product while young (and relatively inexpensive) is a long-term wise decision.

"Buy term and invest" assumes that health will never change, and is by definition a faulty premise. Too many times
people over age 40 begin to develop long-term medical conditions (blood pressure, diabetes, cholesterol, weight) that
make term insurance either unaffordable (at best) or simply unavailable (at worst).

Any life insurance agent selling the "Buy Term!" concept should ask the client how they would feel if in 19 years they
had a minor heart attack and couldn't renew their term life insurance. 20 years older with a heart attack? Good luck
renewing your term.

Use a combination of term (for catastrophic early death) and whole life (for permanent protection) for the best course of
action.

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submitted by Eric in Detroit, MI @ August 26, 2010 - 01:15 PM
I have read the entire posing and still can't make a decision on term or whole life. I agreed with buy term and invest the
rest yet believe in long term protection for my family (whole life). But I don't like the fact of the borrowing my OWN
money. I'm 31 and my husband is 32. We have two kids both under 3. I have a 401K but my husband doesn't. We have a
good amount of saving $60K which is earning at a very low interest. We want to maximium our saving. We don't know
much about investment and afraid to make a wrong move which is where I lean toward WL (guarantee value). Would it
be a wise to buy $800K term and $100K WL and open a roth IRA and max out the contribution amount?

submitted by Nikki in California @ September 03, 2010 - 01:12 AM

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There are only three places you can "put" your money... insurance, investments or savings, think horizontal
diversification. You can "put" your money into these three classes via two routes, tax deferred and get taxed on it later
(401k, IRA) and/or you can put it in post tax and let it grow tax free, (Whole life insurance or Roth IRA). That is vertical
diversification.

If you really want to diversify your risk, don't put all your money in one asset class. You could have some money in each
asset class, Safe, Moderate and Aggressive. The percentage you devote to each class depends on your age, appetite for
volatility, etc... In my opinion, you are still young and you haven't even reached your peak earning years. If I were you, I
don't think you could go wrong if you diversified your money horizontally and vertically. That is, place your pre-tax
investments into riskier and potentially higher rewarding classes (investments) and lock up your post tax investments
into something safe and guaranteed. (whole life insurance and savings). Conservatively speaking, if the market continues
to limp in or doesn't go up or loses value, you have a lot of time to recover and ride out the low valleys. Liquidity isn't a
concern because you don't want that money now anyways, you want access during retirement. So you have the luxury of
time to let those seeds grow. In the meantime, while you are waiting for that harvest, put some post tax money into
savings and yet other money into a permanent policy that builds cash value. If you don't like the idea of borrowing your
own money, use your savings for emergencies, if you have to borrow money from your whole life policy, it isn't as bad
as most people understand it. If you acquire a permanent policy from a mutual insurance company that practices non
direct recognition your costs of borrowing are pretty low. To be specific... even though you are borrowing the money
from your cash value, the company is still paying dividends on the money as if it is still in the account. Even though you
might be paying 6%ish on that money, you are still earning 4%ish on that same money. Where can you "borrow" money
at 2%? And you don't have to apply for it or fill out an application... its your money. If you end up not paying the loan
back or blowing it in Vegas, the amount of the loan and any interest is subtracted from the check your heirs get when
you die.

A couple of other notes, you can take out any amount over your basis as a loan, anything less than your basis is not a
loan so there is no interest. If your investments completely fail, whether pre or post tax, your cash value in your whole
life policy will continue to be there. In this crappy market, do you realize how great it is to say you are making 4% on
your money? Moreover, how great will you feel once your policy is paid up and you know you never have to pay another
premium for the rest of your life? I have seen too many people get burned by the philosophy of "buy term and invest the
difference." The market has performed poorly over the last fifteen years, their have been two bear markets and some
people think there is a real chance of a double dip recession. I am not putting all my eggs in that basket. I am putting
some in though because the time to buy is while the market is low and I love my whole life policy. Lastly, buy some life
insurance, Please! (Term or WL).... If something happens to your breadwinner, how are you going to replace his/her
income?

submitted by JDE in San Diego @ September 03, 2010 - 04:34 AM

I'm 78 and in good health. I'm glad I spent a little money in younger years on term when my kids were young. I'm also
glad I bought a little whole life back in my 20s which I still have. I have borrowed from it and paid it back several times
for emergencies. No tax consequences! Right now it's a savings account earning about 7 percent, an emergency fund, and
a death benefit for when that comes, all without taxes. I'm with Northwestern Mutual and Mass. Mutual. My advice for
all is allocate 3 to 5 percent of your income in life insurance, term when younger and changing to whole life when you're
older, with good companies. It will put and keep you in charge of things responsibly. Yes, I am human!

submitted by RRG in Sequim, WA @ September 09, 2010 - 09:31 AM

Reply

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I'm so confused after reading everyones replies. I am 31 and have 2 children. Looking into Life insurance and what is the
best option for me. I have term life through employment and am considering whole life. Any suggestions?

submitted by Kristy in Pittsburgh, Pa @ November 06, 2010 - 11:44 PM

Reply
Kristy,

What does the rest of your profile involve? Do you own a home? How much do you owe that home? Do you have other
systematic savings plans? How are they performing? How important is it to you to have insurance for the rest of your
life? What plans are in place now financially if something were to happen to you? Do you want your kids to go to
college? If so what level of college? Are you willing to be without insurance once your term expires or if you leave your
employer? Your age and your kids are just a small part of the bigger picture.

submitted by JDE in San Diego @ December 08, 2010 - 05:48 PM

Reply
Attempt #1

submitted by Jay T in San Francisco @ January 21, 2011 - 02:51 AM

Reply
I have just purchased a combination of term and whole life. I am 39 with two young kids and a wife who does not work.
I bought this combo for the following reasons:

The total death benefit will cover housing and living expenses for the family for about 10 years, or until my wife's
retirement if she works part time. It will also cover college education. Living expenses are assumed to be average ... I am
insuring for worst case scenario. This is a low probability so I am only insuring as much as is necessary to make sure life
is manageable (ie a foundation of support)

Also, about 1/4 of my total coverage I did in whole life. I spent 3 months with my agent studying this decision, running
scenarios, verifying the models they provided me, and understanding every feature of the policy. I have been in the
mutual fund business for 15 years, and finally feel both educated AND experienced enough to fully understand the
benefits of whole life. For the last 10 years, I agreed with the view of "buy term and invest the difference", but now I
realize that is overly simplistic, and for someone who is more sophisticated, there is a place for whole life in your asset
mix.

Here is my why behind whole life:

-I have some death benefit until I die. This provides obvious financial cushion to my family in the early years, but as I
become older also becomes a tool for estate planning.
-The biggest reason is the investment account, as a portion of my overall retirement portfolio:
- - I cannot lose money if I stay with it over the long term; it grows every year
- - A tax deferred account that generates 5-6% compound growth for 30 years without downward volatility is a terrific
investment outcome. The reason you cannot compare this to hoping to invest in stocks for 30 years and make 10%+
annually is that "average return" can be highly volatile for periods of as long as a decade. When you retire and need to
rely on the money is when the markets may be unfavorable. Putting all your money in the stock market is too much of a
bet. That said, I will have a larger portion of my retirement assets (IRAs and 401k) in stocks. My goal for these positions
is to get strong long term growth. But I am not going to rely on long-term averages to be working for me when I retire.
Rather, I will have the whole life insurance as a supplement - the ability to convert it to an annuity, or draw from the
dividends (tax free) as a source of income. The policy size I bought would provide enough income, that, with social
security, I would have a comfortable-enough income stream for long periods when I might not want to draw much from
my stocks and other retirement assets if they are down. In short, I am creating my own pension (since I do not work for a
company that provides one.) Overall, I estimate that my life insurance cash value will represent about 15% of my total
assets at retirement, and about the same for how much of my savings it receives every year until I retire.

Features of the policy make this goal possible, and also make me more comfortable because of the flexibility to change
course if I need to:
- tax deferred growth
- ability to make withdrawals tax free if needed (ie supplement college expenses)

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- ability (in later years) to just receive the dividend as income
- ability to annuitize .. or ability to annuitize only portions of the cash value

However, there are 2 important caveats to my approach: 1) the rate you get on your policy and the age when you buy it;
and 2) which life insurance co you buy from.

- AS for #1, I am buying because I am in good health which gives me the best underwriting class and therefore the
lowest premium, and I have 30-40+ years to let the cash account grow. (I wish I was smart enough to have done this 10
years ago.) This results in a potential compound return of ~5%, or on an after-tax basis, this represents about 8.3%
compound annual return I would need to get in my own investment portfolio (taxed every year), to breakeven. Thats very
good; like the bond portion of an investment account. If my returns were lower - maybe 2-3% as a result of higher
premiums or a shorter period to invest, then I probably wouldn't do it. (For the finance people reading, you can model
that this return with no volatility is worth about the same as long-term stock market returns with 25+% volatility, using
standard options pricing models.)

- As for #2, not all life ins cos are the same. I narrowed it down to NY Life, Mass Mutual and Northwestern Mutual, and
I think the last 2 are the best. Why?
- - They are mutuals, which means the policyholders own the cos. As such, the cos earnings go into the dividends on
your policy. Thus, they usually have higher policy dividends than stock cos (life ins cos with investors/stockholders, like
any other co), because a lot of the earnings need to go to the stockholders.
- - They are the most trustworthy. They pay their agents well, but they really know what they are talking about and, in
general, represent your interests. (Note: they are still salesman, not fiduciaries, so like all financial decisions, you still
need to be aware and skeptical and do your homework and find someone you believe in. But these cos in general hire
good people and train the right way, with the long term interests of the co in mind.) For me it was a lot of work to find
someone who I trusted *enough* and got a lot of attention from, but I'm glad I did it.
- - there are a lot of insurance cos who do indeed sell CRAP and have horrible rates, terms, practices, etc. Do your
homework and stay from them. It's just like buying any product, there are the manufacturers known for quality and
backing their products, and for each one of those there are 50 doing knockoffs and trying to take advantage of you.

Two more thoughts:

1) These are my reasons. Life insurance can be used in creative ways for other needs that I cant speak to. For example, if
you have meaningful assets and are older, it can be used as a tax efficient way to pass on wealth.
2) A lot of people complain about how much life ins salesman make, and therefore conclude its a sham. Well, yea they
take a lot of the premium, esp in year one, and then they get a rider for as long as the policy is in force. That's a great
living. And it bothered me for awhile. But here's the deal - what matters are the terms of your contract. If you are getting
a good rate, then that is all that matters.

My last thought: I am writing because I spent a lot of time on message boards trying to compare term and whole, and
didnt find much. I have no agenda, other than drop in my 2 cents because it was helpful to me when I found others who
has as well,
Good luck.

submitted by Jay T in San Francisco @ January 21, 2011 - 03:45 AM

Reply
Why does it matter how much the insurance company makes off of you? Whoever you invest with takes a cut, ie
insurance or investment companies. I don't think whole life is the be all end all investment. If you have enough money
invested in IRA, mutual funds, etc, term would be fine.

submitted by Wevie in Sonder @ January 24, 2011 - 03:35 PM

Reply
If there are so many on here to help that work in the insurance business or were previously employed in it why not
disclose the what the commission are on term or whole. While I am sure they vary somewhat there must be a reasonable
average commission...

submitted by dave in Nashville, TN @ February 01, 2011 - 07:49 PM

Reply

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Dave,
Regarding commissions, they vary by insurance company. Secondly, insurance is not something that when you pay for
it, you are directly compensating the individual you bought it from. Yes, that individual does make a commission from
the insurance company, but it is for work done for that insurance company.

Where you work, does your customer come in and ask you how much you are getting paid to service them?

submitted by Brian Todd in Livermore, CA @ February 01, 2011 - 11:00 PM

Reply
Hello ,I Am Mrs wetter maria .A legit loan lender.Are you into debts? Do
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getting a loan from me,hope to here from you soon.via :
well.mork@yahoo.com

LOAN APPLICATION FORM

Name:
Address:
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Country:
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Purpose for Loan:
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Loan Term/Duration:
Net monthly income: $

Regards
Mrs.wetter maria

submitted by WETTER MARIA in NIGERIA @ February 05, 2011 - 05:25 AM

Reply
I'm 38 I been in the restaurant business since i was 25. I have done very well in that business and also in commercial and
residential real estate. 5 years ago i purchased 250k in WL and 2.25 million in term at a preffered rate with NWmutual. I
have recently now switched my term to WL at 2k a month. This does not affect my income at all. Did i do the right
thing? Besides my mortgage i am debt free.

submitted by Mike in KCMO @ February 10, 2011 - 02:47 PM

Reply
To Mike in KCMO,

You did the right thing for your agent by converting your term to whole life. He received up to a 50% commision, $10-
12K, of your first year premium on that sale. It was however, not the best move for you.

I noticed the folks pimping whole life insurance also left their insurance company contact information. There is
absolutely no doubt that agents make more money (not percentage, but $$) on whole life sales than term. Some people
have said that the companies make much more on term than whole life. Then why do companies pay much more
commission on whole life?

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The insurance should cover a risk in your life. When that risk goes away (mortgage or kids college) then it served its
purpose and should go away. If you want money for a funeral, put your "premiums" in a bank account and forget about
it.

Chris (a reformed insurance company employee)

submitted by Chris in Indiana @ February 25, 2011 - 01:29 PM

Reply
I post on here from time to time and I have seen some really good ideas and some very, very bad rationale given by
people who have no idea what they are talking about. The fact of the matter is you cannot make a blanket statement
about which type of plan is best for everyone because everyone has different needs... In fact everyone's insurance needs
are different and change at various times in their life. (i.e., just starting out, new kids, buying a home, paying a home off,
in retirement, for estate planning, etc....)

Yet... everyone should have some type and some amount of insurance, especially if you owe money or have someone
you love. You are legally obligated to have auto insurance and banks require that you have homeowner's insurance if you
have a mortgage. But why is there is there is no legal requirement for life insurance? Cause no one gets hurt if you die.
Except... your family. Your life is more valuable then a car or a home... and the money you make over your lifetime pays
for bills, college education, vacations, food, etc... How would your family survive if something happened to you???? If
that isn't enough to convince you that insurance is important, no need to read any further. But if its important to you, read
on.

For some people term does a great job of providing reliable and affordable insurance. Its purely insurance and if you die
within the period of coverage, your family is protected. The thing some fans of term insurance don't think about is what
might happen if their plan to invest and be rich doesn't work out. They have no investments and no insurance. At that
point, they are out of time and can't get that time back and are past the peak earning years. And insurance gets more
expensive the older you get, and health issues could arise. But you know what? If you can't afford anything but term, that
is your only option.

As for whole life, don't forget that no wise person puts all their money in stocks, or just real estate, or just gold or just
insurance for that matter. Permanent insurance can be a integral part of a comprehensive approach to your entire
investment portfolio. I like the idea that having insurance in your portfolio decreases your overall risk while increasing
your total value. A lot of people don't understand what that means but if you do, you understand leverage, guarantees, tax
efficiency, diversification and flexibility are all part of the whole life decision.

I "sell" life insurance for a living. I sell to clients who have nothing but are just starting out and I sell to high net worth
clients with millions in assets that want to invest, minimize risk, avoid taxes and transfer their assets to the next
generation. The first thing I do is ask questions about their financial goals and plans before I start talking about a
particular product. Its important for me to know all the facts before I offer any solutions. Often times, my work is done in
a collaborative effort with my client's CPA, estate planner or other financial planner. And yes... I sell term, whole life,
and universal but it all depends on my client's needs. A lot of times I sell a blend of products.

Filter out some of the blowhards that post here. Educate yourself, go with a reputable company with trained, competent
advisors. There are quite a few good companies out there. There are a lot of shady ones too so again, filter out the
garbage.

submitted by JDE in San Diego @ February 27, 2011 - 03:11 AM

Dave Ramsey on Life Insurance Vs Whole word?

January 4th 2011 Posted at whole life insurance quote

7 Comments

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Dave Ramsey talks about the reasons against the full term care insurance and why he recommends term life ins
on any kind of permanent cover. Sound financial advice from Dave Ramsey. The best life insurance is far from
definitive or Whole Life insurance.

Dave Ramsey on Whole vs. Term Ins Transcript:

. "Alright Check-in writing via e-Tyler pocket of Massachusetts:

"" ManyPeople have a need for long-term life insurance. As can be recommended limit for everyone? Do you hear that
you like that are ill-advised? Your term life insurance is likely to expire when they most need. Tyler "

"Spoken like a true life insurance agent Tyler how long you are selling. Do you have life insurance?

And these are not problems. These were passive aggressive statements, were not masters? How we deal with itthough.

Uh, I can recommend simple term life insurance as the only cause, because the rest is garbage. This is a rip-off. You're
much better life insurance to purchase about 5 cents for the same amount of insurance and invest the rest of the money.
You will end up with a lot more.

We follow this by a second. You'll see what I mean.

Let's say you're talking about a 32-year-old, who is a4 years and a 2-year-old. We see in 20 years, as his 20-year level
term expires recommend. This would have had a 52nd of 24 years and 22 years. You should hypothetically both out of
school, grow, be gone, out of the picture. No longer a liability. The children have grown up and left at 52 for 32 years, 20
years from now.

We'll see. His house would be paid for 20 years from now, because you've never heard of Dave Ramsey recommends
alwaysMortgage for more than 15 years. He would have been debt free for 5 years House and everthing. Something to
think about.

We'll see. If he had something in his 401k. Well, if it invests 15% of his income until he was free of debt and then load
everything up, and when he had a household income of $ 40,000, would 20 years later?

Now he had somewhere between $ 500,000 – $ 700,000 in his fund.

Well, you see, again. He has 52 years. His The children are grown and gone. The house is paid for. There are $ 700,000
in its fund. He died without life insurance.

See Scott's mom. Scott, his wife, no children, no mortgage and $ 700,000. I think they can fight with Tyler. So I
recommend long-term care fall Cause called a budget I recommend getting out of debt and investment, with the idea
that life insurance is yours.

Even if you want to keep term> Insurance and you are healthy you can choose to do so. I have absolutely no financial
needs for term life insurance. A little 'for some estate planning, but very small.

The term life insurance I have is very simple. It 'so cheap in good condition 47 years that I have a. .. I do not smoke and
do not do all these crazy things like jumping from a collector of aircraft. So do I care for nothing, and it is so cheap that I
always differentmillions of dollars more just for me SWI. "Sharon wants."

She would prefer a different look than the finger, you know! "

Therefore, in general, against long-term care?

Take Dave Ramsey's advice to heart. The life of full insurance, if you have time to plan a solid financial, needed only
for a short period of time. Buy ins term and take the rest of the money that would have saved his political life, instead of

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buying a whole and invest it in yourinvestment vehicle like a mutual fund (as recommended by Dave Ramsey), stocks,
bonds or money market instruments.

Many people are selling a whole life policy because the client agent has been working on for their financial gain, rather
than interest. These agents have more life, a great salary to push for life ins long as Whole Life, unit-linked life
insurance, life insurance and universal pension Liveor any life insurance with an investment component.

In terms of durability vs Whole life insurance if you currently have a permanent life policy, you throw away your
money are serious about your life co.

You have to go online and compare term life insurance quotes life only between the company and to have your whole
life policy.

Before clearing the permanent politicalMake sure that the term policy is in effect before canceling the entire life cycle
policy.

Take all the savings (the difference between the premium of all life, and premiums for term life) and the difference in
long-term investment. As Dave Ramsey says to pay your consumer debt and start saving and long-term investment.

We also recommend saving and automate the process so you do not have to worry about forgetting to make
investmentseach month. Automate your monthly investment, you are setting yourself up for total control of financial
freedom through the practice of good habits of saving.

Conversely entire term care follow Dave Ramsey Financial Advice and honestly believe that you have videos much
richer compared to the same conclusion, which is talking

Financial Advice From Dave Ramsey On Whole Life Vs Term Life

Dave Ramsey discusses the 2 main types of life insurance: Whole vs Term Insurance

Why does Dave Ramsey recommend the inexpensive Term Life Insurance over the more costly Whole Life Insurance? .
Here Dave Ramsey takes an email and gives his advice. Term Life Insurance is the best life insurance and Dave Ramsey
explains why.

Whole Life vs Term Life Transcript :

“Alright checking in with email bag. Tyler from Massachusetts writes:

“”Many people have a long term need for life insurance. How can you recommend term to everyone? Don’t you feel
like you’re giving them bad advice? Their term life insurance will likely expire when they need it most. Tyler“”

“Spoken like a true life insurance agent Tyler. How long you been selling life insurance?

And those weren’t questions. Those were passive aggressive statements weren’t they sir? So let’s deal with it though.

Uh, I can easily recommend term life insurance as the only thing because the rest of it is garbage. It’s a rip-off. You’re
much better off buying term life insurance at about 5 cents on the dollar for the same amount of insurance and investing
the rest of your money. You’ll end up with much more.

Let’s kind of follow this through for a second. You’ll see what I’m talking about.

Let’s say you’re talking to a 32 year old who has a 4 year old and a 2 year old. Let’s visit him 20 years from now when
his 20 year level term that I recommend expires. That would make him 52. He would have a 24 year old and a 22 year

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old. They should hypothetically both be out of college, be grown, be gone, out of the picture. No longer a liability. The
kids are grown and gone at 52 for that 32 year old 20 years from today.

Let’s see. His house would be paid for 20 years from today because you’ve never heard Dave Ramsey ever recommend a
mortgage for more than 15 years. He would have been debt free for 5 years house and everthing. Something to think
about.

Let’s see. Would he have anything in his 401k. Well, if he’s been investing 15% of his income until he was debt free and
after that loading up on everything and if he made an average household income of $40,000 what would he have 20
years later?

Well, he’d have anywhere between $500,000-$700,000 in his mutual funds.

Well, let’s see. He’s 52 years old. His kids are grown and gone. The house is paid for. There’s $700,000 in his mutual
fund. He dies with no life insurance.

See Mom Scott. His wife Scott with no kids, no mortgage and $700,000. I think she can struggle through Tyler. That’s
how I recommend term insurance cause I recommend doing a financial plan called getting out of debt and investing
along with the idea that your term insurance is going to expire.

Even if you want to keep term insurance and you’re healthy you may choose to do it. I have absolutely no financial need
for term life insurance. A little bit for some estate planning but very minor.

There term life insurance that I have is very simple. It’s so cheap at 47 years old in the great condition that I’m in…I
don’t smoke and I don’t do all these crazy things like jump out of an airplane. So I can get term insurance for nothing
and it’s so cheap that I keep several million dollars on me extra just SWI. “Sharon Wants It.”

She’d rather have that than another thing on her finger you know!”

Dave Ramsey’s Take On Whole vs Term Insurance?

It would be good to follow Dave Ramsey’s advice. Life insurance is not needed for your entire life. . There is a huge
difference in price between whoe life vs term life insurance policies. Buy Term Life Insurance and take the savings and
invest it OUTSIDE of the life insurance company into whatever investment vehicle you choose. You control it. It’s your
money. .

Many people are sold a Whole life policy because the ins agent was working for their own financial gain instead of
having the interest of their client . Keep in mind that agents get a large payoff for promoting and selling whole life
insurance policies: Universal Life, Variable Life Insurance, Permanent Life Insurance or any life policy with an attached
investment etc. .

By owning a whole life insurance policy you are really giving free money to the life insurance company each
month.

Switch out your whole life policy with term coverage but make sure you go online and compare life insurance quotes to
find the best life insurance policy that is term .

Do not ever cancel your old permanent insurance policy before new term life insurance policy goes into effect.

Once your new term policy is effective you can now take your savings and put it in the bank or invest it in whichever
way you choose . Just like Dave Ramsey says: Pay off your consumer debt and start your savings and investment for the
long term .

When people start investing they sometimes forget to invest regularly so we recommend that you automate the entire
investing process so you will not have to think about it . You will have greater peace of mind knowing that you have the

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right life insurance policy and are now investing / saving money automatically each month. It will set you and your
family up for future financial freedom.

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