S/O of Term Life Insurance

smbenevides1989 · August 2014

I looked at the Zander website to compare life insurance rates. I saw one for Protective Insurance and took a look at their site. It doesn't look like they offer Term Life Insurance, but they offer Universal Life Insurance. What is the difference between the two?

brij2006 · August 2014

A term policy is set for the specific amount of time. A Universal Life policy is a similar style to Whole Life and accrues cash value inside the policy.

smbenevides1989 · August 2014

Would that be worth it then? I'm still learning and would rather not get screwed in the end.

brij2006 · August 2014

No it would not. When it comes to life insurance Term is still the better option. All of the other ones called Universal, Custom whole life, etc, are just other names for a Whole Life policy and your money can do better elsewhere.

smbenevides1989 · August 2014

Thank you!

CuriousKiddosMama · August 2014

Seconding what brij2006 said. We had an investment guy we were working with who was trying to sell us a universal life because you can use it as an investment and there are supposed to be some tax advantages to them. He said he had one. After we looked into it more and saw how poorly they performed and how expensive the life insurance actually was, we decided he wasn't the guy we wanted to work with. Stick with term life and invest the extra $ on your own, you will do better in the end.

brij2006 · August 2014

vikingsfan711 said:

Seconding what brij2006 said. We had an investment guy we were working with who was trying to sell us a universal life because you can use it as an investment and there are supposed to be some tax advantages to them. He said he had one. After we looked into it more and saw how poorly they performed and how expensive the life insurance actually was, we decided he wasn't the guy we wanted to work with. Stick with term life and invest the extra $ on your own, you will do better in the end.

Same here. When we got married we both took out Custom Whole Life policies. My parents told us they were a waste of money, and we kept trying to explain "but they're not whole life, they're custom whole life." We paid $2,400/year for $100k. Now we have 20 year term policies at $500k and pay $1,000 per year and use the remaining amount in our budget to pay off debt.

That guy is no longer our financial planner.....

Sisugal · August 2014

You want term insurance.
The purpose of insurance is to help you with the loss of income from your partner should they pass away (or if you pass away - helps with needed expenses/services you provide -- pay off the mortgage, pay for college, etc.
Decide on how much you would need, and then usually a 20 or 30 year term takes care of those child raising years..
Universal life - costs a good deal more and gives a poor return for your money. (Some consider it a savings plan, but you can do better on your own.)

smbenevides1989 · August 2014

Thanks all! I am looking at other companies who would be better for us. I'm sure we will find and put something in place by the end of the week. We just want something in place before DD#2 arrives.

brij2006 · August 2014

I always recommend an Independent Insurance Agents to have run quotes for you. Just Google one in your area, and give them a call. For us, we have 14 different companies we can write with and I'm able to quote all 14 at 1 time. So it will give you more options without trying to figure it all out on your own.

S/O of Term Life Insurance

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