Life Insurance

Life Insurance Tips

Insurance Tips

  • Educate yourself about life insurance from teachers, not salesmen. Read these books: Personal Finance for Dummies, by Eric Tyson, and Making the Most of Your Money, by Jane Bryant Quinn.
  • Only buy life insurance if you need it. Does anyone rely on your income to live? If the answer is yes, keep reading. If the answer is no, it is very likely you do not need life insurance.
  • If you need life insurance, buy term. Cash-value life insurance, like whole life, variable, and universal, are laden with commissions and high fees that benefit the insurance company and its agents. Stay away from these poor products.
  • Buy a level term policy or an ART. A level term policy covers you for a specific period of time, like five or 10 years. An ART is an annual renewable term policy that can be automatically renewed each year. Identify the one that fits your needs, and buy it.
  • If you need term life insurance, go to an online clearinghouse. Avoid the office of an insurance agent. He will try to sell you a cash-value policy that pays him very high commissions. Go to a clearinghouse to find the best value on the best term policy. Here is one:
  • Get six times the amount of your income in life insurance as a rule. If you make $50,000, then you pick up a $300,000 policy. Just make sure you check on free life insurance at work and Social Security survivor benefits if you have kids in the home.
  • Educate your loved ones on what to do with the money, if you pass. Design a specific plan. Write it down, and make a life insurance folder that everyone has access to. Also, provide phone numbers and contact information as needed.

What the Life Insurance Experts Say

“If you are single with no dependents, don’t buy life insurance.”
– Charles Givens, More Wealth without Risk

“Term insurance is the best buy financially. We give it our value-oriented money-planning award in the insurance area. It enables you to compare policies very easily and gives you more flexibility to shift or to vary amounts of coverage. We recommend it over whole life insurance for the majority of our clients.”
– Lewis and Karen Altfest, Lew Altfest Answers Almost All Your Questions about Money

“In my opinion, there is only one kind of life insurance that makes sense for the vast majority of us: term life insurance. When you sign up for term insurance, you’re buying a just-in-case policy for a finite length of time.”
– Suze Orman, the Road to Wealth

“Term life insurance, like most other forms of insurance, is pure insurance protection and the best way to go for the vast majority of people”.
– Eric Tyson, Let’s Get Real About Money

“Commissions for term insurance are much lower than those for whole life insurance, which can create more incentive for an agent to recommend whole life insurance; profits on whole life insurance policies are generally larger as well.”
– Lewis and Karen Altfest, Lew Altfest Answers Almost All Your Questions about Money

“Never buy life insurance on children.”
– Charles Givens, More Wealth without Risk

“Those in the insurance business, insurance companies and agents, who sell their products and earn commissions, have a bias in favor of cash value life insurance. The reasons are pretty simple. Cash value life insurance costs a lot more and provides far, far greater profits for insurance companies and commissions to the agents who sell it.”
– Eric Tyson, Let’s Get Real About Money

“For almost 70 years, the life insurance industry has been a smug sacred cow feeding the public a steady line of sacred bull.”
– Ralph Nadar, consumer advocate

“Life insurance is important, but not when it comes to investing, and anyone who says otherwise is a liar.”
– Ric Edelman, the Lies about Money

“We don’t like to categorize whole life insurance as an investment vehicle, because the cash value built up through yearly investing is not paid out at death, only the face amount of insurance in force upon the insured’s death goes to the beneficiary. Any loans of cash value are deducted from the death proceeds.”
– Lewis and Karen Altfest, Lew Altfest Answers Almost All Your Questions about Money

“How would I buy life insurance? I would start with low-cost term insurance, expecting to cancel it when I retire or when my kids are grown and my spouse is self-supporting. I’d find the insurer through a quote service. I’d build up investments somewhere else, in retirement funds, stock-owning mutual funds, Treasury securities and real estate, to guarantee my security. I would buy no life insurance on any of my children.”
– Jane Bryant Quinn, Making the Most of Your Money

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Stuff the lawyer wants me to say: Investing outside a bank or a credit union is not FDIC insured. You may lose the value in the investments you select. All information provided here is for informational purposes only. It is not an offer to buy or sell any of the securities, insurance products, or other products named. Translated: I am not selling anything! Educate yourself, research the information that you learned and finally make the right decisions that will benefit you and your family going forward.

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