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Recently just had our 1st child: Next up, Life insurance! Help please!
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Posted 2/13/2014 10:58 (#3686948 - in reply to #3658617)
Subject: Re: Recently just had our 1st child: Next up, Life insurance! Help please!


Northern IN		This is something that interests me. First insurance is used when someone isn't financially stable enough to be self insured. So therefore it should never be looked at as an investment.

For fun I just did an instant quote online.
For my age, and I picked just the standard health feature.

20yr Term 500k policy. $470/yr
Whole Life 500k policy. $2310/yr

In 10 years, I die:
20yr term I have paid $4700 in premiums, benefit paid = 500K minus my 4700 in premiums = $495,300
Whole life. Assuming an 8% return, cash value = $41,500. Less than face value, so the 500K benefit is paid, cash value is surrendered. 500k minus 41500 = $458,500

Take the difference in premiums of $1660 and invest them like the insurance agent will do for you for a fee. We will use 8% just like the whole life, and in 10 years that $1660 will be $29,500. Add that back to your 495,300. $524,800 vs. $458,500. To your beneficieries.

Maybe I am wrong, but from what I understand your cash value doesn't mean crap when you die, unless it is above the face value of the policy of which you will be paid whichever is higher. And you surrender the other.
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