Term Life Insurance
OK, rs.netters, I've heard all your opinions about Bowie, Cheney, Rollins and Bad Tazzes. Here's a poser: Do I need life insurance for The Wife and myself, with The Lump about to become The Baby? I'd rather not put numbers up on the web, let's just say we both work and would purchase 20-year term for each of us at $1 million a pop, so to speak.
Is this what people do? Is putting my premium payments (~$2,000/yr.) in a mutual fund a horrible alternative?
No idea on the mutual funds.
Anyway, I'd be happy to discuss all this and all your options with you and the Mrs.
Chopper a/k/a Rich
We might have had quoted $1M/$500k, but dropping the "payout" sounds reasonable. Our Financial Advisor friend didn't seem phased by the figure.
The idea is that the monthly premiums might be better sent into a taxable account instead of on this shoddy, flimmy-flammy, Ponzi scheme called "Life Insurance".
It's like the difference betwixt vacation time and personal time... I have to earn my vacation time, like an investment, but I can take all of my personal time starting on January 1 every year... maybe I'll start doing that... January 2, actually, since January 1 is a holiday... and then the four days (we get three personal days) in a row are guaranteed to combine with a weekend! So I can have 6 days off with no vacation time to start every year! Woo Hoo!
This is the reason Massachusetts's forced health care will fail.
It is still legal to be without life insurance in Massachusetts, and odds are one has made a better financial decision not to pay for it.
Auto insurance isn't for you, it's for the guy you run over. Ask the C-Biscuit who ran me over.
Mandating that the populace purchase a product from the private sector is corporate welfare more than it is social protection. If it's something that the government thinks we all should have, it should be socialized. It should also be made illegal for the private sector to compete with said socialized service, so that the lawmakers will be forced to legislate protection that is up to their standards for themselves.
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Life insurance isn't an investment policy.
If you invest your premiums instead of sending them to Snoopy et al., then drop dead at the end of the coverage period, your survivors are going to wish you had chosen Snoopy. An example:
Assuming $100 per year premium for $100,000 of 20 year term life coverage: $100,000 for your survivors.
$100 compounded annually @ 10% for 20 years: $6,300 for your survivors.
Sure you can do better than 10% if you're watching the market every day, but that will only increase your chances of dropping dead from stress... but if you don't drop dead, you've got $6 grand to spend at http://turntablelab.com.
I think I'm joining the ranks of the life insured.
;)