unsure if that will be understood as it reads. what many fail to understand is there is a cost if insurance and if you had passed away in those first couple years the company would have paid. surrender charges diminish over time around year 7 to 12 depending on company and policy.īe advised, you will not get anywhere near what you put in within the first couple years. ask for surrender value, which is cash value minus any surrender charges. You know how much you're in to the policy (or should). We both know that life insurance "guarentee" is BEFORE fees are Secondly if he wants a guarentee on his money he could get term life insurance for 1/10th the cost and put the $265 in a 1.45% Ally savings account and will still probably come out ahead. He is nof a dumb guy, he just was not informed properly and fell for a slick sales pitch and now he knows the truth. So instead of having life ins coverage and 6,300 in a vanguard index fund he now has life insurance and zero dollars. The cash value of his whole life after 2 years is effectively zero because it was paid to his insurance agent and went to fees to NY Life. That right there is a $6300 loss.Īdditionally if he would have invested $265 in a vanguard index fund over that two years he would have had an investment worth more then 6,300. He paid 7000 for whole life insurance for 2 years when he couldn have paid 700 for term life during the same period. You sound like a whole life agent because you actually believe your own bullshit. this is public consumer misinformation.Ī quote I use at the office more often than not goes something like this: shoulda, coulda, woulda Lastly, the bit on the first two years are the agent's commission and reason why you have no cash value is also wrong. you have to make that decision, no one else. the big point here is IF because that is what insurance is ultimately for. could you afford to replace it on your own? exercise for the layman- run the numbers over 10, 15, 20 years (with point or two increase each year) and see IF it's cost-effective to you. you pay much more for the insurance and if the car was stolen it would buy a new (more or less). the market cannot be compared to insurance either because the market is 100% risk, whereas insurance is guaranteed.Ī simple way most seem to understand insurance is full coverage auto. people want everything for free or low cost. this is exactly the wrong thought process. he paid for coverage during that period and if he had passed, NYL would have paid out. This isn't accurate and unfortunately how most think. "Education is expensive.and a good education is really expensive" Just learn a hard lesson from this and do the right thing to fix it for the future. You lost a bunch of money and cant change that. You will have life insurance protection and have a real investlemt instead of this junk policy. And invest the other $265 a month into low cost index funds. Get 20 year term life insurance for like $35 dollars a month to protect your son if you die. You dont want to continue getting scammed in the future and keep wasting more money on this junk. The main thing is that even though you got scammed out of $7000. So this proves what I am saying is true and what a horrible ripoff whole life insurance is. Say $300 a month for 2 years ($7000) that the actual cash value of your account is almost nothing. I think you will find that even though you have paid So all that money you paid basically is gone forever and is in the pocket of your family member or friend who sold you that junk. The first 2 years of whole life insurance payments basically go to pay the commision of the guy who sold you the policy. Here, please treat others with respect, stay on-topic, and avoid self-promotion.Īlways do your own research before acting on any information or advice that you read on Reddit. Get your financial house in order, learn how to better manage your money, and invest for your future.
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