Term Vs. Whole Life Insurance | The Best Option For The Sandwich Generation
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- Опубліковано 16 чер 2024
- What type of life insurance should the "Sandwich Generation" buy? In this video, I break down the difference between term and whole life insurance. And I'll show you how to determine which one is going to work best for your specific situation.
Timecodes
0:00 - Intro
0:45 - Why Do You Need Life Insurance?
1:44 - Where to Start
2:26 - Term vs. Whole Life Insurance
3:41 - Don’t Get Hung Up On The Expiration Date
4:14 - How Much To Get?
4:28 - Make Sure To Shop Around
4:55 - Permanent Life Insurance - Whole Life or Universal Life Insurance
6:12 - Insurance Broker Commission
6:40 - Insurance Shouldn’t Be Investments
7:18 - This Gets Me Real Boiling
7:50 - Sales Pitch #1
8:43 - Sales Pitch #2
9:19 - Sales Pitch #3
10:18 - My Recommendation
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DISCLAIMER: I am not a financial adviser. These videos are for educational and entertainment purposes only. I am merely sharing my personal opinion. Please seek professional help when needed.
You explain things very clearly, I finally understand what’s the difference. I don’t think too many 40 year olds could even afford 1k monthly on whole life ins.
This is one of the best videos I’ve seen on this topic! Thanks for taking the time
The best explanation I've heard yet! Thanks!!!
Good job. Concise, Clear, clean, easy explaination.
This video is so good and comprehensive, thank you!
Man I bought 20 yr. term life when I was 38 for both my wife and me for $250 mo. I paid for 20 years and didn’t die…Gladly… but before turning 58 I got a warning that my new cost was jumping to $800 a month just for me, plus $650 for my wife in order to continue. I cancelled and now looking to find insurance to cover future expenses so my kids won’t have to worry. This really explained life insurance.
Thats because you did not invest the difference between the term and whole life. If it cost you 250 per month if it were whole life it would have cost you about 750. Imagine if you had invested the difference for that 20 years.
Buy Term Life and Invest the Difference so at the time of renewal you should have had enough money to retire and no need to renew your Term Insurance.
Did you guys read his situation? What difference are you talking about? His term was 250 dollars. What if there was no difference to invest? You guys are hilarious
@@HHHunters There is nothing hilarious about it. If $250 was all he could pay then that means he couldn't afford a whole life policy to adequately protect his family. I estimate he had $700k-$1 mil of coverage on each of them if he was paying $250 per month. You have any idea what that would cost with a whole life type product? Probably around $2k-$2500 per month. Do you think he could afford that?
Real talk, I have a 20-year term policy that's ending this month and a 30 year policy that ends in 10 years. The policy ending this month is a non-issue because I'm self insured with my business interest, stocks, mutual funds and real estate. The money I saved from getting term insurance allowed me to invest in these assets. Yes, you have to be disciplined and actually invest the savings. Otherwise, just close your eyes and buy whole life and let someone else manage your financial future.
This is one of the honest comparison between the Two kinds of insurance.Thank you very much! Very helpful! since me too ,was a bit in doubt what to really purchase. I am about to sign a contract!Thanks!!
appreciate that you explain the difference in such great detail . thank you!
Really honest talk wow now I know what I can get I'm planning to purchase life insurance. Thank you
very well explained! thank you
Well explained! spot on💯quoting Whole Life insurance sales pitch.
Loved the video. I initially had whole life insurance but eventually switched to term. Currently investing the difference I would've paid.
Thank you for enlightening me on why whole life insurance is not a good option in most cases. Appreciate it 👍🏾
Great video. Thank you very much for explaining.
thank you for this. I was sold permanent life insurance last year and have been paying into it, but I don't think I'm actually a very good fit for that kind of plan
Just what I needed. Well explained...
This is a great video. I know financially savvy people, like me, who are planning to purchase life insurance and was equally bought into the whole life policy without understanding the trade-offs vs term. Whole life policies are a well designed product that creates fear, uncertainty and doubt in a person about choosing the better product that is term life insurance. Subscribed.
Świetne spojrzenie na ubezpieczenia terminowe. Super!
Great valuable information! Thank you!
Glad it was helpful!
Very useful info, thanks for creating this video !
Glad you enjoyed it!
Thanks for this very useful information. It's also good to note that some employers provide full time employees 1x or 2x salary life insurances.
Usually, life insurance from employers only apply while you’re still an employee with them
This covers the missing pieces on LI i wanted to confirm if i made the right decision about our LI policy
I had WL paid for the past 6 months for my husband and I 530$/ months premium, i canceled last month and switched to 30 years term. Will invest the difference so that we won't need to renew in our 60, 70s
I lost money for sure, but i learned a lesson. Always do your due diligence before taking on any financial decisions
Spot on 💯 this video. Immediately subscribed
Very good explanation from someone who sold term foe 10 years
Outstanding analysis. Thanks T
Much appreciated!
This topic was very informative 👍🏿👌🏿
If you set up an objective of financial security. at what point does the term life is not needed?
Establishing a Double D [Dividend Portfolio] to match that term insurance or time line for the term cost will go up.
Thank you so much Mr. Kim ,I’m 65years old looking to purchase life insurance ,the way you simplify the best insurance to get it is the best I have listen to for over five years , thank you again and God bless you and your family, take care.
Why the fuck would you buy life insurance at 65?
Buying any type of insurance at 65 is going to be very expensive. Insurance should be purchased during your peaking earning years to protect against loss income. Also, if you have any type of medical issues like sleep apnea or high bless pressure, there's a good chance you will not get insured. I would definitely find a good financial adviser or insurance agent that could assist you would this.
This was a great presentation thank you.
That said, if I had to do it over again I would have purchases a whole life policy vs a term. For me - and this is strictly about my personal situation, I bought a 20 year term 20 years ago. I’ve paid approx $500 per year for 20 years for $750,000 in death benefit which is great! Cheap premium and large death benefit.
But here’s my issue - I’m now 59 years old and I still want life insurance for my children. That same premium is now $1,700 this year and will go up and up and up every year I keep it. I’ve shopped around and I can’t even come close to this same benefit now it would be thousands of dollars per year.
If I had purchased whole life my premium would never go up and I wouldn’t be struggling now with what to do for life insurance. And yes the cash value could have been used if I had the need over the past 20 years for example to pay the premium.
No this isn’t an investment strategy and I could have made more if I had invested in the market but how many people look back and say, dang if I he bought apple stock 20 years ago I’d be rich!
So yes term is a great way to get inexpensive insurance but if you think you’ll still want life insurance when you are 60 or 70 or 80 then the long view would be to pay for something now and guarantee insurance for life without the premium ever going up even if your health goes to crap along the way.
I’m not trying to convince anyone to buy whole life because I see the disadvantages too but personally I sure wish I had whole life now.
Why would a 70 or 80 year old person need life insurance other than burial? Even if I needed money to cover my burial, I would at least save my money or pre-pay it being it would be cheaper than buying a trash value policy such as whole life.
@@astroman30 thanks for your reply…I’ve posted another reply to someone else who explained this a little clearer and I agree term is better! - that said, I plan on leaving my heirs significant money and even if I were to pay an additional $30-40k over the next 20 years the total payments come to around $60k. So at this point paying another $20-30,000 spread out over 20 or so years in exchange for a guaranteed $750,000 death benefit still seems like a deal to me. Like I said to begin with - this is my personal situation and doesn’t necessarily mean it makes sense to everyone.
Of course if I had a lump sum of $75,000 to invest 40 years ago at 6 percent growth rate I would have the $750,000 to leave my family but 40 years ago I didn’t have $75k laying around 🤣
Let me know if you think it’s a bad idea to keep this fairly inexpensive term policy and if so what you would do instead of you wanted to have at least $750k to leave family 20 years from now? Thanks!
@@melaniereveal573 You got a $750k DB WL policy for $125/monthly premiums? Who is the carrier?
Well Done !
Good video, and you have another fan.
Yes, amazing content!
Great Video, well explained....
Agree with you
I’m 37 yrs old, I have both universal and term insurance(30 yrs). We have a lot of assets, only debt we have is out Mrtg, which would be paid off in 12yrs at an interest rate of 2.87% (maybe sooner). My kids college fund is already paid for, I also have retirements & stocks with EJ, not to mention I also manage some stocks myself… the reason, I ended up getting Universal Life was for the benefit of long-term care. So it depends on everyone’s own situation - I hope I made the right decision bc I took my time and researching…
Shout out for USAA. They are an amazing company
thank you!
I guess it really comes down to what your financial goals are. I think it’s easy to say just buy term life insurance and invest the difference when the vast majority of people are not financially savvy or disciplined enough to do that. From what I understand, universal life insurance also has living benefits as well to cover various critical illnesses.
Thanks you!!!!
Thank you for debunking all the whole life selling points that almost suckered me into it! I was looking for a video to exactly address this!
Hello,
I do love watching his videos but he is misinforming people about life insurance. He’s correct about term insurance being cheaper. The best policy for you is the one that you can afford. There is permanent insurance with flexible premiums, provide increasing death benefit over the span of your lifetime, as well as let you participate in market growth with out the risk of ever losing your premium. If you’d like to learn more I’d love to sit down and talk to you about what is truly best for you as a licensed independent broker I would be able to tailor a policy to match your coverage needs as well as your budget.
@@LifestyleATLyou are a lose or you are just an idiot ! But you are wrong ! Whole life is a scam ! It’s the dumbest thing you can do with your money!
Buy term invest the difference in term and whole life and you will always have better returns and still covered!
Why would you over pay just for a chance to borrow it back !
I don’t have to borrow my own money I just go take it out of my mutual funds account! I do not have to pay interest and I don’t have to pay it back !
Using life insurance as an investment only makes the insurance company rich !
They sell it because the one selling it gets a percentage of every dollar you spend
Tae Kim is spot on💯💯💯. As a financial advisor, I can attest that the industry is rife with individuals ready to exploit your lack of knowledge. It's advisable to steer clear of any cash value policies since they primarily benefit the agents who sell them and the insurance company, rather than the consumer.
Wish i knew this 10 years ago. Now I'm nearing not sure what to do
Another masterpiece! I’ve read books about whole life and even coached a client who sold them. It does seem too good to be true. They are so complicated and the reality is your return is minimal.
You get better returns to get term and invest the rest.
I suppose one benefit of whole life is it forces you to save, but if you can be disciplined and just put your money in boring mutual funds, you will win! 🎉🎉🎉
don't be stupid this UA-camr knows nothing about finances, you never compare 15 year bull run what about bear come and you die tell me. you invest in stock from 1999 to 2009 and you die you total investment down 20% vs you pay 800 per month for 120m your family gets 1 million which one is better the number is 96000 investments you are down to 76800, or 96000 insurance fees you get 1 million. which you compare -20% to 1042% return!!
@@jmtake85Giving away your money with only an option to borrow is beyond stupid. Want to know why the IRS prohibits LI companies from calling trash value insurance an investment? Because, YOU DON"T GET YOUR MONEY BACK!!! Try harder.
Bless you
What are your thoughts on LTC?
If you are young, healthy and have a family depending on your income, term is the way to go. There is a term policy available that returns all of premium if you should outlive the term period.
They sell it as that but it’s not real ! Just buy cheap term and invest the rest ! By the time your my age you no longer need life insurance!
I have not needed life insurance for a long time
is it true that if the policy holder passed away the beneficiary. will only get the death benefit but not the cash value?
Where can I get a good term life insurance policy?
Tae like your videos but i disagree. I have had a WL policy for 40 years earned 6%, worth 4x insured amount. I don’t have millions of dollars if i go into long term there goes all my retirement. But my kids will still have some legacy $ tax free. Your right not an investment tool but can still be part of your PLAN. 🥓🥓🥓
Tax free and 6% sounds great for WL. Which company
Question! When the term ends, do you renew? 30 years from now I’ll be in my 60’s. That’s only the first half of my life, still got another 50 in me after that at least! Like do we just keep renewing the term until we die? And premiums become more expensive the older we are yes?
Hi Cyrill, I'm also on my 30's. I guess it really depends on your family situation. By the time I'm 60, my kids would be responsible adults and my parents would most likely not be with us physically anymore (they are 75 & 60 right now). Would it still make sense to buy an insurance to protect them? Or would it be better to leave my kids a legacy via my investments?
I was thinking the same thing. With a variable policy if you start young you can stop putting money into it by the time you’re in your mid fifties and then it pays for itself, and your kids still get the payout. So if someone is hoping to have a long life and wouldn’t mind leaving an extra chunk to their kids maybe it isn’t a bad idea
By the time your term ends, you would have been investing in your Roth, 401k and regular stock accounts which grow 8% annually on average. Therefore, you would have money to leave to your spouse in case you pass first. Your children would be adults that also ideally can take care of themselves and your parents wouldn't be around 🤷♀️
Yes, premiums become more expensive the older we get. That applies to all insurance, term and whole life.
There is a cost of insurance. It increases as we get older.
What is cost of insurance?
For example, cost of gasoline is per gallon.
Cost of insurance is per $1000.00 in coverage.
In your policies it will show the breakdown of the cost of insurance for males and females (cheaper than males) by age.
In many whole life policies I've seen, because the cost of insurance has gone up, the monthly premium is not enough to pay for that cost.
What happens then is the money from the cash value will be used to keep the policy in force. Once that money runs out the insurance company will notify you that the policy will lapse unless you pay an insanely high monthly premium.
@@hilariohernandez Thank you. I’ve been trying to understand the annual notice from my insurance company. With your explanation, I finally get it.
It really depends on how your policy is designed. You showed just the half truth about permanent life insurance. It also depends on the personal situation because if we invest somewhere else other than life insurance, that will be taxed(capital gain) to the next generation to take charge of our investments. The returns you get are not that less, either. Otherwise, this product would have gone from the market if it did not benefit the consumers. So, the main thing is to find out your need first instead of jumping on to any products. Great video though 👏
Most ppl don’t ever invest in the stock market. They’re better off investing into the life insurance to leave something behind.
Truer words haven’t been spoken. Whole life beneficiary don’t get the cash accumulation and life payout. The insurance company cheaps your cash . Like my fathers agent said one time they don’t build skyscrapers from nothing.
Hi Tae. Any thoughts on infinite banking through whole life insurance?
He doesn't know anything about that. Unfortunately, WL is a financial instrument of half-truths and financial experts like him only know about the worst halves and run with them, like that "1.5% WL return".
Avoid it! Infinite banking is a gimmick. It's essentially whole life insurance, and you could face financial losses.
Basically, get well informed and choose what will work best for you. Also, for those saying that you shouldn't need life insurance once you reach a certain age are being foolish. Life happens! There are PLENTY of elderly ppl that are going to have to have alternative funeral arrangements because they don't have any life insurance.
The best for the what generation?
If I purchased multiple policies in my early 20's (term and permanent blend), does it make sense to keep the whole life policies when I'm in my mid 30's? I've maxed out 401(k) and standard IRA options as well.
Keep the term....cash out the whole life policy.
It does not make sense to keep it to ever buy a whole life ! Just cash it out!
If you think investing in this whole life investment scam then you are an idiot at math !
Just buy term invest the difference and after the second year you will have saved more than weighs have ever made with while life !
That’s why I dint need insurance
Currently have a term policy and have older sons Ranging from 17-23. Is getting a whole life worth it. Can the original policy be reassured on cash value? Example is the Cash value amount the same at the end of a death paying policy
Do not buy any trash value insurance. It's a scam.
@@astroman30！ look she have sons 17 to 23 wl is better than term.
@@jmtake85 No it's not. Those kids are old enough to get a job and she would only need a cheap term policy and or save up money to pay for a funeral. Paying $300/monthly payments on a trash value policy isn't the answer. You're just pushing it because you sell this garbage.
@@astroman30 you are stupid,
The premium for whole is higher than term, but that does not mean that the actual cost of insurance is higher. The additional premium above cost of insurance goes into the cash value (your own savings account, which my policy now pays 4.5%, and has guaranteed minimum of 4.0%). Also, in some whole life policies, like mine, the cost of insurance is paid by the interest from your cash value (if large enough) so I am paying insurance with tax-free dollars. Not every extra dollar you have should go into the stock market as this video suggests, especially in your later years. While the return is higher, so is the risk. One other way to think about this choice is buying (whole/universal) vs. renting (term) - do you prefer owning your home or renting forever? One other benefit of whole/universal is maintaining insurability. BTW, I am not a life insurance sales person!
Nah....trash value insurance is a bad product. Giving away your money with only an option to borrow is beyond stupid. Letting an insurance company invest your money is moronic. Try harder.
Not sure how this is 'giving away' my money, and I never used the term 'invest' in my comment. I still have the money in the account, but don't plan to ever borrow on it. Anyone paying for term insurance is paying with after-tax dollars. So the cost of term insurance may actually be more than whole that is paid from interest on the CV (cost, not the premium which part goes to CV). My whole policy CV is
@@jamesklancke4319interesting that you used the word “borrow” but don’t understand that you gave was your money.
@@jamesklancke4319 I do not like the renting vs owning comparison as it is not a fair comparison at all. It is more of a question what do you need. In this case “renting” a term policy is significantly cheaper than “owning” a whole life policy and you also normally don’t need insurance your whole life as compared to housing. Try to convince someone to buy a property that has a mortgage cost 5 times their current rent. Since you used that analogy I will use it against you. Also if you withdraw instead of taking out a loan, if the withdrawal exceeds the amount of premiums, you pay taxes (basically cost basis just like stocks). I’d love to see some comparison of buy term, invest the rest and also see what borrowing against the assets in the taxable account vs whole life looks like. I’d imagine you would have more in the taxable account and for the same loan value you could even sell some assets to pay the interest (similar to what you are basically doing with whole life). Sounds like you are doing fine though since it’s only 10%, I think some people get duped into putting it all in it which I think would be bad advice no matter what.
@@michaelharkins2310 The main problem with whole life is most people really can't afford what's needed to adequately protect their families. A $150,000 policy is not enough for a family of four with two young kids. That family probably needs a minimum of $500k so the remaining parent can have options. What would be the monthly premiums for a $500k policy for two adults? I bet it's out of most people's range and that forces them to be underinsured. I don't need an insurance policy to access a high yield savings account.
I want to start by say (I sold insurance in the past so my POV disagrees a bit), I just thought I’d be a pro whole life insurance comment lol. Finding a policy that accumulates a cash value and is “paid up” at 65 or a specific age definitely can me looked at as an investment. You stop paying those premiums once it’s “paid up”, the cash value will be worth more than your actual policy was to begin with, and the cash value grows tax advantaged like a Roth IRA since you are paying the policy with post tax dollars. That being said, it can be pricy and it’s best to get it when you’re young and healthy. If you’re closer to 40 then the premiums will be quite pricey since your payments will be more condensed if it’s “paid up” at 65.
All in all, get whole life when you’re young or don’t get it.
What happens to the cash value when the person dies?
Dont listen to this stupid comment. It’s completely wrong the person writing it has no clue what they are talking about
A bad unspoken assumption for max’g out IRA and 401K is that income tax and mandatory an aural distributions will stay the same. Both products are TAX code for a nation in $32T in debt and >$120T in future unfunded liabilities … like income taxes and monetary deflation will both massively rise.
Still better than a trash value policy.
youtuber only want ads money！
Hi Tae, I like your videos. However, this video on life insurance is incomplete because life insurance has evolved. Perhaps we can chat and see what is missing.
By all means, do it here. I'd like to read how it's "evolved."
What is the best life insurance for a 60 year old person on social security disability (due to a heart condition that only worsens with each passing day) that wants to make sure that in case of their death that at least their funeral expenses can be paid? I worry about this all the time that no one in my family will be able to afford to bury me.
Final expense insurance...it's cheap.
With those conditions you would only qualify for a burial policy which does exactly what it says.
hello, you mean 10 to 15 years of annual income?
Yes.
but where do you go from there once the term policy is over? is this where you're counting on savings over the years and other investments like the 401k and such you mentioned?
dont you ideally still want to be covered up until you die so your loved ones dont have to utilize the money you saved to be fun money to pay for the death?
When you're older with no dependents and investments flowing, you won't need life insurance.
I did a 20 year and 30 year level term policy. My 20 year is over in a few months and I still have 10 years left on my 30 year. Now I'm actually self insured because I've been saving and investing for a while but having the remaining 10 years isn't bad. Just half of my original coverage. It feels good to know proper plaining actually worked.
I love common sense!
😁
WL insurance can be a good purchase if you can buy it when you are young and healthy. Beyond a certain age, it prolly doesn’t make sense for the vast majority of people
Trash value insurance is ALWAYS a bad purchase.
I disagree just a bit with some of the content in this video. As a life insurance agent, my commission is much greater on a term life product than a participating whole life policy. In participating whole life policies, your cash value will eventually accumulate more than the premium you’re paying the insurance company. Term life policies are FAR MORE profitable for the insurance companies than permanent life insurance. Over 95% of term life policies never pay a death benefit. I think there is a need for both products. One is not better than the other.
Whom is your carrier that you make less on WL than term? I've been in the industry and I've NEVER heard of an LI company that pays less.
But the term life is not covered with Long Term Care which is not going to be covered to your regular health insurance.
You can buy long term coverage at a fraction of the price compared to trash value insurance.
Why 10-15x your income for term insurance ?
The idea is that you have enough money for your family to last awhile.
@@astroman30that’s more than enough lmao That would be literally a decade worth of income
4:18
5:12
7:53 Cash Value Comparison
Term insurance is more expensive than whole life every time.
This guy is telling us what’s good for us, you don’t know Brodie. Everyone is different. This guy is telling us to put our money in the stock market. Is the stock market guaranteed to make you money? Ye or no?
First of all…whole life insurance has a much higher guarantee rate than the 1.5%…in addition…it has dividend and of course different life insurance company would have different rates so need to do homework there to see which company is more suitable for you…second of all…whole life premium goes up significantly with age and best age is of course 18 or even younger…look up the price and you will see a huge difference…lastly….you don’t need emergency funds if your cash value from whole life is enough…and having your emergency fund in whole life is so much better than having it in a CD
"whole life premium goes up significantly with age. " Ummm, no. In a WL policy, your premiums are fixed. In term they go up significantly, especially if you have an ART (Annual Renewable Term.) Either way, trash value insurance is garbage. BORROWING against your own money while paying an insurance company to BORROW against your own money is beyond stupid. The 1.5% ROI is accurate. Consumer Reports did a study on this years ago.
Whoever read her stupid comment please don’t listen to it. She is completely wrong
Got it don’t ever work with you lol term over perm is goofy.
Life insurance sucks. Rather invest money in something that pays out.
insurance is for suckers. all you are doing is slowing your path to wealth and financial freedom by buying a lottery ticket on your life.
This guy bad advising insurance. When he say not listen to insurance company about whole life insurance. Agent not there up sell. Agent know more about the product than this fool talking
Nah....agents want a commission. Asking an agent if you need a whole life policy is like asking a dog if he's hungry.
It pointless sell someone whole life if they can't afford it or not suited for it. agent make enought money than worries about commission.
@@cmale123You go on believing that, bruh.
What happens after the “term” is over? Can you even get a life insurance let’s say after 70?
Why would you need life insurance after 70?
@@astroman30 why not? I m 71 years old, but I am in great health , so I think I could reach 100 years at least..
@@marissatamayo3699 Even better just to save your money to pay for a funeral rather than spend $300 monthly payments on a trash value policy.
you can still get term after 70 but u pay much higher。 if u need life insurance after 60 you don't want to pick term at 30！！
@@jmtake85 Look up "Buy term and invest the difference" in not needing term when you're older. Paying $300/monthly payments to a trash value insurance policy isn't the answer.