I have 30 year term life insurance I purchased at 32. I’m just going to ride it out the full term. Each year the premium is less (due to inflation) and the payout is also less (due to inflation) so it kind of naturally phases out over the term. If no one is dependent on me and I pass at 61 it partially replaces the growth of my estate/inheritance that would have occurred between 62-80.
Life insurance is only good if someone else is dependent on your income. If no one would be financially devastated if you expired, then it's not something you need.
Only other thing to consider is a terminal illness benefit. If your family has a history of cancer or terminal illness then some term policies allow for a portion of the death benefit while you are still living. The amount of money you have determines the level of care you receive. Plus, just because no one is dependant on you today doesn't mean that is always going to be the case. What happens if you were to become uninsurable and then you needed life insurance and couldn't get it. Life happens. Buy term, invest the difference. Not all term is created equal so check the features you have on your term policy.
@@SABADKCP2010 it's usually around the messy middle, from about age 25 to 40, that people are most likely to benefit from life insurance. When they're younger and older they're less likely to have dependants. At some point if I'm ever lucky enough to have kids, of course I'll consider life insurance. Until then, I have no reason. My health insurance is good and I can't imagine needing to borrow money to pay for it.
@@17h127 and hopefully you are still insurable at that point in the future! The benefit isn't for borrowing the money. The accelerated (living) benefit actually pays a percentage of the face amount while you are still living. It's not a loan you pay back. For as cheap as term is I guess I don't understand why someone would risk not having it. Even if you only have 150k. Something is better than nothing.
@@SABADKCP2010 insurance companies are in the business of making money. They are basically casinos because they know the odds and offer plans in their favor. On average it is more costly to have insurance than not. If you are in a financial position to not need it, why pay for it? I am semi retired with zero dependants.
My wife and I let our policies expire at 50 because the cost jumped when the term ended. I’m now 54 and have a 100k policy provided by my employer. That’s more than enough if you don’t have a bunch of debt and no dependents.
My wife and I each have 7 figure life insurance policies that would completely offset our income if invested. The term is set to expire when our daughter is off to college. By that time hopefully we will be debt free and have invested the equivalent of one of our term policies payout and no longer need it.
Life insurance cancels if you move and do not report it to the insurance company. My mom moved in with my sister and hasn't reported it. So I don't expect them to pay out on a $500,000 policy, and with inflation it won't even buy a house today. Some people want $500sqft for a house, so that's only a 1,000sqft home by the time it pays out. Better to buy the home 30 years sooner, rent it, and will it to someone.
Hi Money Guy Show, I am 25 years old and married. My wife is in PA school. I make $91,000 a year and save 25% of my income for investments. I am wondering if I should keep renting and saving up for my forever home, or if I should buy a starter home and live there for a while. I am considering buying a starter home because I want to start building equity and have more control over my living space. However, I am also worried about the cost of homeownership and the fact that I may not be able to afford a forever home if I buy a starter home. What do you think I should do? Thank you for your time. Thanks, Justin
I see your question is toward Money Guy not me but probably they are not going to reply to your comment. Based on all of their videos I've watched, I assume they would ask what your future plans are. When does your wife graduates and do you plan to purchase a bigger home at that point. I think they usually recommend to rent unless you are planning to live in that home for more than 5 years. The reason is that when you purchase a home, there are expenses related to the purchase plus you don't really make much equity first few years (depends how much you are planning to put as a down payment and maket appreciation). Let say you keep your beginner home till your wife graduates in 2-3 years and then you want to sell to get your dream house. Now you have sellers' fees and realtor fees that, together with your monthly interest payments might add up to more than you might be currently paying for rent. Again, that's just an assumption of how they might reply to you.
Buy a starter home as long as you don't plan on moving out of the region. Forever homes are a fantasy. Don't let yourself get in a situation where you are biting off more than you can chew. You will have things you want which will change as your life changes. Living in a home you'll get a better feel for what you want and what you need. Then upgrade the house when you are ready. You'll be better off starting small and working your way up.
I have 30 year term life insurance I purchased at 32. I’m just going to ride it out the full term. Each year the premium is less (due to inflation) and the payout is also less (due to inflation) so it kind of naturally phases out over the term.
If no one is dependent on me and I pass at 61 it partially replaces the growth of my estate/inheritance that would have occurred between 62-80.
Life insurance is only good if someone else is dependent on your income. If no one would be financially devastated if you expired, then it's not something you need.
Only other thing to consider is a terminal illness benefit. If your family has a history of cancer or terminal illness then some term policies allow for a portion of the death benefit while you are still living. The amount of money you have determines the level of care you receive. Plus, just because no one is dependant on you today doesn't mean that is always going to be the case. What happens if you were to become uninsurable and then you needed life insurance and couldn't get it. Life happens. Buy term, invest the difference. Not all term is created equal so check the features you have on your term policy.
@@SABADKCP2010 it's usually around the messy middle, from about age 25 to 40, that people are most likely to benefit from life insurance. When they're younger and older they're less likely to have dependants. At some point if I'm ever lucky enough to have kids, of course I'll consider life insurance. Until then, I have no reason. My health insurance is good and I can't imagine needing to borrow money to pay for it.
It really does boil down to that. Well said.
@@17h127 and hopefully you are still insurable at that point in the future! The benefit isn't for borrowing the money. The accelerated (living) benefit actually pays a percentage of the face amount while you are still living. It's not a loan you pay back. For as cheap as term is I guess I don't understand why someone would risk not having it. Even if you only have 150k. Something is better than nothing.
@@SABADKCP2010 insurance companies are in the business of making money. They are basically casinos because they know the odds and offer plans in their favor. On average it is more costly to have insurance than not. If you are in a financial position to not need it, why pay for it? I am semi retired with zero dependants.
I think when dependents are done depending! That’s when
My wife and I let our policies expire at 50 because the cost jumped when the term ended. I’m now 54 and have a 100k policy provided by my employer. That’s more than enough if you don’t have a bunch of debt and no dependents.
My wife and I each have 7 figure life insurance policies that would completely offset our income if invested. The term is set to expire when our daughter is off to college.
By that time hopefully we will be debt free and have invested the equivalent of one of our term policies payout and no longer need it.
Awesome discussions, thanks
Life insurance cancels if you move and do not report it to the insurance company. My mom moved in with my sister and hasn't reported it. So I don't expect them to pay out on a $500,000 policy, and with inflation it won't even buy a house today. Some people want $500sqft for a house, so that's only a 1,000sqft home by the time it pays out. Better to buy the home 30 years sooner, rent it, and will it to someone.
Some permanent policies include long term care coverage, and a person may not always be insurable going into the future
When Brian puts his foot in his mouth…🤣😂
Hi Money Guy Show,
I am 25 years old and married. My wife is in PA school. I make $91,000 a year and save 25% of my income for investments. I am wondering if I should keep renting and saving up for my forever home, or if I should buy a starter home and live there for a while.
I am considering buying a starter home because I want to start building equity and have more control over my living space. However, I am also worried about the cost of homeownership and the fact that I may not be able to afford a forever home if I buy a starter home.
What do you think I should do?
Thank you for your time.
Thanks,
Justin
I see your question is toward Money Guy not me but probably they are not going to reply to your comment.
Based on all of their videos I've watched, I assume they would ask what your future plans are. When does your wife graduates and do you plan to purchase a bigger home at that point. I think they usually recommend to rent unless you are planning to live in that home for more than 5 years.
The reason is that when you purchase a home, there are expenses related to the purchase plus you don't really make much equity first few years (depends how much you are planning to put as a down payment and maket appreciation). Let say you keep your beginner home till your wife graduates in 2-3 years and then you want to sell to get your dream house. Now you have sellers' fees and realtor fees that, together with your monthly interest payments might add up to more than you might be currently paying for rent.
Again, that's just an assumption of how they might reply to you.
Buy a starter home as long as you don't plan on moving out of the region.
Forever homes are a fantasy.
Don't let yourself get in a situation where you are biting off more than you can chew.
You will have things you want which will change as your life changes.
Living in a home you'll get a better feel for what you want and what you need.
Then upgrade the house when you are ready.
You'll be better off starting small and working your way up.
I got life insurance once. Paid it one year then dumped it. Waste of money. It's like buying a lottery ticket.
And the only way to win is if you die prematurely lol
@@brandonwilliams532 We had a family member die prematurely at 78.
😮😮
🥰🥰