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Jessie Said:

term life insurance versus universal?

We Answered:

Term is usually the better bet from a purely economic standpoint, but if you have trouble saving, universal can play a role -- but for it to work, you need to be very motivated to keep up those premiums.

The basic idea is that universal is sort of like 2 things rolled into one -- it is life insurance, so it pays some amount of money when you die. But it is also has a savings component, so some of the premiums you are paying in are essentially going there, and being invested by the insurance company.

Term insurance is just life insurance -- it just pays some amount of money when you die.

So if you are a good saver, you are typically better off purchasing term insurance, and saving the rest yourself. If you invest those savings in a regular mutual fund or index fund, then you will very likely get a better return (earn more money) on those savings than you would through the insurance company. (They have to make their money somehow, and part of where they make it is on charging "fees".)

If you are a bad saver, then sometimes universal life can help you save -- it turns saving into a bill that perhaps you more automatically pay. That's fine, even though it costs you something, if it means you'll really save. The problem, though, is that if you fall behind on these payments you suddenly may not have life insurance. So if you were following the plan of term insurance plus saving, you could always not save for a month or two if you had an emergency, but continue to pay your insurance. If you have universal life, then if you don't make those payments, you don't have life insurance. The term+saving on your own technique gives you more flexibility.

It is often said that you should have universal coverage if you still want life insurance coverage when you are very old. It is true that term insurance does not last forever, but if you are saving appropriately outside of your term life insurance, then you will no longer need life insurance coverage when you are quite old, because you will have saved enough already.

So figure out how much life insurance you need (www.vilkri.com can help -- it is currently free if you ask for beta testing access), and purchase that much in term life insurance. Ask your agent how much universal life insurance for the same amount of coverage would cost in premiums. Then save the difference. If you stick to it, you will come out ahead of buying universal coverage.

Sam Said:

1 crore life insurance in india?

We Answered:

great question.
i would advice to you to do the following.
find out the most riskest period of your life. (say you already have a family and two kids) these 10 years till your younger kid is 10 years is the most riskest of your life. you need to have the highest cover for that period. (plz note you are also working for these 10 years and have helped your family to prepare the egg nest and retirement funds.) the next 10 years, the risk reduces you can therefore have a lesser risk cover for those next 10 years. after 20 years and you are still alive, the risk still reduces therefore less cover is need.
if i were you i would split the 1 C into 25 L each and take the 25 L cover from 4 companies. the first 10 years will be full 1 C. the next 10 years 75 L, the next 10 years 50L and so forth. i would strongly advice you to take one HDFC and one religare. remaining are your choices.

Carolyn Said:

Can I have two different life insurance covers?

We Answered:

Yes you can

Alexander Said:

Does anybody else have the type of life insurance that pays you back if you don't die?

We Answered:

AIG's insurance business should not be in severe jeopardy. Their insurance business is profitable. It's their investments that are going sour. It's likely that if AIG goes under, they'll be bought by another insurance company that will continue operations.

How long have you had the policies? If you're really that concerned about it, and the policies are new (less than a year old) you may want to consider buying policies at another company and cancelling those AIG policies after the new policies have been issued.

And so you know what type of quotes to ask for if you shop for insurance, those policies are called Return of Premium Term policies, or sometimes Term Policies with the Return of Premium Rider. I know that Phoenix Wealth Management has very good prices on them.

Also, you may want to consider looking into 30 Year terms. Sometimes, when you have the return of premium option, those will actually be cheaper than a 20 year term. Plus, you get the cheap coverage for an extra 10 years, and even more money back after the end of the term.

Vernon Said:

10 insurance easy questions? give you ten points!?

We Answered:

1. true
2.C
3.D
4.D
5.B
6.A
7.B
8.A
9.A
10.B

Herbert Said:

Whole Life vs. Term Insurance?

We Answered:

Whole Life used to be how 'common people' saved for retirement. Whole Life is essentially a mutual fund investment that will pay you a big benefit if you die (big depending on whether or not you pay for big). Term Life insurance is a straight bet that you wont die. Term Life is significantly less expensive since you dont have to pay for a poor investment return.

I've never had an insurance person explain to me or show me how whole life is better than term -- which is why I have term.

Joyce Said:

10 ? insurance test? 10 points!?

We Answered:

1=A 2=D 3=D 4=D 5=B 6=A 7=B 8=B 9=B 10=D