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Cody Said:

Which Insurance company is best for Whole Life Insurance ?

We Answered:

First off, in the interest of full discloser, I am a New York Life insurance agent. That being said, I have the oppertunity to sell MetLife when it is better for the client. The only time that I have found that Met is better is when the client is declinded by NYL. The reason for this is because of what is in each of the contracts. New York Life will be slighter more expensive because of the fact that you will be recieving a higher dividened than that of Met Life (which will translate into a faster growth of Cash Value), also by being a policy holder of New York Life you have an ownership in the company because New York Life is a Mutual company where Met Life is a stock company, so the only way to be a part owner of MetLife is to go out and buy there stock ( this also a reason for them to give a smaller dividend, because that is money going out of the stock holders pocket).

The two companies you have chosen to look at have both been designated as the number 1 company for their designated class by Fortune. The one thing to remember is that major reason that MetLife is there is because aquired a lot of companies last year which inflated their revenues, look for that to shrink this year and for them to be nocked down a couple a spaces in the Fortune list.

Question I have for you is this, at the age you expect to retire, what is the Cash Value amount? And how much money will that give you on an annual basis in your retirment? When your done with the retirement income piece how much Cash Value will be left? And lastly if you lived to be age 100 and never pay back any of the loan how much life insurance is left?

Now for someone your age, if you were willing to put a little more away, I would look into a NYL Custom Whole Life where you can put money into the plan untill your desired retirement age, and then pull out tax free dollars for 20 or so years, never pay back the policy loans, and still die with over $500,000 in insurance.

New York Life is the more consistant company and has been for over 162 years. They payout higher dividends then their competitors because their policy holders are the owners of the company, and their whole life policies payout more because of it too. If you're in the state of California, I would be more than happy to run the numbers for you, if your not, I can get you intouch with an agent in your area.

Joseph Said:

I would like to take a life insurance policy for my whole family?

We Answered:

You're probably not going to get three adults covered on one policy, unless one is a child. Those amounts are EXTREMELY low. Life insurance covers against DEATH. Not illness.

I think you need to talk to a local broker, who can sit down and explain why $10,000 isn't enough for an adult earning an income, and help you figure out what you REALLY want, and how to get it. You can find one at www.iiaba.net by plugging in your zip code.

Timothy Said:

Are these charges on my whole life insurance policy typical or excessive?

We Answered:

It sounds more like a Universal Life policy than a whole life policy. Expenses charges of 15% is extremely high and excessive.

Take your policy to a couple different local life insurance agents and have them take a look at it and get a couple of different opinions. You really need to sit down with a professional and with someone who is honest. So, if you don't find an honest agent keep looking until you find one.

You really need someone local to review your policy. 15%??? Too much.

Cathy Said:

Can you transfer a whole life insurance policy to another company?

We Answered:

Yes you can transfer the cash value in the whole life policy into another cash value policy (ie Whole Life to Whole Life, Whole life to Universal Life, etc) or into an annuity (such as variable and fixed annuities). Its called the 1035 exchange which you can move the cash value into another life policy or annuity without any taxes due.

But I wouldn't do that anyway unless you are nearing retirement and have nothing saved, then I would move the cash value into variable annuity. If this doesn't fit your description, then I would first check if there are any loans due on the cash value. You want to pay this off before exchanging it or canceling it because this loan will be considered as additional income when you do your taxes.

If there is no loan due, then I would first look around for companies that sells term insurance policies of 20 to 35 year. You should check out Primerica Financial Service. While some people don't like their business opportunity, their service to clients is excellent. They provide a customize, complimentary, and confidential financial needs analysis that can evaluate your current finances and makes recommendations on what you should do next to reach your financial goals. They also can help you create a game plan to get out of debt and also re-define your investments (meaning they can make improvements so that you can get a better performance). Its really a great company to do business with.

When you qualify for term insurance and you accept the policy, you will see your premiums will be significantly lower than what you pay for whole life. I would use the savings and invest it every month. With the cash value in your whole life, I would cancel the life policy and put the cash value into a Roth or Traditional IRA. If you have too much cash value (anything above $4000 if you below the age of 50 or above $5000 is you are age 50 and above), then save the rest and invest it later. If you have a spouse, have the spouse open an IRA too.

I have never sold whole life insurance because of the way they are designed. If they paid out cash value and death benefit, then I would say its an "ok" product. But I would still sell term insurance and keep the savings separate because you can afford the right amount of protection and achieve higher rate of returns in your investments. As your investments grow and as you get older, the need for life insurance declines. Eventually, your investments will grow so large that you don't need life insurance anymore and you become self-insured.

Norman Said:

Term or Whole life insurance which is best for 18 yr old female and what is the difference?

We Answered:

Whole life insurance is a type of plan that contains savings in it. It is an insurance plan in which you are covered for life as long as you your premiums.

The technical word for savings in a life insurance policy is called "cash value." Your cash value grows tax-deferred, but at a slow rate of around 3-4% over the long term. During the first two years of the policy, no cash value is accumulated. Because of the cash value feature, whole life insurance is said to be very expensive. If you wish to use the cash value at anytime, you have take a loan out of the cash value. As with any other loans, you will owe monthly interest on it. (do you like to borrow your own money?). If you die someday, the insurance company keeps your cash value, but pay the face amount to your beneficiary. You may use the cash value to fund your retirement. However, using your cash value for withdrawals, loans, surrenders, or other options will reduce the death benefit.

Term insurance is a type of pure protection in which you don't plan to have life insurance for your entire life. Most term policies contain a provision to continue coverage to age 100. There is no cash value in it, so term insurance is inexpensive to purchase. Because it cost so little at the beginning, this enables you to find the right savings vehicle to meet your objective. This gives you better control of where you want your money to go instead of leaving it up to the insurance company. You may use your savings to fund your retirement without affecting the face amount of your life policy.

Now $12/month for a $30,000 policy on a term policy sounds about right because prices between companies are competitive. Depending on what kind of term policy you are getting. Is this 30 year or 20 year? If this was a 30 year term, then thats the competitive rate. If this was a 20 year term, you are paying a bit too much (about $2-$4 more than other companies).

If she bought more coverage, say $150,000, then the cost per thousand coverage goes down. Many insurance companies have different rates for a range of coverage amount. For example, an insurance company may charge $1.60 per thousand coverage on a 30 year term for any coverage below $150k. From $150 to below $300k, they may charge $1.50 per thousand. From $300k to below $500k, they charge $1.25 per thousand and so on. (These are hypothetical numbers and only an illustration to show that the more coverage you buy, the less it cost per thousand coverage. Of course, the shorter the term period, the cheaper it is per thousand.)

If this was whole life insurance, you would be paying at least $100/month on a $30,000 policy.