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Cindy Said:

What are short-term life insurance needs?

We Answered:

Term life insurance doesn't build cash value, so there's nothing to withdraw or borrow from.

That's why is so much DRASTICALLY cheaper than whole life.

Whole life costs more, because you pay extra, into a mini-savings account type thing, and you can tap that cash value if you want to. So, there's no withdrawal with term. You can keep renewing it if you want to, but if you THINK you're going to need life insurance at 80, then you're best off switching it to a permanent type life insurance, even though it's going to cost you about 10X as much.

Set the goal. Then select the appropriate policy. And you probably want to shop around, because generally State Farm isn't very competitive, when it comes to life insurance pricing.

April Said:

Which is better, Term Insurance or Whole Life Insurance?

We Answered:

I've got to put in my 2 cents on this one. You need BOTH! Everyone needs some amount of whole life - not a large amount but more than enough with inflation to cover final expenses. Most people are NOT dedicated enough to put these premium dollars in a secure investment & what if you die within the first few years. What have you saved? Another Reason being -just think if you only have a 10, 20 or 30 year term and during that term you suffer a heart attack or have cancer, good news is you survive. When the term expires IF it is renewable the rate would be absurd and in most cases it would not be renewable and you would no longer qualify for coverage. Never just rely on your coverage at "work". Most times this is not portable - true story client diagnosed with cancer only had life at work. Unable to work and lost his job - now with cancer can not obtain coverage. As a side note: Make sure you have life insurance that belongs to you and is rate stable.

Purchase term in an amount to protect the mortgage, income and children. This is your larger amount of coverage and with the lower premiums to afford you peace of mind. Choose the longest fixed rate term you can afford and qualify for. Example: A 38 year old male with a 30 year term should be sufficient. This protects the family until the individual is 68 and life will be different. The mortgage is hopefully paid for, the children are grown and most couples are retired. If you have followed my advise, you still have that whole life plan so no one has be concerned with debt over final expenses.

Good Luck - find a secure, stable company and an agent who will give you all your options- not just what they want to sell today.

Seems like by your edit you already had your answer. Please reread my reasons and amt. for WL. No it is Not an investment but I have Never had a client receive less than they have paid? I've seen many families struggle with final expenses and so many tell me he/she used to have this life insurnace policy that had lapsed, expired, rate increased to unaffordable or only applied if working. I work mostly with the "working class" and they don't have stocks and large estates to fall back on. I purchased a small whole life in my 20's - the smartest thing I did then. I pay $25 a month for a $50K face value plan. If I live long enough to pay this for 80 years I've still not paid in 1/2 of the value - and if I have an illness - it's still mine.

Annette Said:

Do these mortgage payment estimates look reasonable and am I missing anything?

We Answered:

The deal looks good. What are your total costs of completing the loan beyond the down payment. Is the rate locked? If you a working with a broker are they earning Yield Spread Premium? If a bank, it's called Service Release Premium. These are what a lender recieves for giving/locking you a higher than base rate on a given day. Find out what this number is.

PMI is the same thing as mortgage insurance (it protects the lender from default). Home Owners Insurance (Hazard Insurance) is the second 'i" in PITI (Principle, Interest, Taxes, Insurance). Credit Life Insurance if being market to you is different (upon the insured's demise a debt is paid of by the policy).

The PMI rate is determined by Loan to Value and your credit profile. The lower you LTV and better your credit scores the lower your rate. Based on the numbers you gave your PMI is costing you $78.00 per month.

Good Luck

A computerized software driven approval (DU) is genreated by a lender after you have applied for a loan and provided the lender with supporting documentation. Based on the completeness of the information input into the DU progam an approval/denial/suspense with any outstatnding conditions is generated. The software classifies your application in levels. The higher the level # the greater the risk you pose as a borrower. A higher level will lower your LTV and increase your rate and PMI adjustments. The softwae can generate the need for a munual underwriter to review the loan and work to a decision. Most lender base a written Loan Commitment on the DU or manually underwritten findings.

After all that has been said; even if you are working with a company you belive to be reputable....get the offer in writing and shop.

Marian Said:

Accidental Death Mortgage Insurance?

We Answered:

This Accidental Death Mortgage Insurance is often called "Optional Insurance" by mortgage industry professionals.

In the mortgage industry, Optional Insurance is thought to be a rip-off. If you have any sort of Life Insurance, then your beneficiaries will receive a ton of money if you die. If they choose to pay off the mortgage with that extra cash, nothing is stopping them. If they wish to buy a new house or open a new business (and leave the mortgage balance as it is), then they would have those options as well.

I recommend against Mortgage Life Insurance (Optional Insurance). You can get a better deal on a regular Life Insurance policy that will accomplish the same objectives and offer your beneficiaries more flexibility.

Hope that helps.

Good luck!

Edgar Said:

Term or whole life insurance?

We Answered:

I don't recommend one type of policy over another. That's up to the client after he/she has had an educated view of how insurance works. When doing the Financial Need Analysis, if the client has a large need, with limited funds, to cover the whole need I will show either term or a combination of permanent and term, but I will give the client a choice after explaining the differences.

My recommendation is to contact a LOCAL agent, and have him/her do a free Financial Need Analysis (FNA), or other Total Need Program, to help you determine in your own mind what type, or combination of types, and the total amount of coverage you need to reach your personal goals. After the interview, you will have enough knowledge to make up your own mind.

The FNA will also help you determine if you need Disability Income protection, or a tax shelter, such as an Individual Retirement Account (IRA).

According to statistics, disability is a greater risk than death prior to age 65.