LIFE INSURANCE

[ushdadude]

To illustrate this:

$3mm 30yr at age 28
$2mm 20yr at age 38
$1mm 10yr at age 48

All seemed to be about $1000 a year on term4sale.

Using their calculator, assuming 5% growth and 5% inflation, each of those policies are sized to replace $100k of income for the same many years as the respective term

Most people assume about 4% inflation and about 7% growth without being too aggressive

[ushdadude]

And $0 coverage starting at age 58?

He's saying that's the age coverage started, not when the person died

[Zalc]

Why not use an actual retirement account to save for retirement? Much much much cheaper

I’m not trying to talk retirement here…
I am thinking of insurance from purely a risk mitigation standpoint. For retirement there can be better avenues.

For many young people who won’t have a clear idea of their income potential or their family’s needs for up to 10 years - is there a general strategy that is recommended?

Most articles and people on this thread seem to be mich more settled and have a clearer idea on those 2 things.

[ExGingi]

He's saying that's the age coverage started, not when the person died

Based on term lengths and ages there's no coverage at age 58.

[Zalc]

Based on term lengths and ages there's no coverage at age 58.

I was illustrating the point that as you get older your dollars buy less and less coverage.
It’s not a strategy - most people still need to be covered at 58.

The question is if there’s any simple long term stratagy for someone just starting out, aside from just getting a small policy now and winging it.
What steps (if any) can I take today that will help me ensure I can be insured correctly for the next 40 years, without spending too much or being too risky?

I didn’t think it’s a niche question, but if I is I guess I’ll need to talk to an advisor directly…

[ExGingi]

I was illustrating the point that as you get older your dollars buy less and less coverage.
It’s not a strategy - most people still need to be covered at 58.

The question is if there’s any simple long term stratagy for someone just starting out, aside from just getting a small policy now and winging it.
What steps (if any) can I take today that will help me ensure I can be insured correctly for the next 40 years, without spending too much or being too risky?

I didn’t think it’s a niche question, but if I is I guess I’ll need to talk to an advisor directly…

Always best to speak directly to an advisor.

If unsure about career path at age 28, I personally prefer getting a 10 or 15 year convertible term policy (and reviewing every couple of years), and possibly some whole life, with guaranteed insurability options riders.

[ushdadude]

I was illustrating the point that as you get older your dollars buy less and less coverage.
It’s not a strategy - most people still need to be covered at 58.

The question is if there’s any simple long term stratagy for someone just starting out, aside from just getting a small policy now and winging it.
What steps (if any) can I take today that will help me ensure I can be insured correctly for the next 40 years, without spending too much or being too risky?

I didn’t think it’s a niche question, but if I is I guess I’ll need to talk to an advisor directly…

I think the best strategy is for someone to set their family up in a way not to need to be covered at 58.

[ushdadude]

Based on term lengths and ages there's no coverage at age 58.

Can use retirement accounts then

[ckmk47]

And $0 coverage starting at age 58?

I think the best strategy is for someone to set their family up in a way not to need to be covered at 58.

Yes.  After some time, with enough income and investing right, you basically 'self insure'. Your family expenses are lower than when you had a  young family and you have enough saved for the wife to live off of.
Although maybe having less, rather than $0, might be the way to go.

But this won't apply to those lower on the income spectrum.  They won't have savings to live off.  Especially if they still have larger expenses such as unmarried children.

[ckmk47]

Always best to speak directly to an advisor.

If unsure about career path at age 28, I personally prefer getting a 10 or 15 year convertible term policy (and reviewing every couple of years), and possibly some whole life, with guaranteed insurability options riders.

You like whole life even for people at a lower income? What's the advantage to them?

[ckmk47]

Why not use an actual retirement account to save for retirement? Much much much cheaper

The way I understand it, I can borrow from the account tax free (with no interest?) up to the amount of principle I paid in. I don't know now why that's good, but it was explained to me about 30 years ago.

[ushdadude]

Yes.  After some time, with enough income and investing right, you basically 'self insure'. Your family expenses are lower than when you had a  young family and you have enough saved for the wife to live off of.
Although maybe having less, rather than $0, might be the way to go.

But this won't apply to those lower on the income spectrum.  They won't have savings to live off.  Especially if they still have larger expenses such as unmarried children.

And can they afford a WL policy?

[ushdadude]

The way I understand it, I can borrow from the account tax free (with no interest?) up to the amount of principle I paid in. I don't know now why that's good, but it was explained to me about 30 years ago.

all loans are tax free

[yos9694]

Cash value in a whole life policy can be loaned out tax free, but you will owe interest on the loan.

The interest rate might only be a little bit higher than the rate used to calculate dividends, so net interest costs could be very low (relative to ordinary loans). The spread might be as low as 1%-1.5% in some contracts. With universal life policies this is a little bit more transparent, since the loan account grows at an interest rate that can be directly compared to the account value crediting rate.

Buying WL or Universal because of the ability to borrow back your own money might make sense in some situations, but it's certainly not something that applies to all people and situations. Again, I'm not an advisor, but I scratch my head trying to understand how it would make sense for a low income family.

[Yosel]

In 1987 I met s successful life insurance broker, he has since retired.

he asked me, Do you want to be successful of course I said, wishing and waiting to hear the magic words, and this what he said.

Buy yourself a house!! (I was married with 2 kids) I looked at him, A House? In Boro Park?? it's $175k minimum...... (total purchase price)

You buy a house , get a mortgage , you will have to pay it, or else the bank will take it away. that responsibility will motivate you to work hard and earn good money, u "will" have the ability to pay it.

and he continues

when you feel comfortable with that mortgage payment, Buy another house/real estate, and you will feel even more motivated to work harder to cover that new additional monthly mortgage payment and so on........ take on responsibility, work, earn, pay, rewards will be waiting for you LATER

That man was right, because it worked.

always start with term Life Insurance, Yes GET WHOLE LIFE when you are young if you understand the benefits/guarantees

Yes, its a higher premium payment, motivate your self to make the $$$ now, for the benefits you will receive later   

BTW, do you want Lifetime term? try Guaranteed UL

[Euclid]

In 1987 I met s successful life insurance broker, he has since retired.

he asked me, Do you want to be successful of course I said, wishing and waiting to hear the magic words, and this what he said.

Buy yourself a house!! (I was married with 2 kids) I looked at him, A House? In Boro Park?? it's $175k minimum...... (total purchase price)

You buy a house , get a mortgage , you will have to pay it, or else the bank will take it away. that responsibility will motivate you to work hard and earn good money, u "will" have the ability to pay it.

and he continues

when you feel comfortable with that mortgage payment, Buy another house/real estate, and you will feel even more motivated to work harder to cover that new additional monthly mortgage payment and so on........ take on responsibility, work, earn, pay, rewards will be waiting for you LATER

That man was right, because it worked.

always start with term Life Insurance, Yes GET WHOLE LIFE when you are young if you understand the benefits/guarantees

Yes, its a higher premium payment, motivate your self to make the $$$ now, for the benefits you will receive later   

BTW, do you want Lifetime term? try Guaranteed UL

Instructions unclear. I'm now $500,000 in debt and my motivation to earn more money isn't earning me enough money.

[Yosel]

Instructions unclear. I'm now $500,000 in debt and my motivation to earn more money isn't earning me enough money.

message was for people age 20-25

[Yosel]

Instructions unclear. I'm now $500,000 in debt and my motivation to earn more money isn't earning me enough money.

a good financial coach, with a positive attitude would be good idea

[Euclid]

message was for people age 20-25

Ratcheting up expenses/debt to increase motivation in order to be successful doesn't sound like good advice IMO. Especially for young people.

[Euclid]

a good financial coach, with a positive attitude would be good idea

I doubt there's a financial coach out there that would say to first raise your expenses and then figure out how to pay them off. That's a recipe for disaster.