insurance

Is there any advantage to permanent insurance over term insurance or vis versa? I mean, basically it looks like term is the better deal because I can buy more death benefit for a lot less money, but permanent insurance gives me money with a death benefit. I'm in my late 40's, have a wife and 2 kids, normal bills, mortgage, etc. Does anyone have any opinions about what is really the better deal long term?

I have seen this one asked so many times it's amazing. Usually, you have 2 camps: the cash value (permanent) insurance camp and the term life camp. Both think that they are right.

The truth is that it depends. Now, it's nearly impossible to say what is the *best* option for you because I would need to know more about your financial situation. It's amazing how many websites and "experts" can say, off the cuff that one is better than another *all the time*.

The biggest advantage that term life insurance has over permanent is that it is cheaper in terms of coverage per thousand dollars of insurance. You will almost certainly be getting more death benefit with term insurance than with permanent insurance for the same amount of premium you are willing to pay.

The downside to term lies in in the fact that it gets more expensive as time goes on. Also, there is a reason why term insurance is so cheap. Depending on who you believe, only 1-20% of term policies ever pay out a claim. Now even at 20% (which I think is high), thats still not all that great if you ask me. Some might argue that with term insurance you can invest the difference. Meaning that if a permanent insurance policy costs you $100 per month and you receive $50,000 in death benefit then, as the argument goes, you could just as easily buy a $250,000 term life insurance policy for say $35/month and invest the remaining $65. Or you could buy less term insurance and have more to invest. The point is, the theory is that that by the time you reach age 65 (or whenever you plan on retiring), that you won't need life insurance. If you are quote: "smart with your money", you won't need life insurance.

I think that this is a myth for most people (but again, it largely depends on your situation). One of the problems with investing is that it doesn' t matter how smart you are with your money. Most average joe investors put their money into mutual funds. If that fund tanks 5 years before you retire, it is very likely that it will be extremely difficult to retire on what you thought you would be retiring on.

The other issue I have with the permanent vs. term debate is that folks that advocate term insurance usually try to compare permanent cash value life insurance to an investment. It's not. It was never meant to be. They complain about how low the rates of return are after expenses. Many times the internal rates of return are only 3-5%. But do you know what the definition of "cash value life insurance" is? It's not "a type of investment". It's considered "a death benefit with a *savings* component". Look at any high yield savings account or CD. What is the rate of return? 3-5%. Look at cash value life insurance. What is the internal net rate of return: 3-5%.

The problem with permanent insurance is that it's not a be all end all for retirement savings. Some folks think that this is all anyone should ever buy and that they should never consider anything else. They even go so far as to defend life insurance as a "good investment". Bad move IMO.

My opinion is that BOTH sides are wrong. That's something of an answer for you. If you want more in depth details, read this article: http://www.twintierfinancial.com/articles/Life_Insurance.html

At your age, go with term. It's cheaper and you can get a lot more coverage. The purpose of life insurance is to take care of your wife and kids financially should you die. It is not an investment.

Term because it is a locked in rate for 10,20,30 years. Also benefites are paid in full even if you die 2 weeks after buying it. Well, with Allstate it is.

Term is always better. Its way cheaper. You just need it to cover your kids in case you die.

Permanent Ins. is alot higher plus you have all the fees. Take the money you save and invest it. Or just put it in the bank. You will come out ahead.

TERM is definitely ALOT cheaper GENERALLY.....

If you're looking for long term life insurance you'll want to go with permanent. Term insurance usually only allows coverage for a certain number of years and the only payment will come at the time of death. Permanent insurance usually has cash out options, hence the higher price. It really depends on your needs. If you only need a few years of coverage, at which point you'll no longer be considering life insurance coverage, then term insurance would probably be the better purchase.

We had a baby 3 months ago, but I am looking for health insurance that is good and affordable for my wife. Any suggestions?

Yea it sucks how our health-care system hasn't caught up yet. It makes me furious. Anyhow, I've heard Blue Cross/Blue Shield is good and I believe it's the most inexpensive. I had Cigna for a while and that was good. Health-Net is pretty good only if you don't have any pre-existing conditions otherwise they really raise the premium. Look into Eatna as well. I've heard there a little more pricier in comparison to the others but I've also heard that they seem to cover more.

Hello,

Unfortunately this is not a quick answer. There are some things to consider:

If buying insurance in the the private insurance market there are many different types of plans. There are several questions that you will want to ask before selecting a plan:

1) Will I need my wife's plan to cover maternity for future babies? Some plans cover maternity, some do not.

2) How much premium can I afford to pay every month?

3) If something major should happen to my wife, what would be the maximum that I could afford to pay. (This will help determine the deductible of the plan that you'll pick)

There are wesbites available that will allow you to look at plans from several carriers (Blue Cross vs. Health Net vs. Aetna, etc) and compare benefits and premiums. A site like this could be helpful in your research.

The typical rule of thumb will be that the higher monthly premium you pay for a plan, the better or "richer" the benefits will be. That is a trade off that applies accross all carriers for the most part. Have you wife think about how much she used her health plan in a "typical" year. (i.e., non maternity year) This can help you pick a plan that will not having you paying for services you don't need, but will provide the coverage that you and your wife want.

Good luck!

Kathy K

www.premiumwatchdog.com

There is no possible way for us to answer this. Health insurance (if you are not able to get in on a group insurance plan through work) is based on previous health history. You should NEVER LIE on these. Because we don't know your wife's health background, we can't give you an answer. ALL companies charge based on history, sex, and smoking.

www.ehealthinsurance.com

You seem to not really know a lot about this subject, so you are going to want to get someone to help you understand what all the termanology is so that you don't make a costly mistake. If you are married, most every employer will allow you to add both your wife and your dependant (your child). This will be at a MUCH lower cost than buying something seperate. If you are NOT married, many states have rights for opposite sex domestic partners on their insurance plans. If YOU are working, go to your HR department and speak with your "Benifits Coordinator" to ask all the questions you need to ask. They are there to help!

Leave America. France, England, Germany, Switzerland, Canada, Japan, Australia, New Zealand...actually most of the developed countries in the world have good health insurance but it is not available in the US because...well ask the insurance companies why not.

In general, these days (21st century) the best is a combination of a HSA plan extremely high deductible and MySimpleCard for the everyday dr's visits. Best overall coverage for the buck as a combination. Give us more details and we can help more specifically.