本文发表在 rolia.net 枫下论坛James, given your situation, term is a good choice for now. You may be in your late 20s or mid 30s. Chances of dying for this age group is very low. so for about $17/month you can get $150k coverage (Clarica's term); while the cost for the same UL policy, you are looking at about $40/month for the first 15 years.
However, the biggest drawback of term is that when it is time for renewal after 10 years, you have to pay much higher monthly fee. At the age of 65, your monthly term payment is close to $250, and most term policies expire at the age of 75. that means you got no coverage after that.
If you think that you don't need any insurance coverage after 75, that's fine, but if you have UL, since it is a permanent policy, it will at least pay for funeral cost and all legal expenses incurred as a result of insured person's death. Right now, such cost is around $20,000 to $25,000. it will definitely go up (given 3% annual inflaction rate). Suppose the insured is 35 right now, in 40 years time, final expenses will be around $65,241 to $81,551. However, his term expires already, then his family has to use their hard-earned money to cover the expenses.
If you get a UL in your 30s. You pay higher monthly fee for the same coverage, but part of the money you pay will be exposed to investment. A well balance investment component of UL policy may generate almost the extra cash value equal to your death benefit when you turn 85. (100K policy will be around $200K when you turn 85). all the growth is tax-deferred just like RRSP. You can withdraw the cash value anytime you want to go for a vacation, or buy big ticket items. of course, you pay income tax on any withdrawal of cash value. To minimize tax you pay, you may choose to withdraw the cash value in part or in total when you retire (you will be paying much less tax after retirement) , and the UL policy will still be in force.
So what I suggest is that you do annual review of your current policy with your agent to see if the term still works for your best interest or not on annual basis. When you think you have more money to set aside, swtich the term to a UL or a fully-guaranteed whole life (most expensive one). Check to see if your current term offers guaranteed insurability (that means you can swith it to a UL for the same coverage without giving out your health status report.)
If you trust me enough, we may talk about your policy in detail. Any insurance product you buy should work well with your other financial objectives.
take care
my email: albert.yang@clarica.com更多精彩文章及讨论，请光临枫下论坛 rolia.net
However, the biggest drawback of term is that when it is time for renewal after 10 years, you have to pay much higher monthly fee. At the age of 65, your monthly term payment is close to $250, and most term policies expire at the age of 75. that means you got no coverage after that.
If you think that you don't need any insurance coverage after 75, that's fine, but if you have UL, since it is a permanent policy, it will at least pay for funeral cost and all legal expenses incurred as a result of insured person's death. Right now, such cost is around $20,000 to $25,000. it will definitely go up (given 3% annual inflaction rate). Suppose the insured is 35 right now, in 40 years time, final expenses will be around $65,241 to $81,551. However, his term expires already, then his family has to use their hard-earned money to cover the expenses.
If you get a UL in your 30s. You pay higher monthly fee for the same coverage, but part of the money you pay will be exposed to investment. A well balance investment component of UL policy may generate almost the extra cash value equal to your death benefit when you turn 85. (100K policy will be around $200K when you turn 85). all the growth is tax-deferred just like RRSP. You can withdraw the cash value anytime you want to go for a vacation, or buy big ticket items. of course, you pay income tax on any withdrawal of cash value. To minimize tax you pay, you may choose to withdraw the cash value in part or in total when you retire (you will be paying much less tax after retirement) , and the UL policy will still be in force.
So what I suggest is that you do annual review of your current policy with your agent to see if the term still works for your best interest or not on annual basis. When you think you have more money to set aside, swtich the term to a UL or a fully-guaranteed whole life (most expensive one). Check to see if your current term offers guaranteed insurability (that means you can swith it to a UL for the same coverage without giving out your health status report.)
If you trust me enough, we may talk about your policy in detail. Any insurance product you buy should work well with your other financial objectives.
take care
my email: albert.yang@clarica.com更多精彩文章及讨论，请光临枫下论坛 rolia.net