Be nice to people. This changes the whole environment.
- Manlobbi
Personal Finance Topics / Investing Beginners
No. of Recommendations: 1
Not sure where the best place to post this is, but this is a good read for anyone considering buying a whole-life insurance policy (headline - avioid)
https://www.theguardian.com/business/2025/nov/24/n...“Whole life is not terrible for everybody; it’s just terrible for mostly everybody,” says Clark Howard, a bestselling personal finance expert.tecmo
...
No. of Recommendations: 1
Quoted from OP:
“Whole life is not terrible for everybody; it’s just terrible for mostly everybody,”
Not for everyone; each of us has unique needs, but IMNSHO, all insurance is suboptimal. The only insurance my wife and I have is that required by our mortgage lender and by our State for the vehicles we own. When we were working, we had life insurance up to the amount our employers supplied, and no more.
We like the odds the insurers are betting that they won't have to pay off on any particular policy on any particular day. Insurers make their money on investing the collected premiums. We do, and did, the same with the premiums not paid by not buying insurance. When my wife had her double mastectomy 25+ years ago, we paid cash for the biopsy done first and then cash for the surgery. The total amount paid was less than the accumulated premiums we would have paid to an insurer--and still would have been required to pay 20% each for the biopsy and the surgery.
Everything life insurance is supposed to cover is covered by our invested "premiums."
Eric Hines
No. of Recommendations: 4
Not for everyone; each of us has unique needs, but IMNSHO, all insurance is suboptimal. The only insurance my wife and I have is that required by our mortgage lender and by our State for the vehicles we own. When we were working, we had life insurance up to the amount our employers supplied, and no more.
In my younger days when I had a young family, I had a term policy for a few years - which I thought was a good choice at the time and would recommend to others in the same situation. I think my calculation was, pay off the house + 10 years of income. As you said, once the snowball starts rolling (and the kids get older) it loses its purpose.
tecmo
...
No. of Recommendations: 4
Agree with term insurance for parents of young children.
While most other insurance is purchased in order to ameliorate unexpected big expenses - wrecking the car, burning up the kitchen - life insurance's chief justification is the fulfilling of promises made but not yet kept: a stable home atmosphere, a college education.
Term insurance is simply an annual bet: I bet a few hundred dollars that I'm going to die in the next year; the insurance company bets me a few hundred thousand that I won't. Next year, we bet again.
The nice thing about term is it's cheapest when you need it the most i.e. in your thirties, which typically are when the kids are small and at their most needy. The premiums get more expensive in your forties, and at age fifty it's suddenly, Holy smoke, where'd the extra zero come from? But at that point, all you need to cover are the final few years of college tuition - which you should have already saved anyway.
I did comment once to one of my younger partners that while high amount of term coverage was available to me, I was having a harder time insuring Spouse, a SAHM, for the same amount. He asked, Why does she need that much, anyway? I said, Because the day anything happens to Spouse is the last day I practice medicine full-time: I have children to raise.
I think I saw a light bulb go on over his head, and the insurance broker made another sale
-- sutton
happy to report all those term premiums of 20-30 years ago were a dead loss - easily my least successful investment
