Do you currently have life insurance? If so, does it exclude aviation?
Yes. Simplest way to get it right is just to ask. My underwriter had a simple piece of paper which wanted to know ratings, and hours flown that year. There was zero price change after they processed the answers. It also gives us a way to point and say "they took the aviation risk" if they want to play stupid on a payout on a fatal aviation accident. Nice to have that in writing with all the legal reindeer games one could encounter.
Yeah, you want term. The rest of that stuff is shady.
It can be. There are some very specific tax reasons one might use such a tool, but they're not common.
Term is what the vast majority of folks should purchase. Any of the others tend to look like good investments but have onerous fees associated with them which eat (especially in today's wimpy markets and low interest rates) all the profits.
Life insurance is the world's largest legal Ponzi scheme. Don't you have any kind of 401k or savings ???
You knucklehead ! How much further would that money go if you invested it instead of making an insurance jackass richer ???? It's ok, sigh, I have some money with insurance stocks - just keep giving it away
There are specific uses for it. In our case, term is cheap and is specifically structured to *augment* the savings such that no lifestyle change would be necessary for my wife for a number of years (salary replacement), or she can choose not to work and take a vacation to go find the next Mr. Karen. (Heh. Hopefully a multi-millionaire with something powered by a radial engine if she has her way... LOL!) Same thing for me if she croaks.
Having seen that in action when my 40-something aunt was hit by cancer and dead writhin a year and her spouse and older kids could just relax and figure out what they wanted to do next, it's not such a bad thing to do for loved ones. Their kids weren't college bound and we're almost out of the house when it happened. She and her spouse worked at the same place in different departments and the check was nice for him in that he didn't really have to go back there if he didn't want to.
All circumstantial I know, but it worked out well for him and the boys. Much better than without the life insurance check.
Try west coast.
I pay $336/ yr for 500,000 locked in for 30 years
Similar here and I'm a freaking smoker. I should attempt to quit again here soon. Meanwhile I'll help ol' Art make some money. Ha.
We will scale out of ours completely and drop the policies as the nest egg grows. No red to keep them.
Without kids, it's not so much about paying for their college or anything like that, but force-funding the retirement accounts and portfolio if something stupid happens, such that long-term care that in some hell hole isn't the survivor's only option when they're really old. Salary replacement for X number of years worth of salary.
At some point the curves cross and the investments can take care of it easily. We aren't too far from that but if one of us bit it tomorrow, the policies would cover the earning gap.
Term bought young, is a really easy thing to just keep until it's not needed. Term bought old or already ill, can be a fiscal disaster and Art's right in that regard, desperate folks who didn't put compounding to good use will buy it.
Another thing it can be used for is to cover a large debt, say a business loan. Many businesses are structured such that the Principals can take the check on the life insurance if one of the partners dies, pay off the business' debt, and walk away if they desire. A different type of life insurance, but very commonly done.
I have an old term policy that isn't huge, but costs like $12/month, if that. It's on autopilot and I'd have to go look. It's so low that at current interest rates (or even assuming I could do much better in the real Ponzi scheme, the Stock market), the insurance company would lose money on it, even it I died a day before it expires. It'll never pay for itself. Their assumptions back in the 90s on what they would make on that money over time were too high. My win, their loss. If I croak before the expiration date. If I don't, they made a little money.
Actuaries are smart but even they sometimes get burned. And for $12/mo, I'll always keep that one. It pays out way better than ANY of my investments, right now, interestingly enough. But you do want to do that math and check from time to time.
In Art's defense, the company isn't dumb. Their current pricing reflects covering the under water stuff they wrote 20 years ago. They've been around a long time and around the block more than once. And if we don't cancel that silly thing at the right time it'll jump significantly with them hoping you don't notice. I wouldn't buy that policy at today's prices. Inflation at unexpectedly low rates AFTER purchase can work significantly in your favor.
It's just a tool with a specific purpose. It's neither great nor bad really. Just a choice to make along the way. The old term policy I have wouldn't make significant money added to the regular portfolio and has quite a while until it wouldn't be worth keeping.
It's a short term hedge against death. Odds are long but if it pays off young, well worth it. If you stay in it after a certain age, you're crazy.
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