I hear this all the time and it could not be further from the truth. If a 30 year old buys a 20 year term policy and within that time frame has serious health conditions ie;cancer, heart, diabetes, stroke, LS, MS,etc, that person may not be able to buy life insurance again. And that may be the very time that they need it the most. In other words, at 51 years old, they could be terminally ill and without life insurance and uninsurable. That could really leave the family in a bind. Some permanent life insurance is usually a very good idea. Term works great to cover debt like a mortgage and is an inexpensive way to carry some additional life insurance. Also, if you need to do any type of estate planning, permanent life insurance is the only decent option. I agree that life insurance should not be sold as an investment, but permanent life insurance is a very important financial tool. It is most important to you when you no longer can get it. For a few hundred bucks a year, I have several hundred thousand of permanent life insurance. If you buy it when you are young, it really does not cost that much and it will always be there for my wife and kids if they need it. If I outlive its usefulness, I can always cash it out. Or, keep the policy and use it to transfer wealth to my kids tax free when I die.
Take advantage of your 401k. Getting into a company that matches your contributions is a big positive too. While young you can invest that money (401k) in riskier investments, as you age you'll want to start protecting that money with more "sure thing" investments. Starting early is the biggest key. Putting $1000 a year for 30 years (starting at 25) will net you a larger amount than saving $3000 a year for 10 years starting at 45. Something to think about.
Back to my Cui Bono...most of the non-term (whole lofe) and annuity insurance product pay some of the highest commissions of any investment instruments-which is why the agents and brokers push them (generally 95%+ of what you pay in year 1 is their commission). There are cases like Fletch mentioned, but relatively few for the under 40-45yrs old crowd, no family history, no chronic health problem, non-smokers. But insurance is a numbers game and 'the house' is not going to lose. Frankly even term insurance really isn't needed unless you're married, have kids or if your spouse generates the majority of the income.
First, 95% commission is a dream world. Especially for annuities that many pay single digit commission. Poor information there. I dont push life insurance and dont really sell lots of it. It certainly is not how I make my living, but it certainly has a very important place in any financial plan. Glad to know I should only sell it to married people with kids. That only eliminates about 10% of my clients. So the other 90% seem to be good prospects. Life insurance is actually cheaper now than it was 15 years ago. It is the best way I have ever seen to pass tax free wealth. There arent many ways you can escape probate fees and taxes like you can with life insurance. Show me another way and I will be all ears. I cant imagine leaving my wife holding the financial bag for paying off a house and putting two boys through college without life insurance. Compared to what I spend on hunting, the premium is peanuts.
IDK what your interest rates are, but its often the best plan to pay these things off first before saving back money unless you have great rates locked in.
school loans are usually pretty cheap and Roth IRA is what you are looking for. Max it out every year.
I'm in debt with my school loans, but this is the first semester I had to take them out. I ave two years of school paid for and my truck paid off, I've really been thinking about trying to buy a rental property myself.
My wife got us started years ago when there was extra money coming in. I've got ROTHs, IRAs, Keoughs etc. A fair sum.... but by no means rich. Now... I pay someone to take care of it. They aren't worth what they get paid lately. Fact is... they just went up. I'm going to combine it all in one place to simplify the process. Have the appointment set up for Friday. I'm fixing to start drawing some of it out soon. My son said he doesn't need it. He want's me to spend it. I'm just going to draw so much a month. The amount is dependant on how much they're going to make me draw when I'm 70 and a half. I can draw more than I need for the rest of my life. I don't need a lot. Just enough for hunting, fishing, fly rods and a little travel within the USA and Canada. A plane ticket when I want and all that. Also, a good meal when I want one and of course..... a little Patron and Jack. LOL
