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Everybody dies. That's NOT a caveat.
Who has life insurance?
- Thread starter PaleMoonlight
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But majority of life insurance policies have an end date, so if you outlive without an ROP, you don't get anything. Also, the older you get, the less you get if you do die during the policy. To get your max payout you have to die relatively young. Where was investments, they generally increase by age and you have access to them whilst alive
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Whole life policies have no ending until you die or you cancel it. If you have a 500k whole life policy it pays 500k no matter what age you die.
Term policies have an end date of either 10, 20, or 30 years. They are actually pretty cheap. You can get the ROP add-on but it's not really worth it as you can invest that extra cost elsewhere.
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Whole life policies don't maintain payout throughout their entire term. They devalue as you age. That the crux of the comparison with investments. Investments historically grow with age, life insurance policies deplete.
You're thinking guaranteed level policy but the premiums on those are usually really high
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Whole life policies do not devalue. There is no payout during their duration. They build in cash value at a fixed rate with fixed premiums. They can be borrowed from once the cash value reaches a certain amount.
Guaranteed level policies are term policies.
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my work gives me some insurance, however, I think of it as an emergency should I pass too soon, I believe my wife would get 700k, it's part of compensation, wouldnt deny it, but to go above and beyond, it seems like any other insurance scam that you wont get back. Between my retirement accounts and investments, it did take some time to build up 500K (several years), but I've gotten there, it's mine, I can spend most of it, and it would get taxed, sure, but if I'm gone and it acts as insurance, not by much since my wife doesnt have a conventional job.... and it's not like she would withdraw all at once to incur the taxes.
in five years, my investments will double, and double again in another five, a whole lot more than life insurance is going to give out. It seems counterintuitive to expect an ROI from insurance, the two ideas are at odds.
Edit: I do recall one type of insurance as a type of investment instrument for wealthy folks, cant recall the exact structure
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Because you may die before investments make enough money to support your family. Investments can lose money.
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Life insurance is not about ROI it is about taking care of those you love should something happen to you. It is a much faster and efficient way of taking care of those you love should something happen to you.
The thing about insurance people have a problem with is that frequently they end up not needing it. And then it ends up seeming like a waste of money.
I always had theft/collision insurance on my vehicles and thank God I did because I had two cars totaled and another car stolen. None of which were my fault but I was reimbursed for those incidents.
It's not required to have home insurance unless you have a mortgage but if a disaster happens you are glad you had it.
Same with health insurance. I pay a lot of money every month for good coverage but have yet to need it. But God forbid I need it it covers almost everything since I pay up for premium coverage.
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I have the most cheapest liability insurance, my cars are worth two paychecks at most, low on the desire/theft meter
they are secretly in really good condition, but I'm not paying one dollar more than basic liability. Same with health insurance, you should read my writeup on that topic in this thread. I have five kids, we've been through health disasters, and there are ways you can navigate everything. In terms of insurance, I'm about absolute minimalism, that's how I achieve to have so much invested and hardly any bills, no mortgage, no recurring credit payments, and low premiums.
anyhow, health insurance is a big FOMO scam, get something cheap, pay out of pocket, reimburse yourself through your own HSA. Fund your HSA with the cost difference between cheap and expensive insurance, you'll see that you can probably near max out your HSA with the difference, and you for sure are not going to pay the full deductible each year, and even if you do, chance that it happens every year is unlikely. Five kids, I've spent my fair share of medical bills, more than most I imagine.
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HSA's are not allowed when you have low deductibles like I do. Any surgery or hospital stay I might need is 100% covered by my insurer. So are all treatments for chronic illnesses and hospice care.I have the most cheapest liability insurance, my cars are worth two paychecks at most, low on the desire/theft meter
they are secretly in really good condition, but I'm not paying one dollar more than basic liability. Same with health insurance, you should read my writeup on that topic in this thread. I have five kids, we've been through health disasters, and there are ways you can navigate everything. In terms of insurance, I'm about absolute minimalism, that's how I achieve to have so much invested and hardly any bills, no mortgage, no recurring credit payments, and low premiums.
anyhow, health insurance is a big FOMO scam, get something cheap, pay out of pocket, reimburse yourself through your own HSA. Fund your HSA with the cost difference between cheap and expensive insurance, you'll see that you can probably near max out your HSA with the difference, and you for sure are not going to pay the full deductible each year, and even if you do, chance that it happens every year is unlikely. Five kids, I've spent my fair share of medical bills, more than most I imagine.
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My old policy the benefactor was a no-kill cat shelter.
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low deductible plans are like insurance for insurance, you likely pay a few hundred more if you're raising a family. the low deductible at my work was at minimum 500 more a month, and that's a significant amount of money that gets close to funding my entire HSA each year.... the HSA is all my money, nobody owns it, but me.... and at the current state, I have enough to cover max deductible for at least 9 years in a row if I kept contributions at the delta level. What's the chance that there is a major health emergency each year for nine years? if that were the case, death would be much more likely. Such a scammy system, pretty much everyone that gets those low deductible plans are getting ripped off.
I've never met anyone that had a low deductible plan that can say it was truly clutch, even cancer survivors
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You're not getting ripped off with a low deductible plan if you end up needing a surgery or are seriously injured in an accident of some kind and need a hospital stay. My deductible is 1000 bucks for an individual for the year and I pay about 900 bucks a month but like I said all surgeries and hospital stays, hospice stays any many other procedures/tests are 100% covered. I never go to the doctor or have any health issues but I am on the bad side of 50 now and it can only go downhill from here. On average one night in the hospital is over 3000 dollars.low deductible plans are like insurance for insurance, you likely pay a few hundred more if you're raising a family. the low deductible at my work was at minimum 500 more a month, and that's a significant amount of money that gets close to funding my entire HSA each year.... the HSA is all my money, nobody owns it, but me.... and at the current state, I have enough to cover max deductible for at least 9 years in a row if I kept contributions at the delta level. What's the chance that there is a major health emergency each year for nine years? if that were the case, death would be much more likely. Such a scammy system, pretty much everyone that gets those low deductible plans are getting ripped off.
I've never met anyone that had a low deductible plan that can say it was truly clutch, even cancer survivors
I have a friend who last year was in the hospital for a little over two weeks and the bill was a little over 500k. His insurance picked up 80% but he was on the hook for over 100k. Fuck that. I'll pay extra to avoid that.
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I have a $700k group term life insurance policy and I also have one from work that is basically ~125% of my salary. So if I died prematurely my wife and kids would get $900k, possibly more a they are situations where you get extra. The group term is a little different then regular term life insurance. There is no XX-year term. I can cancel at anytime or I can keep it until I die. The caveat is that as I get older the premium gets more expensive. I pay $35/month, but it will go up when I hit the next age bracket. It starts to get expensive especially once you hit age 60 it’s like $300/month. On a good note I can lower the term amount making the premiums cheaper and every year they evaluate their funds and issue you a check which basically lowers your premium. I’ll probably cancel it before I hit 60 or cut it in half, but it depends on my health at the time.
Life insurance is what it is, insurance. If I die prematurely, my wife and kids would be comfortable with the money not to mention what I have in my retirement accounts. My wife brings in about 45% of our combined income and we have a rental home almost paid off. She will be more then fine financially and will still be able to keep the kids in private school, max her retirement accounts, etc. Whole life insurance is a scam. You are better off getting a term policy (it’s cheap) and investing that money you would have spent on whole life into your 401k/IRA/etc. Never fall for that bullshit.
Life insurance is what it is, insurance. If I die prematurely, my wife and kids would be comfortable with the money not to mention what I have in my retirement accounts. My wife brings in about 45% of our combined income and we have a rental home almost paid off. She will be more then fine financially and will still be able to keep the kids in private school, max her retirement accounts, etc. Whole life insurance is a scam. You are better off getting a term policy (it’s cheap) and investing that money you would have spent on whole life into your 401k/IRA/etc. Never fall for that bullshit.
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you're getting hosed, probably
I'll simplify the math for you, lets say you get a work plan that is on the high side of high deductible, $200 a month (I pay a bit less for a family with five kids).
right there, you're saving $700 a month, $8400 a year. Since you have a deductible of $1000, a high deductible plan is $7000 (100% coverage after that), there is a difference of $6000 for max deductibles, you can see that in the worst case scenario, the high deductible plan can cost $6000 more in practice, but since you're saving $8400 a year, you're still ahead $2400 regardless of hitting the deductible.
In practice, it's a lot different, your doctors visits may accumulate to $500 a year, meds accumulate to $500 a year, and dental isnt even covered.......... but, with an HSA account, you can pay off your dental bills. My HSA distribution showed that I spent $3000 in dental and health for a family of five for both dental and health, that leaves me $5400 ahead...... sort of. I did have to pay for braces for three of them, another $3000 from the FSA tax free account, leaving me only $2400 ahead....
but considering that it paid for medical, and it paid for dental, very costly dental for braces of three of the five kids, I am weathering it just fine I think. Dental and Medical paid in full, ahead by $2400 is darn good. I might add that braces finish up this year, going to be freed up a whole lot more, should be able to add to the HSA much faster once again. There are setbacks when adding to that account, but there is consistent adding rather than retraction, havent encountered a single year when I lost from that account.
when you're in charge of your health finances, you find ways to save on expenses, like goodrx coupons, you can neg lower prices at the docs (it works), and you're left with a stash of money you command. You can even take money from that HSA, but that's a different tangent I'm not going to get into
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It really depends on what's available to you. Having a HDHP + HSA is one of the best investment tool since you get double tax benefit especially when you're young, however you are also taking a risk of a catastrophic medical event from occurring especially once you start having kids. Luckily working for the government I get access to good plans with reasonable premiums. When my oldest got diagnosed with Type 1 Diabetes he had to be rushed to the PICU to another site about 45 min away. Stayed at the hospital for 5 days. The same year my 2nd born decided to pop out early. So another transfer and a premie in the NICU. I can't imagine what we would have had to pay if we had a HSA. Our plan has a $100 deductible and $2000 out of pocket max. Neither events even hit the max because of the great coverage, however sadly diabetes supply throughout the year did even though the actual cost is significantly less. Go figure...low deductible plans are like insurance for insurance, you likely pay a few hundred more if you're raising a family. the low deductible at my work was at minimum 500 more a month, and that's a significant amount of money that gets close to funding my entire HSA each year.... the HSA is all my money, nobody owns it, but me.... and at the current state, I have enough to cover max deductible for at least 9 years in a row if I kept contributions at the delta level. What's the chance that there is a major health emergency each year for nine years? if that were the case, death would be much more likely. Such a scammy system, pretty much everyone that gets those low deductible plans are getting ripped off.
I've never met anyone that had a low deductible plan that can say it was truly clutch, even cancer survivors
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you would have paid $5K extra for that one year
$100 deductible is kind of outrageous when no deductible typically costs $150-$200, use to be a lot lower. Keep in mind, that routine stuff is free with high deductible plans, no charge. I've had some troublesome kids, NICU 10 days, hospital stays for 30 days, special need kid, strabismus surgery, high deductible plan did what it did, had to pay max from my HSA, but it doesnt take long for an HSA to build, and kids get better as they age. my adult child, probably going to pay for lasik via HSA (I think it qualifies), yeah, I've got a shitload of bills.... always trying to optimize, keep as much mine as possible.
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$100 deductible is a drop in the bucket (this is for the entire year). It really makes no sense to be honest since it's only $100. I just looked it up and the out of pocket max for a HDHP is $8,050 for individuals and $16,100 for families. Our monthly premiums are $450/month. For our case having a HSA is definitely not worth it.
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My coverage includes dental and vision.you're getting hosed, probably
I'll simplify the math for you, lets say you get a work plan that is on the high side of high deductible, $200 a month (I pay a bit less for a family with five kids).
right there, you're saving $700 a month, $8400 a year. Since you have a deductible of $1000, a high deductible plan is $7000 (100% coverage after that), there is a difference of $6000 for max deductibles, you can see that in the worst case scenario, the high deductible plan can cost $6000 more in practice, but since you're saving $8400 a year, you're still ahead $2400 regardless of hitting the deductible.
In practice, it's a lot different, your doctors visits may accumulate to $500 a year, meds accumulate to $500 a year, and dental isnt even covered.......... but, with an HSA account, you can pay off your dental bills. My HSA distribution showed that I spent $3000 in dental and health for a family of five for both dental and health, that leaves me $5400 ahead...... sort of. I did have to pay for braces for three of them, another $3000 from the FSA tax free account, leaving me only $2400 ahead....
but considering that it paid for medical, and it paid for dental, very costly dental for braces of three of the five kids, I am weathering it just fine I think. Dental and Medical paid in full, ahead by $2400 is darn good. I might add that braces finish up this year, going to be freed up a whole lot more, should be able to add to the HSA much faster once again. There are setbacks when adding to that account, but there is consistent adding rather than retraction, havent encountered a single year when I lost from that account.
when you're in charge of your health finances, you find ways to save on expenses, like goodrx coupons, you can neg lower prices at the docs (it works), and you're left with a stash of money you command. You can even take money from that HSA, but that's a different tangent I'm not going to get into
I am not working so I have to pick up all the expenses of health insurance. Even the plans available to me in NY with the higher deductibles only pick up 50% or 80% of the cost concerning surgeries and hospital stays. I want 100% coverage for those events.
I am well aware of how HSA's work and what monies can be removed and for what.
