Posted on: 06-08-13 11:48:37
Quote:
Originally posted by AshwaniG
Mkannuri please check your PM .
Thanks Ashwing and replied back thru PM :-)
-----------------------------------------------------------------
MK
Don't know about Forresters but RBC Insurance charges CAD 51 pm ( with multi product rebate ) for Term 20 Age 40 Male non smoker .. covergae 500K.. Non smoker defined as if you have not smoked with in the past 12 months ...
You can quit smoking from today and apply a year later and most likely get this rate ....
-----------------------------------------------------------------
Fido.
Thanks Fido.
Thats what i was thinking but my mortagage liability will be in effect from next month onwards and dont wanted to take any chances in between :-)
What about the whole life, i was thinking though its a bit expensive at least you are forced to save and at the end of 20yr term your money is guranteed and you still have the life insurance till 100yrs wihtout paying..
Whats your thoughts on this... as it will be too late if you wanted to go that route after 45 or 50 :-( ofcourse already late...
-----------------------------------------------------------------
MK
Quote:
Originally posted by mkannuri
Here is my situation and hope experts in this line can throw some suggestions/guidence.
I am a smoker (process in quitting) 40yrs age (precisely 39) and have mortagage of $400k.
I was been advised by one insurance agent that "Forester" is the best option for me as they are currently giving non-smoking rates for smokers and revise rates to smoker if you not quit in two years.
The following are the quotes given for various combinations.
TERM Plans
T10 for $500k => $916/year => around $80/month
T20 for $500k => $1800/year => around $150/month
Life 20year participating whole life plan
Basic Face Amount $167,200 Life $4,496.01 60
Initial Enhanced Insurance $232,800 Life $0.00 60
Total Initial Insurance Amount $400,000 Life $4,496.01 60
Certificate Fee $90.00 60
First Year Annual Premium $4,586.01 which is $382/Month
Now i am in dilema as T10 serves my purpose of the mortgage liability by paying of $80/month..ofcourse no returns
Where as the Life is getting break even by 20yrs (total premium will be paid $91720 and Total cash value $115k and Guaranteed Cash value $68k)
First time home buyer and unknown forth coming expenses..is it risky to go to life insurance though it has savings for retirement vs. less expensive to just cover the mortagage
Your inputs/feedback is highly appreciable.
Hi,
First of all, Guaranteed Cash value is before tax. If you withdraw this money after 20 years and your MTR is 40%, you only get about 40K. When you withdraw, you insurance is gone. When you withdraw partial, your face value is reduced.
Secondly, total cash value is not guaranteed and based on dividends and you cannot predict dividends.
Now lets come back to your insurance. If you take term insurance for 10 Years (although I recommends 20-25 Years in your case since you are around 40 years old), you save $ 300 on monthly basis. Put this 300 dollar in a TFSA account. @ 4% returns (very conservative approach), you will have about 110K. This is a tax free money!
Another scenario is you take 400K Term and about 100K permanent (both can be combined in one policy. Currently Foresters does not do this in family life insurance policy but there are other options). Remember you can always have other combinations (like 450K term and 50k permanent)
I am not a big fan of permanent insurance as this does not suit everybody but still agents try to sell these!
Hope this helps. Feel free to ask more questions. Everything will be answered on the forum!
Quote:
Originally posted by rsbagwell Put this 300 dollar in a TFSA account. @ 4% returns (very conservative approach),
Can you please recommend a couple of conservative investment options where we can get 4% return . ? . Thanks .
-----------------------------------------------------------------
Fido.
I would like to know as well. 4% on conservative investment options is hard to find these days.
While we still await the 4% safe investment options , I was reading an article and could not help pasting it here to respond to Mkannuri s option of whole / universal life ....
Enjoy - pls remember insurance is for an uncertain happening - if you are insuring yourself till 100 yrs of age , there s no uncertainty involved .... Read on ...
-------------------------------------------------------------
Life insurance is a tool, not an investment. With whole life/universal life insurance, you will pay a higher premium with the promise that the company will take those extra dollars and invest them for you. The problem is that this type of insurance is very expensive. The investments don’t grow because the expenses eat up your interest.
In 29 years as a financial planner, I’ve yet to see whole life or universal life pay off for any client. Often, people have little to show for such policies other than the money they paid in. Whole life and universal life policies are the reasons why life insurance companies can afford big buildings and Super Bowl ads. The only time these policies make sense if you have an estate-tax problem but this is a subject beyond the scope of this post.
Life insurance is a very important tool. When you use it for its intended purpose, it’s great. That means you should look to term life to cover your family protection needs. Ignore the slick sales gimmicks of guaranteed life, life insurance or children, travel and accident insurance, and whole life/universal life.
-----------------------------------------------------------------
Fido.
