Living Stingy: 11/01/2019

This storyline of cash value versus premiums paid for this Northwestern plan illustrate that life-insurance is a long-term investment, with a payback assessed in years, not years. 10. Dividends exceeded premiums in 2014, no monthly premiums for 2015 and beyond credited? Conclusion: As an investment, life insurance is no real bargain.

63 a month) will remain relatively smooth. The dividends from our other “paid up” guidelines more than pay for the premiums on this policy currently. For each and every dollar invested as this aspect, the policy raises by more than two dollars. LIFE INSURANCE COVERAGE – it is an excellent deal?

I have discussed it before, and it is an interesting animal. For a young family out starting, a term policy can be bought cheaply – and offer coverage in case a spouse dies young enough. However, as you grow older, the premiums become larger and larger. At that time, you ought to have enough set aside in case there is early loss of life – and a term policy is no more necessary.

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Whole Life, on the other hands, acts as both an insurance policy and an investment vehicle. You’ll be able to convert a policy to “Paid up” status at any time (provided the policy has a cash value). The policy is cashed in, and the money value used to buy a “paid up” policy, which boosts in cash value, over time.

The death benefit may be significantly less than the original policy and remains fixed. This is a good option if, down the road later, you don’t want to (, or cannot afford to) pay rates – but don’t want to reduce all your policy, either. I did this for just two of my Northwestern Mutual Life procedures, as I could not afford the hefty premiums on four life insurance polices. Yes, I bought much too. Speaking of “paid up” – most Insurance Agents will encourage one to use the annual dividend to buy additional “paid up” additions to the policy.

These add a little to the loss of life benefit and generate dividends of their own, which are added to the pile. In a single respect, this is similar to re-investing more income into the policy. In another respect, it is like buying little small life insurance plans at a very, high cost per buck of coverage. An improved idea is by using dividends to lower premiums. The policy might not quickly grow as, but then again, it won’t set you back as much, either!