Life Insurance for Parents

should you buy life insurance for your parents?

Life Insurance for Parents!  It's a snazzy tagline used by a certain insurance industry periodical that I won't publicly shame for such a terrible grab at attention.  The idea is straight forward and lacks any real creativity or nuance.

Here's the basic premise…

Your parents are older than you, you likely haven't saved enough money, so why not buy a life insurance policy on them and wait for your parents to die.  When that day comes, your weak retirement savings will benefit from the windfall death benefit (insert raising eyebrows emoji…if we had emoji's back then…).

This was an idea actually published in an industry publication years ago and the idea came back around to me recently.  I thought, surely this horrible idea met an appropriate death years ago and long since disappeared from the face of the earth.  Nope.

Turns out some people are still talking about it like it's a newly minted idea.  To be fair, I'm certain the first time I read about it wasn't the first iteration of the idea either.

But let's get serious for a minute.  Can you really buy life insurance on your parents to guarantee a stronger retirement account position for yourself in the future?

Maybe.  Should you?

Probably not.  Let's talk about why.

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What Happened to Single Premium Life Insurance?

why did single premium life insurance go away?

Single premium life insurance functions just like it sounds.  You pay one single premium and the policy remains in force forever.  In somewhat more technical insurance-speak, it only takes one premium to satisfy the paid-up requirement of the policy.

This sounds pretty cool at first glance.  You pay one premium and you can keep your death benefit forever and always with no need to make any additional premiums.  I can hear many of you shouting “sign me up!”  But if you go out hunting for this type of life insurance, you'll find it's a bit trickier to find than almost any other type of life insurance.  Why this is the case and what you can do given that fact is the focus of today's blog post.

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Whole Life Insurance Guarantees Improve Over Time

How is that the guarantees of whole life insurance actually get better over time?

Whole life insurance guarantees serve as a constant source for discussion about life insurance and other personal finance related matters.  Some might suggest that the whole life insurance guarantees are nothing special.  These guarantees represent a paltry return on your hard earned dollars.  Alternatively, some might suggest that these guarantees represent a rather remarkable offering from life insurance companies.

Regardless of your initial opinion of such guarantees, I'm going to spend a great deal of time today discussing why they are unique and exploring a very incredible function they serve for all policyholders.

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When Shopping for Life Insurance The Best Strategy Is to…

life insurance shopping should have a strategy depending on what you want the policy to do for you

When shopping for life insurance, the best strategy is first to understand your objective in buying life insurance and then focus on the products best suited to meet that goal.

This statement might sound a bit underwhelming or generic, but it has considerable nuanced implications that I want to spend time building out a bit.  I think you'll find that effort both insightful and helpful in your pursuits when in the market for life insurance, be it the first time or the umpteenth time.

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Paid-Up Universal Life Insurance?

Paid-Up Universal Life Insurance

One of the niftiest features of whole life insurance is the option to make it paid-up at any point in your lifetime.  The reduce paid-up feature for whole life allows you to electively stop paying premiums and guarantee the policy will never lapse so long as you are willing to accept a smaller death benefit on the policy than the one you currently have.  But what about paid-up universal life insurance?  Does this same feature exist for people who own universal life insurance?

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How We Evaluate Life Insurance Companies

evaluating life insurance companies may not be as simple as looking at their ratings

How to evaluate life insurance companies is a question that plagues both consumers and industry professionals.  Many companies love to market on ratings or a single financial metric at which they excel.

But highly rated life insurance companies are a dime a dozen and what financial attributes truly matter when it comes to crossing life insurance companies off your list.  I want to spend today discussing how we evaluate life insurance companies.

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The Life Insurance Retirement Plan

Should you consider using a life insurance policy to create retirement income that could be tax free?

The life insurance retirement plan isn't necessarily a specific “plan” that accomplishes a specific goal related to retirement planning. Instead, it's a “tip of the hat” to the fact that life insurance will accommodate strategies that focus on retirement income.

It does this because of the versatility that cash value life insurance provides.

The idea of a life insurance retirement plan gains popularity with each passing day as people seek out alternatives to hedge more traditional approaches to retirement planning.  That's not to say that the more traditional ideas are wrong.

I certainly do not mean to suggest such. Instead, the use of life insurance for retirement preparedness works as a complement to absorb the vulnerabilities investment strategies like passive index investing possess.

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Should You Cancel Your Bad Whole Life Insurance?

Should you keep a poorly designed whole life insurance policy or ditch it and move on?

The decision to cancel whole life insurance is not always an easy one.  We understand this.  We've discussed this subject with numerous people.  The biggest concern is still the money already paid to a whole life insurance policy.  The gist of the conversation goes something like “I already paid the premium and if I cancel I won't get that money back, so perhaps I should wait until I at least break even on my bad whole life policy before I cancel it.”

I completely understand the emotional pain tied to exiting when the money received equals some number less than the premiums paid.  It's a loss and not one you can claim on your taxes.  But perhaps focusing on this loss is precisely what the insurance company wants you to do. Possibly focusing on this loss creates more significant losses you never thought about.

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Paid-Up Life Insurance

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Paid-up life insurance is a term that confuses a lot of people.  The idea seems straight forward, but what makes a life insurance policy paid-up?  Also, how does paid-up life insurance differ from other types of life insurance?  We hope to help you understand all of this today

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Endowment Life Insurance Policy: It Was a Sure Thing

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We don't often talk about the endowment life insurance policy.  This is largely due to the fact that they are no longer a thing in the United States.  But just because you won't find them for sale doesn't mean there aren't still endowment policies in existence.  So let's take the day to explain these special life insurance contracts as we weep softly over the fact that you can no longer buy them.

Oh a really quick note, I do not mean Modified Endowment Contract, which is an entirely different thing that is certainly available “for sale” in the United States today.

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