What Type of Life Insurance is Best for Your Family?

What Type of Life Insurance is Best for Your Family? - Although there seem to be many distinct types of life insurance, only two exist. These two types of insurance are term and whole life (cash value). Pure insurance is what term insurance is. Over time, it guards against harm to you. Full life insurance includes both insurance and a separate account called cash value. Consumer Reports typically recommends term insurance as the most affordable option, and they have for some time. The most common type of insurance in modern culture is still whole life insurance. Which should we purchase?

Let's discuss the need for life insurance. Everything else will fall into place once we have mastered the proper use of insurance. Life insurance serves the same function as other insurance products. To "insure against loss of" is what it is. In the event of an accident, car insurance protects your vehicle or the vehicle of another person. In other words, insurance is in place because you presumably couldn't afford to pay for the damage yourself. Homeowners insurance protects you from losing your house or the belongings inside. Therefore, you purchase an insurance policy to cover it because you are unlikely to be able to afford a new home.

The same applies to life insurance. It serves as insurance against the loss of life. If you had a family, it would be impossible for them to survive after your passing, so you purchase life insurance so that your loved ones could continue to live if something unfortunate happened to you. Life insurance isn't meant to make you or your heirs wealthy or provide them with a justification for murdering you. Retirement insurance is not what life insurance is for (if it were, it would be called that)! If you pass away, life insurance will replace your income. However, the evil ones have led us to believe otherwise to overcharge us and sell us various other goods in exchange for payment.

The Process of Life Insurance

I won't confuse things; instead, I'll explain very simply what and how an insurance policy works. It will be oversimplified since otherwise, we would be here for the day. Here's an illustration. Suppose you are 31 years old. A typical 20-year term insurance coverage for $200,000 would cost around $20 per month. Now, if you wanted to get a $200,000 whole life insurance policy, you might pay $100 per month. Therefore, you will be overcharged by $80, which will then be deposited into a savings account rather than $20, which is the actual cost.

This $80 will keep building up for you in a separate account. Generally speaking, you can BORROW MONEY from the history and pay it back with interest if you want to take some of YOUR money out of the account. Suppose you gave your bank $80 monthly instead of some other expense. You would probably go clean upside someone's head if you tried to withdraw money from your bank account and were told that you had to BORROW money from them and pay it back with interest. But somehow, this is acceptable in terms of insurance.

This is because most people are unaware they are borrowing their own money. Rarely would the "agent" (of the insurance Matrix) describe it in that manner. As you can see, one of the ways businesses make money is by charging customers, who then borrow the money back and accrue interest on it. Another example of this is home equity loans, which is a topic for a very different sermon.

Offer or No Offer

Let's continue using the previous example. Assume the 1,000 individuals, who are all in good health and are 31 years old, purchased the term above insurance policy (20 years, $200,000 at $20/month). These people would pay $240 annually if they paid $20 every month. You will have $4800 if you take that and double it over the 20 years. The total cost for each person during the time will be $4800. Since 1,000 people purchased the policy, they will ultimately shell out $4.8 million in premiums to the corporation. The insurance provider has previously estimated that between 31 and 51 years old, 20 people in good health will pass away. As a result, if 20 persons pass away, the corporation will be responsible for paying out $4,000,000 (20 x $200,000). Therefore, the business will have an $800,000 profit if it pays out $4,000,000 and receives $4,800,000.

You can understand how things work well, but this is OVER SIMPLIFYING because many individuals will CANCEL the policy (which will also reduce the number of death claims paid). Additionally, some of those premiums can be utilized to build interest.

Let's contrast it with whole life insurance. Assume the 1,000 individuals, who are all in good health and are 31 years old, purchased the aforementioned complete life insurance policy of $200 000 for $100 per month. These people make a $100 monthly payment. It comes to $1200 annually. The average person will pay 44 years' worth of premiums, assuming they live to 75 and are in good health. That is equal to $52,800 if you multiply it by $1200. Each person will pay a total of $52,800 over the insurance. Since 1,000 people purchased the policy, they will wind up paying the firm 52.8 million in premiums. If you get a whole life insurance policy, the insurance provider has already determined the likelihood you will pass away. What is the probability of that? 100%, as it is whole life insurance (until death, do us part)! This indicates that the insurance provider would be obligated to pay out $1,000 x $200,000 ($2,000,000,000) if everyone maintained their policy. Indeed, two billion dollars!

Please excuse my rudeness, but how can a business afford to spend two billion dollars when it only makes 52.8 million? This is an oversimplification, precisely like in the previous example, because policies will expire. In truth, most whole life insurance policies expire because their owners cannot pay for them, if you get my drift. Let's focus on the person. A male aged 31 purchased insurance that required him to pay $52,800 and receive $200,000 back. There are no free meals in life. To break even on this policy, the firm must somehow coax $147,200 from him! Not to mention paying the underwriters, insurance fees, advertising fees, 30-story buildings, etc., and paying the brokers (who receive significantly greater commissions on whole life plans).

This doesn't even account for the variable and universal life insurance policies advertised as excellent for your retirement. So you're going to invest $52,800 in a policy that will make you wealthy, pay you a $200,000 death benefit, and cover the costs of the agents, employees, and fees? This is a scam.

How could they defraud you, then? Maybe no monetary value will build up during the program’s first five years (you may want to check your policy). Perhaps it's exaggerating the return's worth (this is easy if the customer is not knowledgeable on exactly how investments work). Additionally, it is pretty evident from my essay on the Rule of 72 that entrusting someone else with your money could result in you losing millions! Even though you might pay $52,800, that doesn't account for the money you MISS OUT on by not making your investments! Regardless of how skillfully your representative may claim the business will invest your money, this is true! Simply put, companies must take advantage of you to stay in business.

Do you require life insurance indefinitely?

We might be able to resolve this issue if I explain The Theory of Decreasing Responsibility. Let's imagine you and your husband are young parents who recently wed. Like most people, they are young and crazy, so they go out and get a new house and automobile. You currently have a young child and are neck-deep in debt. In this situation, if one of you were to pass away, the other spouse and the child would suffer significantly from the lack of income. The same is true of life insurance. But that is what takes place. You both start making payments on the loan. As they grow older, your child becomes less reliant on you. You begin to accumulate your assets. Remember that I'm talking about REAL assets here, not fictitious or imaginary ones like equity in a home (which is just a fixed interest rate credit card)

The situation ultimately looks like this. The kid has moved out and is no longer reliant on you. You owe no one anything. You have enough money to cover your living expenses and burial costs (which now cost thousands of dollars because the DEATH INDUSTRY has found new ways to make money by having people spend more honor and money on a person after they die than they did while that person was alive). What exactly do you need insurance for at this point? Exactly... nothing at all! Why, then, would you purchase Whole Life (also known as DEATH) Insurance? It is absurd for a 179-year-old individual with grown children who are independent of them to continue paying insurance premiums.

In reality, if one learned to avoid building up debt and instead swiftly create money, the need for life insurance might be significantly reduced and quickly eliminated. However, I know this is practically unattainable for most people in this materialistic, middle-class, matrixed world. However, let's go one step further.

Unclear insurance policies

The following sentence is blatantly clear but also significant. Death and life are the precise opposites of one another. What makes me say this? Investing is the goal to build up enough money in case you live to retire. To safeguard your loved ones in the event of your passing before retirement, you should purchase insurance. These are two completely different actions! Therefore, your Red Pill Question should be this if an "agent" approaches you at home and tries to sell you a whole life insurance policy, informing you that it can protect your life and enable you to retire.

"Why will I constantly need insurance if this strategy will allow me to retire comfortably? On the other hand, how is this a decent retirement plan if I will be so poor later in life that I would still want insurance?"

Now imagine asking an insurance agent those questions; they might be perplexed. This results from the marketing of policies that do two contradictory things simultaneously.

In his book "What's Wrong With Your Life Insurance," Norman Dacey summed it up best.

"Nobody could ever argue against the concept of protecting one's family while also building a fund for things like retirement or higher education. However, it is unavoidable that both of these tasks will be performed poorly if you attempt to complete them using a single insurance policy."

You see, the Red Pill Question must always be posed, even when there are many new whole life policy variations, such as variable life and universal life, with many bells and whistles (saying to be better than the original, usual entire life policies)! If you're going to purchase insurance, do so now! Invest if you're going to, then invest. It's that easy. Don't fall for an insurance agent's deceit in convincing you to purchase a whole life policy because you lack the knowledge and discipline to manage your finances.

Learn how to invest if you're hesitant to do so because you lack knowledge. Even though it could take some time, it is preferable to provide your money to someone else so they can invest it on your behalf (and get rich with it). How can a business make a profit if it accepts money from its consumers, supports it, and then returns all of the earnings to them?

Do not fall for the age-old "What if the term expires and you cannot obtain re-insurance trap." Listen, numerous term insurance policies are renewable until an advanced age (75-100). Yes, the cost is significantly higher, but you must understand that by the time you get a whole-life policy, you will have been conned out of even more money (if that even happens). This is another incentive to manage your money wisely. Avoid purchasing unclear policies.

What amount should you purchase?

I often advise choosing an insurance face value 8–10 times your annual income. Why so tall? This is the cause. Suppose you earn $50,000 annually. Your family may invest $500,000 (10 times $50,000) in a fund that pays 10%, giving them $40,000 annually, without touching the principal, if you were to pass away. Therefore, you have replaced your revenue.

Another justification for why Whole Life insurance is harmful is this. It is hard to afford the necessary insurance by purchasing costly policies. Term insurance costs a lot less. Don't let high-face values worry you, to add to this. It is far preferable to be underinsured than to have no insurance if you have many liabilities and worry about your family. Purchase what you can afford. Don't buy anything you can't afford.

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