Unbundled Life Insurance Policy

  

Categories: Insurance

Just life insurance, a la carte. That's it.

Related or Semi-related Video

Finance: What is whole life insurance?6 Views

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and finance Allah shmoop What is whole life insurance Well

00:07

if health insurance is a safety net for your health

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then guess what life insurance is yet a safety net

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for your life I e In case you die which

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unless you found the fountain of youth or a genie

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in a lamp well it's gonna happen sometime with life

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insurance There's the owner of the policy who is from

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usually also the insured You know the person whose death

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makes it rain money The person who would get that

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money is the beneficiary And of course there's the insurer

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the life insurance company who takes your money every month

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They're also the ones that cough up a lot of

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cash when you eventually bite the dust Well whole life

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insurance hole there with a W is a type of

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permanent life insurance That kind of investment E It's permanent

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because it follows you for life like an insurance of

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Grim Reaper you know always lurking in the shadows You

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know whole life insurance was born from its mother term

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life insurance and back in the day when life insurance

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was just getting it start in life while term life

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insurance was the only option Like you'd pay fifty seven

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bucks for a month's worth of a million dollar life

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insurance policy in your twenties if you didn't die that

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month Well congratulations But then the insurance company kept all

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the money you just gave them and then it would

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start all over again the following month For the insured

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life insurance can feel kind of like a lose lose

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situation If you live well you're making payments that go

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into an abyss and if you die while you're dead

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But at least your kid or mom or whoever the

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beneficiary is has some money Well life insurance buyers got

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tired of this term life insurance gamble every month losing

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all the money they gave to the insurance companies So

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they began Teo What's called Oh yeah think And then

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using the power of frighteningly large groups will they began

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to invest the money into markets with like a thirty

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year time horizon No more giving over of all that

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fifty seven bucks every month to the insurance company watching

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all the money go down the drain As you might

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imagine the life insurance company's weren't very fund of people

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getting smart on them investing their money for insurance instead

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of dropping it into well you know the insurance black

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hole So they decided to cut a deal with those

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wanting to be insured They said We'LL cover you for

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three months instead of one If you fall off a

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bridge or get hit by a bus while your wife

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and kids will be seeing a cool million dollars and

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then they said will invest half of your monthly premium

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in an index fund Yes we'LL even let you choose

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which index fund we put it into and the other

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half Well we get to keep And if you want

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to back out and terminate the plan not because you're

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in a wooden box but because you ran out of

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money or moving or something Well you can keep eighty

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percent of what's left in that pot Well this whole

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structure for the revolved into what we have today whole

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life insurance which covers you not for one month or

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three but for life Remember it's permanent You could still

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cancel payment or future payments but it would cost you

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a pretty penny Whole life insurance includes building up savings

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from part of your premium payments not watching all your

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premiums go into the insurance black hole Since whole life

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insurance is permanent it acts as a no touchy investment

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account And because it has high fixed payouts when you

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die well it's super expensive In essence Ah whole life

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insurance plan is a tricycle style a handhold the investment

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vehicle that tries to pull a Miley Cyrus right getting

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the best of both worlds For those with the cash

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and discipline and the ability Teo stay alive that we

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watch out for that bus You can replace the need

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to even have a whole life insurance policy by simply

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buying your own shares of an index fund or mutual

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fund all on your own with no insurance company middleman

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taking a cut then you own one hundred percent of

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the investment and all that's left to do after then

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is you know not die for a decade or three

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Enjoy your loot

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