livesoft wrote:I don't understand why your goal wouldn't be to be self-insured by age 50, so that if either of you died, then there would be no financial impact to your loved ones. To be self-insured means you put money into 401(k), Roths, taxable, etc.
Set up an automatic savings account or an automatic transfer to an investment account, and choose the monthly amount so that when she's in her seventies she won't NEED a "death benefit." It's up to you whether to do this literally or just to do it by accounting in your general retirement account.BigMike wrote:BUT...I am 7 years older than my wife, so chances are she will outlive me, perhaps by a significant number of years. When I brought this up, our agent suggested that I might want to supplement with a $250K whole life policy that would provide her with a death benefit if I were to pass away when, say, she's in her 70s, and our term insurance is gone.
bluemarlin08 wrote:I hope your agent didn't tell you that you would receive a guaranteed 4.5% return on premiums paid, because that is not true for any Whole Life policy.
livesoft wrote:Money invested in TSM grows virtually tax-free, too. All unrealized capital gains are tax-free. If you die, the heirs get all the gains tax-free. One does pay a small amount of taxes on the qualifed dividends that TSM pays out every year. The taxes amount to something like 0.3% of the invested amount, so that is not something to worry about.
nisiprius wrote:Set up an automatic savings account or an automatic transfer to an investment account, and choose the monthly amount so that when she's in her seventies she won't NEED a "death benefit." It's up to you whether to do this literally or just to do it by accounting in your general retirement account.
If you decide to consider going the whole life route, try this experiment. I'm dead serious, I mean it literally. When you go to your agent, write down on a sheet of paper "In the [Exact name of policy being proposed] policy, whatever portion of the premium goes to cash value is invested and grows at a minimum of 4.5%," date it, and ask your agent to initial it.BigMike wrote:No, I could have misunderstood, but my understanding is that whatever portion of the premium goes to cash value is invested and grows at a minimum of 4.5%. Am I wrong, or is this how whole life policies work?
Of course, if the person gives you a sad look, "Why don't you trust people," that's a cue to run.
texasdiver wrote:If you die after you are both retired that should leave your wife better off rather than worse off.
With the same portfolio and income you had as a couple she now has one less mouth to feed, one less car to pay for, 1/2 the health costs to deal with, one less plane ticket to buy every time you travel and so on.
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