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#483891 01/10/09 11:11 PM
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A family member passed away recently and it truly brought home the need to get my finances and other things in order, starting with life insurance. What are the differences between term (I think that's what it's called) or permanent life insurance. How much of a difference are there in rates?
I know I can get life insurance for my kids, can I get it on my parents as well?
I know my ex husband said at one point he had life insurance on me, even though he was married to someone else (a scary thought...lol) is that even possible?
Just looking for some insight on the topic of life insurance.
Thanks!!!


Dianne Walker

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Thank you for the question. The easiest way to distinguish between term and permanent insurance is this...term insurance is like renting an apartment and permanent insurance is like owning a home. Of course when we rent we have coverage (i.e. roof over our head) for the term or period of time needed. At the end of the term or lease we walk away knowing that had there been a storm we had protection. In the case of term insurance at the end of the term you walk away knowing that had you died during that term your family or beneficiary would have received the proceeds from the policy. When we own a home after some time (barring the current market) we have equity. In a permanent life policy it builds cash value that you can borrow against. In terms of the rates. Permanent policies will tend to cost more because of the cash value piece.

Yes, it is possible that your former spouse has a life insurance policy on you while he is married to someone else. Likely, he purchased the life insurance policy while you two were married when he had an insurable interest. As long as he maintains the premiums it is legal for him to have the policy. Now if the policy lapses for some reason he would not be able to get another policy as there is no longer an insurable interest (unless the two of you have young children--that's a little more complicated). Hope that helps.


Denise Castille
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Thank you....Very helpful...We do have 2 children ages 17 and 12. Would they still be considered "young"?

Can we get health insurance on parents?

My aunt passed away recently and just the problems the family went through because her insurance lapsed last year, was a nightmare.


Dianne Walker

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I'm glad the information was helpful Dianne. Absolutely your children are still considered "young". They are young enough that the premium on a permanent policy would not be overly costly. You of course would remain the owner of the policy until such time you were ready to change the ownership of the policy, if ever.

Unfortunately, you probably won't be able to get health insurance on parents unless your parents are dependent on you for support. I will do some research and perhaps write an article.

When my father died in 2001, he did so without a life insurance policy (though it believed he had coverage - he had an accidental death/dismemberment policy--you can't know how guilty I felt for not having reviewed his insurance policy). Prior to his death he was in a coma for more than 30 days. He spent his last days in hospice care. He was a medicare beneficiary. Fortunately, he had some savings and we were able to bury him with diginity.


Denise Castille
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Denise,
Thanks for sharing about your dad.
I thought one of my family members had told me that they had taken out insurance on their parents in order to pay for funeral costs...morbid but necessary.

If you could write an article on that, it would be extremely helpful. Insurance and taking care of aging parents, what the children (or caregiver relative) should make sure is in order, what questions to ask..etc...
Also, I would love to know about how to go about shopping for life insurance. I tell you, when my aunt passed away with no insurance at all, it truly hit home, so I'm really trying to get those types of things in order.



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its sad that in a bad economy a lot of people cancel thier insurance

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We don't have life insurance; I've given it thought at times but because we both have enough savings to cover funeral costs and my son is an adult I am counting the pennies it saves. I suppose there's important pros and cons.


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Hi Dianne:

Saw your post just now - sorry!

Believe it or not I started selling life insurance for Primerica in September of this year when I got my temporary life insurance license. My boss has been selling it for years.

Yes, times are hard right now - but he firmly believes in getting at least 1 year term insurance and renew as you can. So many folks, including me, never get around to doing this along with a will. I pray to God I can do BOTH soon as I would hate to leave my only child (now 25) burdened with trying to bury me and dealing with the courts in regards to my possessions. In ending a "living" will is also good to have as it states your wishes. My daughter hated me telling her my wishes, but it was something we needed to talk about. LOL, I am also selling the prepaid legal part of the business too.



Originally Posted By: Dianne W - Editor
A family member passed away recently and it truly brought home the need to get my finances and other things in order, starting with life insurance. What are the differences between term (I think that's what it's called) or permanent life insurance. How much of a difference are there in rates?
I know I can get life insurance for my kids, can I get it on my parents as well?
I know my ex husband said at one point he had life insurance on me, even though he was married to someone else (a scary thought...lol) is that even possible?
Just looking for some insight on the topic of life insurance.
Thanks!!!

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Hi Denise:

Thanks for the info, helped me better understand selling life insurance as all this is so NEW for me and just doing it as there was nothing else out there.

If you don't mind my asking, do you sell insurance?

If yes, any tips to pass my way?

This is my first time at living on commissions only, not enjoying the experience at all as it has been over a month since I got a commission payment - yikes!!!

But folks have been doing this for years and successful.

I look forward to reading more informational articles and posts from you - so glad I made some time to stop by and visit wink smile blush

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I find that insurance is a need that changes and evolves, depending on where we are in our lives. For most of us, in our earlier years, when our income is limited and assets are slim to none, we need insurance in case the unforseen happens so that we do not become a financial burden for our loved ones. As we get older and our earned and unearned income potential increase, we develop a need for permanent insurance products, and there are many to choose from. Nowadays there are some very interesting products out there - Split Dollar, Universal Life, ROP (Return of Premium - returns all premiums paid after 20-30 years, as long as the policyholder survives) and so forth. The idea is to find the product that's right for you at every given stage of your life.

Last edited by Encore DT; 06/06/12 05:16 PM.

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