Life Insurance: Term vs. Whole Life

Term vs. Whole Life?

This is a no brainer... TERM! Now, I can guarantee if you have ever asked an insurance agent with a company other than Primerica then you have probably be told the opposite. Why do I single out Primerica from my attack on whole life? Because, Primerica doesn't offer anything other than term!

Now for an explaination on my opinion. Term is cheaper for more coverage (much, much cheaper). Why is this, well term life will cover you for X years and pay out X amount. That being said, here's an example... if you buy a $300,000 policy for 35 years when you are 30 years old then, you (or your beneficiary to be more exact) will be paid $300,000 if you die before the age of 65. If you outlive the policy, then there is no cash value. That probably doesn't sound very good if you don't die. But, hey what is insurance for? It is an insurance if something unexpected happens.

And what about whole life? Or, other names could include Universal Life, Term to 100, etc.

Here is an example of a whole life policy: $100,000 coverage, small cash value (very small... say a few thousand saved within a decade or so) if you decide to withdraw it. How does this work? Well, when you die (at any age) your beneficiary receives $100,000. Now this may sound good on the surface... death benefit paid at any age, small cash value! But, you forgot to ask one question! How much is the premium? Well, the premium for these two examples would be drastically different! The whole life policy could cost upwards of 10 times as much as the term policy for 1/3 the coverage!

FAQ:

Q: So, if I buy term not whole life, then what happens if I outlive the policy?
A: Buy term and invest the rest. What does this mean? Buy term insurance and invest the difference between what you pay for term and what you would have paid for whole life. This strategy, if paired with your RRSP or 401K will ensure that by the time your 35 year term insurance expires you will have more than enough in your RRSP to ensure all postmortem obligations are covered. In essence... you will be self insured! That's a pretty good place to be!

Q: If term is so much better, why does my insurance agent suggest whole life?
A: His commission! I'll tell you right now, it isn't with your bet interest in mind. He stands to make 10 to 100 times the commission on a whole life sale as he would on a term life sale. Find a new agent! If you live in BC call me, if you need a referral outside BC I can recommend someone.

Cheers,
R

PS. Here's another opinion on this subject from someone you probably know... Suze Orman (Bestselling auther and TV personality). Take a quick look at this 3min video clip:

Currently Reading: February 2009

Here's the updated February Currently Reading list:

How to Get Rich - Felix Dennis

Hedge Hunters: Hedge Fund Masters on the Rewards, the Risk, and the Reckoning

The Wolf of Wall Street

Never Eat Alone: And Other Secrets to Success, One Relationship at a Time

and

The Snowball: Warren Buffett and the Business of Life

Enjoy,
R

Felix Dennis' Poem "Never Go Back"

Check out Felix Dennis' peom "Never Go Back". If you don't know who Felix Dennis is, he is the president of Dennis Publishing (Publisher of Maxim magazine and many more).

Enjoy,
R

Book Review: The 4-Hour Workweek by Timothy Ferriss

The 4-Hour Workweek by Timothy Ferriss - 4.5 STARS
Personal Finance, Entrepreneurship, Small Business

This book is a masterpiece I do believe. Really it just opens your eyes to a completely different way of life. Whether you choose to employ the strategies described within this book or not, you will truly enjoy the journey that Tim takes you on throughout this book.

To be honest a great deal of what is included within this book is not of direct use to me. I am going to school get my Bachelor of Commerce (Bcom), then I am getting my Chartered Financial Analyst (CFA) designation and finally my Master's of Business Administration (MBA) specializing in Finance or Private Equity. All of this in order to allow me to work within and later own my own hedge fund, private equity fund or venture capital firm. Needless to say, all of these directions do not make a 4-hour workweek very possible. Nonetheless, this is an amazing work. AND a real eye opener!

Please trust me on this one and pick up a copy of this and give it a read! It is a great book!

Quick topic spoiler...

Nevermind, I can't do it! This book is way to much fun to read and a poiler truly would spoil it!

Get it at Amazon.com!
Click here: The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich

Cheers,
R

Book Review: Instant Income by Janet Switzer

Instant Income by Janet Switzer - 3.5 STARS
Personal Finance, Entrepreneurship, Small Business

Now, I had a very hard time deciding what to rate this book. It was a very interesting read, covered some great topics and gave some wonderful insights into creative ways to market products and services. I enjoyed the read, at the time I read this though I don't really have a use for the information... I think it may be worth another read. But, we'll see when that happens.

This book covers such topics as: increasing sales of a product from existing customers, making money with affiliates and joint ventures, making money online, writing ads (copywriting), starting and running occasional small businesses and going into business with your employer. I know that looks like a ridiculously ambitious list to cover in just one book, but she does a surprisingly good job. I'd say though, that each topic requires much more information than is included within this book. It is a great starting point for each of these subjects though.

Switzer's real wins within this book are the portions dealing with copywriting, internet marketing, selling to existing customers and how to launch a product (in particular a book or other intellectual property).

Janet Switzer has some very solid experience working with clients marketing and launching their products (most well known client that I'm aware of is Jack Canfield of the Chicken Soup for the Soul empire). She really is an expert within the above mentioned field and it is a pleasure to hear her prospective on these topics.

All in all, this is well worth a read if you are looking for some base info on any of the topics I mentioned within this review.

Take a look at Instant Income here (Amazon):
Instant Income: Strategies That Bring in the Cash

Please let me know what you think of this... Also, I truly believe the information contained within this book is only as valuable as the degree you put it to work in your life!

Cheers,
R

Book Review: Affiliate Millions by Anthony Borelli and Greg Holden

Affiliate Millions by Anthony Borelli and Greg Holden - 3.5 STARS
Internet Marketing, Entrepreneurship

Borelli and Holden give a great overview of the business of marketing affiliate programs. This is a wonderful introduction for anyone interested in how this lucrative business is run or wants to start an internet marketing business of their own.

Now, this book focuses almost entirely on one form of marketing and the is Pay-Per-Click (PPC) advertising. That refers to such services as Google Adwords, Google Adsense, Overture, etc. This is perfect if you are looking for strategies on marketing in this way, but remember very little of this book is dedicated to marketing your own website or blog.

One wonderful aspect of this book is the fact that Borelli really narrows down your search for products and sevices to market. He spends a great deal of time sharing info on particular affiliate networks and how they work (Clickbank, Commission Junction and Amazon).

If this is an area of business you are interested in getting involved in, you currently market on or offline, you own a website or blog, you would like to make money online or you are just curious how this potentially lucrative field works then give this book a read.

Check it out here (Amazon):
Affiliate Millions: Make a Fortune using Search Marketing on Google and Beyond

To your future affiliate millions!
R

Book Review: The E Myth Revisited by Michael E. Gerber

The E Myth Revisited by Michael E. Gerber - 4.0 STARS
Small Business, Entrepreneurship

Michael Gerber really hit a home run with this book on entrepreneurship. This is a classic, and a must read (especially for a small business owner, or someone thinking of starting their own business). It is also a very good read for any mid to high level manager within a customer-centric company.

Gerber goes through the evolutionary stages of a company and goes in depth on pitfalls and strategies of a company at each stage. He also shares real life stories of his experience consulting with small business owners.

Join the "Turn-key Revolution" and create your "Franchise Prototype". I have to agree with the majority of the reviews on this book that I've read and say this is a MUST READ!

Take a look at it here (Amazon):
The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It

Enjoy reading this Small Business classic!
R