A insurance agent suggested me a 15 years term insurance scheme with 25000 USD death insurance and 25000 USD accidental insurance. I need to pay 4500 USD annually for 12 years, at the end of first 4 years I get a return of 15,000 USD, and at the end of another 4 years, I get a return of another 15, 000 USD and at the end of 12 years I get 20,000 USD return. I don’t have to pay for 13th, 14th and 15th year and at the end of 15th year I get paid 50,000 USD. Should I take it? Or Is it too good to be true? or I’m being fooled?
Should I Take A 15 Years Term Life Insurance?
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What is the goal?
Are you in need of insurance to protect your family or estate from debt? If so, is it for a fixed period of time? Can you easily afford premium payments?
If this is the case, a traditional term policy would be useful. Term policies offer lower annual premium costs compared to permanent life products as they most likely are covering you for a period of time that will pass before you are actuarially expected to die. This product does not solve this problem.
Are you in need of insurance in order to leave money behind for a loved one or charity when you die?
In this case, a permanent life policy is the way to go. Depending on your needs, you can choose Whole Life or Universal Life products, both offering you a cash accumulation feature that can be accessed for a loan or one-time withdrawal to pay for unexpected expenses. Obtaining these policies at a younger age, allows for a longer period of cash accumulation, offsetting your premiums in the future. Further, Universal Life products allow you a flexibility in how much you pay and when, provided that you have sufficient cash value in the policy.
Are you looking for a low-risk, tax-deferred investment vehicle?
Again, in this case a Universal Life product (UL), including an Indexed UL will give you the benefit of tax-free (deferred until you withdraw cash) growth of your money, indexed to the stock markets, with downside protection or guaranteed minimum growth on your cash. The added benefit is that your death benefit will always be in excess of your policy value, therefore protecting the policy beneficiary in the event that you pass unexpectedly. FURTHER, depending upon whether you set up an Irrevocable Life Insurance Trust (ILIT), this is a way to move money out of your taxable estate, grow at a conservative rate and pass to your heirs tax free!
If you are looking for a get rich plan, make sure you have a qualified financial advisor not linked to the soliciting agent, review the proposed product. Being fixed on the opportunity to make money may distract you from the fee-loaded policy charges or the less-than-attractive, actual return on your money at the end of the day!