Maybe I just don’t understand what they’re doing. BUt it seems to me if I take out a 10 year policy that costs $100 per month, I’m betting that I’m going to die within that period of time and the company is betting that I won’t or that they won’t have to pay out. If I get to the end of that 10 year term, then I’m just out $12,000. What am I missing?
In: 116
My example for my 10 year term may help make sense. Two years ago I bought a business I have a vendor takeback loan to pay for and had 21 years left on my mortgage. All in all I owe about $600,000. My coverage is for $600,000 which my partner can use for whatever. Pay off house, pay off business, go back to school, move, whatever. I also have critical illness, disability, in case I can no longer run my business, but I’m alive and need that income.
At the end of 10 years I will not owe 600k and will no longer need that coverage. It was cheap to get 600k because I’m young. If I got whole life for 600k it would not have been cheap and I’d be over-insured in year 11 and beyond. In year 11 I may want that money for something else or we may be in a place where we can pay off our mortgage early.
Latest Answers