Quote:
Originally Posted by FurnaceFace
I was in the industry last century. My view is there is a place for both, and I think Slava articulated this in one of the posts above.
I bought a permanent policy where I payed the fees for 20 years and then they stopped. The policy has grown over this time, accumulating cash value I can borrow on if ever required, and overall value which can be used as a retirement vehicle. Perhaps I drank the koolaid but the idea of a liquid savings component and retirement option appealed to me. Had my personal situation warranted it, I'd have supplemented with term however the perm policy coupled with group policy insurance covered any debt (mortgage) requirements I had.
Buy term and invest the difference is a viable option assuming you follow through. I often saw people buy term and spend the difference which didn't help them. I look back on it now and wonder about some of the people who cashed in their policies would do it again. I think of one guy I knew from university who cashed in his policy his parents bought when he was a baby. The policy gave him basic coverage, cost nearly nothing, and I think would have been a useful financial tool for him now.
The only real advice I'd give is to gather information like you're doing, evaluate it and make the decision with the full picture in mind. Everyone's scenarios are different. If you can find someone in the industry who can help you learn about all the options and build a plan for you then you're further ahead than a lot of people.
I'd also say whatever you do, do something, have a plan. I will never forget the one account I serviced. Single guy, somewhere in his 40s, lived in an older war time house in the somewhat sketchy part of Regina. He perhaps had $40k in net worth and said he wasn't interested in saving anything or looking at retirement options because "the government will take care of me." I'm guessing this guy is retired or nearly retired now and I wonder if his opinion has changed. As someone in my early 20s at the time I left his house saying "that will not be me" and now that I'm about his age I'm happy to say I'm nowhere close.
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I'm obviously biased here, but I do think that is a significant point. The fact is that you're going to pay the same amount for a policy whether you talk to an
independent advisor about it or not (do yourself a favor and talk to someone who has access to a variety of options for you and not just one company's proprietary stuff). Even if you have done the research online or wherever, why not sit down with someone who knows the area and at least make sure that what you're planning and think is right is backed up by someone with that knowledge?