1. 552 POINTS
    Ruth Ladas
    CEO, RLI - Ruth Ladas Insurance, LLC, Fort Myers, Florida
    Thank you for the question. You will likely get a different answer from everyone you ask about that. There is no set percentage as a norm. Here's my opinion. I love whole life for several reasons, the most important of which is that you have a fixed amount to pay every month. Products with "flexible" payments leave it to you to have the discipline to make payments high enough to keep the plan going. That you are creating your own bank of money and that you can borrow from yourself is appealing as well. The product is lots more expensive than term insurance. I normally set clients up with a combination of term and whole life. After setting our budget, let's say $150/month. We buy sufficient term insurance to satisfy their short term needs...like to get their children through high school or college...and put the rest of the budget into the whole life product. I hope that this information helps you. It's a good idea to speak with an agent in your local area. I'm in Florida and if you live in my state, please contact me! Good luck.
    Answered on April 17, 2016
  2. 406 POINTS
    Coby Higgins
    Licensed Independent Agent, Texas Insurance Alliance, Little Elm, TX
    There is no set calculation. You first want to make sure you have final expenses covered, at least $7,000 to $15,000. Then you need to consider income replacement for a spouse if married. After that, I generally look at term insurance to cover short term debts including your mortgage. Find a local agent that can offer a variety of companies to find the right ones for you. Even with life insurance companies, it is not one size fits all. They all have different underwriting rules but generally come in around the same price for the same coverage. Let me know if I can refer you to a local agent as we have over 60 offices across the country.
    Answered on April 18, 2016
  3. 21750 POINTS
    Jim Winkler
    CEO/Owner, Winkler Financial Group, Houston, Texas
    That is a great question! I'd like you to think about the insurance expense as a function of the amount needed for coverage, not as a percentage, and here's why: Everyone will have different needs. So while a blanket statement like "housing costs should be no more than 30% of your income" might be a good rule of thumb, that same type of statement would not work when describing insurance coverage costs.
    For example, if I'm a young college student with no car, living at home, and without many possessions, my only insurance expenses are health and life policies (assuming Parent's aren't covering those too). But as a Father, homeowner, family, business owner, and husband, my insurance needs are going to be quite a bit more costly. Even in a situation where there are several exact people like me, our insurance needs will differ, based on the homes, cars we drive, amounts of life insurance we want, our health situations, credit ratings, etc. My percentage could be much higher than yours, and certainly much lower than the one the struggling minimum wage college student would be paying, if we were to compare incomes and expenses.
    So it really boils down to what your needs are, what you can safely afford to spend, and how much coverage you can get on the amount you are willing to spend. The best advice I can give you is to meet with an agent or agents, and look at the different options available to you. I really hope that helps you, and thank you for asking!
    Answered on April 19, 2016
  4. 246 POINTS
    Ronald Mesler
    We Protect Doctors, LLC, Boise, ID
    Honestly, I think you should first examine how much death benefit coverage you need. If you need a large amount of coverage and do not have a lot of free cash flow, then whole life may not even be a good option for you. You may want to consider Term Life to get more coverage for the money if your needs only last for a specific period...think 10-20-30 years. That said, if you have plenty of money and whole life fits your overall plan then so be it. But first, solve for your protection needs and that will drive the answer to your question. Good luck!
    Answered on April 21, 2016
  5. 10968 POINTS
    Tim Wilhoit
    Owner, Your Friend 4 Life, Brentwood TN
    I agree with the earlier comments, there is no set calculation on a ratio of income versus premiums on whole life. The first question is do you need a whole life policy? Not everyone does. I know I will ruffle a few colleagues feathers by saying that, but it is true. Whole life is purchased with the need for a certain death benefit for a loved one for your whole life. I am aware that whole life has become the Swiss Army knife of life insurance that pays for everything, but in most cases term life insurance will give you a larger death benefit for a lot less premium. I recommend sitting down with an experienced independent life insurance broker that can shop multiple carriers for the right product for the right price for your unique situation,
    Answered on April 21, 2016
  6. 1866 POINTS
    Paul Roth
    Senior Commercial and Annuity Specialist, Freedom Brokers, Marion, Carbondale, Harrisburg IL
    To me, the best answer to this question is finding out how much insurance you need first. Use a resource like life happens.org. Thir calculator hyperlink is here, or cut and paste. http://www.lifehappens.org/insurance-overview/life-insurance/calculate-your-needs/ Buying half of what you need is like buying half enough gas to get across a desert.
    The following is designed to cover necessary expenses if you should pass unexpectedly. The below approach is not for tax free asset transfer to your children, or tax free retirement. If you are lucky enough to be in that position, it's a whole different conversation....
    Like most of us,you are on a budget, so to keep premiums that match expenses, I take my clients through a "layering" approach. For instance, if you need to get your children through college, once they have graduated, you no longer have that need. So instead of buying one lump policy you might get a smaller shorter term policy for college, a second longer term policy through your home getting paid off, and a third whole life policy that takes care of final expenses. As the expenses drop off, let the term policy that covered that expense lapse. Then work your budget backward.
    If you think you can't afford it, think of what would happen to your family if you didn't carve it out of your budget. This year I was a judge for an scholarship essay contest for high school kids who had been affected by lack of life insurance purchased by their parents. There were some 37 gut wrenching stories of broken homes, foreclosed houses. In one case, it had gotten so bad at the foster family, the child was witness to a murder of passion. If you don't want that for your family, get started NOW!
    Answered on May 8, 2016
  7. 1976 POINTS
    Ronald Hinch
    Regional Marketing Director, Capital Choice Financial Group,
    How about 0%! Yes, I mean that no percentage of a person's insurance budget should be put into whole life insurance. Whole life insurance is the industry scam! First of all, it is very expensive thus preventing most people from even getting enough coverage to cover final expense, debt, income, and child education. Secondly, the insurance portion of the policy is "bundled" with a cash value that agents will make sound like a wonderful thing allowing the client "emergency" money to borrow on if needed. But, who's money are you borrowing? Well, your own! Now, how can that be a good thing? It is a financial mistake. Instead of whole life insurance I recommend level term protection for 10, 20, or 30 yrs which is very cheap and will give the policy holder the coverage needed in the early and middle years. This savings offered by term life can be invested or even added to debt elimination thus eventually eliminating the need for life insurance at all. Remember, when purchasing life insurance always buy term and invest the difference.
    Answered on June 1, 2016
  8. 22 POINTS
    Insurance Agent, American Income Life, Florida
    Great question! This is a real simple one to answer too. Generally a good rule of thumb to keep things manageable and affordable is 3-4% or $30-$40 a month per $1000 you bring home in income. I recommend getting what is comfortable for you at first to get your "foot in the door" to cover basic expenses, then continue to add more coverage as your life becomes more complex. However, if you feel like you could have potential health problems sooner then later, getting the most you can afford and qualify for would be the best idea. We're all just one hospital visit away from being uninsurable.
    Answered on July 28, 2016
  9. 1492 POINTS
    Jeff Davis
    Insurance Advisor, Lordship Insurance Services, California
    It will all depend. The biggest challenge in purchasing whole life insurance is not getting a policy but making sure it fits into your budget so that if and when your life financial situation changes you don't cancel the policy. The value in Whole Life insurance is how it increases in value over time.

    As far as what percentage of your income should go towards your policy it will depend on what you are earning. For people who earn less than $25,000 a year it can be hard to maintain a policy with a $100 a month premium. If you earn $100,000 a year a $500 a month payment for insurance is not unreasonable.

    Typically if you can keep your payments at 5% or less of your income it should be affordable.

    Contact an Insurance Advisor for quotes.
    Answered on August 29, 2016
  10. 1185 POINTS
    Scott W Johnson
    Manager, Marindependent Insurance Services LLC, California
    Thanks for your question. I would need to know lots more about your financial situation before making exact recommendations.

    However, unless you are extremely wealthy or you have a very specific need for it, I rarely believe that whole life insurance is the best option for clients. Only after fully contributing to your 401K, Roth IRA or non deductible IRA, saving for any childrens 529 account, paying down your mortgage, and successfully creating both an emergency and short term savings fund, would I even explore the option of buying a whole life policy.

    A level term life policy is simple affordable option that can be purchased easily.
    Answered on October 3, 2016
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