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?

  1. 0 POINTS
    Trevor Toft
    Vice President, State Bank Agency,
    First things first, this does not sound like a "term" policy.  A term policy includes a paid premium and at the end of the designated time of coverage, the policy "terms" or cancels.  Many policies will offer a guaranteed continuation of coverage, however this is at a MUCH higher rate than the term portion of the policy.  What you are explaining sounds some what like a Universal Life policy with a guaranteed premium of 15 years.  With the way interest rates are today, I find it hard to believe you would receive $50,000 at the end of the "term", regardless of what kind of policy it is.  The one thing to remember, is any insurance policy which offers guaranteed pay outs are based on assumptions in the market.  My golden rule when selling life insurance is if you need it for debt, pay ONLY for term coverage.  If you need it for income replacement or final expenses, go with whole life.  Only if you have the money to spare on not so risky "investments", is a Universal Life policy fitting.  (My opinion only and sure to be argued by other agents.)
    Answered on November 12, 2013
  2. 0 POINTS
    Harris Simkovitz, CES
    Managing General Agent, Simkovitz & Associates, LLC, Marlton, NJ
    You need to provide more information, such as your age, health condition, and work situation for starters.  No one can advise you based on the limited information you have provided and would be foolish to do so.  This is a common mistake most agents make.  There could be 10 reasons why you should or why you shouldn't buy this policy off the top of my head.  Who is the carrier?  Please provide the reason you inquired in the first place, and what you hope to accomplish down the road by owning life insurance.  The answers may seem obvious, but you would be surprised how things could look quite different once you organize your thoughts.
    Answered on November 12, 2013
  3. 285 POINTS
    Keith Prim
    Agent, Farmers Insurance Company, Dallas, TX
    What you are describing is not term insurance.  I usually recommend term insurance to pay off specific items such as mortgages and college education funding for children.  I recommend a smaller face amount permanent policy to take care of final expenses and income.  Every person's situation is different.  I would recommend you revisit exactly what you want the life insurance to accomplish.
    Answered on November 12, 2013
  4. 1805 POINTS
    Samuel Smith
    Enrolled Agent-licensed to practice before the IRS, Samuel N Smith, EA, South Carolina
    If you understand the "present value" of a dollar vs. "future value" of a dollar then you realize that when you are working with a policy that says you pay this premium for X years then you do not have to pay the premiums for years 10-13 or what ever, they are simply having you pay inflated costs today so that you are prepaying those costs today. What is your objective? Is it short term or long term? If it is short term then buy a term policy from a reputable company . If it is long term then buy a whole life policy from a reputable company that has a history of delivering the rates they quote.
    Answered on November 13, 2013
  5. 65 POINTS
    Mark Elliott
    Owner/Agent, MKE Financial Services, Florida
    A term policy is for a Term 1, 5, 10 15, 20 25, 30 years. Sounds like a whole life or a Ul policy. Need more info from you. Need your age , DOB, where you live. Your health is it good or bad. Do you smoke or not. Most of all , What do you need it for??????
    Answered on November 13, 2013
  6. 110 POINTS
    Deborah Kittredge
    Agent, American Financial Associates, Inc., North Port, Florida
    There are some new life products that offer a return of premium and other features that they call living benefits but your description doesn't quite fit what I have seen. Like the others who have responded, more information is needed to give you a better answer. Think about what your goals are for the protection and ask again with more information so the agents can better advise you.
    Answered on November 13, 2013
  7. 0 POINTS
    John "Jake" Nugent II
    Solution Provider, Madison Strategic Partners Group, Greater New York City Located, Serving Clients Nationwide
    There are many good responses to your question however, there is one IMPORTANT question that you should ask yourself first;

    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!
    Answered on November 13, 2013
  8. 4249 POINTS
    Gary Lane
    President, Lane Independent Agency, Southern California
    I can obtain for you New York Life Level Term Policies now, for 10 years, at a substantially reduced rate. I an also obtain 15 or 20 year term at low rates. Wouldn't you rather be with an excellent company, with high ratings, and know prompt payment could be made? You might also consider New York Life's Universal Life, and end up getting Life Insurance down the road for FREE. This is also an option with our Whole Life Permanent Insurance.
    Answered on November 13, 2013
  9. 1370 POINTS
    Jack Heller
    Owner, Insurance Browser,
    Let me offer just a comment of a Life Insurance Truism: Life insurance will never be less expensive than the day you buy it. What ever type you decide upon ( and there are lots of choices out there)but buy what you can afford as early in Life as you are financially able to do so. Every day you live you are one day older and moving toward higher costs that are naturally dependent on age.
    Answered on November 14, 2013
  10. 4249 POINTS
    Gary Lane
    President, Lane Independent Agency, Southern California
    The vast majority of folks with term, do not keep it to the end of the term but let it lapse. Thus you find yourself starting to look all over again. If you cannot yet afford Whole, I suggest you start with term for 10 years and then convert with a company you trust. The older you get the harder and more expensive it becomes. New York Life has just announced a reduction in price in its 10 year level term policies, which can convert to Whole Life.
    Answered on November 19, 2013
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