Life insurance (though it shouldn't be) is still a hotly debated topic. There appear to be many different types of life insurance available, but there are only two. They are Term Insurance and Whole Life (Cash Value) Insurance. Term insurance is just that: insurance. It safeguards you for a set amount of time. Whole life insurance includes both insurance and a cash value account. Consumer reviews, in general, and for a long time, have recommended term insurance as the most cost-effective option. Nonetheless, whole life insurance is the most common in today's culture. Which one should we purchase?
Let us now discuss the objective of life insurance. Everything else will fall into place once we get the appropriate purpose of insurance down to a science. The goal of life insurance is the same as the goal of any other sort of insurance. Its purpose is to "protect against loss of." Car insurance protects your vehicle or the vehicle of another in the event of an accident. In other words, insurance is in place because you are unlikely to be able to pay for the damage yourself. Homeowners insurance protects you against the loss of your house or its contents. So, since you are unlikely to be able to afford a new home, you get insurance to cover it.
The same is true with life insurance. Its purpose is to protect you from the loss of your life. If you had a family, it would be hard to sustain them if you died, so you get life insurance so that if something happened to you, your family could replace your income. The purpose of life insurance is not to make you or your descendants wealthy or to give them a motive to murder you. Life insurance is not intended to assist you in retiring (otherwise it would be called retirement insurance)! The purpose of life insurance is to replace your income if you die. But the wicked have made us believe differently in order to overcharge us and sell us all kinds of other things in order to get paid.
What Is the Process of Life Insurance?
Rather than complicating matters, I will provide a straightforward explanation of how and what is included in an insurance policy. In reality, it will be oversimplified since otherwise we would be here all day. Here's an example. Let's pretend you're 31 years old. A typical 20-year term insurance policy for £200,000 would cost around £20 per month. Now... if you were to get a £200,000 whole life insurance policy, you may spend £100 each month for it. So, rather than charging you £20 (the genuine cost), you will be overcharged by £80, which will be deposited into a savings account.
This £80 will now be deposited into a separate account for you. Typically, if you wish to withdraw part of YOUR money from the account, you can BORROW IT from the account and repay it with interest. Let's assume you take £80 a month and deposit money in your bank. If you went to withdraw money from your bank account and were informed you had to BORROW your own money from them and pay it back with interest, you'd probably go clear above somebody's head. However, when it comes to insurance, this is acceptable.
This is because most individuals are unaware that they are borrowing their own money. The "agent" will almost never explain it in that manner. Companies make money by persuading others to pay them, then turning around and borrowing their own money and paying even more interest! Another example is home equity loans, but that is a topic for another talk.
Let us now discuss the objective of life insurance. Everything else will fall into place once we get the appropriate purpose of insurance down to a science. The goal of life insurance is the same as the goal of any other sort of insurance. Its purpose is to "protect against loss of." Car insurance protects your vehicle or the vehicle of another in the event of an accident. In other words, insurance is in place because you are unlikely to be able to pay for the damage yourself. Homeowners insurance protects you against the loss of your house or its contents. So, since you are unlikely to be able to afford a new home, you get insurance to cover it.
The same is true with life insurance. Its purpose is to protect you from the loss of your life. If you had a family, it would be hard to sustain them if you died, so you get life insurance so that if something happened to you, your family could replace your income. The purpose of life insurance is not to make you or your descendants wealthy or to give them a motive to murder you. Life insurance is not intended to assist you in retiring (otherwise it would be called retirement insurance)! The purpose of life insurance is to replace your income if you die. But the wicked have made us believe differently in order to overcharge us and sell us all kinds of other things in order to get paid.
What Is the Process of Life Insurance?
Rather than complicating matters, I will provide a straightforward explanation of how and what is included in an insurance policy. In reality, it will be oversimplified since otherwise we would be here all day. Here's an example. Let's pretend you're 31 years old. A typical 20-year term insurance policy for £200,000 would cost around £20 per month. Now... if you were to get a £200,000 whole life insurance policy, you may spend £100 each month for it. So, rather than charging you £20 (the genuine cost), you will be overcharged by £80, which will be deposited into a savings account.
This £80 will now be deposited into a separate account for you. Typically, if you wish to withdraw part of YOUR money from the account, you can BORROW IT from the account and repay it with interest. Let's assume you take £80 a month and deposit money in your bank. If you went to withdraw money from your bank account and were informed you had to BORROW your own money from them and pay it back with interest, you'd probably go clear above somebody's head. However, when it comes to insurance, this is acceptable.
This is because most individuals are unaware that they are borrowing their own money. The "agent" will almost never explain it in that manner. Companies make money by persuading others to pay them, then turning around and borrowing their own money and paying even more interest! Another example is home equity loans, but that is a topic for another talk.
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