WHAT'S THE BEST TYPE OF LIFE INSURANCE?

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I have been coming to you.

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Me?

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All right. I had a question about uh, I had a question about life insurance. I know I'm trying to be invested in the stock market, but at the same time, I only have life insurance through my job, which is like maybe about twenty thousand if I pass away. I don't know if you know, if it's on the job or not. But I'm not sure what to get and how to go about getting.

You know what I mean.

I'm on thirty two and I got a four year old, so I want to make sure she's straight, okay, because I know you said something about don't invest to the stock market and sell you out of day. I got about five thousand credit card there, but I'm working that down as a speech.

For sure, we appreciate the question, Troy, I get a pen this pencil broke. Well. The first thing I would say is that group life insurance is what you have at your job. It's always beneficial to sign up for your job's life insurance plan because usually it's like next to nothing as far as the premiums, Like you might be paying like thirty dollars a month or ten dollars a month for your.

Life insurance, so it's not that much.

Yeah, the risk of war ratio is pretty you know, it's only your favorite as far as that's concerned. But the downside we're having that as your only life insurance is that magnet.

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The downside with having that as your only life insurance is that a most of the time it is not portable, meaning you can't take it with you. And also you're limited as far as how much insurance you can get. Usually it's like one or two times your salary, and most of the time it's usually like group term. They don't really give you too many options. So getting insurance outside of that, the first thing that you want to do is figure out you know how much insurance you need.

Permanent insurance is going to last your whole life permit.

Permanent insurance has different names, but most popular whole life insurance Universal life insurance. So the difference between term insurance and whole life insurance is that a term in shurant is only going to last for a term ten twenty years. It builds no cash value, like there's no money that you saved while you're paying it. So the benefit is that the premiums are lower. So like let's say you

The odds are that you probably.

Will live longer than that term, So that means that now you pay premium for twenty years, but you don't get anything back from that.

Where a whole.

Life policy, the premiums are higher, like let's say a million dollar policy. For a whole life policy, premiums might be six hundred seven hundred dollars a month, So that's that's higher, but it lasts your whole entire life, meaning it's not going to expire, and it also builds us called cash value. Cash value you can kind of look at it like equity in the house.

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Hey, you have money that grows inside of a policy, and you can actually borrow from that policy down the line, and you can vow from and you can use that money for a variety of different things. You can use that money to pay for your kids college. You can use that money to buy a car, to put a down payment on a home, or anything that you want, you know, start a business, whatever.

So it's another form of savings.

So from there, so like I said, so from there, you want to see, okay, what's affordable in my budget. And it's always good to work with an insurance agent because the insurance agent will you know, help you with this whole process and just kind of understanding it. But usually you don't want to really go over two point five at the most, probably five percent of your income

Dollars a month.

That that for most people, that should be affordable if you're making one hundred thousand dollars, not like I said, you can be making one hundred thousand dollars and not have any money, or you can make it one hundred thousand dollars and have you know, ten thousand dollars a month left over if you don't have any expenses at all. Everybody situation is different, but just on average because you don't want to put all your.

Money into insurance. You want to do other things.

You want to you know, put money into your four one K, put money into your child's account, put money into an investment account, pay off your debt.

So the only way to do that is to really, you know, do something that's affordable.

So then you can look at the situation from a more educated standpoint to say, okay, this is a man of insurance that I need. This is the budget that I feel comfortable with, and then you can do okay, I'll start off with term and then you know, switch over down the line to the whole life because that's one of the benefits for terms that you can always change over or you can do a combination of both.

Like let's say your budget's two.

Hundred dollars a month, you can do half of it in term, you can do half of it a whole life, and that way, you know, you still have permanent coverage, but you're not spending over your budget. But that's another thing as well. You can do a combination, so you know, it's it's it's kind of a long answer because it's not like a simple answer to give.

It's a lot of different variables that go into play.

But that's that's something some of the education that you should have when making a decision about insurance. And if all else fails, just get term insurance because some insurance is better than no insurance. And the most important thing is to protect your family. So you have a child, so that's the most important thing. You can always figure it out later on, but you know, as far as

Oh yeah, most depth, I mean two hundred or even more, even six hundred willing you be killing me in a budget because I don't have a mortgage or I'm not paying rent because I inherited a house in twenty thirteen. So I'm fixing on that. I know how to do construction on the house, so I don't have a mortgage.

All right, well, no problem, all right, all right guys.

And then also if I so, especially for the insurance and like retirement questions, if you want so, I still have my financial planning practice.

I just I'm not actively doing it anymore. But my dad actually the financial advisor on my sister. So I say that at least once a call.

But you know, if you want, I think magnet, if you could just put the information in the chat, anybody can reach out to them and get a consultation if you want some some you know, questions about actually how to implement different things, different strategy. Like I said, you can work with whoever you want with, but it is something that I did for over a decade and still actually end licensed and I still have my practice. I'm just not hands on like me personally, but still kind