Without Profit or With Profit


Whole life insurance is a permanent and cash value policy that allows for gaining a return with your investment. A permanent policy or whole allows the insured to provide benefits upon dying and a cash value policy simply allows to build profit with your investments. Depending on what type of whole life policy the person receives, that policy will decide whether the insured has investment options or simply that the rates and monetary outcomes will be fixed.

Whole life allows for coverage for the insured person their entire life while another type of policy called term insurance is quite the opposite and is a set amount of time such as 10, 20 or 30 years. Whole life is a pretty significant higher payment per year while term is more affordable because of the simplicity and non cash value.

The Simple Man’s Policy

Term life insurance is a great policy for the person that makes less than $250000 a year and is only interested in a simple payment plan to take care of their beneficiaries in a set amount of time. Additionally, the term life is also a good option for someone that wants to keep their investments separate than a life vs death scenario or might have savings already squared away in other investments.

Making Money and Saving for the Inevitable

Whole life can be quite diverse and also more structured. The benefits of whole life are quite straightforward when comparing it to term insurance but the capacity of these benefits can be more complex. While term is simply temporary insurance for a set amount of time and provides only a death benefit; Whole life provides a policy for the life of the insured and cash accrual for members of the family. The policy is designed to build tax deferred cash value with dividends or interest over a period of time while making payments.

Annual Price Comparison of Both Term and Whole

The annual cost of whole life insurance and term can obviously vary because of age, health,  and size of investment. When comparing prices of term and whole insurance there is quite a difference because a portion of the whole life payment is going into investments. Here is a small ballpark case study that involves price comparisons of term and whole life:  

Healthy 35 yr old Man Term Insurance Policy

  • $430/ year for $500,000

Healthy 35 yr old Man Universal Whole Life Policy

  • $4,400/yr for $500,000

It is worth noting that the term policy can be changed later into a whole plan but there will be a fee involved that most likely will not benefit the insured. When looking at the study above and the annual payment differences; A person would understand if the lesser payment is better in the long run for them based on current finances and occupation.

Participating and NonParticipating Policies

So let us look at the definition of participation; Participate is to take or have a part or share. So simply the insured has the ability to take part or not take part in the profits earned by the company which is part of your investment and is usually given in bonuses or dividends. These profits are earned from a group of policyholders that are all participating and the company uses this money to invest. Nonparticipating policies are paid a guaranteed sum from which both parties agreed upon at the maturity of the policy such as the death benefit and usually have a lower payment..  

Both of these policies are used with term and whole plans but cash value policies such as whole life are more common because it is simply another option to gain a return. It is also good to understand that these 2 different participation types are among a number of other different whole policies. Participation loans are being used more often with term policies because of the obvious advantages of gaining a return of your investment.

Is Your Debt out of Control?

the benefits of a costco visa credit cardIf you are anything like me, you know of the nightmare getting out of debt can be. Over just a few short years, multiple bad decisions when it comes to finances and spending can leave you facing consequences for years, if not longer. Regardless of how bad you may have allowed your situation to become, there is an answer other than filing for bankruptcy.

I was one of the lucky ones. I had a career waiting for me with a nice salary after graduating college. I was going to take over one of the manager positions with the business that had been in my family for over thirty years.

In my younger days, words like income, budgeting, and planning ahead meant nothing to me. All I knew and cared about was how high my hourly wage was compared to other positions within the industry. I was making great money to say the least.

The problem begins

Because of my income, I was right away approved for a couple of credit cards. However, because of my lack of credit history, each of them came with a high interest rate. I can remember taking a group of my closest friends out for dinner and several rounds of drinks when the first card arrived in the mail.

Within the next year or two, I added a mortgage, truck note, and a motorcycle payment to the list of monthly bills. While most mature adults would have started using the credit cards more wisely with the addition of the other responsibilities, that simply was not the case for me.

I can still vividly remember the first time one of cards were denied. I was on vacation in southern Florida with three friends, one of which was depending on me to cover the bill. Less than a week later, the same thing happened with another card. Eventually, I would have to use one card to make the payments on another, just to make a small advance towards lowering the original debt.

Getting stuck

I was in serious trouble and it felt like I had nowhere to turn. I couldn’t go to my parents for help, they were trusting me to run a six figure company for them. Seeing the shambles my own credit was in might have caused them to rethink my position.

Due to all of the focus and attention on my credit cards, I received a letter in the mail concerning my motorcycle. It had been almost six weeks since my last payment. I was making a great salary and working well over 40 hours per week. Where was all of my money going?

Turns out, the amount of my debt I had accumulated was much higher than I had anticipated. Payments were being deducted automatically from my checking account and I wasn’t taking the time to figure the amounts into what I had available. It seemed like every week I was receiving a new notice in the mail of an overdue balance. I was no longer approved for borrowing money from my bank.

When there was nothing else I could do, I began looking for the best place to get a debt consolidation loan. Subsequently, within a matter of weeks, all of my debt had been compiled into a single monthly payment. There was a lot of work ahead of me, but I felt as if I could finally breath after holding my breath for what seemed like months.

Don’t allow yourself to make the same mistake I did. If your debt is starting to get out of hand, don’t wait until the last minute to do something about it. Contact someone who knows how to help today.

Survival Tips For Families On a Budget

family-eating-at-the-table-619142_640Family units tend to experience different seasons in life. It is inevitable to come across a period where there are more needs than the income. Shifts in finances may be sudden. With inadequate preparation, such changes may have an adverse effect in a union.

While we all anticipate and hope for financial stability, it is essential to arm ourselves with the knowledge and muscle to face a turbulent economy. Preparations helps a family sail through such storms with ease and grow stronger when the coast is clear.

Here are some tips to survive when money is scarce with minimal conflict;

Identify Priorities and Draw a Budget

There is no better time to agree and engage consistently as when facing a financial crisis. It is crucial to make well-calculated moves, especially where money is concerned. Engaging each family member to find out their most pressing needs is vital. A roundtable discussion to deliberate works best.

When all members are brought on board and needs well represented, decisions are made with a clear mind. Funds are therefore to channeled urgent matters first. As a family, you will less likely have to borrow to cater for pressing needs as this will have a provision already.

Make provision of every coin with people’s needs represented. A balanced budget that provides for everyone is essential. Stick to the budget.

Compare Before Committing and Settle For Cheapest Deals

Once you have agreed on what you need as a family, you need to shop around to identify the best deals. Some prices are brand name influenced. Consider functionality more than the brand. With little money to spend, you cannot afford to play brand loyal. Browse through available options to see where and how you can get the best deal.

Cheap auto insurance for people with no citations can work well at this time. Check which companies are offering such and only commit once you have exhausted all other options.  Deliberate and discuss so that you are all on one page.

You do not have to forego family outings and vacations altogether, just look for cheap options. Many picnic sites are free. Get your meals nicely made from home and have fun. Carry enough games. For a holiday consider self-catering apartments. Most of the units are cheaper than hotels as you get the entire house or apartments for yourself as opposed to paying for rooms. You can agree on cooking your meals and refrigerate. With the home away from home set-up, you are more in control of how you will use everything.

Be Creative

You will be amazed at how creative you can get when there is a need. Look around and see things that you can put to better use. Check online for ideas to DIY where possible and do it.  To celebrate a member’s birthday, you can bake the cake as a family instead of ordering. It will be fun to have everyone participate. Decorate the house using paper and follow recipes to prepare sumptuous meals. The Internet has made life easy. Just wear your creative hat, twist some things here and there and enjoy!

Avoid Borrowing and Use What You Have

With the easy access of credit, spending money one does not have is rather easy. It calls for a lot of financial discipline to avoid borrowing. Remember, borrowing attracts interest, and the last thing you want is getting more debts piled at this time. If possible, collect all the credit cards in the family and keep them safe. Some members may be more inclined to borrowing than others, be each other’s accountability partners.