Four life insurance policies you should never buy

Despite the title of this post, I am a big fan of life insurance. Indeed, were it not for term life insurance, I could never go to college and have a career as a financial consultant. (My father against life term vs whole life and has bought a small political life two months before he died suddenly at the age of 44 years. That life insurance is served by a network security important to me and my brothers.)

No one knows when their number is high, of course. But regardless, there are two types of people who simply must own life insurance:

While the first condition does not apply to many people, the second condition applies to most of us. If others rely on you, I strongly encourage you to buy term life to fulfill your responsibilities. That said, I want to emphasize that there are many other types of life insurance that you should never buy. Let's look at four that just does not make sense.

1. Issue guaranteed. Guaranteed issue life insurance is touted for television late at night. You've probably seen the ads. The major selling point is that if you apply, you can not be lowered. On the face of it, might seem like a breeze. But there is actually much less to this policy that meets the eye.

First, if you buy a life insurance policy and dies within two years, most policies require the company to just retrieve the premium paid. This means that if you are very sick and do not expect to live long, this may just be a waste of energy. In addition, death benefits are very low and the premiums are expensive.

If you absolutely need life insurance, can not get coverage elsewhere, and think you have the chance to live beyond the period of exclusion (check with your carrier), you may have no choice but to purchase a guaranteed issue policy. But please check other alternatives, such as the senior term life insurance in the first place.

2. Life insurance for children. In general, life insurance for children is a huge waste of money. This is because (thankfully) the majority of children are born healthy and live a very long time. And since children have no income, does not really have any reason to secure their lives, as cold as it sounds. Just because you do not buy insurance does not mean you love your children. Means they are smart enough to put that money to better use-how to save for a college education.

3. Travel insurance / accident. This coverage is very cheap for a reason. Most people arrive at their destination safely, and very few get into terrible accidents. And what does it matter how you die, anyway? Because your family needs life insurance just because he died in an accident rather than a disease? I know this sounds gross, but insurance does not make sense. Rather than wasting your money on these policies, have an extra-large, fresh orange juice at the bar while you're waiting for your flight. Will live longer.

4. The whole life / universal life. Life insurance is a tool, not an investment. With whole life / universal life insurance, you pay a higher premium with the promise that the company will take those extra dollars and invest them for you. The problem is that this type of insurance is very expensive. The investments do not grow, because the cost of eating your interest.

In 29 years as a financial planner, I have not seen the whole life or universal life pay for each customer. Often, people have little to show for these different policies that have poured money into the whole life and universal life policies are the reasons why life insurance companies can afford large buildings and the ads of Super Bowl. The only time that these policies make sense if you have an estate tax problem, but this is a topic beyond the scope of this post.

Life insurance is a very important tool. When used for its intended purpose, is fantastic. This means that you should look at term life to cover the security needs of the family. Ignore the slick are selling life assurance, life insurance, or children, travel and accident insurance, and life / universal life.

What type of life insurance you have? Why?

Reference: http://finance.yahoo.com/news/4-life-insurance-policies-never-180314056.html