Term and whole life insurance policies

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Overview of the difference between term and whole life insurance policies
More free lessons at: http://www.khanacademy.org/video?v=uGpLS_pr7oc

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Melissa Fourie says:

Difference Between Term And Whole Life Insurance will help you pick the
policy you will like or need!!!

Steven Turner says:

Why is that nearly 97% of term policies never pay a dime (no payout)? This
is a major down-size to term insurance. People out-live or just cancel
these term policies.

uarewhatuthinkable says:

The whole life description in this video is incorrect. Please correct and
repost.

Zeliang Jia says:

the guy is totally wrong with his description of the death benefit of whole
life

bill glueck says:

Term insurance is so cheap everybody that is employed and that has loved
ones that depend on them should have $500k to $1 mil depending on your
responsibilities and how much you earn. Buy it at work or from an agent or
both. It’s really cheap and one of the most noble things you can do for
your family.

bahhaziz says:

I’m thinking about buying both

John Thiel says:

This is not a good description of whole life

Paris Harper says:

But question, if you have a term life and you die after your term is up,
and you don’t invest into mutual funds and savings like most families
don’t, what does your family get? Great video btw!!!

Allied Insurance Managers, Inc. says:

This is a great explanation of life insurance. Thanks for keeping it simple
and straightforward.

My Life Insurance For Elderly Parents says:

People always eager to ask about whole life insurance and term life
insurance. Good Video.

Chhewang Sherpa says:

you are wrong. in whole life you don’t have to pay your entire life. it is
not terms. for eg. Zurich Insurance has 7 years vanishing premium for whole
life, that means you pay premium untill 7 yrs and you are covered for the
whole life.

Yuecheng Shao says:

This is a great explanation but I think the whole life insurance part is
wrong. You will get insurance coverage and your cash value back at your
death.

Jeff Finlay says:

With in 7 years a participating whole life policy grows in a greater value
than the premium you are paying into it. A whole life policy is cheaper
than a term because every dollar you put into premium belongs to the
insurance company. The odds for you to die during the policy period is 2 in
100. The Odds of your death holding a Whole Life policy is 100%. 

Antoinette George says:

Is Khan a licensed Life Insurance agent? His ‘term’ explanation was fine
HOWEVER, it’s very sad that people/consumers are still being misinformed
about Whole Life (WL) insurance! 

Bradley Truett says:

The explanation of term insurance is fine. However he has Whole life
polices completely wrong. I work in insurance and we the cash value does
not go to the insurance company it is added to the death benefit, so when
you die the beneficiary receives the benefit of $500,000 plus the cash
value. Many of these polices have a rider that says if you miss a payment
the policy does not disappear the company just “borrows” or takes a loan
out from the cash value to pay the premium and keeping the policy in place.
In other word at a certain age when the cash value is high enough you can
use the cash value to pay the premium each month and reduce your bills for
a the time you are borrowing the money. In that scenario the benefit would
be $500,000 plus the cash value minus the value of your loan. which would
still be much greater than the original benefit of only $500,000. For more
information look at individual polices but for the most part Whole life is
a much better deal and investment than term.

theknightlynews says:

Let me ask a question:

I tried to buy a large life insurance policy and was turned down. Since I
rent, and have no children, no debt or liabilities of any kind, and a
modest income, the agent said that he could only sell me $50,000 for
funeral expenses. I was looking for a million dollars simply because I
wanted to leave a lot of money to charity and I could afford the premiums.

But no dice. They won’t write the policy. I’m 45 with no medical history. 

Soto 2014 says:

This videos does show some good insight about life insurance, however I do
not not agree about his explanations for the whole life. He is putting his
input or personal opinion on it if you will. 

Greg Duncan says:

I’d have to agree with many of the points drakan58 made. I work in the
insurance industry and Khan did a good job of explaining “Term”. When it
come to “Whole Life” Either he has been misinformed on subjects such as
“fees” and the “cash” pay out at death or he didn’t get all the options.
Find a company with a proven “Participating” product (another kind of whole
life), and your money can grow tax advantaged, cheep and always pay out at
death. Not to mention all the other ways you can use it to grow your
wealth along the way. 

Nathan Montgomery says:

can you make a very simple video on endowment policies and how they work? 

gamingwithrej says:

Can’t ask 4 any better explanation than this..!!thankyou..!!!

Gregory Smith says:

Disappointing coming from Khan “Academy”
1)Cash value in the whole life contract WRONG!
Cash value cannot be more than the death benefit in a whole life policy –
never, ever, ever – that is no longer a life contract. the death benefit
grows as the cash value gets close to that level. OR you stop paying and
the contract pays for itself, pays you an income, etc.
2)You don’t need to pay forever! – You control this and the contract can be
written to your specifications. I regularly see contracts that pay until
65. At 65 you take the cash or a portion of the cash, and let the policy
continue to grow until its at a level or time when you wanted to withdraw
funds. Many can be set for lifetime income, where the life policy acts like
an annuity and will pay you income until age 120.

Ibrahim Bah says:
Thomas Rockford says:

My whole life policies with Northwestern Mutual bought years ago when
family protection was need have continued to grow and show a return higher
than my other investments since 2009. Safer too.

Obviously as everyone learns in high school term insurance is a bad choice
for older folks.

Terry Golesworthy says:

Life Insurance – Term vs Whole.
Most carriers have some content on this subject but usually not great. Here
is a version from Kahn Academy, its pretty good, educational and jargon
free. 

Shirley Wang says:

I think Drakan58 should just make his own videos and start his own channels
:) 

drakan58 says:

of helping people understand when term is good, when whole life is good or
when and under what circumstances both a products that a person can own
during their lifetime. On the other side is the USE of Whole Life which of
course, if its a product you dont understand(he does not) then you see no
USE for it. So there you have it. Multiple errors and ridiculous
assumptions with no real truth behind the words!

stylezNsmilez says:

Do tell

drakan58 says:

cont… Im not expecting you to fully comprehend number 1 because its an
advanced idea that most people do not understand. 2. Whole Life….They
dont CHARGE you MORE for it. Its not and EXPENSE. You will build up CASH in
the policy with interest(dividends etc). So how can something you get all
of your money back plus more be a CHARGE or EXPENSE? 3. He says “Whole
Life, you keep paying into this policy until you die!” WRONG, there are
policies where you can pay for 10 year or 20 years etc…

drakan58 says:

5. Guardian or Ohio National etc… See how their Whole Life products work,
not how this person WRONGFULLY explains the product. 6. 10:18 on the video
he says “A fraction of your premium goes into the cash account of the
insurance!” A FRACTION? in MOST contracts after the 3rd year your entire
premium is added to the cash value. Ask for an illustration from an
insurance company! You put in 5000 and they put in 5000, NOT A FRACTION!
Ridiculous!

Grounderz7 says:

So after all that, my question is – how did you come to this video? Unless
you’re also a rookie in only recently picking up the subject…

D Dino says:

Never ever get whole life, aways get Term & save the difference. Thanks Khan

handy bucks says:

Hi! I wish you make a presentation for UNiversal Life Insurance. My premium
is 250/mo and Death Benefit is 249K. I started when I was 27 and I am now
33.

PaperBryce says:

haha its obvious who the one person who disliked the video was!

Theresa Clifton says:

Great, simple, and useful lessons to pass on to youngsters.

drakan58 says:

cont… 4. Whole Life is the MOST SAVVY product if you know how to use it
during your early years up to retirement and then after retirement. Term
insurance is like playing checkers, WHOLE LIFE is like playing chess. This
person has no idea what they are saying! 5. He says 9:18 on the
video…”…I would say a VERY HIGH PREMIUM…” NO the premium is what it
is its not low or high. You will have your money with interest in the
policy. Go ask New York Life or MassMutual or Northwestern or….

drakan58 says:

cont….. 3. You can actually structure your premium payments over time
and/or use dividends to reduce your premiums over time. 4. He says “Whole
Life is LESS FINANCIALLY SAVVY than the TERM!” Now this is a good one. How
so? Term life is simplistic. You dont have to THINK to acquire TERM life.
It does nothing for you besides pay a death benefit IF one dies. Most times
99% or so TERM Life never pays out to the beneficiary. So how is this
SAVVY? Cont…

drakan58 says:

Grounderz….Rookie in what? What does that have to do with anything anyway
and to answer your question, no I have knows this for 15 years and
thousands of others have known this for 30 40 50 years or longer. How did I
come to this video? I see this person advertise on TV as if hes the worlds
formost expert in everything. I thought I would check out what he has to
say about this subject. Very bad! Youre still paying attention to what most
people pay attention to, all the wrong stuff!

drakan58 says:

9. is that as the cash grows so does the Death Benefit. So if my cash at
age 90 is 600k maybe my death benefit is 800k not still the same 500k. Im
using his numbers here. 10. My GOD…Who is this person. “If you know youre
going to DIE and you have 600k of cash and a 500k death benefit, the best
thing to do is stop paying the premium and cash out the policy!” REALLY!
This person needs to probably stop making a lot of these videos. There are
multiple errors in this one….cont

Jared Davis says:

On a whole life insurance policy, could you take your savings and convert
the policy to a term life insurance policy? I thought I heard that
somewhere before

drakan58 says:

7. So yes thats right WHOLE LIFE is BAD but dont worry, hold on for the
LONG RUN for Mutual Funds to do 7 or 8% or more. How long is that long run?
50 years? 70 years? Thats right ILL BE dead by then. 8. 13:28 in the
video…Cash is LARGER THAN the Death Benefit? WHAT? That can NEVER HAPPEN,
ITS impossible. The cash will always be smaller than the death benefit up
until whats called Endowment(look it up). 9. 13:55 in the video…he writes
600k of cash….What he does not know….Cont

drakan58 says:

This is funny. I commented on this particular topic a few weeks back and
they took it down and REPORTED this same video. Funny. I guess i was
correct on everything that I posted and they took it down because I pointed
out all of the errors in the tutorial. There are 10 or more errors in his
examples. Maybe he should stick with only subject matters he knows rather
than ones he as no clue about and this subject matter is one he has no
clue, not even a little one, about. Interesting…….

drakan58 says:

Funny…. This guy should have stopped at TERM Insurance. I would have been
ok with that. But he keeps going on and on about something have no idea
about. Here are the MANY ERRORS, and these are just a few…. 1. Whole Life
is for LIVING….You should own it in retirement, not for the CASH but for
the DEATH Benefit. The Death Benefit allows you to Spend your other money,
(401k, IRA, Cash etc) the Death Benefit will restore the assets for the
spouse and or heirs….CONT

drakan58 says:

7. FEES? As if NO OTHER PRODUCT in the world has fees? Be that as it may,
lets say there are FEES, but you get over a 20 year time from 4% cash
growth in a tax deferred account. How would that fare with a savings
account which is taxable? How would that fare with a MUTUAL FUND that is
taxable? What has the S&P 500 done over the past 15 years, thats right
2.74% without fees and taxes, now were close to 0%. What have savings
accouts and bonds done over the past 15 years 2-3%?

MsSilverstar104 says:

I work in life insurance and this is byfar the best explanation I’ve heard!

drakan58 says:

10. How can he be taken seriously in all of his others? What bad advice and
ridiculous observations made by this man. I hope he reads this and goes to
insurance basics 101 to learn what he obviously does not know. Whole Life
is a product which people should own along with their savings, mutual
funds, 401ks etc….Its just another piece of someones financial puzzle.
Its not about do this or do that its about putting the pieces together and
he does a very poor job…..

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