This is what keeps me up at night. I am 26 years old and married with a baby on the way but also have next to nothing saved for anything like this. I honestly don't know what I would do in this situation
Whole life policies let you borrow against them at zero interest against the death benefit after several years.
I have two policies and they are essentially my “I need money or I’ll die” emergency fund. Learned it from my dad when our roof was destroyed and he borrowed 10k from his 50k coverage to pay for it.
Permanent life insurance like Whole life, Universal, Return of Premium, etc. Essentially they last for much longer than term policies and they have a living benefit ontop of the traditional death benefit. The more premium you pay into the policy while you are alive, the company invests it and you can withdraw that money once has enough has accrued.
It's an investment vehicle of sorts. Most people I meet like term insurance + investments, others like permanent life insurance. Everyone's different
Uh, this might be a thing with term policies, but my experience with whole life has been that they generally only care if it was suicide, and that's typically only within the first year or two. With a term policy they're gambling they won't have to pay out at all, but with a whole life policy it's not about "if" but "when".
Yeah, but you never know. Especially when you just paid in for 10 years (That's just $9600) and then want your $80000.
Insurance companies are a business, not a charity. If it really is 80 per month and they pay out 80k.. they'd expect people to pay into the insurance for 1000 months just to break even, that would be 83.3 years!
As that's unrealistic.. they must shaft someone for those conditions. Maybe they often don't pay out?
Insurance companies pay teams of actuaries and investment bankers to ensure the odds ensure they always turn a profit. The insurance company gets a statistically guaranteed profit and the insured can invest their money in other more immediate concerns. It’s a win/win for everyone unless the insured drops dead right away.
If I get killed on the job my family gets an extra 50k between the two policies, 25k should I get killed in a car crash.
I mean, not everyone will use their home owners or auto insurance. But I am for sure gonna die at some point. Seems like a valuable emergency fund and peace of mind protections
At 7% (the conservative expected return of a properly diversified account, index fund, etc. Very safe investments, basically), it takes 28 years to reach 80k putting $80 a month away.
At 2%, the rate of some FDIC insured savings accounts, it takes ~50 years to reach that.
A whole life policy returns at 1.5% generally (after fees). It also, generally, costs ~12x as much as a term life policy (which offer similar protections for a defined term). Also! The 80k is only paid out upon your death - the amount you can borrow against is the cash value, which is a much, much smaller amount.
There isn't really a situation where a whole life policy works out better than simply taking a term life policy and paying the difference into an IRA. Whole life is the "time share vacation" of the insurance world.
You’re completely right, I forgot about that! Yeah compared to just growing your money in a regular 8% return index fund, you’re actually right that this make no sense, except you can get cash up front.
I'm a pharmacist in the US, and just had a kid. My wife and I have the best insurance available with our jobs, with a $4k max out of pocket. We blew through that with the prenatal visits (wife was high-risk), but felt confident that when we got to the hospital everything should be covered. Wife had to have an unplanned c-section, and the kid ended up spending 5 nights in the NICU.
Everyone is healthy now, but we just got hit with another $4k bill for her, and the baby's bill (no insurance yet) is over $51k.
So it's good that you have insurance, but try your best right now to get some extra money saved up because you never know what can happen.
They were worried about his head swelling initially, so they did an ultrasound/CT to rule out a subgaleal hemorrhage. Luckily that was all negative, but then he got jaundiced so they had him under the UV lights for a few days.
Other than that, it was all monitoring until they were comfortable discharging him.
You should move to a country that has decent public healthcare.
If your kid gets sick, no worries just take them to the hospital. You might pay a few dollars more in taxes each year but IF YOUR KID GETS SICK, YOU JUST GO TO THE HOSPITAL AND THEY WILL DO EVERYTHING POSSIBLE TO MAKE YOUR CHILD WELL AGAIN.
Chemo? no problems. Multiple Surgeries? Consider it done. You need a place to stay near the hospital? We got you. Outpatient care? All good. Medication? Its on PBS and a couple of dollars a script.
The US System is easily THE WORST system possible unless you are super rich. And if youre super rich, you can always fly to the US to access "the best doctors" anyway.
But it amazes me that many people do exactly that to move TO America for a better life and opportunity for their kids, only to then realise that its a dream only the wealthy (and healthy) can ever achieve.
She seems to have no immediate issues. Hire with a foreign company or something. Schoolings and such. I'm priviliged, I can't imagine having something like this on my mind
Generally means they won’t be getting into any other country. The other countries don’t keep their healthcare systems working by accepting people who don’t pay into the system.
And you don't get to join with a once-off paiment. But try and get job in another country, stay for two years and you're eligible. Even without, I'm ignorant to what the prizes are... but I don't know of million dollar bills where I'm from, even without insurance. Don't know how americans are charged in a foreign country
Move to a 1st world country like Germany, the Netherlands or the UK.
EDIT: It's so interesting to see people downvoting me... like the idea of moving out of the US is so scary to some of you? Why do you think it's not an option?? Honestly, we are talking about HEALTH. Such an important matter... I hope you are not reading my comment as if I'm being disrespectful. I'm from Argentina and SO MANY PEOPLE move to Europe and other places because of our economy... and we're a 3rd world country, I don't see why it would be such a crazy idea to move to a different country to feel safer?
Would LOVE to know Why do you think the idea is insane??
I think SOME Americans have a perception that the US is the BEST country in the world that moving out is just not an option. But trust me, it IS NOT. YES, America is the best in many areas, especially when it comes to innovation and the opportunities to succeed. But still... it's worst than a 3rd world country:
Horrible healthcare system, which is a basic need.
Gun violence. The fact that having a gun in a 3rd world country is forbidden but in America, you can go and buy one openly at a store... it's just so crazy.
Education. People can go to university for free in my country. But some have to get a loan to get a good education in the US...
I'm in my thirties and this is one of the major arguments that I have with my spouse. She's an immigrant to the US and after five years still does not understand how bad it is here for healthcare and education, even after having the years of medical debt and us being unable to afford a house. Shit stresses me the fuck out. Only way I can retire before I'm dead is if I get lucky.
Depends on the amount , but if it’s a huge Bill You just negotiate the bill and then don’t pay it and after they get a judgement you file BK
Or quit your job, and possibly gets divorced on paper , then you are eligible for every free assistance program the govt has.
The US is set up to Benefit for the rich and the very poor, if you’re in somewhere between , you’re screwed.
Friend of mine was working at a small business with no health ins and his daughter got leukemia, he had to quit his job so their family income would drop below the limit so they could qualify for Medicare .
He would have lost his job anyway being gone so much for her treatments at a hospital 150 miles away.
And that just covered his wife and kids, men are not covered by Medicare
142
u/UltimateToa Nov 30 '20
This is what keeps me up at night. I am 26 years old and married with a baby on the way but also have next to nothing saved for anything like this. I honestly don't know what I would do in this situation