You have insurance on your phone, your laptop, your car, yourhome, your health, but what about your life? Nothing's going to happen to that, No one likes talking about life insurance, and no one likes talking to those pushy insurance sales people that chase you around in the mall. Good question, what will you do when you die? Uh,catch up on sleep. That's why today, I'm going to break down the truth about life insurance that you need to understand, so make sure you watch this video until theend. But, before we get into that, make sure you hit that thumbs up button below because[clap] it's kind of like a virtual high five, and subscribe to the Minority MindsetYouTube channel, that way, you don't miss our new videos every single week. First—sowe're on the same page—what the heck is life insurance? Life insurance isinsurance on your life.
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If you unexpectedly die, you don't want yourfamily to start struggling or go into bankruptcy because they lost an incomeor they lost their only income. So, life insurance is a way for you to protectyour family just in case something bad happens, this way, you know that they'llbe okay financially. But, what you need to understand is that, two: Not all lifeinsurance is good life insurance. You have whole life insurance also known asuniversal life insurance, and then you have term life insurance and these twokinds of life insurance work very, very differently. With whole life insurance,you're going to pay your life insurance company every single month, and then whenyou die, whenever you die, your life insurance company is going to pay yourfamily a big check for a million dollars, or whatever amount you decide. With termlife insurance, you are buying life insurance for a period of 10 years or 40years or something in between. If you happen to die during the term ofyour term life insurance policy, your family will get a big check. If you don'tdie within that term, your family gets nothing.So, with whole life insurance, your family is guaranteed to get a big check, butwith term life insurance, they're not. Which makes whole life insurance look awhole lot better at first glance, but you better take a secondglance because,
two: Insurance is meant to be risk protection. When you buy a car,you get insurance just in case you get into an accident. But, if you manage to driveyour car around, and you keep your road rage in check—GET OFF THE ROAD GRANDMA—and you don't get into an accident, that means, you paidinsurance on your car for years, but insurance didn't pay you anything.Insurance is a risk management strategy. It's just there to protect you just in casesomething horrible happens. [groan] Life insurance is not meant to be for aninvestment. But Jaspreet, my family is guaranteed to get a check with wholelife insur-insurance is not an investment, it's a risk managementstrategy. At the time that we recorded this video, if you are a healthy malewho's thirty years old, a term life insurance policy for $1,000,000 can costyou less than one dollar a day. The exact same person, under a $1,000,000whole life insurance policy, might have to pay something around twenty fivedollars a day for the exact same coverage. That means,you could be paying twenty five to thirty dollars a month with term lifeinsurance, but the same policy could cost you seven hundred fifty to a thousanddollars a month with whole life insurance.
There's a reason why this is so muchcheaper than this. When you buy whole life insurance, you are treating yourlife insurance policy like an investment because you're paying money to yourinsurance company each and every month, and then the insurance company will payback your investment, after you die, to your family. But unlike mostinvestments, with whole life insurance, you don't get to touch your money orenjoy the profits, the fees are high, and their returns tend to suck. The averagereturn on a whole life insurance policy is something like one and a half percenta year. Ouch. If you want an investment, buy assets,not whole life insurance. If you want to get the most bank for your buck, uselife insurance as a risk management strategy, not as an investment. Which iswhy you want to have term life insurance, this way, you can protect your familyjust in case something bad happens, and term life insurance is so much cheaperthan whole life insurance. And five: You need to think about your money. So manyinsurance people love selling whole life insurance because they get a hugewindfall. Remember, you want to buy life insurance so you can protect your familyand your wallet, not so you can make your insurance company rich. And thanks to oursponsor, Policygenius, you can be sure to find the best term life insurance policyat the lowest price.
All you have to do is enter in a few pieces of information,which just takes a few seconds, and then Policygenius will show you the samelife insurance policies from different companies, this way, you can make sure you'regetting the best price. They don't charge you any additional fees to use theirservice, and Policygenius has unbiased experts you can talk to if you havequestions about life insurance, and no, they're not incentivized to upsell youanything. And my favorite part, they show you term life insurance policies beforewhole life insurance, this way, you don't get sucked to an expensive policy. If youwant to learn more and get a free life insurance quote, I'll put the links towhere you can do that with Policygenius in the description below.Minority Mindset is a partner with Policygenius so if you use them, we willget compensated, but there's no additional cost to you. So, if you want tolearn more and get a free quote, I put the links to where you can do that in thedescription. Sixth: How much insurance do you really need? If something bad were tohappen, you will always hope that you have more insurance, but that can takeyou down this rabbit hole of never having enough insurance, and then you canend up paying way more than you need to. So, a simple rule of thumb for lifeinsurance is, you want to have 10 times your annual salary of life insurance asa very minimum, and ideally, something closer to 15 times.
And for your term, youwant to have a very bare minimum of 10 years in your life insurance policy,ideally, much longer, but 10 years is the very minimum. So, if you make $100,000 ayear, you want to have at least a million dollar policy for a minimum of a 10-year term.Seventh: I hope your money goes to waste. Look, I'm cheap, I hate wasting money. Uh,di-did you just say cheap? The only time I want my money wasted is with insurancebecause that means something bad didn't happen.You have insurance on your car, your house, your investment properties, andhopefully, you'll never have to use your insurance. But, insurance is a small priceyou pay today for a big piece of mind, and just like how you don't want to becaught on YouTube with your pants down, oh,oh, sorry uh-yeah, you don't want tobe caught in a bad situation outside of your control without some sort of riskmanagement system like insurance to protect you and your family. Thank youfor watching, if you enjoyed this video, share it with one friend, and if you don'twant to miss our new videos on entrepreneurship, business, and money,every single week, hit that subscribe button below and that littlenotification bell, that way, YouTube actually lets you know when ournew videos are released. And as always, KEEP HUSTLIN' *
