so I'm 7 months pregnant working through the must do list of things before baby comes. We both have insurance thru work but want to get separate term life insurance policies. I just spoke with Selectquote and am confused as to whether to go with a 20 or 30 year. Assuming we have 2 kids in the next 3 years and are done, to me 30 years would cover us thru there college years, but 20 years is half the price. This guy suggested buying a 20 year now... and then a 20 year again in 5 year or so and cancelling the first one to push out the end date of insurance. Obviously this assumes in 5 years you get the same great rate.
For those that used selectquote and or were on the fence about 20 vs 30 year, any suggestions?
Yay, you for taking care of the financial stuff now before your little one arrives That's great.
I'm not a parent, but we made the decision to do 20 years because that would get us through (1) mortgage payoff and (2) we'd have substantial retirement savings by then that would put us in a financially independent position.
I actually like his strategy of buying the 20-year now and re-evaluating in 5 years if needed. Sure, there is some risk involved, but if you'd like, you could use the difference to up 529 investments / other investing for your kids (ex: if the 20-year is $50, but the 30-year is $125, buy the 20-year, and put the delta of $75 into a savings account automatically each month.)
Curious to hear how other posters made the decision.
We did 30 because 1) gets us through child-rearing and college, 2) gets us close to retirement (we purchased at age 31) so we don't worry about lost income since I am a sahm, 3) we don't know what issues will arise in the future that will make life insurance expensive or unattainable, and 4) we were young and in good health so we qualified for really good rates on a 30 year term.
Yes I think 30 year just sounds more logical, we just bought a house, will likely have 2 kids and 30 years would get us to a good spot. Im surprised the rates are just about double doing from 20-30 year when we are in the best category. I will shop around.
We're doing 30. We haven't even conceived the kids, so 20 won't get us through college of #1, and won't even get us through high school for #2, most likely. I'm just not comfortable gambling on insurability and rates if I need to reevaluate in 10 years. I'm already about to turn 33; rate quotes at 43 will not be appealing. If it turns out that we don't need all 30 years (and I'm ok with that), we'll just stop paying the premiums at 25, 26, 27, whatever years.
Yes I think 30 year just sounds more logical, we just bought a house, will likely have 2 kids and 30 years would get us to a good spot. Im surprised the rates are just about double doing from 20-30 year when we are in the best category. I will shop around.
You say the rates are double--just curious as to how much of a difference this is dollar wise (if you don't mind sharing)?
Do you think in 20 years you'll have sufficient assets to potentially take care of your house, college, lost income etc? If not, then I would suggest the 30 buuuut if it's a HUGE difference in cost I (for ME) might be willing to take on the 20 year term and put that money in investments.
Edit: we have no kids and did a 30 year term 8 yrs ago when we purchased our 1st home to make sure the mortgage/loan was covered. However, even if we have kids now we likely would not change our life insurance terms since our financial position is sufficient enough that I feel in 22 years we won't have another mortgage or will have sufficient assets to cover our needs. I hope that makes sense...
My H researched and read a lot about tiered policies so we did that. Basically you do X amount for 20 years and X amount for 30 years. For him we did a 10 year too. So each policy was a smaller amount but we have different amounts to get us through some life milestones...
So "double" is inaccurate but that is what the guy told me... i have the quotes in email now. 20 year for me $1m would be $30 and 30 year same company would be $50 per month.
Overall the question is still should you get 30 year now while the rate is so low, assuming new 30 year mortgage and yet to be born children I assume will go to college. The selectquote guys suggestion was to buy a 20 year now and then another 20 year in 5-8 years and cancel the first, but how easy is it to cancel first? that also assumes the same health and great rates in 5-8 years.
My H researched and read a lot about tiered policies so we did that. Basically you do X amount for 20 years and X amount for 30 years. For him we did a 10 year too. So each policy was a smaller amount but we have different amounts to get us through some life milestones...
This is what we'll do as well. We have 17 years left on our mortgage, so the 20 year policy will be for a higher amount. The 30 year is just a small cushion for those last few years of college we don't have covered under the 20 year.
Post by dr.girlfriend on Jan 28, 2015 14:32:59 GMT -5
I would caution against banking heavily on re-insuring in five years. My husband was three years smoke-free when we first shopped for insurance, and we decided to wait until he was five years smoke-free because his rate would drop dramatically. In the meantime he got diagnosed with diabetes, and instead his rate went up hugely. Stuff like a high-risk pregnancy, death of a parent, diagnosis of a precancerous mole, that kind of thing can really change your rate dramatically. On the one hand, I'm glad we locked mine down with a 30-year. On the other hand, we are sticking with one kid, he'll be in college by the time 20 years have passed, and if we remain on target to pay off our mortgage in 15 years and save enough for his college, I don't think my death would be a huge financial stressor for DH between the 20 - 30 year mark. But of course, that's all hindsight. We hadn't even bought our house or conceived our kid (had just started TTC) when I purchased the policy.
I agree, I dont want to wait, and I dont want to bank on adding more or extending it and then of course paying a higher rate. And of course you never ever know what will happen!! At this point I just need to sign on the dotted line and have it done and not overthink it.
My husband did half his coverage on a 20 year and half on a 30 year. I actually did a 30, but I have half as much coverage as my husband due to my income.
We'd like to have kids soon, so 20 yrs gets us to high school/college. We plan to have the house paid off about then and will probably have most college savings as well, but the insurance would help if we had to cash flow anything. So basically, I think it will be nice to have SOME insurance in 25~ years, but we won't need as much as we have now.
This also split the cost, of course. More than just a 20 at the same coverage, less than 30 at the same coverage.
We did 20-year term for $1M. I feel as long as we can get H through the child rearing years, we'll be ok. We'll have paid off most of our mortgage by then and DS and DD will almost be to college. He can use the funds to pay off the rest of the house or move to FL (where he's from) or pay for DS and DD's college.
Out of curiosity are you applying for a policy while pregnant?
yes. "they" claim as long as I'm healthy now and tests come back fine that it wont effect the rates.
I applied for our life insurance while pregnant with my first. One of my tests came back very high (can't remember which one) and I was able to get my primary care dr to write a note that the result was abnormal based on my health history and was off due to the pregnancy.
I could have waited and been retested after pregnancy instead if I had wanted.
Does anyone have 2 policies? for example instead of $1m two $500k one for 20 yr one for 30 year?
We are just having kids, just bought a house with 30 yr mortgage I guess I think 30 year is safest bet but I keep being told 20 year will be fine....
We each have 2. We bought policies through State Farm when we bought our house (we were childless) in 2006...enough to cover paying the mortgage off on my policy and an additional $500,000 on DH's b/c he made significantly more than me. After we had kids we each purchased another policy (also term) through Northwestern Mutual. We kept the State Farm ones too. Both were 20 year policies. I like the staggering.
Post by iheartbanjos on Jan 28, 2015 18:56:25 GMT -5
We bought new insurance when we had DD2, so we did 20 years as our youngest will be finishing up college and if everything goes to plan, we should be self-insured at that point without any debt.
Post by truckentruck on Jan 29, 2015 10:24:18 GMT -5
We bought our policies last year through USAA because they offered a 25 year policy at a good rate, which we felt was the happy medium for us, time-wise. We did not look elsewhere because the time length of 25 years and the quoted rate was worth it to us. Thirty years was just a bit more than what we felt we needed and cost more than we wanted to spend. At the time we purchased, we were 30/29 and in good health. In the resulting year, we are both still healthy, but we had a child with health issues that turn out to have a genetic origin. My husband and I are going through the process of genetic testing right now, and all I can say is that I'm really glad we bought policies for the longer term we wanted rather than cutting it close with the 20 year and hoping to buy a policy later, because at the time we purchased we had no idea either of us carried a gene, and we had no indication our child would get sick. My advice would be that you never know what the future has in store, so buy what you need to help you sleep at night right now.