NDR: Does anyone know anything about Life Insurance?

[Marmee]

Term! Very rarely is whole advised from what I've researched. My H & I have 30yr term of around $1M & it's very reasonable. We have kids which is why we have such a high payout.

[kaylie]

The ladies on MM can tell you pretty much everything about life insurance and they'll recommend you get it through Select Quote (unbiased and can find you the best rate). Term is the right option for most people but if you're a high earner, whole life might offer tax advantages.

[finally]

Nov 23, 2013 15:01:53 GMT -5 Marmee said:

Term! Very rarely is whole advised from what I've researched. My H & I have 30yr term of around $1M & it's very reasonable. We have kids which is why we have such a high payout.

But then in 30 years, hopefully you are still alive, won't the rates be much higher because you are that much older?  I'd rather pay more now while I am working than worry about a high renewal price when I'm retired.

[boiler717]

Nov 23, 2013 16:12:13 GMT -5 finally said:

Nov 23, 2013 15:01:53 GMT -5 Marmee said:

Term! Very rarely is whole advised from what I've researched. My H & I have 30yr term of around $1M & it's very reasonable. We have kids which is why we have such a high payout.

But then in 30 years, hopefully you are still alive, won't the rates be much higher because you are that much older?  I'd rather pay more now while I am working than worry about a high renewal price when I'm retired.

The idea is that in 30 years you will have enough assets and lower debts that you don't a big insurance policy anymore.

[kaylie]

Nov 23, 2013 16:36:29 GMT -5 boiler717 said:

Nov 23, 2013 16:12:13 GMT -5 finally said:

But then in 30 years, hopefully you are still alive, won't the rates be much higher because you are that much older?  I'd rather pay more now while I am working than worry about a high renewal price when I'm retired.

The idea is that in 30 years you will have enough assets and lower debts that you don't a big insurance policy anymore.

This. Kids will be done with college/grown up, mortgage will (hopefully) be paid off and you'll probably be coming up on retirement.

[Deleted]

Term only. 10x your salaries. Go with whatever company is the least expensive. Use selectquote.com, accuquote.com, or zanderins.com. Do not go to a State Farm/All State/Met Life agent - they can only sell their company's products (captive agent).

If you make so much that you max out your 401ks, IRAs and HSA (if you have a qualifying health plan) and it's not 15% of your gross, then you can consider whole life as an alternate retirement vehicle.

[Deleted]

If you develop something during the 30 year term that would deem you ineligible for new insurance at the end of the term, you can convert to permanent insurance at that time and only have to pay the higher premiums from then on. Whole life is too expensive to be worth it for your average person, except for the agent who gets a large commission for selling it to you.

[ktzmoh]

We just had this conversation. We realized h only has 1x salary and I only have 4x salary. He just laughed and said if have a year to find someone new so I better grieve quickly.

Between term life , umbrella , homeowners, health, and car insurance products - it all just drives home how far gone my youth us. Harrumph .

[simpsongal]

DH and I got 20 year term policies, $750K each. Good for you thinking about this. I asked my SIL if they had insurance since they just had a LO, she has a policy through work and her DH doesn't have one. Ugh (I particularly care b/c DH and I are the godparents).

We'll be 50 by the time our policy expires, but we should have plenty in retirement, college savings, and a paid off mortgage to get by should one or both of us pass. I think it's about $650/year for both our policies.

[emoflamingo]

I have a 10 year term and I can convert mine next year to a 10 yr pay wl I think it is. H and I both have 2x our yearly salary but intend to get more as neither of us could stay in our house for that.

[emoflamingo]

Dec 20, 2013 5:09:19 GMT -5 rahulnaamtohsunahoga said:

Nov 23, 2013 14:55:59 GMT -5 finally said:

I've always had life insurance through work but am now thinking that I probably should drop that and just have my own policy that I will have forever. I want to lock in the rate now and just have a flat death benefit.  I don't need any bells or whistles...no cash value, no long term care rider etc.  What type of policy should I be looking for?  Universal Life, Variable Universal Life, Whole Life?  It's so confusing to me!!!

Usually people prefer term insurance, but if you are reluctant you can get one. For your understanding see what all those mean below:

Universal life insurance (UL) is intended to combine permanent insurance coverage with greater flexibility in premium payment, along with the potential for greater growth of cash values.

There are several types of universal life insurance policies which include interest sensitive (also known as "traditional fixed universal life insurance"), variable universal life (VUL), guaranteed death benefit, and equity indexed universal life insurance.

Whole life insurance provides lifetime death benefit coverage for a level premium in most cases. Premiums are much higher than term insurance at younger ages, but as term insurance premiums rise with age at each renewal, the cumulative value of all premiums paid across a lifetime are roughly equal if policies are maintained until average life expectancy

I would still advise you to consult an unbiased financial adviser to get the best life insurance plan

^o)

[msmerymac]

Ditto everyone on term. Get a term long enough so that when it expires, your kids will be grown (if applicable) and your house will be paid off. If either of us (or both of us) died, our two priorities would be making sure the house got paid off and that our kids' college funds were complete. I could basically handle the rest of the day-to-day bills with little extra on my salary, and my husband would be absolutely fine on his salary.

Right now, we're debating a 20 or 30 year term and either $500k or $1 million on each of us. Ideally, we'd have kids in high school with plenty of college savings and a paid-off house in 20 years, which is why we're considering that. We plan to have kids in the next 2 years. My husband has 3 times his salary through work and 1 times my salary through his job as well, but I don't think it's enough, and it's nice to be able to determine your own rate and coverage, and be able to keep the same policy no matter where you work. Also, I think a lot of companies limit your coverage through work to something like 5 time your salary. 

I've heard selectquote.com is the best place to get a low rate. They compare every plan you are eligible for and get you the best rates/coverage. I'm working with them now.

[Susie]

OP, ditto the previous suggestions to go w/ term.

Nov 23, 2013 19:52:38 GMT -5 simpsongal said:

I asked my SIL if they had insurance since they just had a LO, she has a policy through work and her DH doesn't have one. Ugh (I particularly care b/c DH and I are the godparents).

I am not sure what godparenthood has to do with it, unless you also happen to be named as the guardians in their will. Calvin and I are godparents to a child too, but there isn't any legal or financial obligation attached.

[simpsongal]

Dec 20, 2013 11:55:58 GMT -5 Susie said:

OP, ditto the previous suggestions to go w/ term.

Nov 23, 2013 19:52:38 GMT -5 simpsongal said:

I asked my SIL if they had insurance since they just had a LO, she has a policy through work and her DH doesn't have one. Ugh (I particularly care b/c DH and I are the godparents).

I am not sure what godparenthood has to do with it, unless you also happen to be named as the guardians in their will. Calvin and I are godparents to a child too, but there isn't any legal or financial obligation attached.

Very true.  Now that you mention it, I don't think they have a will and designated guardians. If we died young, I suspect one of our parents would take over guardianship, not siblings.