Life Insurance: what do you have?

[ericn2k3]

What type of life insurance do you have? I've read term is the way to go.

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[Momus]

Don't have one currently. No dependents.

Term insurance is what I will buy if I ever need one.

 

[confettiflyer]

Term life insurance - $1M AIG, $1M L&G America (Banner). $1400/year total. Also get free life insurance through work (something like $75k) and I signed up for ultra cheap AD&D insurance for $400k (it's like $20/yr) and another $470k in insurance ($280/yr) that I will let lapse at the end of the year (since it's cheaper as an outside policy and I finally got that done this year).

Off topic, but my long term disability insurance policy is run through work also, approx $600/yr for a $6000/mo policy (90 day elimination period). I use Geico for umbrella coverage ($1M - $159/yr, but I get a $150/yr discount on my car insurance, so it was pretty much free).

EDIT: put the wrong amt for one policy

 

[ericn2k3]

Thanks for the reply. Interesting that you bought two 1M policy from 2 different insurers.

 

[Old Timer]

I have the following:

• 750 K Renewable and Convertible Term. Penn Mutual
• 170K Term through employee payroll deduction
• 1 x Salary From my employer
• STD disability provded by employer
• LTD disability through payroll deduction

Total Term a littler over 1 million. As I am approaching 60, premiums are higher. Make sure all term is renewable and convertible. Also, make sure the policy is sold in the state of NY. You should definitely have disability insurance.

 

[triguitarpharm]

I always heard it's a bad idea to have two policies. Is one primary? Heard they will fight over who will payout if it's actually needed. Me and my wife are each covered at 500k each 30yr term. 3 dependents. Pay 59/mo. Should probably look into bumping mine up to a million.

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[confettiflyer]

I always heard it's a bad idea to have two policies. Is one primary? Heard they will fight over who will payout if it's actually needed. Me and my wife are each covered at 500k each 30yr term. 3 dependents. Pay 59/mo. Should probably look into bumping mine up to a million.

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Nope, death is death, insurance should pay out regardless. Multiple policies are very common.


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[farmadiazepine]

It honestly depends on the person and what your goals are, and/or what you have to insure. I have whole life insurance, $1,000,000. I pay $600/month for it. It is from New York Life Insurance. I got it at a younger age.

 

[FlavyFlav]

I am on the opposite end of this spectrum it would seem. I have a work policy that would pay out roughly $180k and I've added another 100,000 on top of it. I think I pay about $5 a month. I am 34 with a wife and one child. In the event of my death, this would pay off the house and any remaining bills and leave a little more on top. When we have more saved I will probably expand this, but I don't think I would go more than $500k in insurance. I can't fathom dropping $600 a month when it could be used for other more immediate things. Especially considering we are paying almost $1000 a month on health insurance. Unless that's one of those investment policies that pays money back, but I haven't really looked into that aspect yet.

 

[BMBiology]

It honestly depends on the person and what your goals are, and/or what you have to insure. I have whole life insurance, $1,000,000. I pay $600/month for it. It is from New York Life Insurance. I got it at a younger age.

Why would anybody buy whole life insurance? I bet if you put in $600/month in the S&P 500 you would get a better rate of return. Insurance agents get a load of commission when you buy whole life invariance. Why? Because it is crappy product and 80% end up canceling their whole life insurance.

Term life insurance is often free via work. If you have a family and you are the only breadwinner then I can see why you may want to get term life insurance, just in case.

If you want to invest, there are plenty of better ways like 401 k, ROTH IRA, health saving account (HSA). Don't waste your money on life insurance.


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[Old Timer]

I am on the opposite end of this spectrum it would seem. I have a work policy that would pay out roughly $180k and I've added another 100,000 on top of it. I think I pay about $5 a month. I am 34 with a wife and one child. In the event of my death, this would pay off the house and any remaining bills and leave a little more on top. When we have more saved I will probably expand this, but I don't think I would go more than $500k in insurance. I can't fathom dropping $600 a month when it could be used for other more immediate things. Especially considering we are paying almost $1000 a month on health insurance. Unless that's one of those investment policies that pays money back, but I haven't really looked into that aspect yet.

Life insurance is more than to keep your family from selling the house. You can use this calculator to figure out how much you need. I reiterate my basic guidelines:

Buy Term Life insurance. Insurance is insurance and investments are investments.
Make sure the policy is sold in New York State
Make sure the policy is renewable and convertible.
Make sure you have long term and short term disability insurance.

 

[wagrxm2000]

I've never really worried about this nor have I researched it, I use what Walgreens gives me, haven't checked in awhile but I believe its 1.5 times base salary which is plenty. They took like $100 total last year. No one should be a sucker and pay $600 a month for whole life insurance. If you save and invest wisely there is zero reason to blow your money on any of these scams.

If your 24 with a family of four, maybe look into it but you are going to find that when you've worked for 16 years it was a complete waste of money. I would imagine the other chains have some low cost offers that some should consider.

The wife works so like most have said use the money to pay off everything then move on.

 

[owlegrad]

I cannot imagine paying 600 a month for insurance. Dear God why? That money could have debts paid off so quickly and then invested.

 

[Momus]

Whole life lol... Many many fees and complex rule so your insurance agent can retire in his 40s.

 

[farmadiazepine]

It depends on the person.

 

[npage148]

Term life of a million (I think) through Security Mutual. I pay life 600/year. Plus 1x salary and LTD at work. Enough to cover the house, cars and leave a sizable chunk left over for wife/kid.

 

[FlavyFlav]

Life insurance is more than to keep your family from selling the house. You can use this calculator to figure out how much you need. I reiterate my basic guidelines:

Buy Term Life insurance. Insurance is insurance and investments are investments.
Make sure the policy is sold in New York State
Make sure the policy is renewable and convertible.
Make sure you have long term and short term disability insurance.

Thanks, it's a good link. It's putting me right at a million now, I may play with it more and rework my policy some by start of next year.

Thanks again!

 

[awval999]

Level Term $1M / 30 years. $60/month.

 

[deleted480308]

Stick to term life, stay away from whole

A lot of size depends on stage in life. I have young kids so I run almost a million now. I joke that my wife can drive a very nice car to my funeral.

When i'm older with the kids grown and actual savings, won't need a million

 

[trailerpark]

Suzy Orman always recommends TERM and not whole life insurance.

 

[deleted480308]

Suzy Orman always recommends TERM and not whole life insurance.

same for clark howard and dave ramsey....as @Old Timer said, insurance is insurance, investments are investments

 

[confettiflyer]

+1 for separating insurance from investments, it rarely makes sense...you're just fattening the wallet of the agent selling it to you.

You can achieve the same result with lower cost.

I opted out of a convertible policy...I figure when I'm 60, future kids will be grown, house paid for, and my retirement accounts will serve as an inheritance/insurance policy if I croak right at 60 (aka I will self-insure).


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[BenJammin]

I don't believe in life insurance. I have funds set aside for cremation in case I pass. My family can do what they wish with them.

 

[Momus]

paying

$600/month x 12 months= $7,200 x 30 years = $216,000
Farmadiazepine is a veteran poster. I can't believe you have whole life unless you have an uninsurable (?) disease. I would shop for term life and signup. After signing up, get out of whole life asap.

He is probably stuck with fat surrender fee lol.

I'd do pro and cons to cancel it even if it means I take the hit in the short term.

 

[wagrxm2000]

Maybe if you're constantly worried about dying you should buy extensive life insurance otherwise use what your company gives you.

Just look at the amounts you will lose at 5 and 7% returns over 40 years:

$100 per month: $150k or 250k
$200 per month: $300k or 500k
$500 per month: $750k or $1,250,000

Yes that last one is over $1 million. The power of compounding is your friend.

In other words spend smart not scared.

 

[ericn2k3]

Life insurance is more than to keep your family from selling the house. You can use this calculator to figure out how much you need. I reiterate my basic guidelines:

Buy Term Life insurance. Insurance is insurance and investments are investments.
Make sure the policy is sold in New York State
Make sure the policy is renewable and convertible.
Make sure you have long term and short term disability insurance.

Can you explain why the policy SHOULD be sold in New York State? Thanks

 

[farmadiazepine]

To each his own! I have my reasons, I rather not get too personal on here.

 

[Old Timer]

Can you explain why the policy SHOULD be sold in New York State? Thanks

I'll explain each of my reasons.
Sold in New York: New York has the most zealous regulatory environment. Other states are more lenient in how they regulate insurance companies. If they sell it in N.Y. state your are less likely to have a problem with the policy.
Renewable and Convertible: Term polices are for a number of years. You want to make it renewable so you can renew it automatically without having to take another physical in case you have an adverse health event in the intervening years.

 

[Schwimmy]

$500 per month: $750k or $1,250,000

Yes that last one is over $1 million. The power of compounding is your friend.

In other words spend smart not scared.

I put in 500/mo, the current value of the death premium is about 750k. If I get out at age 60 (about 30 years) I get 144k/year tax free for the rest of my life. It's less if I get start withdrawing earlier, more if later.

 

[wagrxm2000]

I put in 500/mo, the current value of the death premium is about 750k. If I get out at age 60 (about 30 years) I get 144k/year tax free for the rest of my life. It's less if I get start withdrawing earlier, more if later.

This doesn't seem right. At 30 years you've put in 180k and they are going to give you 144k per year? Like I said I never looked into it since it looks like a scam and Walgreens has their term insurance but if this is true it appears worth it. I'm assuming there's a catch somewhere.

 

[Tortelloni]

Whole life has it's place but it is most certainly NOT for most people. Whole life should only be an option for those that max out other tax advantage retirement accounts first (IRA/401k etc). Meaning for many people term is the way to go and investing the difference. However - for those that do buy whole life it should be with a company that has low fees and high dividends. I have a whole life policy, it is a great product for those that maximize other savings/investment opportunities. Also - I was young when I purchased the policy so my premiums are low relative to many folks. Again - for the vast majority of people buying term and reinvesting the difference is probably ideal.

 

[confettiflyer]

Maybe if you're constantly worried about dying you should buy extensive life insurance otherwise use what your company gives you.

Just look at the amounts you will lose at 5 and 7% returns over 40 years:

$100 per month: $150k or 250k
$200 per month: $300k or 500k
$500 per month: $750k or $1,250,000

Yes that last one is over $1 million. The power of compounding is your friend.

In other words spend smart not scared.

Why the hell does one need life insurance for 40 years?

You don't buy life insurance because you're scared of dying, you buy it because you have dependents and if you die at age 40, the whole $500/mo x 40 year plan just went to pot.


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[wagrxm2000]

Why the hell does one need life insurance for 40 years?

You don't buy life insurance because you're scared of dying, you buy it because you have dependents and if you die at age 40, the whole $500/mo x 40 year plan just went to pot.


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My bad make it 200 to 260k over 20 years at 5 or 7%. Add that to hopefully a cheap term plan your company gives you and if you die at 40 it comes to 400k. I would hope your spouse could move on by then. Even without it, the 1.5x salary should be enough to move on with.

Your still spending scared. Unless you're at an increased risk of dying just invest it.

Like I've been saying I've done little research on this, if someone can show statistics or their actual policy that shows it is beneficial, I'll agree.

 

[The White Coat Investor]

I always heard it's a bad idea to have two policies. Is one primary? Heard they will fight over who will payout if it's actually needed. Me and my wife are each covered at 500k each 30yr term. 3 dependents. Pay 59/mo. Should probably look into bumping mine up to a million.

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Not true. They will both pay.

 

[The White Coat Investor]

I am on the opposite end of this spectrum it would seem. I have a work policy that would pay out roughly $180k and I've added another 100,000 on top of it. I think I pay about $5 a month. I am 34 with a wife and one child. In the event of my death, this would pay off the house and any remaining bills and leave a little more on top. When we have more saved I will probably expand this, but I don't think I would go more than $500k in insurance. I can't fathom dropping $600 a month when it could be used for other more immediate things. Especially considering we are paying almost $1000 a month on health insurance. Unless that's one of those investment policies that pays money back, but I haven't really looked into that aspect yet.

Luckily, it doesn't cost anywhere near that to be adequately insured. The guy dropping $600 a month owns whole life insurance (probably a mistake, but I don't know his situation.) A million dollars of term insurance is probably $600 a YEAR. Life insurance is way cheaper than health insurance.

 

[The White Coat Investor]

Make sure the policy is sold in New York State

? Does he live in New York? Otherwise I wouldn't worry about that.

New York has the most zealous regulatory environment. Other states are more lenient in how they regulate insurance companies. If they sell it in N.Y. state your are less likely to have a problem with the policy.

What problems are you expecting? It's term life. You're either dead or alive. People don't have issues getting paid the death benefit due. This isn't disability insurance.

Make sure the policy is....convertible.

? Since almost no one needs whole life insurance, it seems convertibility is not a particularly useful feature. I certainly don't care if my policies are convertible, although most are anyway. Why wouldn't they be? The company would love for you to buy some whole life.

 

[The White Coat Investor]

Whole life has it's place but it is most certainly NOT for most people. Whole life should only be an option for those that max out other tax advantage retirement accounts first (IRA/401k etc). Meaning for many people term is the way to go and investing the difference. However - for those that do buy whole life it should be with a company that has low fees and high dividends. I have a whole life policy, it is a great product for those that maximize other savings/investment opportunities. Also - I was young when I purchased the policy so my premiums are low relative to many folks. Again - for the vast majority of people buying term and reinvesting the difference is probably ideal.

I would disagree that a whole life policy is a "great product for those that maximize other savings/investment opportunities." There are many opportunities that literally cannot be maximized. Thus, there would never be room for whole life. It certainly isn't a great investment, asset class, or retirement account despite how frequently it is sold that way.

I mean, I'll give you that buying whole life insurance before maxing out retirement accounts is stupid, but that doesn't mean it is smart to buy it after maxing out your retirement accounts.

 

[The White Coat Investor]

Why the hell does one need life insurance for 40 years?

You don't buy life insurance because you're scared of dying, you buy it because you have dependents and if you die at age 40, the whole $500/mo x 40 year plan just went to pot.

You mean life insurance doesn't bring me back to life? That sucks.

 

[Tortelloni]

I phrased that poorly.

It's a good product for my situation - it has it's place. For most it's no bueno.

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[confettiflyer]

My bad make it 200 to 260k over 20 years at 5 or 7%. Add that to hopefully a cheap term plan your company gives you and if you die at 40 it comes to 400k. I would hope your spouse could move on by then. Even without it, the 1.5x salary should be enough to move on with.

Your still spending scared. Unless you're at an increased risk of dying just invest it.

Like I've been saying I've done little research on this, if someone can show statistics or their actual policy that shows it is beneficial, I'll agree.

Duh the expected value always benefits the insurance company (hence actuarial sciences), but that was never the point. Mitigation of catastrophic events is the name of the game.

Airline companies still insure their flights/planes despite the incredibly low death/accident rates...why? Because one event can wipe out a company.

Cheap term for short periods is the way to go. Term is so incredibly cheap assuming you're insurable most of us piss away more money on coffee daily.

And most people don't start saving for death at age 20....more realistic that this dead-at-40 person started saving in earnest at the start of their pharmacy career at 25-30.


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[wagrxm2000]

Duh the expected value always benefits the insurance company (hence actuarial sciences), but that was never the point. Mitigation of catastrophic events is the name of the game.

Airline companies still insure their flights/planes despite the incredibly low death/accident rates...why? Because one event can wipe out a company.

Cheap term for short periods is the way to go. Term is so incredibly cheap assuming you're insurable most of us piss away more money on coffee daily.

And most people don't start saving for death at age 20....more realistic that this dead-at-40 person started saving in earnest at the start of their pharmacy career at 25-30.


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I think we might be agreeing. Short answer don't get whole.

 

[pharmd 08902]

I have whole life 250k @ $134/ month
I trusted a friend to give me good advise and didn't do research on my own.
I told him to f$&@ off once I realized I've been fooled
My policy is through penn mutual
Should i covert the whole to term?
Would that be better than starting from scratch?
I was in my late 20s when I signed up for term, now in early 30s
What can I expect to pay for $1,000,000 coverage?

 

[confettiflyer]

I have whole life 250k @ $134/ month
I trusted a friend to give me good advise and didn't do research on my own.
I told him to f$&@ off once I realized I've been fooled
My policy is through penn mutual
Should i covert the whole to term?
Would that be better than starting from scratch?
I was in my late 20s when I signed up for term, now in early 30s
What can I expect to pay for $1,000,000 coverage?

Surrender it and start fresh. $1M for a healthy early 30's male is something like $600-800/yr for a 30 year level term policy.


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[Tortelloni]

NEVER BUY WHOLE LIFE INSURANCE and TIMESHARES! NEVER TRUST ANYONE WHO TRY TO SELL YOU ANY OF THESE PRODUCTS.

This video is better at explaining your point. Dave Ramsey is not wrong but saying "I'm right you are wrong just listen to me" does not educate folks. Cheers.

 

[sakigt]

$500k 20 year term, $89/quarter
33 WF, two kids
Also have the cheapo stuff from work. $100ish a year for $200k, plus all the random free ones from my credit unions, clubs etc

I also have it all in a file and hubbs knows where it is

 

[MD Financial Services Scott]

I have whole life 250k @ $134/ month
I trusted a friend to give me good advise and didn't do research on my own.
I told him to f$&@ off once I realized I've been fooled
My policy is through penn mutual
Should i covert the whole to term?
Would that be better than starting from scratch?
I was in my late 20s when I signed up for term, now in early 30s
What can I expect to pay for $1,000,000 coverage?

\
You should expect to pay about $25 per month from a 10 year rate lock, $35-$40 for a 20 year rate lock.

 

[MD Financial Services Scott]

$500k 20 year term, $89/quarter
33 WF, two kids
Also have the cheapo stuff from work. $100ish a year for $200k, plus all the random free ones from my credit unions, clubs etc

I also have it all in a file and hubbs knows where it is

If you pay it annual, semi-annual, or monthly it is less expensive than quarterly....that mode of payment is the most expensive. Sometimes that cost is as much as 8% more. In addition I just ran numbers for you and assuming you are in good health that $500k for 20 years should cost you $210 per YEAR, you can get $1,000,000 for 20 years for $355.....I think you need to have a discussion with your agent.

 

[ericn2k3]

If you pay it annual, semi-annual, or monthly it is less expensive than quarterly....that mode of payment is the most expensive. Sometimes that cost is as much as 8% more. In addition I just ran numbers for you and assuming you are in good health that $500k for 20 years should cost you $210 per YEAR, you can get $1,000,000 for 20 years for $355.....I think you need to have a discussion with your agent.

What monthly rate should I be expecting? 31/yo M. Non-smoking, healthy, Married w/1 yo. 20 yr vs 30 yr. Thanks

 

[MD Financial Services Scott]

Assuming great health you should be $35 for a 20 year and $62 for a 30 year rate lock on $1,000,000 of coverage, those are monthly rates and annual rates would typically be 4% less.

 

[MD Financial Services Scott]

What monthly rate should I be expecting? 31/yo M. Non-smoking, healthy, Married w/1 yo. 20 yr vs 30 yr. Thanks[/QUOTE

Annually, assuming great health, 20 year is $415 +/- and 30 years can be locked down for $724 apx.