life insurance

[GuP]

Can someone explain to me the benefit of having two term life insurances i.e. as you guys are recommending with one for 1 mil 20 year and one for 2mil 30 year VERSUS just having one big one(3 or 5mil) for 30 years?

---

Members don't see this ad.

 

[BLADEMDA]

Can someone explain to me the benefit of having two term life insurances i.e. as you guys are recommending with one for 1 mil 20 year and one for 2mil 30 year VERSUS just having one big one(3 or 5mil) for 30 years?

It is up to you. The idea behind Term is buy what you need for only as long as you need it since the money spent is gone. You should have a net worth over $1million in 10 years and hopefully $2 million by 20 years. So, why keep paying for life insurance you don't really need?

The idea behind two policies is the concept that from year 20-30 you are partially self-insured. Hence, Policy number 1 could be for 2 miilion Level Term 20 while Policy number 2 is for $1 milllion Level Term 30. Perhaps, you prefer it the other way around or like to spend all your money on cheap women and liquor?

There is nothing wrong with buying a Level Term 30 policy ONLY with a value of $3 million. But, I'd prefer not to waste my money on extra insurance that I don't need.

 

[IlDestriero]

It is up to you. The idea behind Term is buy what you need for only as long as you need it since the money spent is gone. You should have a net worth over $1million in 10 years and hopefully $2 million by 20 years. So, why keep paying for life insurance you don't really need?

The idea behind two policies is the concept that from year 20-30 you are partially self-insured. Hence, Policy number 1 could be for 2 miilion Level Term 20 while Policy number 2 is for $1 milllion Level Term 30. Perhaps, you prefer it the other way around or like to spend all your money on cheap women and liquor?

There is nothing wrong with buying a Level Term 30 policy ONLY with a value of $3 million. But, I'd prefer not to waste my money on extra insurance that I don't need.

Exactly. After 20 years on the job, barring disaster, my house will be paid off and my kids will be on their way to college, which is also funded. I also should have enough money for my family to live on comfortably. My wife is also a professional. The last $1m that goes to 30 years is really insurance against unforseen problems which could interfere with my plans. A 20 and smaller 30 yr policy is significantly cheaper than one large 30 yr plan. My wife only has a 20 yr plan because I don't really need her income at all, but it would pay for a live in nanny, etc while the kids are still living at home.
I probably don't need the insurance level that I have, but it's not expensive and it will provide an adequate cushion in case everything else I've got going goes balls up. For me it's 2m/1m, your plans may require more or less depending on your family size and situation. For example, will you have to take care of your parents? That could require another million. When you're planning these multi million dollar plans talk to your financial planner about how to structure things, and as the inheritance laws change, and your assets increase, you're going to need to reevaluate your plans and potentially make changes.
Cheers!

 

[Robert Loblaw]

anyone take out a term policy on a (currently) stay-at-home spouse?

 

[deleted126335]

anyone take out a term policy on a (currently) stay-at-home spouse?

Yup. When my first kid was born got a 15 year level term policy @ 500K. Cost peanuts. Realistically, if my wife kicked the bucket I would have needed a live in nanny for at least a decade. It has already expired. Didn't renew. Could self insure this particular liability. The financial part anyway.

 

[pgg]

anyone take out a term policy on a (currently) stay-at-home spouse?

Absolutely. Initially $1 million for mine (dirt cheap for a young healthy nonsmoker), now only $500K since our kids are aged 10-14 and the kick-outta-the-house dates are in sight.

The cost of hiring someone to be a mom to 3 kids for 15+ years just during daylight hours, plus the cost of a nighttime sitter / lost income from not taking call, is large.

 

[periopdoc]

I know this is another issue but lots of doc's I know have their assets (real estate) in trusts. Whst is the benefit there?

Asset protection.

- pod

 

[GoSoxGo]

Do any of you get life insurance as a benefit from your employer (PP or academics?) I'm a resident looking at life insurance options, which are expensive for me because I have a medical condtion, and I'm wondering if this will all be up to me or if I can count on some life insurance coverage from my employer someday.

 

[IlDestriero]

Do any of you get life insurance as a benefit from your employer (PP or academics?) I'm a resident looking at life insurance options, which are expensive for me because I have a medical condtion, and I'm wondering if this will all be up to me or if I can count on some life insurance coverage from my employer someday.

You don't want to rely on insurance from your employer as you might change jobs and then have to get it yourself. The older you are the more expensive it is, also you might develop hypertension, high cholesterol, or worse. Good luck getting a policy after you've had a significant medical problem. I do have some from the university. It is automatic, without med clearance, etc. I think it's $100k. You can buy more, but only up to $1m, so you'd need your own policy anyway. I don't know if you can keep it after you leave or not, but I'd bet not. I had 2 term policies, 20 and 30 years. I bought another 20 year $500k a few years later when I decided I was a bit underinsured. When the kids are out of school I won't need it.

 

[deleted126335]

Do any of you get life insurance as a benefit from your employer (PP or academics?) I'm a resident looking at life insurance options, which are expensive for me because I have a medical condtion, and I'm wondering if this will all be up to me or if I can count on some life insurance coverage from my employer someday.

What you are referring to is known as group term life. The coverage is usually tied to emplyment- i.e., you leave the job, the coverage goes away. Sometimes excess coverage is available for a charge. THe excess coverage may or may not be subject to medical underwriting.

Excluding internship and residency, I have had group term life as a benefit with three different employers ranging from 250-500K.

 

[excalibur]

Hey thank you all for this wonderful thread. I am in the process of looking for more life insurance. I have the group life insurance through my employer, but it is not enough.

After reading the thread and other websites like whitcoatinvestor I can tell that term life insurance is the way to go with a 10 yr term and a 20 yr term combo a serious possibility.

Does anyone here have life insurance through the AMA?? I keep getting these letters from them for this. Is it dirt cheap as an AMA member? Is this something I should even consider?

I have home and auto insurance with Allstate. I have no problems. I spoke in detail with my local agent, and I liked what I heard.

I know advice here was to get cheap term life insurance from a well known respectable insurance agency. I would assume Allstate would be a respectable agency, right? I don't believe it is the cheapest, but there is that comfort level of having all my insurace policies at one place.

So, thoughts on Allstate term life? Thoughts on AMA life insurance--anyone have it?

 

[excalibur]

Posting again to see if anyone has thoughts on Allstate life insurance or if anyone has life insurance through LMA

 

[ChoiceFinancial]

Posting again to see if anyone has thoughts on Allstate life insurance or if anyone has life insurance through LMA

Not sure if you are still looking for a response, but association coverage is similar to group coverage. Meaning the premium tends to go higher every 5 years based on age brackets. So be sure to read the contract.
As for Allstate, I would just compare them to a life insurance carrier. Their niche is more home/auto. It's pretty easy to find an insurance broker to spread sheet a few carriers for you. Remember to look into the ratings and benefits as well, it's not all about the monthly cost.

 

[johncunningham]

I bought a 30 year level premium term when I finished training and had a baby 5 years ago. 2MM 30 years. It costs me ~1350/year. Short money as far as I'm concerned. My wife works very part time (outside the house) but we have 3 little ones now. I had briefly considered taking out a smallish term policy on her, but changed my mind when I realized that a couple years of attending salary with moderate frugality and reasonable investment performance leaves us no need. Life is good. the FU account that everyone loves to talk about is growing quite nicely at the Cunningham house.

 

[BLADEMDA]

I bought a 30 year level premium term when I finished training and had a baby 5 years ago. 2MM 30 years. It costs me ~1350/year. Short money as far as I'm concerned. My wife works very part time (outside the house) but we have 3 little ones now. I had briefly considered taking out a smallish term policy on her, but changed my mind when I realized that a couple years of attending salary with moderate frugality and reasonable investment performance leaves us no need. Life is good. the FU account that everyone loves to talk about is growing quite nicely at the Cunningham house.

Nice move.

Remember to save money in the F U account, pay down debt and invest for the long run.
You may want to buy a prepaid college plan for the kids and start a 529 plan. I did both when my kids were very young and I recommend it.

 

[excalibur]

Thanks all for advice. I am in good hands with Allstate. $2M 20 year term and a $1M 30 year term. 30 yr policy will end for me at age 64.