How to solve this life insurance problem?

[Anonymous]

My (female, 47) term life insurance policy ran out this year right when I was diagnosed with breast cancer. I had very limited bandwidth to solve the problem then, and ended up converting automatically to the very expensive option that our current provider (USAA) offered.

I have now completed my treatments and am cancer free (!). What is the best way for me to find a hopefully much better deal? Should I just contact USAA? Or is there a broker who can help me look across multiple providers? Please help me get this process back in gear!

Thank you!

[Anonymous]

Do you have children? How old?

Unfortunately it will be very expensive because you just beat cancer.

[Anonymous]

Go through a broker but I think it’s unlikely that you will be able to get a new policy post cancer.

[Anonymous]

Insurance broker here. Sorry, but you ain’t getting approved for life insurance for many years—and, even in the future, it won’t be at remotely the same rates that you were used to.

When you say “converted,” I’m assuming you converted a term life policy into a universal life policy. That’s generally very expensive but is really not a bad deal for someone in your situation. Actually, you may be getting a steal relative to the risk that you pose to the insurance company. Remember, no other company wants to insure you now—AT ANY PRICE.

Side note: this is why you always get a longer term than you think you’re going to need. Your finances and health don’t always cooperate with the vision you had of your future. Fortunately, my clients don’t think I’m trying to upsell them unnecessarily. I have just seen this type of situation over and over and over again.

[Anonymous]

OP here…thanks for these replies. Whats the best thing to do financially in this situation, then? Do we increase our savings in some way to mitigate risk to my husband and kids (ages 10 and 12)?

[Anonymous]

Anonymous wrote:Insurance broker here. Sorry, but you ain’t getting approved for life insurance for many years—and, even in the future, it won’t be at remotely the same rates that you were used to.

When you say “converted,” I’m assuming you converted a term life policy into a universal life policy. That’s generally very expensive but is really not a bad deal for someone in your situation. Actually, you may be getting a steal relative to the risk that you pose to the insurance company. Remember, no other company wants to insure you now—AT ANY PRICE.

Side note: this is why you always get a longer term than you think you’re going to need. Your finances and health don’t always cooperate with the vision you had of your future. Fortunately, my clients don’t think I’m trying to upsell them unnecessarily. I have just seen this type of situation over and over and over again.

I don’t think you need a longer term than you think you will need, but you do need to be realistic. I don’t know why you would get a term that ends when the kids are this age.

[Anonymous]

Do you work? Employers often provide 1x salary life insurance for free but have an option to buy a higher coverage at a group rate

[Anonymous]

Anonymous wrote:Do you work? Employers often provide 1x salary life insurance for free but have an option to buy a higher coverage at a group rate

Usually this option requires medical exam/history.

[Anonymous]

Anonymous wrote:OP here…thanks for these replies. Whats the best thing to do financially in this situation, then? Do we increase our savings in some way to mitigate risk to my husband and kids (ages 10 and 12)?

Are you asking if you need to increase savings in addition to keeping your life insurance? Is the coverage not enough?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do you work? Employers often provide 1x salary life insurance for free but have an option to buy a higher coverage at a group rate

Usually this option requires medical exam/history.

Not at my company. I can choose any coverage up to 6x salary without an exam

[Anonymous]

This isn’t helpful to OP but everyone, if they can, should be getting a 20 year policy the year their kids are born for max protection

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do you work? Employers often provide 1x salary life insurance for free but have an option to buy a higher coverage at a group rate

Usually this option requires medical exam/history.

NP - ours doesn’t. We can elect in 5x our salary. No medical exam required.

[Anonymous]

My dh couldn’t get life insurance when kids were little bc of cancer so we doubled the amount on me so the kids would be ok if both dh and i died. We also saved more aggressively than we would have otherwise to build a cushion for me in case something happened to dh.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you work? Employers often provide 1x salary life insurance for free but have an option to buy a higher coverage at a group rate

Usually this option requires medical exam/history.

NP - ours doesn’t. We can elect in 5x our salary. No medical exam required.

Just don’t cancel your outside life insurance if you get one through work because if you leave your work they will require an exam to continue your coverage.

[Anonymous]

Anonymous wrote:OP here…thanks for these replies. Whats the best thing to do financially in this situation, then? Do we increase our savings in some way to mitigate risk to my husband and kids (ages 10 and 12)?

Yes. I'm younger than you and I don't have life insurance because: (1) I've saved over $600k between 2 kids in 529 plans, (2) I have 7-figures in my retirement account that would go to DH, (3) I also have a brokerage account with a nice sum, (4) DH earns enough to cover all household expenses without me, and (5) they would also get my social security survivor benefits. I feel like life insurance is unnecessary. So, I would amp up savings, but I wouldn't go extreme. As a cancer survivor, you probably understand better than most that life is short and you should make the most of the time you have.