term life insurance advice

[Anonymous]

We just had our third baby last month, and I'm finally getting my act together to get some life insurance. How much life insurance do I need to cover expenses for 3 kids if something happens to me?

I'm thinking we'll need to cover most of the cost of childcare, the mortgage, and college expenses. Anything I'm missing? I'm planning to ladder 3 policies, so that I'll have higher coverage for the next decade when our childcare costs are highest, and the least amount of coverage when our kids are in or just finishing college and our mortgage is hopefully mostly paid off. I'd appreciate advice on amounts of coverage and good reputable companies. Most of the info I'm finding on companies is on how financially sound they are--useful, but I'd also like to know who is more likely to dispute a death claim or terminate my policy if we change our direct deposit account or move and miss a bill.

And, I'm still about 10 lbs up from my pre-pregnancy weight. Is there any downside to buying a policy now, and then just scrapping it and getting a new policy when (if!) I get back to a healthy weight?

[Anonymous]

I based my amount on my salary initially. I think I did 6x salary. I recently got individual term life and backed it down to $1 million since my kids are older, we have college fully funded and we have significant savings so the income replacement needs aren't so great.

I did wait until I lost weight to go through the application process. But I was 30 lbs overweight. If you are within normal weight guidelines you are fine. You should be able to look that up online. I was at the high end of normal and got a "best" rating for insurance.

[Anonymous]

You may want to consult with an indpendent life insurance broker if you're interested in a slightly more complicated, laddered setup. My husband and I purchased simple plans - mine is a 30 year level term, so we just used Accuquote and bought from the least expensive company with decent ratings.

[Anonymous]

You should compare prices on multiple policies vs a single policy. As I recall a $1 million policy was fair bit less than double the cost of a $500k policy, plus I think you can always ask them to reduce the amount of insurance you have...

[Anonymous]

Anonymous wrote:You should compare prices on multiple policies vs a single policy. As I recall a $1 million policy was fair bit less than double the cost of a $500k policy, plus I think you can always ask them to reduce the amount of insurance you have...

This is generally not the case. Usually there is a policy issuance fee of a small amount, say $35 and but for that $1m is twice $500k.

[Anonymous]

Consider laddering, like 500k for 20 yr and 500k for 30 yr term instead of 1m for 30 yrs.

[Anonymous]

Both my husband and I have 20 year term policies

Things we considered in having 20 year term policies.
1. Our current age and expected years of employment prior to retirement.
1. We have a 15 year mortgage - the policy will cover the mortgage amount as necessary
2. At 20 years, our oldest 2 children will be out of high school. By this point in time, college is either funded or not. Child #3 will be in high school.
3. We have decent retirement savings already - this savings rate will continue to help cover costs after the term policy expires

[Anonymous]

One suggestion is to wait until you've stopped nursing or at least another few months to make sure that your blood tests are normal. Losing the weight is also a good idea. I understand that those life insurance exams are tough.

I've got 7.5 times my salary in a 20 year term. Bought when my youngest son was 6 months, so both kids will be in college when the term is over. Like PP said, college will either be funded or not, and we'll hopefully be in good shape with respect to retirement.

[Anonymous]

Not OP, but I signed up for life insurance through my company and the insurer asked me to fill out a health form. I recently had a baby and am 40 pounds overweight. Not sure what I should put as my weight. After filling out the form, do they also require a physical exam? If so, maybe I should wait an sign up next year. Is it going to look weird not to submit the form they requested?

[Anonymous]

Anonymous wrote:Both my husband and I have 20 year term policies

Things we considered in having 20 year term policies.
1. Our current age and expected years of employment prior to retirement.
1. We have a 15 year mortgage - the policy will cover the mortgage amount as necessary
2. At 20 years, our oldest 2 children will be out of high school. By this point in time, college is either funded or not. Child #3 will be in high school.
3. We have decent retirement savings already - this savings rate will continue to help cover costs after the term policy expires

We also got 20 year term policies for similar reasons. I made sure that the policies were more than enough to pay off the mortgage, death expenses (funerals are expensive!) and still have some padding for extra money for the family. We both make about the same amount, and much more than we need to live on, even for the surviving spouse and two kids, provided the mortgage is paid off. We can also opt to pay down much of the mortgage, but not all, reducing the payments and have more money for other expenses, such as college, if necessary. And this is in addition to the retirement benefits that we each have.

[Anonymous]

Anonymous wrote:Not OP, but I signed up for life insurance through my company and the insurer asked me to fill out a health form. I recently had a baby and am 40 pounds overweight. Not sure what I should put as my weight. After filling out the form, do they also require a physical exam? If so, maybe I should wait an sign up next year. Is it going to look weird not to submit the form they requested?

When I had employer life insurance they didn't do an exam. Definitely had it for private insurance though, and the tester brought a scale.

[Anonymous]

OP here. Don't forget child care expenses when you calculate how much you need. We definitely couldn't pay those on one salary alone if one of us died.

About waiting till you lose the weight--i never did lose it after my first. is there any reason not to get a policy now, and then just let it lapse if I lose the weight and can qualify for a cheaper policy?

[Anonymous]

Anonymous wrote:Not OP, but I signed up for life insurance through my company and the insurer asked me to fill out a health form. I recently had a baby and am 40 pounds overweight. Not sure what I should put as my weight. After filling out the form, do they also require a physical exam? If so, maybe I should wait an sign up next year. Is it going to look weird not to submit the form they requested?

If you apply for life insurance you usually have to report that on later insurance applications, but if it's employer-provided insurance I don't know if you have are really applying for it, or what.

[Anonymous]

You will want to talk to a broker. I have a $5 million policy on my husband and same on me and our college expenses are fully funded. I would get 20 year if they will be out of college by then.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not OP, but I signed up for life insurance through my company and the insurer asked me to fill out a health form. I recently had a baby and am 40 pounds overweight. Not sure what I should put as my weight. After filling out the form, do they also require a physical exam? If so, maybe I should wait an sign up next year. Is it going to look weird not to submit the form they requested?

If you apply for life insurance you usually have to report that on later insurance applications, but if it's employer-provided insurance I don't know if you have are really applying for it, or what.

The form specifically asked for my height and weight. Then a yes/no check list for HIV, chronic conditions, mental health, etc.