Life Insurance
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Anonymous
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DH and I are looking into getting life insurance. Both of us have small policies through our job, but we want to get something significant since we have a child now.
National Life group did a presentation for us where they said the life insurance policy with them could be used for other things such as college tuition, retirement, etc. I'm not familiar with what the best types of plans are? Anyone familiar with this one? |
Anonymous
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That national life insurance sounds like whole life-- stay far away from it and anyone who suggests you combine insurance with investments.
(I'm sure someone will come along to say that for one in 100,000 people it makes sense to buy whole life insurance but I used to work in that area and I think it's probably more like 1 in 10 million, and if you don't have a team of financial/legal advisers and tens or hundreds of millions in assets you are not one of them). You want term insurance, and level term for as long as you expect to need it. For example, if your kid 2, you might 20 years, until your kid is out of college. If you might have another kid, consider 30 years (although it's a little more expensive). You can get quotes from different companies from sites like insure.com. You can also read up on insurance at CN/Money personal finance 101 website. |
Anonymous
| NP. Also consider return of premium insurance, OP. You pay a higher monthly fee but they pay you everything back if you survive the length of the policy. Win, win. |
Anonymous
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The only thing you need is a hefty TERM LIFE policy, at least 10 times (for each of you) what you each make. So if you make 70K, get a 750K policy. We did a 30-year but 20 is probably fine too if you're a good financial stewart and expect to have home and college savings finished by then.
Run away from any gimmick (ie: whole life) policy. They're abysmal. I could explain why, but there are thousands of articles on it. The only people who think whole life policies are useful are people who sell whole life policies. Try zander insurance - they are a life insurance broker and can look for best prices for you. TERM LIFE. That's all you need. |
Anonymous
| Get term unless you have an unusual situation. We have 80% term and 20% whole/universal, but we have a complicated situation where this makes sense. For most people, term is the way to go. |
Anonymous
the pricing on this is usually not worth it. if you are comfortable running the financial calculations then do them. if you aren't then don't buy it and invest your extra money elsewhere. |
Anonymous
| Get term, not whole or universal or anything except term. Think about how much you will need for what period of time. Who is the beneficiary (person getting payout)? Usually it makes sense if you have kids - so get it for the period that you would normally support them, and coverage the amount you would have earned to support them. Or if beneficiary is spouse - you likely would have supported them until you retired, so get amount reflecting that. Make sense? |
Anonymous
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OP we are going through this right now. Through the wonders of DCUM we got connected with this broker and he's been AWESOME in terms of finding the best policies for us: (He's also hilarious.)
Leonard Kopp 301-581-7390 lkopp@meltzer.com |
Anonymous
Exactly this. We both make around $200K - we are both getting $2mm policies for 20 years. |
Anonymous
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Agree, no whole life.
Get two term life policies ine for 10 years and one for 20 years. We did half and half, based on that 10 years from now we would have significant college savings, and then mortgage gone, but your projections might be different so do it differently. Policies with a shorter term are cheaper and 20 years from now, we won't need the same amount as we do now. |
Anonymous
Which companies offer this? |
Anonymous
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Okay, so I figured out that this is a universal policy, it's similar to whole I guess but it has an investment component.
If we got a term policy it would expire, so what's the benefit of getting a term policy which you may outlive and then getting whole life would be expensive right because I'd be much older? |
Anonymous
The benefit of getting a term policy is that it will be much cheaper to get insurance for the period during which you need insurance, and then you can take the money you are not spending on fee-laden, expensive universal life and invest it somewhere else. You don't need life insurance for your whole life-- just the period during which someone is depending on your paycheck. If you really need life insurance coverage for more than 30 years and have unlimited funds to spend on life insurance then perhaps you want to consider whole/universal life, but that's not the case for the vast majority of people. |
Anonymous
| You need whole life if you own a farm or a lot of other nonliquid assets or a business. Otherwise your heirs will have to sell in order to pay taxes. |
Anonymous
| Piggybacking on this thread--does anyone know a good broker who can shop me around to different insurances? I am 32 and a (very well-controlled with just diet) type 2 diabetic, overweight, and had a parent die at the age of 50 (not from cancer or heart disease though--a fluke infection, really). I know these are dings against me, but I also know that someone will sell coverage to me, just need to find out who. I am located in NOVA, but I suppose it doesn't matter where the broker is located. I am currently pregnant, so won't be looking to write the policy for a few more months. Thanks. |