Life Insurance

[285south]

Been looking at life insurance by extensively reading whose who, five to ten year old news/stats/etc on them, and within the last 18 months for today's comparison since I will being getting a policy or two.

So question is:

1) who do you have it with,
2) single or multiple policies,
3) have term or whole life,
4) annual fee?

Book "What's Wrong With Your Life Insurance" by Norman Dacey, seems to be the must-read book before getting life insurance. So I will be reading that.

 

[skyactiv]

My brother has Western Southern Life. Is a pharmisist with a stay at home wife raising the kids. I'm sure his wife researched it before going with them.
My wife and I have no children, mortgage or debt. We both work and only have what our employers give us for free. Mine is 2080 X my hourly rate and if my wife dies it is what she earned the previous year.

 

[BubbaFL]

If you want professional advice, the best thing you can do is find a Certified Financial Planner who is competent in insurance matters.

 

[Shannow]

Insurance companies are businesses and not charities, which means much like lottery agencies, they are on the winning side of the ledger.

So statistically, and on average you are worse off with insurance. However, like the lottery, if you don't partake you don't win.

 

[Pop_Rivit]

Both my wife and I had term policies when we were young-if something happened to one of us the other wouldn't struggle financially. However, once we reached a level of financial stability we removed life insurance from our mix of financial instruments completely.

 

[bullwinkle]

I have a relatively small ($50K) whole life policy & my wife has a $50K term life policy, but as we've been able to save enough over the years, I haven't felt the need to buy more.

 

[Mr Nice]

I've got no cost $50,000 life insurance provided by my employer... but other than that I didn't purchase any life insurance.

I agree with Pop_Rivit about not needing it as reach a level of financial stability.

 

[supton]

Originally Posted By: Pop_Rivit
Both my wife and I had term policies when we were young-if something happened to one of us the other wouldn't struggle financially. However, once we reached a level of financial stability we removed life insurance from our mix of financial instruments completely.


I like that plan; sounds smart. I have term at the moment, but I like your idea, and maybe when my term runs out I will not bother renewing.

*

I have 1x my yearly salary at work as a benefit. We bought term when we got a house and kids, 20 year plans, so we have ten left on the policies. $164k on the wife costs $160, $450k for me at $560 per year, through Prudential, who had our auto and home insurance at the time. To cover us as we just bought a house and just had kids.

We got terms for our kids, but perhaps that was not wise. One of our kids was hard to insure because of his medical condition. Probably money wasted, but I have not been wise in getting advice over the years. Will say as advice, if one wants to insure their kids, do not delay, just in case something gets diagnosed.

 

[toneydoc]

Your questions have many things to be considered.
How old you are
How old and how many children you support
How much money you have saved for down the road
How many people you will need to support after you die
How long that support may need to last
How much money you have to spend on life insurance
How much insurance you have from employers
What kind and how much debt/mortgage you have
What kind of health you are in and can you pass physical exam for some insurance
Do you smoke and what kind of meds you take
And many others

Seek some good advice. Remember that life ins salespeople make commissions from sales and the companies make money.

Good luck in your research

 

[HerrStig]

Originally Posted By: BubbaFL
If you want professional advice, the best thing you can do is find a Certified Financial Planner who is competent in insurance matters.
"Certified" by whom?

 

[Bandito440]

Buy 10-year term policies if you need them while you're young and they're cheap.

When your older and (hopefully) retired and debt-free, they'll be progressively more expensive and it'll be time to step away.

 

[JHZR2]

10-20 year term policies. So long as the companies are rated financially strong, Im not sure it matters THAT much.

Term policies only.

The key is that you minimize your outlay of funds, since insurance is generally a bad deal with the odds in their favor. So you want just enough at low enough cost to cover catastrophic issues. Once out of debt with liabilities off your plate, you really don't need it.

I dont recall what we pay per million but it is pretty low. Granted we're young, but we got the longest term. We found the best rates for both of us were through a trade organization my wife is part of.

 

[4wheeldog]

Originally Posted By: JHZR2
10-20 year term policies. So long as the companies are rated financially strong, Im not sure it matters THAT much.

Term policies only.

The key is that you minimize your outlay of funds, since insurance is generally a bad deal with the odds in their favor. So you want just enough at low enough cost to cover catastrophic issues. Once out of debt with liabilities off your plate, you really don't need it.

I dont recall what we pay per million but it is pretty low. Granted we're young, but we got the longest term. We found the best rates for both of us were through a trade organization my wife is part of.


This matches my view. My wife and I had term policies until our children were no longer a factor. If you build up an estate, you can consider yourself self insured.

Whole life is an expensive way to buy a substandard annuity. Don't mix the two.....Buy insurance for contingencies, and invest for the future......Separate pots of money.

 

[Bandito440]

Originally Posted By: 4wheeldog
Originally Posted By: JHZR2
10-20 year term policies. So long as the companies are rated financially strong, Im not sure it matters THAT much.

Term policies only.

The key is that you minimize your outlay of funds, since insurance is generally a bad deal with the odds in their favor. So you want just enough at low enough cost to cover catastrophic issues. Once out of debt with liabilities off your plate, you really don't need it.

I dont recall what we pay per million but it is pretty low. Granted we're young, but we got the longest term. We found the best rates for both of us were through a trade organization my wife is part of.


This matches my view. My wife and I had term policies until our children were no longer a factor. If you build up an estate, you can consider yourself self insured.

Whole life is an expensive way to buy a substandard annuity. Don't mix the two.....Buy insurance for contingencies, and invest for the future......Separate pots of money.

This is what I try to tell my many co-workers that purchased and continue to pay into a whole life plan. It's mediocre insurance and a terrible investment, but I can't convince anyone otherwise.

 

[JustinH]

My employer offers insurance on both myself and my wife.

We are in our early 30's.

I have a 250k policy on each of us for something like 5 dollars per month.

This way if one of us kicks, the house is paid off and a couple years worth of expenses taken care of.

 

[Patman]

Can someone explain to me how insurance companies can possibly make money on life insurance policies? The monthly payments over someone's lifetime will never be as much as the payout, so it simply makes no sense how they make money, unless they simply don't payout a lot of the policies somehow? (is that even legal for them to not pay a policy, for instance if someone didn't know that they were entitled to it so they never contacted the company to begin with)

I pay $20 a month for my policy and when I die (which I most certainly will someday!) the payout is $200,000. I started this policy at age 30, so even if I live to age 100 I will have only paid them $16,800. This seems like a massive money losing venture for insurance companies if you ask me.

 

[Oldmoparguy1]

Originally Posted By: Pop_Rivit
Both my wife and I had term policies when we were young-if something happened to one of us the other wouldn't struggle financially. However, once we reached a level of financial stability we removed life insurance from our mix of financial instruments completely.

We did the same. Also, we both have payouts from our company retirement plans. Just remembered, we have a free $5K policy through our credit union.

 

[SHOZ]

I have a term plan to cover funeral expenses.

 

[Wolf359]

Originally Posted By: Patman
Can someone explain to me how insurance companies can possibly make money on life insurance policies? The monthly payments over someone's lifetime will never be as much as the payout, so it simply makes no sense how they make money, unless they simply don't payout a lot of the policies somehow? (is that even legal for them to not pay a policy, for instance if someone didn't know that they were entitled to it so they never contacted the company to begin with)

I pay $20 a month for my policy and when I die (which I most certainly will someday!) the payout is $200,000. I started this policy at age 30, so even if I live to age 100 I will have only paid them $16,800. This seems like a massive money losing venture for insurance companies if you ask me.


What kind of policy do you have? If you have a term policy, when you renew, once you're 10-20 years older, the monthly rate isn't going to be $20/month anymore. I think what happens is that the rates end up going so high that people don't end up buying a policy so when they die, there's no policy in place. Also once you hit 70 or 80, you probably won't be able to buy a policy.

 

[285south]

I have brought the number of companies out there to a list of 4 and after doing even more research I found another one, making it 5, it's an association and I would be going with them. I'm happy even thou they are not a very large very known mutual company.

Originally Posted By: Bandito440

This is what I try to tell my many co-workers that purchased and continue to pay into a whole life plan. It's mediocre insurance and a terrible investment, but I can't convince anyone otherwise.


Yes whole life is a terrible investment.

The problem is that for those that do get it, get it because they know premiums go up after the years but they are the ones that should read that book: Book "What's Wrong With Your Life Insurance" updated in 1989 from 1963 by Norman Dacey that mention how he denounces the insurance industry as a whole for misusing policyholders' money. Huge surpluses from lapsed policies, investments and favorable mortality experience, argues the author, finance exorbitant executive salaries and agent compensation.

Now to the point I want to make about Whole Life without reading that book yet. Share with your friends/coworkers this from me:

Whole Life is for $100,000. As a 35 year old male (they're going to have to change age and monthly cost here) for me with the company I will be going with for Term but say I do go for Whole. It's going to cost me: 92.70/month for 20 years = $22,248.
Now if I bought it out right in 3 years: $414.60 monthly.

Saving me 7,322.4. Mine will also mature faster and not be a terrible investment. The reason why they are terrible investments are because the first year (and possibly up to 3) you're paying half the amount for commission to someone that did 3 minutes of work and you could have done it yourself in 15 minutes. People are lazy even with Google's almost instant results and yesteryear spending days at the library. Google is really just a Library Card Catalog.

Whole Life is the same as buying a 30 year Treasury Bond directly from Uncle Sam but without a commission.