Life Insurance questions

[Erin Stringer]

Based on my last question and the excellent advice I received I thought I would ask another (http://sawmillcreek.org/showthread.php?t=23404)

I need to get tips on Life Insurance. I know I need it but I'm trying to get information on who has what and if there are any big things to look for. I have figured out the basic differences between Term and Full Life and think that Term is the direction I want to head. Any advice is greatly appreciated.

Thanks in advance.

[Frank Hagan]

I used QuoteSmith and another one on-line (name escapes me now) but ended up with a company called (at the time) Zurich Life, that I called direct after recieving a direct mail piece from them. That was 6 years or so ago.

The thing these on-line places do is quote you a pretty good price based on your responses (non-smoker, weight, etc.) But there's almost a bait and switch type of thing at the end, because after the blood test and urinalysis, they say you don't fit into the category they first quoted you (even AFTER you gave them all the bad info about your weight up front!) And your premium will be several hundred more per year.

[Rich Konopka]

Erin,

Unless you are self employed or work for a small employer most companies offer some type of group life term policies that offers a reasonable life insurance policy. It is usually offered in a multiples (2x, 3x up to 10x that) of your salary/pay. It does not give you all of the protaction so do not rely on it solely. It also is not in effect if yu change employers.

Good luck

[Donnie Raines]

Feel free to PM me...I am in the insurance biz

[Jim Becker]

Group life with your employer should be your first stop since you can often get a lot of coverage for very reasonable rates, (my employer offers up to 7x annual earnings) but it shouldn't be the only coverage you have...jobs can and do go away at the worst times. Term life is what you want for the maximum coverage for the buck. And don't forget to be sure you have a lot of coverage on your spouse, too...losing either of you would have a profound financial impact on your family/kids.

[Donnie Raines]

Group life with your employer should be your first stop since you can often get a lot of coverage for very reasonable rates, (my employer offers up to 7x annual earnings) but it shouldn't be the only coverage you have...jobs can and do go away at the worst times. Term life is what you want for the maximum coverage for the buck. And don't forget to be sure you have a lot of coverage on your spouse, too...losing either of you would have a profound financial impact on your family/kids.

That has become a bit an issue in the insurance biz these days: folks thinking that term is the best bang for the buck. Term polices do not generate any cash value and most policies that are written remain steady in premium paid but loose certain benefits over time....thus they are often more expensive in the long run.

Whole life polices that carry cash value(tax deffered) and also carry universal features(varity of options) is ther most user friendly policy on the market today...and they are cost effective9depnding on riders you choose).

The problem with net shopping life insurance is that, unless you have a very good working knowledge of life polices, you are not viewing all of the option availble to you. Life polices are not just a blank sheet. The rate varies, big time, depnding on the idividual and the indivdual's health/history. Often time people think they quailfy for the preferred rate(rated down) when in reailty they on quailfy for the std rate(determined by the underwriters).

Get with a professional....you need not worry about being commited to just one if you meet with them. I meet with people all of the time...some times we hit it off...sometimes we don't...thats sales.

[Erin Stringer]

Thanks all for the responses so far. I have some price information for the term stuff available through work, it does look pretty good but they have a nasty habit of "letting people go" after 8-10 weeks of illness. If I "went" quickly in an accident I would be ok but if it were a long drawn out type of thing I could be in extra trouble.

[Marc Ward]

Based on my last question and the excellent advice I received I thought I would ask another (http://sawmillcreek.org/showthread.php?t=23404)

I need to get tips on Life Insurance. I know I need it but I'm trying to get information on who has what and if there are any big things to look for. I have figured out the basic differences between Term and Full Life and think that Term is the direction I want to head. Any advice is greatly appreciated.

Thanks in advance.
How old are you?
How long do you want your insurance to be in force?
How much do you need?

Buy your own, no need to mess with group stuff at work. Control your own insurance, keep it if you chance employers. It is VERY cheap to buy your own, probably cheaper than the "group".

Make sure to get lever premium for the years you need.

Term vs. Whole Life has been debated endlessly. Term is NEVER more expensive than whole life if you invest the difference in premium. For example, $500,000 whole life is $350 month, term is $50 (I am making up numbers for sake of illustration) per month. If you can AFFORD the $350 you will always be better off to buy the term and invest the $300 in a no load index fund (S&P 500) and then when the term runs out, you will have a shitload of cash.

Of course, if you can only afford the $50.00, your choice is clear.

[Frank Hagan]

Financial advisors (who don't sell insurance) will always tell you term is the better "bang for the buck" buy in life insurance. Assessing your needs is the first step: why do you want insurance? Is it to assist your wife in getting on her feet after you're gone, or do you have kids you want to provide for? Or, do you want the grieving widow to live better than she does now?

Some of the calculators on sites like http://finance.yahoo.com/insurance/life will tell you to use a multiple of your annual income, or to calculate your total payout to do what you want to ... pay off a mortgage, provide a lifestyle for your survivors that matches your current lifestyle, etc.

Once you have a number by assessing what you want the insurance for, you can also determine how long you want that insurance. If the primary reason is to make sure your kids have a shot at college, and they are 10 years old now, a 15 year term policy would do the trick. Then, after the need for a large policy is past, you simply quit paying for it.

If you want to have life insurance for the rest of your life, and not for a "season" of your life, then maybe whole life makes sense. The stuff gets a lot more expensive once you are in your 60's.

[Donnie Raines]

Term is only better for the dollar if you want stright life...no frills. If you are unaware of the options you are selling yourself short.

[Donnie Raines]

Financial advisors (who don't sell insurance) will always tell you term is the better "bang for the buck" buy in life insurance. Assessing your needs is the first step: why do you want insurance? Is it to assist your wife in getting on her feet after you're gone, or do you have kids you want to provide for? Or, do you want the grieving widow to live better than she does now?

Some of the calculators on sites like http://finance.yahoo.com/insurance/life will tell you to use a multiple of your annual income, or to calculate your total payout to do what you want to ... pay off a mortgage, provide a lifestyle for your survivors that matches your current lifestyle, etc.

Once you have a number by assessing what you want the insurance for, you can also determine how long you want that insurance. If the primary reason is to make sure your kids have a shot at college, and they are 10 years old now, a 15 year term policy would do the trick. Then, after the need for a large policy is past, you simply quit paying for it.

If you want to have life insurance for the rest of your life, and not for a "season" of your life, then maybe whole life makes sense. The stuff gets a lot more expensive once you are in your 60's.

You can choose a rider that will maintain a level premium on Whole life thus saving you money over the long haul(which is what the life product is all about).