Term life insurance

[Matt Day]

A friend of mine recently passed away from lung cancer at 40, and had $1M in life insurance which is (and will in the future) really help his family. This has me thinking I should get consider getting term life insurance as well.

I’m 38, pretty fit and very active, and got a quote from Health IQ (through Banner Life) for $85/month for 30 years. After a physical and reviewing my health records I qualified for the “preferred plus” class which apparently is the best health level which should be the best pricing.

Question is, is $85/mo a good price? I always shop things like this around and was hoping you all could chime in with your experience.

[Frederick Skelly]

I was quoted $100 per month for 30 yr term. So if the company is secure - doesnt help your family if they go belly up in 2 years - I'd say you got a fair price.

[Dan Friedrichs]

Everything you need to know:
https://www.whitecoatinvestor.com/ho...ife-insurance/

[Jim Becker]

It's a good idea to get a contract now while you're younger and in very good health. But before you sign for the contract you have a quote for, do some additional shopping around. The rate you have, assuming it's for $1M isn't bad at all, but this is something you can get multiple quotes from. If you are a member of AAA, for example, check with them on rates...they did a good job for me when I last bought additional term life insurance. It was much less expensive than the group life program with my former employer (I had an age change that ramped up the group rates) and I knew I was going to retire in some reasonable period of time when I made that change. With a special needs adult kid and my younger just starting in college, it was important to me to maintain a higher level of coverage for a some period into the future. (I envy you on those 38 yo rates... )

[Matt Day]

Thanks guys - appreciate the information. I’m going to get a quote locally for comparison.

Also, I think I’m going to get a quote for a 15 year term. In 15 years the kids will be out of high school and independent enough where my wife wouldnt need to hire help for them. I’m a stay at home dad and my wife is the breadwinner, so I don’t have a salary to replace.

[Dan Friedrichs]

Matt, did you see the link I posted? There is no reason to shop "locally" - term life is a commodity, prices between agents are ~same, you'll find the all prices transparently available on term4sale.com (and you can tweak years/benefit/etc as much as you like and get immediate quotes). A local agent is likely to try to steer you to a more expensive product - much better to find exactly what you want on term4sale, print out the quote sheet, walk into the office of a local agent and say, "I want exactly this at the listed price"

[Jim Becker]

I’m a stay at home dad and my wife is the breadwinner, so I don’t have a salary to replace.

I think you vastly underestimate your "salary"...

Dan is generally correct that you can and should shop for term life online as that's often the best way to find the lowest rates. But I also do believe that there's no harm in shopping with a local independent agent, too, especially if you are an "informed consumer" who already knows what the general rates for your age and health should be.

[Ralph Okonieski]

If you are a veteran, try USAA for term life insurance. I think they only sell to veterans now.

[Marshall Harrison]

i just wanted to caution you about getting insurance information from strangers on the internet. Talk with one or more licensed local professionals.

[Aaron Conway]

Don't just shop and base your decision on price. You need to consider the rating of the insurance company for financial stability. You may not get a better rate from a local company but you should get better service in the event your spouse needs to cash in that policy. I buy mine through the Knights of Columbus so I know that my wife won't need to worry about a thing should I pass and my local agent will take care of everything. Please do your research and make a decision to take care of your family should you not be around.

[Andrew Kertesz]

Why do you want Term insurance? You need to talk to an educated agent and look at policies that build cash value. There are many ways to cover yourself and start generational wealth. Take the blinders off and look at different options before you sign on the dotted line....

[Lee Schierer]

I agree with Andrew. With Term insurance when the term ends you have nothing. There are other policies that may cost a bit more, but build a cash value that you can cancel and get some return on the investment if you later decide you don't need it.

[Malcolm McLeod]

... look at policies that build cash value. ...

... and get some return on the investment ...

There is an adage that's way older than I am, "Buy Term Life and invest the difference."

This certainly isn't in my experience wheel-house, but I believe the insurance product Lee & Andrew are referring to is called a Whole Life policy - tho' carriers probably disguise it with eleventy-seven other names. If you look at this as an investment, for equivalent death benefit policies a Whole Life policy costs more, but builds cash value. The catch is that the interest they pay on the accumulated cash value has traditionally been very low. I'd bet its near zero in today's low interest environment? IF you have the discipline, Term Life and investment has been, and probably will continue to be, a better long-term deal.

Most investment advisers would probably follow the adage. Most insurance salesman would probably sell you Whole Life.

As to investment discipline, in some ways it's like escrowing your property taxes with your mortgage payment: some people have the discipline to set aside money for their annual tax bill; others allow their mortgage company to 'force' them to save... YMMV.

Adder: pretty good explanation here .... https://www.consumerreports.org/cro/...-you/index.htm
Adder^2: Just read Dan's link :: even better.

[Dan Friedrichs]

Adder^2: Just read Dan's link :: even better.

Glad someone saw what I posted. Seriously, folks - just read that link. It's the most information-dense and useful thing you'll ever read about life insurance.

Whole life is a terrible choice for most people. The reason you hear about it at all is because the commission made by an agent selling it is MUCH higher than a term policy, so they push it. That's another reason it's almost foolish to involve a "local" agent in your life insurance search - the "friendly, local guy" sitting across the table is going to talk you into a product that makes him the most commission, not what's in your best interest. The sales commission on a term life policy is roughly equal to 1x the annual premium - so, like, $200? You think a local agent (who has office rent to pay and staff overhead) is going to work really hard to get you the best policy in exchange for a one-time payment of $200?

[Jim Becker]

I've been around the insurance business life-long...my father was extremely successful in the business for 30+ years and I spent some time there, too. While "whole life" may have a place for "last expenses", especially when purchased at an early age at a lower premium, for pure insurance purposes, term life brings the best bang for the buck when you are talking about the typical $500K-$1M that many of us purchase to provide financial resources to our families should we meet an early demise. That, combined with a sound, but separate, investment plan to "build wealth" is what I subscribe to personally. It is very true that price alone shouldn't be the deciding factor. Company stability and good service are also important.