I need help~ Life Insurance

sommerrayne · June 2011

I need help!

So we just met with a life insurance guy and this is the breakdown we were told

DH (age 37) = 600K 30 yr term + 25K whole life
+
Me (age 30) = 600K 30 yr term + 25K whole life

=
260 a mo

Each girl gets 25K whole life for 30 bucks a mo paying for 20 years.

Thoughts?

I seriously need help because I don't know what is a "good deal" or not.

AvaLikeLava · June 2011

I don't know what term + whole life is.

I signed up for personal coverage right after G was born at age 30. I pay $235/yr total for a 750K 30yr/term policy. So in effect, I get more coverage than you alone, but pay for the whole year what you two pay in one month.

I'm insured through West Coast Life. I worked with a life insurance broker who presented several companies and plans to me.

BRSaugust20 · June 2011

That seems high to me. I was 37 when I got mine 500k for 20 yrs and my dad died of a heart attack at 57 which hurt my rates and I think they were about $50 per month. We pay annually because it is cheaper that way. Go to www.selectquote.com they will price you through a bunch of name brand carriers and will come to your house to do the mini physical. We are going to get more now that we have ; and will go through them again.

RoxBride · June 2011

Ditch the whole life.

Stick to the term insurance. That should lower your monthly payment amount, which seems high. I would ask for a quote for just the term insurance.

And skip the insurance on the girls. 20 years of payments equals $7200. You would be far better off to take that money each month and put it in their college account, where it would grow. At 5 percent, you'd have close to 14K after 20 years. Cash, that can be spent anyway you want.

RoxBride · June 2011

Oh, I meant to add, in case this helps, a really dumbed down version:

Term insurance = insurance. You pay a bit. If you die, they pay out. If you don't die, they keep your money.

Whole Life = You pay lots more. If you die, they pay out. If you don't die, you have some cash value you can pull out.

It is almost always a better deal to buy straight up insurance, take the monthly cost difference and invest it on your own.

charmcitygirl · June 2011

Term life has a designated number of years where the rate is set. After that time (say 20 years), you would need to renew and that would inevitably be at a higher rate because you're 20 years older.

Whole life is exactly as it sounds. It is a policy that will last your whole life, from the time that you take out the policy.

Universal life is a life insurance and investment policy where you will gain equity in the policy and can take that equity throughout your life.

Obviously, whole and universal life are going to be significantly more expensive.

We have $3m term on my husband and $500k on me, thinking that it would get Jacob through his childhood and would be able to provide for me/him if something happened to our breadwinner. We pay $260 a YEAR for DH's policy and about $100 for mine.

Think hard about insurance for the girls. What would that money be needed for/used for if they (God forbid) were to die? If you need money for funeral expenses, then it could be significantly less. FWIW - we do not have insurance on Jacob.

I'm not in the insurance industry (anymore), so I can't tell you about rates. But definitely get a couple of quotes and compare. They are working with a lot of moving parts (your health, family history, insurance company rates, etc.) so they might be able to play with the numbers and get you a better rate.

dana316 · June 2011

Never buy whole life insurance. It is a complete rip-off.

Term is the only way to go.

I think you can find more good info at daveramsey.com on why whole life is a bad, bad idea...

schmoodle · June 2011

That sounds high to me. DH and I have $750k coverage for each of us, I'm 31 and he's 40, we're both obese (which factors in - we had to have physicals done), and we pay around or a little less than $40/month each. I don't recall the specific type of coverage we have, except that our broker indicated it was a short term/stop gap type of coverage that we should put in place for now until we had trusts/wills set up and then we'd be able to get something better and cheaper, so that's on the high side according to her.

PrincessShay80 · June 2011

Ditto to no whole life, Term only! I'm not sure if I read it correctly, but you are getting 25K for your children? The reason to get life insurance is to replace your income, since children don't have income they don't need life insurance- you are better off taking the money you would pay into a life insurance policy and invest in in a mutual fund or a 529 plan for your kids.

DH has 3 million in term and I have 1 million in term- we pay $100 month for both.

You need to get a new quote on term.

ManciniD · June 2011

I think whole life is a waste of money unless you have a large estate and need a whole life policy to offset estate taxes. There are other tax-free investment options, such as IRAs and 401(k)s, that work better than whole life insurance as a savings vehicle. In fact, considering the commissions, high administrative costs and the charges for surrendering your policy, you may not get the kind of gains you expected from a whole life policy even after several years. Check out the rates your agent is offering by getting free life insurance quotes online. I got mine through Accuquote.com and it was 30 percent lower than what my agent quoted me for the same policy!

Denise

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