Life Insurance

Ttimes3 · April 2011

I know we've had this discussion before, but can we do it again?

DH and I already have a few basic policies (offered through work); but, through the process of helping my dad consider a few things related to his impending retirement, I've decided that we should probably shop around for an additional supplemental policy(ies).

All that said, please share what type(s) of insurance coverage you (and/or your DH) have purchased. Term? Whole Life? Universal Life? Variable? A mix of different types? What is the face/cash value (if you don't want to share the actual $ amount, a general equation (8x annual salary, for example) would be helpful)? Most importantly, how did you decide which policy(ies) to purchase?

Ugh, thinking about death (your parents', your own, etc.) is depressing. I wonder how actuaries do it, all day.

Ttimes3 · April 2011

I guess I could share what we already have and what we're thinking of purchasing.

My company provides a core life insurance policy (equivalent to my annual salary) to cover basic costs in the event of my death, a core policy (about) half that size which covers DH, and core policies of (about) 1/4 that size for the boys. I also have a variable basic life policy (4x my annual salary), through Minnesota Life, provided through work. DH has similar coverage for himself, through work.

Above and beyond that, I'm thinking that we should both purchase a 25-30 year term policy (for maybe around $100K-200K for each of us?). I still fail to see the real benefits of whole life and/or universal life policies. I might be missing something, though, so I'd love to hear other perspectives. The only reason I opted into the variable policy, which I currently have, is because the premium is discounted (and company-reimbursed) through my employer. Now, to shop around...

kel716 · April 2011

I'm really glad you posted this... and I don't know the answers. DH and I need to sit down and figure this out (this is where his brain understands more of it than I do). We *may* purchase one of the policies available through NEA MB, but we're undecided. At this point, I know we don't have enough as it's the one through my work as well.

warriormomerin · April 2011

For Term Life products I really like Grange. They're easy to purchase and their prices are very reasonable. I have a small ($40K) policy through them and I think I pay less than $10 a month.

We had a really nice ROP Term product through American General (AIG), but I'm not sure if they have those anymore. Basically, it was 10X H's annual salary and if he didn't die within the 30 years we got the $30K in premium back in cash. Obviously, we paid higher premiums on it, but it wasn't a huge amount since it was purchased when he was fairly young (late 20s) and healthy (not crazy). This product is nice for people who think life insurance is a waste of money.

Also, have you looked into LTC insurance for you and B? It's a good way to protect your assets and the earlier you buy it, the cheaper it is. A lot cheaper. I think GE has a pretty decent product.

Meg41208 · April 2011

warrior*mom:
We had a really nice ROP Term product through American General (AIG), but I'm not sure if they have those anymore.

I think AIG does still have them, but I'm not sure I'd buy one from them given their history. ING has one, I think, and I'm looking into that for myself but not DH because premiums for a male are so much higher. I think the ROP policy for myself would be the same price as a traditional term policy for him.

teacherjess · April 2011

DH and I both have basic policies for free through work for 10k apiece. We purchased term life insurance (20-year-term) two years ago for 250k per person. We decided on term because we just wanted it to cover during the time period where we will have kids around. We chose term, also, because of where our inheritance is stacking up at this time. There will most likely be emergency money if necessary at some point in our lives.

JLPT830 · April 2011

DH has a small term policy through work for like 1 or 2 x his salary. We each have a term policy (25 yrs I think) that are quite a decent chunk of change (7 figures). Life ins works in tiers....the more you purchase the cheaper it is. We really don't pay much a month for our policies combined. At the urging of our financial planner, we sat down and talked about what each one of us would want should the other die first. Both of us wanted to be able to not work for a period of time to be with our children and not have to worry about things like bills/mortgage, etc. We also took into account funding some college education. We filled out a worksheet that helped us determine based on our debt and tuition costs, how much each one of us should have. So that's how we determined the dollar amount. Such a happy thing to talk about!

Ttimes3 · April 2011

Meg41208:

I think the ROP policy for myself would be the same price as a traditional term policy for him.

Interesting. I never thought of that.

Ttimes3 · April 2011

JLPT830:

Such a happy thing to talk about!

Agreed, it's very morbid (and, therefore, easy to put off for another day). Also, it seems like such a racket...until you NEED it. I'd rather be safe than sorry, especially now that the boys' financial futures are tied to ours.

warriormomerin · April 2011

Meg41208:
warrior*mom:
We had a really nice ROP Term product through American General (AIG), but I'm not sure if they have those anymore.
I think AIG does still have them, but I'm not sure I'd buy one from them given their history. ING has one, I think, and I'm looking into that for myself but not DH because premiums for a male are so much higher. I think the ROP policy for myself would be the same price as a traditional term policy for him.

Eh, AIG is a decent company (IMO) they just got the brunt of the publicity during the economic crisis. Most products are pretty much the same no matter the company. The difference usually comes from which state you're in and how they insure the products. Ohio does a pretty good job at insuring and is pretty comparable to the FDIC in that respect.

As for ING, they're a good company too. I've worked for them in the past and other than the fact that their products are pretty vanilla and usually more expensive, I had no complaints.

Ttimes3 · April 2011

warrior*mom:

Also, have you looked into LTC insurance for you and B? It's a good way to protect your assets and the earlier you buy it, the cheaper it is. A lot cheaper. I think GE has a pretty decent product.

Excellent point. I'll add this to my list. I don't know why (duh!) I hadn't yet considered this option for B and me.

warriormomerin · April 2011

Ttimes3:
warrior*mom:

Also, have you looked into LTC insurance for you and B? It's a good way to protect your assets and the earlier you buy it, the cheaper it is. A lot cheaper. I think GE has a pretty decent product.

Excellent point. I'll add this to my list. I don't know why (duh!) I hadn't yet considered this option for B and me.

Honestly, I think anyone who doesn't get it is stooopid. Unless you know for a fact that you'll be on Medicare or you're too rich to care. The people in between are the ones getting screwed, especially those who think their families will take care of them. Indifferent

Last I heard, rumor was that the government was contemplating going back two generations in order to procure medical expenses. In other words, if your parents rack up a ton of bills, you can be held accountable for the costs. I hope that's still just a rumor...

Ttimes3 · April 2011

warrior*mom:
Last I heard, rumor was that the government was contemplating going back two generations in order to procure medical expenses. In other words, if your parents rack up a ton of bills, you can be held accountable for the costs. I hope that's still just a rumor...

Stop scaring me. My maternal grandfather has been in assisted living for almost 4 years.

JLPT830 · April 2011

If you go the LTC ins route, make sure you understand the policy before you buy it. We have had several patients/families who think their policy will pay for expenses like the cost of an AL apt, and it does not. Some policies suck compared to others. It's definitely a good thing to have since Medicare is paying for less and less these days. Don't get me started on my soapbox...... Zip it!

hannah&ben · April 2011

warrior*mom:
For Term Life products I really like Grange. They're easy to purchase and their prices are very reasonable. I have a small ($40K) policy through them and I think I pay less than $10 a month.
We had a really nice ROP Term product through American General (AIG), but I'm not sure if they have those anymore. Basically, it was 10X H's annual salary and if he didn't die within the 30 years we got the $30K in premium back in cash. Obviously, we paid higher premiums on it, but it wasn't a huge amount since it was purchased when he was fairly young (late 20s) and healthy (not crazy). This product is nice for people who think life insurance is a waste of money.
Also, have you looked into LTC insurance for you and B? It's a good way to protect your assets and the earlier you buy it, the cheaper it is. A lot cheaper. I think GE has a pretty decent product.

When we were last shopping for life insurance there were lots of ROP options but I wasn't thrilled with the 20-40% increase in premiums for the same (regular term) coverage. I'll take the lower premiums, invest the difference and come out way ahead in 30 years, thanks I was pretty surprised at the $$ but, that's the rub I guess

ETA: I wanted to add.. I do see the benefit if you can get a premium you're happy with... the windfall at the end would certainly be cool. However, we just weren't willing to pay an extra $20K to maybe get a check for $60k in 30 years... I can do better than that, financially speaking.

Ttimes3 · April 2011

JLPT830:
If you go the LTC ins route, make sure you understand the policy before you buy it. ... It's definitely a good thing to have since Medicare is paying for less and less these days. Don't get me started on my soapbox......

I like hearing from the soapbox. GO!

stillwaiting12 · April 2011

Ty has a policy through work that is I think 4 times his salary and then if he's killed at work that jumps to 10 times I believe. I have a small 20k policy through my employer. On top of that we have private policies that are not term but not whole life. I guess that makes them universal? I'm not the most intelligent person when it comes to insurance lingo so I could be wrong. We got the policies before kids were thought of so we only got $50k a piece. We spoke with our financial planner and after all things considered, it made the most sense. We are fortunate to live mortgage free and basically debt free except for my car payment so that was all taken in to consideration. Now that I'm pregnant again, I have considered looking at upping the amounts. I know our policy has some kind of buy back type program where if we can't pay the premiums or simply don't want the policies any longer we get what we've paid in back, at a certain percentage. Our problem is that DH is older than me and his premiums are double mine. So, don't wait like he did until 40 to buy a plan.

ManciniD · August 2011

DH and I each have term life insurance in addition to the life insurance we receive at our workplace which is very minimal. Together we have about 10 times our annual income. We have a mortgage to pay off, and other loans. We?ve also included college tuition for both our children and included a reasonable rate of inflation in our calculations. If you want, you can use an online insurance coverage calculator that makes it easy for you to calculate your ideal coverage.

We were able to find cheap life insurance even though our coverage is large through aggregator life insurance websites. How did we wind up choosing the policy we did? The free quotes we got from these sites gave us a chance to compare life insurance quotes ? prices, products, terms and conditions. Some offered free riders or a feature like double indemnity for just a few extra dollars. But we didn?t go for the cheapest life insurance. We choose products that offered us features like a waiver or renewability option. We also looked at the financial rating of each company and only chose companies that have a rating of A or A+. Hope that helps.

Denise

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