Life Insurance policy?

Now that I have a child and another on the way, it's time for me to look at increasing my coverages. Right now I have a minimal policy that is free through my job. I'm a healthy 34 year old male. Don't live an extravagant life style or have a lot of debt, so just want my wife to be okay for a while should something happen to me. So, insurance experts, school me on life insurance.

 

I go by the rule of insuring yourself for 10x what your annual salary is. Then if you go, she can drop that into a decent mutual fund and replace your income with the interest.

20 year term is what I'd check out if I were you.

 

My work offers an 8 x Salary term plan, but that is where they stop. Priced about $450 annually. Seems cheap to me, but I haven't looked elsewhere.

 

The problem with the work plan is... You loose it when you quit or get fired and your next employer might not offer up the same insurance/cost. Also, if and when that happens, you will be older and insurance will be more expensive. Insurance can get complicated due to many financial factors individual to you, but it is safe to say that a basic 500k/1M 30yr term life should be a good foundation for you & your family's needs. I would recommend talking to a reputable agent to see what's available and in your best interest.

 

20 yr team at least. But you also have term to age 80 and 30 year terms as well. Depending on income 500-1m is appropriate don't forget when you pay for life insurance it's tax free if you are to die. If your work pays it then it's taxed at income. Keep in mind inflation and the crazy ass cost of college per kid. In 20 years 4 years of tuition might be over 100k even just at a state school.

Biggest thing is making sure you get it at a good company.

 

i am pretty much in the same exact boat right now. I'm 35...i was quoted between $500-$720 per year for a $1M/20 year term policy.

 

The way my wife and I set things up was a 20yr term policy that would pay off the house plus allow the other spouse to live at our current quality of life for a while. Since we both make pretty much the same per year it made sense.

Also got long term disability and "try" to keep enough cash reserve in the wings to cover expenses until it kicks in should one of us get in a debilitating accident.

We recently had our will created with the help of a lawyer associated with our credit union. Also had him draft up a trust fund for our kid since the boy definitely wouldn't have enough sense to know what to do with the insurance payout until he's much, much older (if ever). Lawyer fees were less than $100 b/c of the credit union too, so it was great timing.

 

Thanks guys. Wasnt thinking about leaving company because it is through Unum. I'll have to see what the rules are there. Wondering if I could keep the policy as an individual through them if I were to leave the company.

 

My work is 10x salary max including avg of previous 3 years bonus. It's about 300 a year.

 

I got a half-mill policy with 20-year term for about $400/year. Bought it around age 40, so I'll have coverage till about 60, and by then my retirement account would take good care of the wife should something happen to me. Term-life is the best bargain, you can go to selectquotes.com (or it might be selectquote without the 's') and look at the various companies' rates. Shop around, but also look at the company's financial ratings too. Don't buy insurance with a junk-bond type of company. Good on you to be thinking ahead for your family.

 

I had life insurance through my old place of employment. Before leaving there, I contacted the agent and I was able to take the policy with me. It was 10 year term at the time. I paid the premium myself until the term expired.

Then, I got a 20 year term. Like others have done, by the time this expires, our house will be paid off. Paying off the house and paying for the funeral were always our main goals.

I have a will.

I have a cemetery plot, the headstone will be done this winter, so all of that is already taken care of. In the next year or so, my wife and I will do the pre-need thing at the funeral home, so we can pay for our funeral, pick out the caskets, etc.

My wife and I both have life insurance through where we work, which amounts to a years salary. I should have a pension, that pays my wife half of my benefit for life when I die.

My mom worked at an insurance agency for years. She always said term was the best way to go.

 

I'm a licensed life insurance agent in New York State. Most of what everyone has said is fairly accurate.

Whole life is the biggest scam going, and it's been going for some time. The cost effectiveness of a $500k-$1M, 20-30 year term policy is amazing for a 30-40 year old in good health.

The problems with group plans are numerous. Yes, per $1,000 of coverage it is the cheapest term insurance, but these plans are annual rentable term (ART) plans. Every 5 years the premiums will go up, and it isn't a graceful curve. My brother's group plan through his engineering firm will cost him and his wife over $7,000 a year when they reach 50 years old for $500k for each! Yes, he's getting out of it.

Also, these type of plans are not even induvidual policies: i.e. You don't even own and control the policy, the custodians of the group do, and they can change the rules at any time. If you do wish to transfer out of the group plan you can, after 5 years, but guess which type of policy they place you in? Yep, whole life.

If anyone has any individual questions, feel free to shoot me a PM.

 

I just got a quote from Northwestern Mutual for term 80, for an additional $1million to what i already have. I'm 33 and healthy, but the racing was killer. $440 a month for that million. I priced met life and minn life also, and they were $60 and $100 a month respectively, but that was only for 10 year term.

 

At your age and good health it's a no brainier to lock in your current picture of health in for a 20-30 year term policy.

Term 80 is a pathway to whole life conversion and will only get more expensive.

If you're investing appropriately via mutual funds you should be self insured by your early 60s and have no need for life insurance at that point.

 

How does racing/riding motorcycles in general impact premiums? Does it have to be disclosed? If you don't and something happens riding, will the policy still pay?

 

The curveball is the racing. If I lock in a 20-30year term now I'm paying more for the racing risk. I'm debating whether to hang up the leathers at 40 or so, and re-lock in a 20yr term then.

I have a 1/2 mil term 80 currently, and there is no racing exclusion. It was actually an underwriting oversight, but it's mine now. With the birth of my daughter I want that extra million, but your comments on the term 80 have me thinking. By 40 my net worth should be >1mil, and double that by 50. I don't know how stupid it is to consider myself self-insured by those points.

 

Seems most are on the same page. I'm 34 very healthy. Purchased $750K 20 year term when I was 31. It's $54 per month.

 

Underwriting requirements differ for each company.

Many companies will insure you as a racer in "timed events," but you won't get a preferred rating when it comes to premium costs. it will be higher, but not 10x higher.

 

Thanks

 

There are a lot of reasons to keep your life insurance separate from work. I found that my work group policy was a LOT more cost than me going out and getting my own policy. I ended up with Liberty Mutual.