Life Insurance questions

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Topic Author
Ryebrook
Posts: 183
Joined: Thu Dec 23, 2010 2:34 pm

Life Insurance questions

Post by Ryebrook »

As a follow-up to the post I just made regarding my wife's 403(b), we also have the opportunity to buy voluntary life insurance through her employer.
I was always under the impression that it is better to buy this on our own, outside of the free insurance offered by our employers (in my case 4x salary).

Her plan costs $3.81 per bi-weekly paycheck (basically, $100/year), and is an "Employee - $100,000/Spouse - $25,000/Child(ren) - $10,000" benefit.

Is this $100,000 benefit worth the minimal cost, or should we simply buy term insurance for the total amount needed to support either of us?

We are both 32yos, non-smokers, and expecting our 1st child in October.

Thanks!
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BL
Posts: 9874
Joined: Sun Mar 01, 2009 1:28 pm

Re: Life Insurance questions

Post by BL »

Go to http://www.term4sale.com/ and see what that costs for comparison.

See the other life insurance thread currently running here, also.
Topic Author
Ryebrook
Posts: 183
Joined: Thu Dec 23, 2010 2:34 pm

Re: Life Insurance questions

Post by Ryebrook »

Thanks - it looks like a 20 year term guaranteed is running around $104 on that website. Given the similar pricing, is it really worth it to us to buy a policy through work, and then another policy on our own? I would assume there are some discounts on the higher policies?
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mephistophles
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Joined: Tue Mar 27, 2007 2:34 am

Re: Life Insurance questions

Post by mephistophles »

It depends on your individual situation. In my case, decades ago, employer sponsored group life was less expensive than indiviually purchased term insurance. Plus the company paid for the basic coverage, so that part was free to me. Also, if you have any medical or other underwriting problems and cannot bet preferred or higher ratings on an individual policy, then group term would probably be a better choice. Another consideration is how long you plan to stay with this employer. If you think you will be chaning employers early on, or frequently, that would point to getting indiviual term insurance in force at the earliest possible date.
ole meph
Topic Author
Ryebrook
Posts: 183
Joined: Thu Dec 23, 2010 2:34 pm

Re: Life Insurance questions

Post by Ryebrook »

Thanks for the advice Ole Meph. The point about how long she will be with her employer is a good one. As I mentioned, we are going to have our first child soon, so her future career path may be a bit uncertain. Knock on wood, both of us are healthy at this point, so hopefully we would qualify for the best levels of insurance premiums possible.
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