20 year term life vs. Roth IRA

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20 year term life vs. Roth IRA

Postby Fieldsy1024 » Thu May 02, 2013 7:46 am

ME: 80,000 year
Age: 28y/o
Had a Roth IRA for a year now, plan to max out each year
Price for ins would be about 40-45 a month, same with wife

Wife: 30k year
Age: 37y/o
Also had a roth ira for a year now


I was looking at a 20 year term (200-250k) for the both of us, but I was wondering if investing into a Roth is smarter? I know that death can come at anytime. My wife and I are healthy people, eat right, don't smoke, no health problems. Neither of our families have any commons health problems in the family.

I am thinking of three options.
1) My wife and I both get life insurance.
2) I just get life insurance. My wife doesn't make much money and is 10 years older just about.
3) We just continue to max out our roth iras
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Re: 20 year term life vs. Roth IRA

Postby HardKnocker » Thu May 02, 2013 8:08 am

This is apples and oranges.

Term life and a Roth IRA have nothing to do with one another.

Do you need life insurance?
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Re: 20 year term life vs. Roth IRA

Postby Fieldsy1024 » Thu May 02, 2013 8:11 am

HardKnocker wrote:This is apples and oranges.

Term life and a Roth IRA have nothing to do with one another.

Do you need life insurance?


I do not have life insurance at the moment. I was thinking of putting the money saved from life insurance into the roth ira. My wife doesn't have it either, but her income is so low that I think it may not be worth it for her to have it.
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Re: 20 year term life vs. Roth IRA

Postby dickenjb » Thu May 02, 2013 8:18 am

Do you have children? Do you plan to have children? Would the loss of your wife and the associated income be a financial hardship for you?

My guess is you need term life and your wife does not.

The purpose of life insurance is to replace lost income, and is only needed if that loss would cause financial hardship.

My guess is if the two of you can survive on 110K you would find a way to get by on 80K. Thus no need to insure against loss of wife's income.

The way you framed the question is bizarre. Kind of like, "Should I put gas in my car or pay the electric bill?" The answer is probably "yes, you should do both".

Another question is insurability, as a single person I did not get any term life beyond the 2x salary my company paid for. Then I got married and had kids but in the meantime had lymphoma and found myself needing substantial insurance but could not qualify. Best to buy it when you can.
Last edited by dickenjb on Thu May 02, 2013 8:21 am, edited 1 time in total.
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Re: 20 year term life vs. Roth IRA

Postby trasmuss » Thu May 02, 2013 8:21 am

I think you will find that term life coverage for yourself is quite inexpensive. You didn't mention if you have kids, what your debts are, etc. If your wife would have a tough time getting by if you die you likely need term life insurance coverage.

I don't know where you live (cost of living) but at your income level I doubt if it should be an "either/or". Get the term life coverage that you need and an appropriate emergency fund. Then, by all means, fund a Roth, 401k, etc.

The life insurance will protect if you die early, your investments will protect if you don't.

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Re: 20 year term life vs. Roth IRA

Postby Savvy » Thu May 02, 2013 9:06 am

Fieldsy1024 wrote:
HardKnocker wrote:This is apples and oranges.

Term life and a Roth IRA have nothing to do with one another.

Do you need life insurance?


I do not have life insurance at the moment. I was thinking of putting the money saved from life insurance into the roth ira. My wife doesn't have it either, but her income is so low that I think it may not be worth it for her to have it.


The question was not "have" but "need". Do you need life insurance? What do you need it for?
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Re: 20 year term life vs. Roth IRA

Postby Fieldsy1024 » Thu May 02, 2013 9:13 am

dickenjb wrote:Do you have children? Do you plan to have children? Would the loss of your wife and the associated income be a financial hardship for you?

My guess is you need term life and your wife does not.

The purpose of life insurance is to replace lost income, and is only needed if that loss would cause financial hardship.

My guess is if the two of you can survive on 110K you would find a way to get by on 80K. Thus no need to insure against loss of wife's income.

The way you framed the question is bizarre. Kind of like, "Should I put gas in my car or pay the electric bill?" The answer is probably "yes, you should do both".

Another question is insurability, as a single person I did not get any term life beyond the 2x salary my company paid for. Then I got married and had kids but in the meantime had lymphoma and found myself needing substantial insurance but could not qualify. Best to buy it when you can.



More info...
I don't have any health issues, but I did have to go to a suboxone doctor to help me ease off pain pills from a gym injury (no surgery or anything)
Im fine with or without my wife, my wife would struggle if I died in the next 10-20 years. I am clean now and in the best shape of my life. I honestly don't even know if I will get accepted for insurance since I went for special treatment to get off something.
We will never have kids either.
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Re: 20 year term life vs. Roth IRA

Postby Fieldsy1024 » Thu May 02, 2013 9:15 am

Savvy wrote:
Fieldsy1024 wrote:
HardKnocker wrote:This is apples and oranges.

Term life and a Roth IRA have nothing to do with one another.

Do you need life insurance?


I do not have life insurance at the moment. I was thinking of putting the money saved from life insurance into the roth ira. My wife doesn't have it either, but her income is so low that I think it may not be worth it for her to have it.


The question was not "have" but "need". Do you need life insurance? What do you need it for?


See above this post, but I will add more.

The only reason I would get it is if something crazy happened to me in the next 10-20 years. I eat very healthy, hardly drink, never smoke, workout.... I didn't want to admit it in the original post....because it is embarrassing, but the ins/co may find something in my doctors record saying I was addicted to opiates. I do not do or have done anything illegal.
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Re: 20 year term life vs. Roth IRA

Postby dhodson » Thu May 02, 2013 9:24 am

the majority of people need term insurance on the primary bread winner typically around 20 year term of enough money to cover things the other person would have a hard time paying for alone such as kids education and mortgage.

this isnt an either or question.

you very likely need term and you very likely should also max the roth.

just dont let someone talk you into permanent insurance like whole life.
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Re: 20 year term life vs. Roth IRA

Postby Grt2bOutdoors » Thu May 02, 2013 9:25 am

Fieldsy1024 wrote:The only reason I would get it is if something crazy happened to me in the next 10-20 years. I eat very healthy, hardly drink, never smoke, workout.... I didn't want to admit it in the original post....because it is embarrassing, but the ins/co may find something in my doctors record saying I was addicted to opiates. I do not do or have done anything illegal.


How long has it been since you kicked the habit?

I had family members who ate healthy, exercised 7 days a week, never smoked, had good blood pressure, low cholesterol, wore sunscreen, annual check-ups, the works. Kicked the bucket due to cancer, that life insurance policy was the difference between his wife keeping the home and not having his kids have to take care of the mother for the rest of her life. Penny wise, pound foolish - don't make that mistake. If $40 a month provides lets say $250K lumpsum - how many years of max Roth contributions would you need before your receive the equivalent amount? Alot can change between now and 25 years from now - could walk out of home and get struck by lightening, hit by a car or bus or a train, fall down and hit your head, and not to be morbid, recent news events ought to show you just how fragile life can be. If you have an insurable need - which is sounds like you certainly do, get it!!!! Read my signature - if you don't understand what I mean. A thoughtful plan can go a long way in terms of piece of mind for your wife, if not for you.
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Re: 20 year term life vs. Roth IRA

Postby MN Finance » Thu May 02, 2013 9:32 am

I'm not sure that addiction impacts insurability, but maybe someone that understands underwriting can speak to that.

Even though you stated that your wife might struggle without you, the need for insurance is still relatively limited, so it may not be that necessary. That said, at your age a 20 yr term policy for $250k is probably $200-$300 per year which is hardly a major expense.
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Re: 20 year term life vs. Roth IRA

Postby Fieldsy1024 » Thu May 02, 2013 9:35 am

It has just been 10 days, and I am just starting to feel good and very proud of myself.

The "addiction" part of it might have been 6-8 months tops. I am so worked up over this that I am afraid to open up to anyone.
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Re: 20 year term life vs. Roth IRA

Postby Grt2bOutdoors » Thu May 02, 2013 9:38 am

Fieldsy1024 wrote:It has just been 10 days, and I am just starting to feel good and very proud of myself.

The "addiction" part of it might have been 6-8 months tops. I am so worked up over this that I am afraid to open up to anyone.


You likely could purchase "guaranteed issue" no underwriting insurance for a short-term period of 1-2 years; costly? - a bit more than underwritten life insurance, but then after that wouldn't understand why you would not qualify for normal term assuming you stay clean.
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Re: 20 year term life vs. Roth IRA

Postby Fieldsy1024 » Thu May 02, 2013 9:41 am

Grt2bOutdoors wrote:
Fieldsy1024 wrote:It has just been 10 days, and I am just starting to feel good and very proud of myself.

The "addiction" part of it might have been 6-8 months tops. I am so worked up over this that I am afraid to open up to anyone.


You likely could purchase "guaranteed issue" no underwriting insurance for a short-term period of 1-2 years; costly? - a bit more than underwritten life insurance, but then after that wouldn't understand why you would not qualify for normal term assuming you stay clean.


Do you have any idea how long it would take for me to be clean? Another aspect is my wife does not know my short time problem and I am afraid to tell her.
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Re: 20 year term life vs. Roth IRA

Postby Grt2bOutdoors » Thu May 02, 2013 9:50 am

Fieldsy1024 wrote:
Grt2bOutdoors wrote:
Fieldsy1024 wrote:It has just been 10 days, and I am just starting to feel good and very proud of myself.

The "addiction" part of it might have been 6-8 months tops. I am so worked up over this that I am afraid to open up to anyone.


You likely could purchase "guaranteed issue" no underwriting insurance for a short-term period of 1-2 years; costly? - a bit more than underwritten life insurance, but then after that wouldn't understand why you would not qualify for normal term assuming you stay clean.


Do you have any idea how long it would take for me to be clean? Another aspect is my wife does not know my short time problem and I am afraid to tell her.


I am not an underwriter or in the insurance industry so I couldn't tell you. The "wife" issue is something you need to come to terms with and discuss with her - a marriage is between 2 people - a partnership, something as serious as this is not something that should be swept under the rug - that's my 2 cents.
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Re: 20 year term life vs. Roth IRA

Postby dhodson » Thu May 02, 2013 10:06 am

im not an agent but im pretty sure the drug use will affect your rate substantially.
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Re: 20 year term life vs. Roth IRA

Postby bayview » Thu May 02, 2013 11:37 am

If you took the meds strictly as prescribed (never at a higher rate; didn't buy on the street etc to supplement), it would be worth contacting your original physician who wrote the prescription to ask if there is a way that s/he can verify that the addiction was not the result of drug abuse but of medical treatment.

This does happen.

Unfortunately, the diagnosis codes for opiate, etc addition don't specify how the addiction came about.

I don't know if there is an appeal process (verification from original physician, etc.) I'm trying to remember the last time I looked at a term-life application, and I think that some include some phraseology like "have you been treated for substance abuse or addiction within the last three years," etc.

Yes, it's embarrassing, but insurance people have heard it all by now. You certainly won't be the first or the last.
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Re: 20 year term life vs. Roth IRA

Postby Fieldsy1024 » Thu May 02, 2013 11:50 am

bayview wrote:If you took the meds strictly as prescribed (never at a higher rate; didn't buy on the street etc to supplement), it would be worth contacting your original physician who wrote the prescription to ask if there is a way that s/he can verify that the addiction was not the result of drug abuse but of medical treatment.

This does happen.

Unfortunately, the diagnosis codes for opiate, etc addition don't specify how the addiction came about.

I don't know if there is an appeal process (verification from original physician, etc.) I'm trying to remember the last time I looked at a term-life application, and I think that some include some phraseology like "have you been treated for substance abuse or addiction within the last three years," etc.

Yes, it's embarrassing, but insurance people have heard it all by now. You certainly won't be the first or the last.


Early on I took them as prescribed until the last several months were I knew I was getting addicted so I checked myself into a Suboxone clinic. I heard it helped get you off of opiates...which in my case it did not. Now I quit cold turkey for a little bit and I am just started to feel better.
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Re: 20 year term life vs. Roth IRA

Postby bayview » Thu May 02, 2013 12:03 pm

It's a really tough process; misery to go through. I've known patients who were admitted for inpatient detox from prescribed meds that were given for disabling pain. Congrats on getting through the rough part.

By the way, was the original prescribing doctor your regular doctor? If not, you do need to let your regular doctor know, because you will both need to keep this in mind for future situations. I'm sure you don't ever want to have to go through that again.

Anyway, I agree with the others on your original question: you should have both the term life to protect your wife and fund a Roth IRA or whatever other investment vehicle seems most appropriate. You might not be able to get the term life right away, or you might have to pay higher premiums initially, but it's still important.

By chance, does your employer offer group life insurance without having to go through the exam and answer the questions? That's another option. It might be available during your annual benefit period, although unfortunately many plans only let you get it when you're first hired.
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Re: 20 year term life vs. Roth IRA

Postby Fieldsy1024 » Thu May 02, 2013 12:35 pm

bayview wrote:It's a really tough process; misery to go through. I've known patients who were admitted for inpatient detox from prescribed meds that were given for disabling pain. Congrats on getting through the rough part.

By the way, was the original prescribing doctor your regular doctor? If not, you do need to let your regular doctor know, because you will both need to keep this in mind for future situations. I'm sure you don't ever want to have to go through that again.

Anyway, I agree with the others on your original question: you should have both the term life to protect your wife and fund a Roth IRA or whatever other investment vehicle seems most appropriate. You might not be able to get the term life right away, or you might have to pay higher premiums initially, but it's still important.

By chance, does your employer offer group life insurance without having to go through the exam and answer the questions? That's another option. It might be available during your annual benefit period, although unfortunately many plans only let you get it when you're first hired.


I just made an appointment with my family doc (the person who original treated my gym injury) and I am just going to lay everything out and be as honest as possible. Im also going to have a long talk with my wife about all of this. It will break my heart breaking hers, but she will find out sooner or later.
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Re: 20 year term life vs. Roth IRA

Postby bayview » Thu May 02, 2013 12:39 pm

Excellent ideas, both of them. Secrets in a marriage (beyond the level of guess what you're getting for your birthday) are devastating. They always seem to lead to more and more secrets on both sides, uglier and uglier.

Best wishes!
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Re: 20 year term life vs. Roth IRA

Postby Fieldsy1024 » Thu May 02, 2013 12:52 pm

bayview wrote:Excellent ideas, both of them. Secrets in a marriage (beyond the level of guess what you're getting for your birthday) are devastating. They always seem to lead to more and more secrets on both sides, uglier and uglier.

Best wishes!


You are a total stranger but this has been so helpful to hear. I have to keep telling myself that I did not plan for this, but I will change this.
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Re: 20 year term life vs. Roth IRA

Postby dimdum » Thu May 02, 2013 4:45 pm

Can you get Term from work ? They are expensive but you can't be denied.

Edit: Group term offered at work.
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Re: 20 year term life vs. Roth IRA

Postby AustenNut » Thu May 02, 2013 7:15 pm

When you speak with your doctor, let them know that you will be applying for life insurance and ask that they word their notes truthfully, but fully. My husband had checked himself into an alcohol rehab program before we met. More than two years later, after we were married, we both decided to get life insurance. After some difficult times, we learned that most insurers won't give someone a policy who has been through a treatment program. We then learned about specialty insurance agents who specialize in difficult cases (alcohol/drug rehab, diabetes, and some other things I can't remember off the top of my head). He had someone who was willing to underwrite for someone who had been clean for three years since treatment, which my husband had. But then we got the paperwork with a denial.

Why? He'd gotten a new doctor and in giving his history had mentioned the prior problem with alcohol. The doctor noted it, but the way it was written in the files, made it seem as though this was a current thing, not a past thing. So the insurance company thought he was still drinking, and denied him.

Basically, I would ask your doctor to be careful about his/her notes, and you may want to look into a specialty insurance broker. Dealing with general insurance people ended up providing a lot of frustration when they didn't know what they were talking about and said everything would be okay, and then we got a rejection letter from the underwriters. Good luck to you and your wife.
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Re: 20 year term life vs. Roth IRA

Postby HardKnocker » Fri May 03, 2013 8:17 am

If you have just been to rehab or come off a detox program I don't think there is a chance in heck of getting life insurance.

On the other hand I don't think you need life insurance.
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