Term Life Insurance Quote - Expensive?

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XtremeSki2001
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Term Life Insurance Quote - Expensive?

Post by XtremeSki2001 »

THIS IS AN OLD POST. SEE LINK TO SCROLL TO BOTTOM FOR UPDATED QUESTION.

http://www.bogleheads.org/forum/viewtop ... 8#p1752388


Hi All,

I used Terms4Sale to get general quotes and then went to a local agent I use to actually purchase a 30-yr Term Life Policy. I am 30yrs old non-smoke w/ no health problems, 6' tall, and weight ~240lbs. I asked my agent for a $1.5M term life policy for 30yrs and the cheapest quote (Banner Life) I received was $2,300/yr which seemed outrageous. Is my agent doing something odd or is my weight really driving the price this high?
Last edited by XtremeSki2001 on Wed Jul 17, 2013 3:07 pm, edited 2 times in total.
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letsgobobby
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Re: Term Life Insurance Quote - Expensive?

Post by letsgobobby »

Are you an 'xtremeskier'?
dhodson
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Re: Term Life Insurance Quote - Expensive?

Post by dhodson »

what number did you get from term4sale?
if this number was less, did u ask the agent why you didnt qualify for the rate?
dpusa
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Re: Term Life Insurance Quote - Expensive?

Post by dpusa »

Agree some of it may depend on your circumstances; however when I looked at Zander just now $1.5M for 30 years is about $1000 for non smokers and perfect health males.
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G-Money
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Re: Term Life Insurance Quote - Expensive?

Post by G-Money »

For Banner Life, at 6'0" and 240 pounds, you don't qualify for the Preferred Plus (best rate) or Preferred (next best rate). At that height/build, I think you're on the border between "Standard Plus" and "Standard." So, assuming no other family history, high BP, cholesterol, etc., yes, it looks like your weight is driving the rate higher.

Using the Health Analyzer at Term4Sale, it looks like you won't qualify for most preferred plus/preferred plans. There are a few that Term4Sale says are a maybe, likely because Term4Sale does not have the underwriting guidelines from those insurers.

You want to confirm this is the cheapest rate you can get for the amount of coverage you're seeking, as opposed to the cheapest rate you can get from Banner. Perhaps ask which other insurers your agent has access to, and have him/her get you quotes from them to compare.
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bsteiner
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Re: Term Life Insurance Quote - Expensive?

Post by bsteiner »

You might also check http://www.prudential.com, which is often competitive on term insurance.
dhodson
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Re: Term Life Insurance Quote - Expensive?

Post by dhodson »

arent they just also listed on places like term4sale.
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G-Money
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Re: Term Life Insurance Quote - Expensive?

Post by G-Money »

OK, I played around with the Health Analyzer on Term4Sale a little more.

It looks like you might qualify for Preferred rating with Principal (cost: $1428.75). But looking up Principal's underwriting guidelines, it looks like you'd only qualify for Standard Plus. So maybe that won't work.

In the "Regular Plus" category, using the Health Analyzer to restrict by height/weight, it looks like you might qualify for SBLI's Select Non-Nicotine (cost: $1815.50), Banner Life's Non-Smoker Plus (cost: $1820), and Grange Life Insurance Company's Standard Plus Non-Tobacco (cost: $1920.00). As I noted before, you appear to be right on the cusp between Banner's Standard Plus and Standard. Looks like 6'0"/240 is also right at the cut-off for SBLI's Select. Don't know about Grange.

In the "Regular" category, I see the Banner life quote you got at $2300. But there are several insurers with lower rates in that category:
Assurity Life Insurance Company $2,050.00
North American Co for Life and Health $2,195.00
Midland National Life Insurance Company $2,195.00
American National Insurance Company $2,250.00
Standard Life and Accident Insurance Co $2,250.00
Grange Life Insurance Company $2,355.00
Cincinnati Life Insurance Company $2,280.00

Now, it's possible that none of those insurers are available in your market (although I entered a Philadelphia zip code when prompted by Term4Sale, so I'd be surprised). It's also possible that some other health, history, or avocation makes you ineligible for all of these. Or, perhaps, your agent simply doesn't have access to these companies. But, at a minimum, it's worth asking the agent why none of the above policies (including the Principal Preferred and the handful of Regular Plus policies I referenced above) are appropriate for you.
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Rupert
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Re: Term Life Insurance Quote - Expensive?

Post by Rupert »

Did one of your parents die before age 60? If so, that fact could also be driving the rate.
BruDude
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Re: Term Life Insurance Quote - Expensive?

Post by BruDude »

At 6'0" 240 pounds and otherwise in excellent health, there is one company you could qualify for at a Preferred non-smoker risk class. The $1000/year quotes you are seeing are for the Preferred Plus risk class, which you would not be eligible for without losing about 30 pounds. Here are the lowest available rates based on your height/weight:

Principal National - $1,428.75 (Preferred risk class)
SBLI - $1815 (Standard-plus risk class)
Banner - $1820 (S+)
American General - $1834 (S+)
Prudential - $1855 (S+)

Principal looks like a no-brainer.
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Re: Term Life Insurance Quote - Expensive?

Post by XtremeSki2001 »

Thanks, Brudude. Oddly enough my agent provided me with a quote from Principle and it's nearly $2,500/yr.
letsgobobby wrote:Are you an 'xtremeskier'?
No. :happy
dhodson wrote:what number did you get from term4sale?
if this number was less, did u ask the agent why you didnt qualify for the rate?
$1,000/yr

I did not use the quote on Term4Sale to find an agent. I used T4S as a basis for expected costs and then called my agent (found previously through home/auto insurance) for a quote.
G-Money wrote:For Banner Life, at 6'0" and 240 pounds, you don't qualify for the Preferred Plus (best rate) or Preferred (next best rate). At that height/build, I think you're on the border between "Standard Plus" and "Standard." So, assuming no other family history, high BP, cholesterol, etc., yes, it looks like your weight is driving the rate higher.

Using the Health Analyzer at Term4Sale, it looks like you won't qualify for most preferred plus/preferred plans. There are a few that Term4Sale says are a maybe, likely because Term4Sale does not have the underwriting guidelines from those insurers.

You want to confirm this is the cheapest rate you can get for the amount of coverage you're seeking, as opposed to the cheapest rate you can get from Banner. Perhaps ask which other insurers your agent has access to, and have him/her get you quotes from them to compare.
Thanks. I did ask the agent for other companies and most were higher then what's in the original post. I did re-run Term4Sale with 'Average' health and did find rates commiserate with what the agent quoted. Just surprised me I would be in the average category. I also played around with Health Analyzer and I'd need to weigh 200lbs to get the premium close to $1k/yr. I don't think I've weighed 200lbs since highschool - I guess term life doesn't take into account muscle mass?
Rupert wrote:Did one of your parents die before age 60? If so, that fact could also be driving the rate.
No
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BruDude
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Re: Term Life Insurance Quote - Expensive?

Post by BruDude »

The agent may have a policy of quoting only a standard risk class for everyone. Some agents do this to avoid the "well you told me it was going to be $1,200, why is it now $2,500?" questions when the client does not get a preferred plus risk class. If the client feels like the agent lied to them, they may go find another agent and the sale is lost. This way if you do get the better risk class, the agent looks like they got you a great deal instead of a poor one. Personally, I ask the client about their health history and quote the rate class as accurately as possible, but every agent is different in how they handle the quoting.
Grt2bOutdoors
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Re: Term Life Insurance Quote - Expensive?

Post by Grt2bOutdoors »

Can you prove to insurer that body mass is nearly all muscle (<5-6%)? Otherwise, they are going to assume you are overweight for the height category.
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BruDude
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Re: Term Life Insurance Quote - Expensive?

Post by BruDude »

Grt2bOutdoors wrote:Can you prove to insurer that body mass is nearly all muscle (<5-6%)? Otherwise, they are going to assume you are overweight for the height category.
Most (all?) of them still won't care. I've had bodybuilders in perfect health that couldn't get Preferred rates because of height/weight.
pochax
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Re: Term Life Insurance Quote - Expensive?

Post by pochax »

consider either a 20-yr term (if it still fulfills your needs) or splitting into two $1M (20yr and 30yr each) to lower cost. i have two $1M (for total of $2M) 20yr-policies from USAA for total of $1200/yr total for both and i am much older than you (1 policy at 39yrs old and 1 policy at 40yrs old).
jlawrence01
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Re: Term Life Insurance Quote - Expensive?

Post by jlawrence01 »

I have a few questions:

1) Do you have access to insurance through professional organizations (e.g., AICPA)? Some of those offer some phenomenal rates.
2) Have you tried a 20 year product? I have found that the 30 years are more expensive, especially for people with some health risks. And most would consider ANYONE with a BMI over 30 years old to be a risk, even if they are athletic.
3) Will you really need term life until you are 60 years old?
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Re: Term Life Insurance Quote - Expensive?

Post by XtremeSki2001 »

jlawrence01 wrote:I have a few questions:

1) Do you have access to insurance through professional organizations (e.g., AICPA)? Some of those offer some phenomenal rates.
I didn't think of this, but I may since I'm a member of a few (AICPA not being one of them).
jlawrence01 wrote:2) Have you tried a 20 year product? I have found that the 30 years are more expensive, especially for people with some health risks. And most would consider ANYONE with a BMI over 30 years old to be a risk, even if they are athletic.

3) Will you really need term life until you are 60 years old?
I've debated this, considering our savings rate, but not knowing how many additional children we'll have (currently have a 2 month old, but plan for 2-3 more) and my wife's work status (e.g., will she return to work once we have 3 or 4 children) makes me worried to go with a 20-yr.
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G-Money
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Re: Term Life Insurance Quote - Expensive?

Post by G-Money »

XtremeSki2001 wrote:
jlawrence01 wrote:3) Will you really need term life until you are 60 years old?
I've debated this, considering our savings rate, but not knowing how many additional children we'll have (currently have a 2 month old, but plan for 2-3 more) and my wife's work status (e.g., will she return to work once we have 3 or 4 children) makes me worried to go with a 20-yr.
I agree with your thinking. I recommend you get at least some coverage, even if not all, out to 30 years.
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mephistophles
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Re: Term Life Insurance Quote - Expensive?

Post by mephistophles »

I am an insurance agent, and based on the information provided I would go for the 30 year term.
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Re: Term Life Insurance Quote - Expensive?

Post by XtremeSki2001 »

Hello again ....

My DW and I have been spending a lot of time thinking about our choices. The $1500 for a 30 year term life policy @ $1.5M for me is a little more then we were expecting to pay. We'd like to add some term life for my DW (albeit, much less) and disability insurance (only for me). Given my pay (~$100k), we could be looking at ~$3,000/year for term life and DI for both, which is too much for us.

Given the above, what should we prioritize? DI because there is a greater chance of me being disabled versus death?

Some other info that I learned today ...

My employer provides short-term and long-term disability. Short term disability covers my pay for three months, ~70% for two months, and then 24 months of long term disability for 60% of my pay. After the 24 months, they don't pay anything else.

My employer does offer group term life, but at a max of $50k.
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Meg77
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Re: Term Life Insurance Quote - Expensive?

Post by Meg77 »

Social security offers long term disability protection, so be sure to factor that out of what you are considering purchasing. If you get short term covered through work and long term through SS, then I wouldn't be inclined to buy much more...it's notoriously hard to qualify for disability payouts anyway. You have to be pretty much incapable of doing any job - not just the job you have. Some policys are for your exact job/industry but as you may be finding out they are very expensive. And unless you are a doctor making a lot more I'm not sure they are worth it from a cost/benefit analysis perspective.

By all means get the term life though on you and your wife. Maybe cut it down to 20 or 25 years instead of going for 30 to shave some of the premium off? You can always add disability later, but the earlier you get term the cheaper it is so I'd get that set up first. Good luck!
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Re: Term Life Insurance Quote - Expensive?

Post by bsteiner »

At standard rates, you would pay $528 per year for $1 million of term insurance through the AICPA with the premium increasing every 5 years: http://www.cpai.com/personal-insurance/ ... xrates.jsp. After age 45, the rates vary depending on your health at that time. I haven't analyzed how that compares to a 20-year or 30-year level term.

You can also get disability insurance through the AICPA also has disability insurance, with different rates depending upon whether you take a 13-week or a 26-week waiting period, and whether you want the partial benefits option: http://www.cpai.com/pdfs/Rate-Charts-under-40.pdf. I don't know how these rates compare to the rates for disability policies you could otherwise buy, or how the coverage compares.
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Re: Term Life Insurance Quote - Expensive?

Post by XtremeSki2001 »

bsteiner wrote:At standard rates, you would pay $528 per year for $1 million of term insurance through the AICPA with the premium increasing every 5 years: http://www.cpai.com/personal-insurance/ ... xrates.jsp. After age 45, the rates vary depending on your health at that time. I haven't analyzed how that compares to a 20-year or 30-year level term.

You can also get disability insurance through the AICPA also has disability insurance, with different rates depending upon whether you take a 13-week or a 26-week waiting period, and whether you want the partial benefits option: http://www.cpai.com/pdfs/Rate-Charts-under-40.pdf. I don't know how these rates compare to the rates for disability policies you could otherwise buy, or how the coverage compares.
I really appreciate this information. Unfortunately, I have not obtained my CPA yet.
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Re: Term Life Insurance Quote - Expensive?

Post by jlawrence01 »

XtremeSki2001 wrote:I really appreciate this information. Unfortunately, I have not obtained my CPA yet.

It is VERY difficult to compare the AICPA rates with commercial rates. In MOST years, the AICPA refunds a good portion of the life insurance premiums back to the policy holders each year based on their experience. In the 17 years that I have had the insurance, I have received 12-55% of my premium back. As you get older, the rebates are smaller.
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Re: Term Life Insurance Quote - Expensive?

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