Life Insurance--- term

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
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Joe5858
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Joined: Tue May 26, 2015 8:09 pm

Life Insurance--- term

Post by Joe5858 »

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Last edited by Joe5858 on Mon Jul 13, 2015 9:03 pm, edited 1 time in total.
inbox788
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Re: Life Insurance--- term

Post by inbox788 »

What do you mean by "best credit quality"? Do it mean for $1900-1500=400, there's better chance Metlife doesn't go bankrupt compared to Guardian in the next 30 years? Or are there other benefits for the $400 difference?

If I only had to choose between the two, I'd take my chances and save the $400.

Are you getting rid of the permanent insurance? There's a high likelihood you get recommendations that you should if you ask around here.

How old is the child? How old will the child be when the first 20 year policy runs out? You could get a 20 year and put the savings into a 529 fund.
dhodson
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Re: Life Insurance--- term

Post by dhodson »

you are dealing with an agent that has strong financial ties to guardian. Id guess thats who the permanent insurance is with as well. If you look at the credit ratings, there are plenty of companies who sell cheaper term with pretty much the same ratings. I wouldnt pay that extra 400 personally. I bet the agent would also love to convert that term to more permanent insurance and probably will be trying to convince you of that in the future.

I also find it funny that you are worried about the 400 bucks a year but you are losing so much more on the permanent but hopefully you are happy with your purchase.
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JonnyDVM
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Re: Life Insurance--- term

Post by JonnyDVM »

Life insurance is not like disability insurance with nuances in what qualifies you as disabled between policies. Either you're dead or you're not. That's why you want to go with the policy that is less expensive. Both Met life and Guardian are high quality companies. As for 20 year or 30 year the answer lies in how long until you will be financially independent to the the point that your accumulated assets would be enough for those who depend on you in the event of untimely demise. I picked a 25 year policy as I plan to retire at about that age. I believe you could also do some type of a ladder though I'm not very familiar with that approach. Permanent insurance is a bad deal. Research it more yourself and I suspect you will come to that same conclusion.
I’d trade it all for a little more | -C Montgomery Burns
fundseeker
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Re: Life Insurance--- term

Post by fundseeker »

How about $1 million for 20 years and $1 million for 30, using nothing but annual renewal term of course. In 20 years you'll have other assets and won't need $2 million. Now as to whether you really need $2 million for the first 20 years, sure seems like a lot.
Last edited by fundseeker on Sat Jul 11, 2015 10:25 pm, edited 1 time in total.
BeneIRA
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Re: Life Insurance--- term

Post by BeneIRA »

I would definitely go with a Metlife 30-year in this case. Metlife, in all likelihood, will be around in 30 years and the $400 per year for 30 years adds up to $12,000 over 30 years Don't get me wrong, Guardian is a high-quality company, too, but Metlife is pretty solid. On the permanent insurance front, I am sure if we saw the numbers, most of us would probably tell you to dump it for more term insurance. Am I wrong in assuming the $2 million of permanent insurance is much higher than the terms are, even given your age? You can probably replace it with two more $1 million term policies for 30 years. Then, you'll be 59, possibly close to 60 and your need for life insurance shouldn't be very high. Given medical advancements, you should definitely be able to take out a 5 or 10 year term at that point if need be, but the insurance will have done its purpose.

As far as the amount, are you a physician or in a position where you earn a very high income? Does your spouse not work herself? Unless you're making $300,000 a year or more, you may want to pare that back a bit. Even then, it might still be too much. If you are, then your spouse, upon your theoretical passing, may need to back down the lifestyle a bit. Even if she were to spent $200,000 a year, and that is quite a bit to spend in a year, that is still 15 years at that rate, although I am assuming you have a reason for wanting so much. But now you want $4 million total in life insurance. Wow.
avocadorunner
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Re: Life Insurance--- term

Post by avocadorunner »

What is your occupation and current annual income? Does your wife have any life insurance coverage?
Independent
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Re: Life Insurance--- term

Post by Independent »

Joe5858 wrote: I am now faced with question of whether we need another 1mm in coverage. I want my family to be able to live a moderate/comfortable lifestyle and the kids college to be paid for if God forbid something were to happen.
?
The answer is probably "no". If you're a high income individual, and your spouse stays home with the kids, they will get a SS benefit. It could be as high as $45,000 per year, FIT free. That's a long ways toward "moderate/comfortable".

Your current $3 million should provide another $100k per year, for 30 years, even if your surviving spouse's investments just match inflation. That's clearly moderate/comfortable in my neighborhood.
SimonJester
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Re: Life Insurance--- term

Post by SimonJester »

$1900 per year for a 1M 30 year term policy?? That is WAY high. I would shop for term policy outside of this broker on any of the term quoting web sites. At you age unless you are a smoker or into sky diving you should be able to get that policy for a LOT less.
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin
new2bogle
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Re: Life Insurance--- term

Post by new2bogle »

You are paying too much.

www.term4sale.com something like 7 different ins companies selling a 30 year, $1 million policy for less than $700/year. (assuming you do not smoke or have any other major health issue). I got mine last year from term4sale - the website actually puts you in contact with an independent agent that will honor term4sale prices as long as the health screen is ok.
BruDude
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Re: Life Insurance--- term

Post by BruDude »

I don't know where they got the rates from that OP posted. Here are the rates for MetLife at $1M/30 years, nothing in the $1200 range:

Preferred Plus risk class - $909
Preferred - $1029
Standard Plus - $1089
Standard - $1759

And Guardian:

Preferred Plus risk class - $860
Preferred - $1020
Standard Plus - $1340
Standard - $1900

So it looks like you are being quoted a standard risk class by Guardian and who knows what by MetLife? The lowest rate available for 30-year $1M term at Preferred Plus rates is Banner at $690/year.

IMO, paying an extra $400/year for the same coverage to a company with an A++ financial rating (Guardian) instead of an A+ rating (MetLife) is a waste of money. Think about it this way - for that extra $400, you could add another few hundred thousand bucks to the death benefit!

OP - Are there health issues involved that are resulting in the higher rates?
Topic Author
Joe5858
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Re: Life Insurance--- term

Post by Joe5858 »

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Last edited by Joe5858 on Mon Jul 13, 2015 9:04 pm, edited 1 time in total.
tj
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Re: Life Insurance--- term

Post by tj »

2mm in permanent coverage? That must cost you several thousand per year. Terrible. You could get a much larger term policy for that.
BruDude
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Re: Life Insurance--- term

Post by BruDude »

Joe5858 wrote:Thanks for the responses.

Some answers...

-the rate is high because I was honest and said I smoked a few cigarettes last year. I am told I can switch to a nonsmoker rate after 2 years non use which I plan to do.

-I understand the credit argument is not good as MetLife unlikely to be that different then guardian.

-when it comes down to it, I want to protect against the following things if a tragedy were to occur:

I want to make sure college for two kids private school (told could be 1.2-1.4mm total in 20 years), and living expenses for family without spouse working. Say 130k a year including housing. Plus any other unexpected expenses...

Currently have 2mm in permanent types of coverage, 1mm in term and being told I need more.

I know you think the permanent stinks. Stripping out that argument...

1. Do you think 3mm is enough protection for the future costs?

2. Would you go with 20yr or 30yr? Child 1 toddler, child 2 hopefully here soon. Could be more kids in future if in God's plan.

Please assume zero retirement or other assets for argument. Also assume housing cost in that living expenses number above.

Thanks
Still don't know where those rates are coming from. The lowest Preferred Smoker rate for $1m/30 years is $2110 with Assurity, then the next lowest is $2475.
dhodson
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Re: Life Insurance--- term

Post by dhodson »

tj wrote:2mm in permanent coverage? That must cost you several thousand per year. Terrible. You could get a much larger term policy for that.
You are actually greatly underestimating how much the OP is paying.
BruDude
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Location: Las Vegas

Re: Life Insurance--- term

Post by BruDude »

dhodson wrote:
tj wrote:2mm in permanent coverage? That must cost you several thousand per year. Terrible. You could get a much larger term policy for that.
You are actually greatly underestimating how much the OP is paying.
x2

A permanent UL policy at Preferred Plus rates for $2M would be around $7k/year. A whole life policy would probably be around $20k/year.
Topic Author
Joe5858
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Joined: Tue May 26, 2015 8:09 pm

Re: Life Insurance--- term

Post by Joe5858 »

Thanks for help
dhodson
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Re: Life Insurance--- term

Post by dhodson »

Funny how the OP deleted his original post
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