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musiclover
Joined: 24 Apr 2007
Posts: 65
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 Posted: Mon Nov 02, 2009 1:13 pm Post subject: Another Life Insurance Thread |
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OK. So I discussed Return on Premium (ROP) on term life policies in another thread. I had a few more questions in that thread that are getting buried in other details so here I will ask them.
1) What are good reputable websites to compare Term Life quotes.
2) If one buys a policy through a company that one has never heard of, what is the AMBest/S&P rating that should be a minimum? I understand that these are just a measure of company's ability to pay today and not if they are going to be in business 20/30 yrs from now.
3) This is more of a personal choice question but if I determine that I need a certain face value policy today based on current mortgage balance, living expenses etc., does it make sense to increase the amount and over-insure right now to accommodate for move to a higher cost-of-living area of the country? That may mean a higher mortgage/rent and/or higher living expenses.
Thanks. |
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Fbone
Joined: 20 Jun 2009
Posts: 241
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| Posted: Mon Nov 02, 2009 2:32 pm Post subject: |
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I'll try to help. Keep in mind I'm not an agent but recently comparison shopped for life insurance.
1) It probably doesnt matter because once you provide all your info on the website you'll get calls from several local agents. And the agents will give you the actual prices and offers. I used 2 websites and received about a dozen calls from various agents and companies.
2) Difficult to determine. Here are this years ratings for 3 insurance companies:
AM S&P Fitch
AIG A A+ A-
Prudential A+ AA- A+
Northwestern Mutual A++ AAA AAA
These 3 have various reputations so maybe you can use them as a comparison.
3) Depends on the additional cost. You can see what the difference is from a (an example your figures may be different) $500k and $750k. Or the cost of a $500k and a separate $250k when you move. Either case it may be better to have 2 separate policies and cancel one when no longer needed. Perhaps, stagger them if children are planned. |
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musiclover
Joined: 24 Apr 2007
Posts: 65
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| Posted: Mon Nov 02, 2009 2:41 pm Post subject: |
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| Fbone wrote: | II used 2 websites and received about a dozen calls from various agents and companies.
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Fbone,
Thanks for your response. Which two did you use? |
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Fbone
Joined: 20 Jun 2009
Posts: 241
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| Posted: Mon Nov 02, 2009 3:10 pm Post subject: |
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I believe www.insure.com and www.accuquote.com from a google search.
Both websites gave me quotes from companies I never heard from but I did receive calls from agents of well-known companies. |
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mephistophles
Joined: 27 Mar 2007
Posts: 1375
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| Posted: Mon Nov 02, 2009 3:36 pm Post subject: |
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Buy the new "Bogleheads Guide to Retirement Planning." In that book an expert insurance agent tells you how to shop for and buy the best life insurance for your situation.
ole meph |
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ddb
Joined: 26 Feb 2007
Posts: 3105
Location: Manhattan
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| Posted: Mon Nov 02, 2009 3:48 pm Post subject: |
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| mephistophles wrote: | Buy the new "Bogleheads Guide to Retirement Planning." In that book an expert insurance agent tells you how to shop for and buy the best life insurance for your situation.
ole meph |
I'd like to think this forum can offer advice other than just "buy a book".
The site you use to get term quotes doesn't really matter. The agent you buy the policy through doesn't really matter. The two things that matter are:
1. Determining the appropriate amount and length of coverage. In my opinion and experience, the vast majority of those who should have life insurance are WAY under insured ** (particularly those who have minor children).
2. Obtaining the best price from a company that has good financial ratings.
If you are of "normal" health, just find the lowest-price policy from a large highly-rated company and apply. For ratings, I'm personally comfortable with Fitch A or better, S&P A or better, Moody's A2 or better, AM Best A- or better. You may have higher standards, but I think you'd be hard-pressed to find instances of failure-to-pay-claims when buying from a large company with investment-grade financial ratings.
If you have an unusual health resume, then might be worthwhile to contact an agent or insurance brokerage firm who can deal with any company, as his/her guidance may be helpful in shopping underwriting departments.
- DDB
_________________
"There is a moment of sheer panic when I realize that Paul's apartment overlooks the park, and is obviously more expensive than mine. " - PB |
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musiclover
Joined: 24 Apr 2007
Posts: 65
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| Posted: Mon Nov 02, 2009 4:39 pm Post subject: |
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Thanks for the responses.
I will read the chapter about buying Life insurance.
Thank you also for the pointers regarding the pursuit I have. I am mostly of normal health and was getting a variety of insurance premium quotes for same coverage. That was what confused me. Thanks again for your responses. |
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mephistophles
Joined: 27 Mar 2007
Posts: 1375
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| Posted: Mon Nov 02, 2009 5:58 pm Post subject: |
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| ddb wrote: | | mephistophles wrote: | Buy the new "Bogleheads Guide to Retirement Planning." In that book an expert insurance agent tells you how to shop for and buy the best life insurance for your situation.
ole meph |
I'd like to think this forum can offer advice other than just "buy a book".
The site you use to get term quotes doesn't really matter. The agent you buy the policy through doesn't really matter. The two things that matter are:
1. Determining the appropriate amount and length of coverage. In my opinion and experience, the vast majority of those who should have life insurance are WAY under insured ** (particularly those who have minor children).
2. Obtaining the best price from a company that has good financial ratings.
If you are of "normal" health, just find the lowest-price policy from a large highly-rated company and apply. For ratings, I'm personally comfortable with Fitch A or better, S&P A or better, Moody's A2 or better, AM Best A- or better. You may have higher standards, but I think you'd be hard-pressed to find instances of failure-to-pay-claims when buying from a large company with investment-grade financial ratings.
If you have an unusual health resume, then might be worthwhile to contact an agent or insurance brokerage firm who can deal with any company, as his/her guidance may be helpful in shopping underwriting departments.
- DDB |
I would suggest that you buy and read the Boglehead book before dismissing it as excellent advice for those with life insurance questions. |
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ddb
Joined: 26 Feb 2007
Posts: 3105
Location: Manhattan
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| Posted: Tue Nov 03, 2009 12:34 pm Post subject: |
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| mephistophles wrote: | | ddb wrote: | | mephistophles wrote: | | Buy the new "Bogleheads Guide to Retirement Planning." In that book an expert insurance agent tells you how to shop for and buy the best life insurance for your situation. |
I'd like to think this forum can offer advice other than just "buy a book". |
I would suggest that you buy and read the Boglehead book before dismissing it as excellent advice for those with life insurance questions. |
Reading comprehension can be useful, Meph. I did not dismiss the Bogleheads chapter as excellent advice.
The answer to every single question posed on this forum can be, "Buy XYZ book and read chapter N," but I don't think it would make for a very useful forum.
- DDB
_________________
"There is a moment of sheer panic when I realize that Paul's apartment overlooks the park, and is obviously more expensive than mine. " - PB |
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EmergDoc
Joined: 02 Mar 2007
Posts: 4938
Location: Home sweet home
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| Posted: Tue Nov 03, 2009 12:51 pm Post subject: Re: Another Life Insurance Thread |
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| musiclover wrote: | OK. So I discussed Return on Premium (ROP) on term life policies in another thread. I had a few more questions in that thread that are getting buried in other details so here I will ask them.
1) What are good reputable websites to compare Term Life quotes.
2) If one buys a policy through a company that one has never heard of, what is the AMBest/S&P rating that should be a minimum? I understand that these are just a measure of company's ability to pay today and not if they are going to be in business 20/30 yrs from now.
3) This is more of a personal choice question but if I determine that I need a certain face value policy today based on current mortgage balance, living expenses etc., does it make sense to increase the amount and over-insure right now to accommodate for move to a higher cost-of-living area of the country? That may mean a higher mortgage/rent and/or higher living expenses.
Thanks. |
term4sale.com is the single best website out there IMHO for comparisons. They're not selling anything (to you anyway.)
http://term4sale.com/
I'd keep it at least A-
I would definitely recommend "over-insuring." Term is cheap (especially if you're young and healthy). When I bought my last policy my total insurance in force became 20X my income. Soon it may only be 7-8X, and that's just fine.
What you need to do is decide what you want the money to do if you die. What's the family plan if you die? Spouse back to work? Pay off house but spouse still back to work? Pay off house, 3-5 years to allow spouse to retrain/kids to get into school then back to work? Spouse never to go back to work? Kids to have income until they turn 18? Then buy that much insurance.
For me, I simply figured out about how much I'd need to retire now and live comfortably for 40 years or so on a 3-4% withdrawal, then bought that amount. Essentially, as I work/save/invest, my portfolio will gradually replace my insurance until I get to the point where I don't need the insurance any more. But I suppose if you didn't plan on ever being financially independent, that plan wouldn't work very well.
But I wouldn't think twice about tossing on another quarter or half a million in term insurance. The premiums are usually just so low for people in their 30s or younger that it is far better to be overinsured than under. I mean, you can get $1 Million for 20 years level term for $400-$31 a month. I think we spend that much in milk.
_________________
1) Invest you must 2) Time is your friend 3) Impulse is your enemy
4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course |
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mephistophles
Joined: 27 Mar 2007
Posts: 1375
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| Posted: Tue Nov 03, 2009 2:33 pm Post subject: |
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DDB,
Perhaps you should check your own reading comprehension. My advice to read the Bogleheads book is in addition to other excellent advice given in this forum, by others and by me.
ole meph |
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ddb
Joined: 26 Feb 2007
Posts: 3105
Location: Manhattan
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| Posted: Tue Nov 03, 2009 3:00 pm Post subject: |
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| mephistophles wrote: | DDB,
Perhaps you should check your own reading comprehension. My advice to read the Bogleheads book is in addition to other excellent advice given in this forum, by others and by me. |
Your post, verbatim, was:
"Buy the new "Bogleheads Guide to Retirement Planning." In that book an expert insurance agent tells you how to shop for and buy the best life insurance for your situation."
In which of the above two sentences should I infer your feedback about the "excellent advice given in this forum"?
- DDB
_________________
"There is a moment of sheer panic when I realize that Paul's apartment overlooks the park, and is obviously more expensive than mine. " - PB |
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mephistophles
Joined: 27 Mar 2007
Posts: 1375
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| Posted: Tue Nov 03, 2009 3:17 pm Post subject: |
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DDB,
If you insist on attempting to discredit my advice for posters to read the new Bogleheads book, please take it off forum. That book was written by many Bogleheads who wanted to contribute to the education of investors, in addition to advice they offer on this forum. That is so with me and with others.
By the way, if you haven't noticed I have made many hundreds of posts on the subject of insurance and I will continue to do so. I have also read the Boglehead books and find them as providing more in-depth advice on a variety of topics than can reasonably be presented here.
If you do not support the Boglehead books that is your choice, though not a good one.
ole meph |
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ddb
Joined: 26 Feb 2007
Posts: 3105
Location: Manhattan
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| Posted: Tue Nov 03, 2009 3:31 pm Post subject: |
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| mephistophles wrote: | DDB,
If you insist on attempting to discredit my advice for posters to read the new Bogleheads book, please take it off forum. That book was written by many Bogleheads who wanted to contribute to the education of investors, in addition to advice they offer on this forum. That is so with me and with others.
By the way, if you haven't noticed I have made many hundreds of posts on the subject of insurance and I will continue to do so. I have also read the Boglehead books and find them as providing more in-depth advice on a variety of topics than can reasonably be presented here.
If you do not support the Boglehead books that is your choice, though not a good one. |
I support the Boglehead books and I think many could benefit very much from reading them. I have not stated anything contrary to that.
(bowing out from this discussion before it gets further off-topic)
- DDB
_________________
"There is a moment of sheer panic when I realize that Paul's apartment overlooks the park, and is obviously more expensive than mine. " - PB |
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Hexdump
Joined: 10 Oct 2008
Posts: 355
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| Posted: Tue Nov 03, 2009 3:38 pm Post subject: Does the Boglehead guide have a LTC section ? |
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| mephistophles wrote: | Buy the new "Bogleheads Guide to Retirement Planning." In that book an expert insurance agent tells you how to shop for and buy the best life insurance for your situation.
ole meph |
Title says it all. |
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musiclover
Joined: 24 Apr 2007
Posts: 65
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| Posted: Tue Nov 03, 2009 5:19 pm Post subject: |
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Meph, DDb, EmergDoc
Thank you all for your responses. I think I will follow EmergDoc's advise in addition to what I read in Bogleheads guide. Did not mean to start a thread to cause heated debate about interpreting/comprehending posts.
I think DDb's and EmergDoc's post is what I was looking for when I started the thread. Maybe all this is covered in the book's chapter on insurance, but there is advise specific to my situation that you helped answer and guided me in the right direction. Thanks again.
I have already looked at term4sale.com and that is a well designed website specially as it includes the Health Analysis tool. |
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mephistophles
Joined: 27 Mar 2007
Posts: 1375
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| Posted: Tue Nov 03, 2009 5:35 pm Post subject: Re: Does the Boglehead guide have a LTC section ? |
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| Hexdump wrote: | | mephistophles wrote: | Buy the new "Bogleheads Guide to Retirement Planning." In that book an expert insurance agent tells you how to shop for and buy the best life insurance for your situation.
ole meph |
Title says it all. |
Yes, there is a Long Term Care section. |
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cjackson0
Joined: 21 Aug 2008
Posts: 257
Location: St. Louis, MO
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| Posted: Thu Nov 19, 2009 11:27 am Post subject: Re: Another Life Insurance Thread |
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| musiclover wrote: |
2) If one buys a policy through a company that one has never heard of, what is the AMBest/S&P rating that should be a minimum? I understand that these are just a measure of company's ability to pay today and not if they are going to be in business 20/30 yrs from now.
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Is it wise to break up a policy into 2 or 3 smaller chunks in order to diversify the risk of your insurer going out of business? I know this is often discussed for SPIA's and didn't know if it comes into play here as well.
Or is more in the way of 'if they stop sending you a bill for your premium, you better look elsewhere'? |
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