Term insurance premiums: buy now or wait a year or two

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
Bambuk
Posts: 62
Joined: Sun Apr 05, 2015 9:34 pm

Term insurance premiums: buy now or wait a year or two

Post by Bambuk »

I am 48 yo with no serious medical problems and thinking about buying a 20 year term insurance. Or maybe two policies: 10 year and 20 year.

Should I wait a year? I have two reasons:

1. The interest rates are supposed to go up this year and the FED seems to be inclined to tighten the money supply.
Will that result in insurance premiums going down?

2. I am currently a little out of shape (can lose 25 pounds) with high cholesterol level (within the norm, but near the high) and blood pressure is not perfect. What if I get on a diet and get myself into a shape so I could qualify for the better health group?

So if I spend a year getting into a shape while the rates go up by let's say 1% - would I be able to buy cheaper policy and how much cheaper the premiums will be if the rates are 1% higher?

The cons are:
1. I will be a year older (higher premiums).
2. There is no guarantee I will be able to get cholesterol or blood pressure down significantly to qualify for better rates.
3. I will be uninsured for a year.

Does the above make sense or should I buy it now?
Would it make sense to look for a no-exam policy considering there is a big chance I won't be able to stick with the diet.
Any advice?
TIA.
Last edited by Bambuk on Fri Feb 02, 2018 11:02 am, edited 1 time in total.
OnTrack2020
Posts: 1423
Joined: Mon Mar 20, 2017 10:24 am

Re: Term insurance premiums: buy now or wait a year or two

Post by OnTrack2020 »

Do you have dependents? A mortgage? Debts?
Valuethinker
Posts: 49038
Joined: Fri May 11, 2007 11:07 am

Re: Term insurance premiums: buy now or wait a year or two

Post by Valuethinker »

Bambuk wrote: Fri Feb 02, 2018 10:56 am I am 48 yo with no serious medical problems and thinking about buying a 20 year term insurance. Or maybe two policies: 10 year and 20 year.

Should I wait a year or so? I have two reasons:

1. The interest rates are supposed to go up this year and the FED seems to be inclined to tighten the money supply.
Will that result in insurance premiums going down?
Let's say the 30 year interest rates are 2% higher in 2 years. How much lower the premiums will be approximately?

2. I am currently a little out of shape (can lose 25 pounds) with high cholesterol level (within the norm, but near the high) and blood pressure is not perfect. What if I get on a diet and get myself into a shape so I could qualify for the better health group?

So if I spend a year getting into a better shape while the rates go up - would I be able to buy cheaper policy?

The cons are:
1. I will be a year older.
2. There is no guarantee I will be able to get cholesterol or blood pressure down significantly to qualify for better rates.
3. I will be uninsured for a year.

What am I missing? TIA.
Do not worry about interest rates -- you cannot call them. If for example there is a stock market crash, the price of insurance might go up a lot because insurance companies are nursing losses. Or a bad flu epidemic (one is raging now, but it's not bad in the way the 1967/68 HK flu was).

Uninsured for a year is a big risk. If you want insurance, it is because your dependents need it, and being uninsured is not a good risk to take.

I'd look at a 10 year policy if my survivors can live with that. Because this policy is going to be relatively expensive (assumption not fact, check) and a lot more expensive for a 20 year policy.

If you significantly improve your health in a year or two you can look at taking out a new policy.

EDIT: I misread "no serious health problems". Given that you have none, then it is possible your insurance rate would not drop a lot even if you get your meds down.

I would say the risk of being uninsured is your greatest risk at this point.
Last edited by Valuethinker on Fri Feb 02, 2018 11:18 am, edited 1 time in total.
Topic Author
Bambuk
Posts: 62
Joined: Sun Apr 05, 2015 9:34 pm

Re: Term insurance premiums: buy now or wait a year or two

Post by Bambuk »

OnTrack2020 wrote: Fri Feb 02, 2018 10:58 am Do you have dependents? A mortgage? Debts?
Wife and 1 yo daughter. The apartment is almost paid off and we don't have debt, but not much savings.
Because of a daughter I am looking at 20 year term. But maybe 15 year makes sense as well considering I have no idea at what age I will retire.
sbh8
Posts: 40
Joined: Fri Apr 03, 2015 7:17 pm

Re: Term insurance premiums: buy now or wait a year or two

Post by sbh8 »

What about getting a policy now and then trying for a new policy in 1-2 years if you’ve lost weight and improved cholesterol #s? Seems like being uninsured is a pretty big problem if you think you need the insurance.
User avatar
Nate79
Posts: 9373
Joined: Thu Aug 11, 2016 6:24 pm
Location: Delaware

Re: Term insurance premiums: buy now or wait a year or two

Post by Nate79 »

Get it NOW. Feel free to shop around in a few years to try and beat your current rates. If you find a lower rate, GREAT. If not, oh well. You have a baby at home who is relying on you and it is not worth the risk to that kid to worry about saving a few bucks on some maybe's.
User avatar
djpeteski
Posts: 1078
Joined: Fri Mar 31, 2017 9:07 am

Re: Term insurance premiums: buy now or wait a year or two

Post by djpeteski »

I would echo the chorus of "get it now", and mean like today. Like start the process before your head hits the pillow tonight.

When you have a need, with life insurance, there is no procrastination that is justified.

If you do drop the weight, then you can always replace with a lower cost plan. What happens if you lace up your running shoes, and get hit by a car? What will your wife and daughter do then? If that happens you can leave a happy legacy and be a good man that took care of his family always.
User avatar
jimmd
Posts: 9
Joined: Fri Sep 11, 2015 5:05 pm

Re: Term insurance premiums: buy now or wait a year or two

Post by jimmd »

Nate79 wrote: Fri Feb 02, 2018 11:19 am Get it NOW. Feel free to shop around in a few years to try and beat your current rates. If you find a lower rate, GREAT. If not, oh well. You have a baby at home who is relying on you and it is not worth the risk to that kid to worry about saving a few bucks on some maybe's.
+1, see if you can qualify for a level term policy for a time.
Personally, had great experience with TIAA
Topic Author
Bambuk
Posts: 62
Joined: Sun Apr 05, 2015 9:34 pm

Re: Term insurance premiums: buy now or wait a year or two

Post by Bambuk »

jimmd wrote: Fri Feb 02, 2018 11:36 am
Nate79 wrote: Fri Feb 02, 2018 11:19 am Get it NOW. Feel free to shop around in a few years to try and beat your current rates. If you find a lower rate, GREAT. If not, oh well. You have a baby at home who is relying on you and it is not worth the risk to that kid to worry about saving a few bucks on some maybe's.
+1, see if you can qualify for a level term policy for a time.
Personally, had great experience with TIAA
Thanks all. I agree, that buying it now is the best way to go.

Should I be looking for a no-exam policy considering I don't have any medical issues?
Can it be cheaper than a policy with exam which would put me into the lowest medical group?
afan
Posts: 8195
Joined: Sun Jul 25, 2010 4:01 pm

Re: Term insurance premiums: buy now or wait a year or two

Post by afan »

Going uninsured now is a terrible idea. If you need insurance now, then get the best you can NOW. You can always shop for a better rate in the future.

I don't know how much it will matter that you lose some weight. The insurance company will see your medical history. It will know that losing weight is hard, most people who manage it gain it back. It will know whether you are on medication. It will know how many people who lose weight and lower their cholesterol stay at those healthier targets. Meanwhile, you get older and your family is not protected.
Get a 20 year term policy now. If your health improves in the future, or even if it does not, shop for a better deal every few years..

I cannot imagine that a no exam policy would be anything other than extremely expensive. The only people who would buy such a thing would be those whose health prevents them from qualifying for a regular policy. Shop for a policy, go through medical underwriting, and see what you can get. While waiting you can price some alternatives. But get something in place now.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
soccerrules
Posts: 1380
Joined: Mon Nov 14, 2016 3:01 pm

Re: Term insurance premiums: buy now or wait a year or two

Post by soccerrules »

Bambuk wrote: Fri Feb 02, 2018 11:08 am
OnTrack2020 wrote: Fri Feb 02, 2018 10:58 am Do you have dependents? A mortgage? Debts?
Wife and 1 yo daughter. The apartment is almost paid off and we don't have debt, but not much savings.
Because of a daughter I am looking at 20 year term. But maybe 15 year makes sense as well considering I have no idea at what age I will retire.
Do not go uninsured if you care about your wife/child.
I would go level premium 20 year term, If you don;t need it after 12 or 15 years- just drop it. I would advise against a 10 or 15 and then try to grab another policy when you are 58 or 63 (ungodly expensive). Some policies allow for you to "adjust" underwriting (thus lower premiums) within X months from policy date if you get yourself into shape. I was told the weight was the big issue for me and why I was not getting superman rates. (age 52, i do not have HBP or High Chol).
Level Premium allows for your premium to stay consistent over the full 20 years. 20 year level policy allows you to lock in the rate and insure-ability. At our ages a standard term policy the rates start to increase pretty dramatically into your 50's. You can always reduce death benefit amount or drop the policy in later years if you have enough financial assets and don't need the coverage.

I plan to drop policy or reduce the death benefit (and premium amount) when youngest graduates from college in 6 years.
Don't let your outflow exceed your income or your upkeep will be your downfall.
Rupert
Posts: 4122
Joined: Fri Aug 17, 2012 12:01 pm

Re: Term insurance premiums: buy now or wait a year or two

Post by Rupert »

Use an independent broker so he/she can steer you to the insurance companies with the most lax underwriting standards for your particular medical issues. No-exam policies are for sick and young people. You are neither. Even if you are offered a standard, as opposed to preferred or super-preferred, rate, it will be cheaper than a no-exam policy.
ivk5
Posts: 1348
Joined: Thu Sep 22, 2016 9:05 am

Re: Term insurance premiums: buy now or wait a year or two

Post by ivk5 »

Go to term4sale.com, connect with a couple brokers and find one you're comfortable with, and as noted above, get some guidance on which insurers are going to be better fit for your health profile.

Do you plan on having more kids? I would make 20y term the minimum - at that point your daughter may be most of the way through college but likely not yet launched. I wouldn't be comfortable relying on future savings to justify a shorter term. (Can always drop later.) I did a mix of 20y and 30y when our son was 1 (with plans for 1 more kid).

Of course still good to lose weight, eat better, get in shape, etc. More specific medical advice off limits here but consider discussing high cholesterol with your doc. As noted, can always replace policies with better rates in future if you qualify.
User avatar
dm200
Posts: 23214
Joined: Mon Feb 26, 2007 1:21 pm
Location: Washington DC area

Re: Term insurance premiums: buy now or wait a year or two

Post by dm200 »

Buy now - you never know what might happen to cause higher premiums or not get at all
fourkids
Posts: 210
Joined: Mon Mar 23, 2015 9:40 am

Re: Term insurance premiums: buy now or wait a year or two

Post by fourkids »

Now! You have a child. do the 20 year policy. Premiums go up a lot with age in your 40's/50's
Then start working out and getting healthier, and reapply next year. If your health improves considerably, maybe you'll get a policy with a lower premium and you can just cancel your first policy.

and fast and exercise and no alcohol, etc for the week before your exam/blood test. a slight drop in cholesterol or Blood pressure can make a big difference in premium
User avatar
dm200
Posts: 23214
Joined: Mon Feb 26, 2007 1:21 pm
Location: Washington DC area

Re: Term insurance premiums: buy now or wait a year or two

Post by dm200 »

I might also get a modest whole life policy as well -
NotWhoYouThink
Posts: 3595
Joined: Fri Dec 26, 2014 3:19 pm

Re: Term insurance premiums: buy now or wait a year or two

Post by NotWhoYouThink »

dm200 wrote: Fri Feb 02, 2018 3:07 pm I might also get a modest whole life policy as well -
Why? I've never thought of a reason most people would need one.
User avatar
dm200
Posts: 23214
Joined: Mon Feb 26, 2007 1:21 pm
Location: Washington DC area

Re: Term insurance premiums: buy now or wait a year or two

Post by dm200 »

NotWhoYouThink wrote: Fri Feb 02, 2018 3:11 pm
dm200 wrote: Fri Feb 02, 2018 3:07 pm I might also get a modest whole life policy as well -
Why? I've never thought of a reason most people would need one.
Bad stuff can happen down the road - some degree of financial protection for the survivors. I speak from experience.
NotWhoYouThink
Posts: 3595
Joined: Fri Dec 26, 2014 3:19 pm

Re: Term insurance premiums: buy now or wait a year or two

Post by NotWhoYouThink »

dm200 wrote: Fri Feb 02, 2018 3:20 pm
NotWhoYouThink wrote: Fri Feb 02, 2018 3:11 pm
dm200 wrote: Fri Feb 02, 2018 3:07 pm I might also get a modest whole life policy as well -
Why? I've never thought of a reason most people would need one.
Bad stuff can happen down the road - some degree of financial protection for the survivors. I speak from experience.
In any case, the advice for OP is still to get term insurance in place, starting today. Not to late in the day to enter some data at Term4Sale and get things started. Also agree with advice above not to try to get one of the no medical exam required policy. They know why people want those, and charge accordingly. And usually, you can't get as much insurance as you need that way.

The insurance company makes the medical part easy - they'll come to you. You do have to give your doctor permission to give them your data, as well. Plenty of people get insurance that won't make the cover of Men's Fitness, so go ahead and get moving. Now.

Later, if your physical condition is markedly better, you can try for a better rate. But that's later, for today good enough is perfect.
User avatar
Dan-in-Virginia
Posts: 841
Joined: Sat Apr 16, 2011 5:33 am
Location: Virginia

Re: Term insurance premiums: buy now or wait a year or two

Post by Dan-in-Virginia »

I bought a 30 year $1M level term policy from USAA that costs me $66 per month. This is in addition to my Federal govt life insurance which will get more expensive as I age (its value increases as my salary increases). I got my USAA insurance at age 36, but they let me back date to get the age 35 rate if I paid the premiums for the months since my birthday.

Anyone can get life insurance from USAA.

If you get diagnosed with anything ominous, or your health stats worsen, you may find your life insurance premiums prohibitively higher, or you may be uninsurable.

It’s crazy to wait.
Tal-
Posts: 544
Joined: Fri Apr 22, 2016 10:41 pm

Re: Term insurance premiums: buy now or wait a year or two

Post by Tal- »

Like above, I'd echo the "get it now" comment.

I also encourage you to focus on term only for now, and not get lost in the muck on whole life. You may or may not need, or may or may not benefit from a whole life policy. But, they are complicated, and expensive, and determining if you need one is often not an easy question. As such, I encourage you to get coverage in place first using a term policy (or two), and then worry about whole life after basic term coverage is in place.

Getting term is easy today. Canceling term is easy tomorrow. Getting term may not be easy tomorrow.
Debt is to personal finance as a knife is to cooking.
User avatar
Nate79
Posts: 9373
Joined: Thu Aug 11, 2016 6:24 pm
Location: Delaware

Re: Term insurance premiums: buy now or wait a year or two

Post by Nate79 »

dm200 wrote: Fri Feb 02, 2018 3:20 pm
NotWhoYouThink wrote: Fri Feb 02, 2018 3:11 pm
dm200 wrote: Fri Feb 02, 2018 3:07 pm I might also get a modest whole life policy as well -
Why? I've never thought of a reason most people would need one.
Bad stuff can happen down the road - some degree of financial protection for the survivors. I speak from experience.
Whole life is not the solution to any problem. It is a junky product.
limeyx
Posts: 308
Joined: Wed Sep 07, 2016 5:34 pm

Re: Term insurance premiums: buy now or wait a year or two

Post by limeyx »

Valuethinker wrote: Fri Feb 02, 2018 11:02 am
Bambuk wrote: Fri Feb 02, 2018 10:56 am I am 48 yo with no serious medical problems and thinking about buying a 20 year term insurance. Or maybe two policies: 10 year and 20 year.

Should I wait a year or so? I have two reasons:

1. The interest rates are supposed to go up this year and the FED seems to be inclined to tighten the money supply.
Will that result in insurance premiums going down?
Let's say the 30 year interest rates are 2% higher in 2 years. How much lower the premiums will be approximately?

2. I am currently a little out of shape (can lose 25 pounds) with high cholesterol level (within the norm, but near the high) and blood pressure is not perfect. What if I get on a diet and get myself into a shape so I could qualify for the better health group?

So if I spend a year getting into a better shape while the rates go up - would I be able to buy cheaper policy?

The cons are:
1. I will be a year older.
2. There is no guarantee I will be able to get cholesterol or blood pressure down significantly to qualify for better rates.
3. I will be uninsured for a year.

What am I missing? TIA.
Do not worry about interest rates -- you cannot call them. If for example there is a stock market crash, the price of insurance might go up a lot because insurance companies are nursing losses. Or a bad flu epidemic (one is raging now, but it's not bad in the way the 1967/68 HK flu was).

Uninsured for a year is a big risk. If you want insurance, it is because your dependents need it, and being uninsured is not a good risk to take.

I'd look at a 10 year policy if my survivors can live with that. Because this policy is going to be relatively expensive (assumption not fact, check) and a lot more expensive for a 20 year policy.

If you significantly improve your health in a year or two you can look at taking out a new policy.

EDIT: I misread "no serious health problems". Given that you have none, then it is possible your insurance rate would not drop a lot even if you get your meds down.

I would say the risk of being uninsured is your greatest risk at this point.
I too thought i didn't have any health issues. Dropped my blood pressure a little and had a heart murmur discovered that's almost certainly serious enough to make me uninsurable ... thankfully I already have a policy in place

If you can get the insurance at a reasonable cost it might be worth the chance of not being able to get any (assuming you truly need it)
User avatar
Kenkat
Posts: 9553
Joined: Thu Mar 01, 2007 10:18 am
Location: Cincinnati, OH

Re: Term insurance premiums: buy now or wait a year or two

Post by Kenkat »

I had no health issues either until i had a fairly serious health issue last January (pulmonary embolism) at 52. I was glad that I already had a level term life insurance and disability income policies already in place. Get insurance now while you are still a good insurance risk.
Post Reply