Is $53 too much for life insurance for me and my wife?
Is $53 too much for life insurance for me and my wife?
Hi guys. I just signed up for life insurance through an agent who happens to be a friend. My current quote is $38 per month for $500,000 for a 20 year term. My wife’s will be $15 per month for $100,000 for a 20 year term. So a total of $53 per month. We are both 34.
I’m just curious....how do these premiums seem to you? Do they seem high or average?
I looked on the Zander website that Dave Ramsey sponsors and i was quoted on their website to get $500,000 for 20 year term for $20, so a savings of $18. Grated this was just a quote and not actually completing the application they send, but it got me thinking that maybe I am overpaying. Would love to hear peoples opinions on this. Thank you!
I’m just curious....how do these premiums seem to you? Do they seem high or average?
I looked on the Zander website that Dave Ramsey sponsors and i was quoted on their website to get $500,000 for 20 year term for $20, so a savings of $18. Grated this was just a quote and not actually completing the application they send, but it got me thinking that maybe I am overpaying. Would love to hear peoples opinions on this. Thank you!
- Smorgasbord
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Re: Is $53 too much for life insurance for me and my wife?
Those might be great rates, or they might be bad. If you are a morbidly obese smoker who likes to cave dive and has a family history of heart disease, then those are amazingly good rates.
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Re: Is $53 too much for life insurance for me and my wife?
Couple years younger, pay $120/yr per 500k. Skinny/fit, healthy, non smoker/non adventurer.
I think term is like 10 years though. Why do you need 20? Assuming you are healthy and saving, my reason for life insurance is to cover kids cost. I figure by 10 years from now my retirement savings should be able to more than cover the remaining time (also note you get some amount of social security survivor benefit for kids)
I think term is like 10 years though. Why do you need 20? Assuming you are healthy and saving, my reason for life insurance is to cover kids cost. I figure by 10 years from now my retirement savings should be able to more than cover the remaining time (also note you get some amount of social security survivor benefit for kids)
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Re: Is $53 too much for life insurance for me and my wife?
It depends. What are your living expenses currently? How much debt do you have? If one of you dies, how will that impact the other one financially? How long will it take the other to get things sorted and get on solid financial footing on their own? Do you have kids? Do you have disability insurance?
The answer is different if both people make similar incomes than if one is the breadwinner, for example. If one person makes most of the family money, the other probably doesn’t need life insurance at all, because the breadwinner can support themselves.
I think a lot of time young people who don’t have kids and don’t have a lot of debt don’t need anything beyond what they get for free at work. The surviving spouse will need some time to recover, both emotionally and financially, but then they will be able to support themselves.
That said, I’ve never seen rates that low. Where are you finding that?
The answer is different if both people make similar incomes than if one is the breadwinner, for example. If one person makes most of the family money, the other probably doesn’t need life insurance at all, because the breadwinner can support themselves.
I think a lot of time young people who don’t have kids and don’t have a lot of debt don’t need anything beyond what they get for free at work. The surviving spouse will need some time to recover, both emotionally and financially, but then they will be able to support themselves.
That said, I’ve never seen rates that low. Where are you finding that?
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Re: Is $53 too much for life insurance for me and my wife?
I would disagree that the non working spouse doesn’t need insurance. If they die you will need to cover child care and likely other unseen costs (eating out more due to time crunch) unless you plan on remarrying - that may be even more expensive though based on marketability with kids.
Re: Is $53 too much for life insurance for me and my wife?
Curious as to whether the quote that you received from the agent was from one of the companies on the Zander website.JB2013 wrote: ↑Sat Feb 09, 2019 9:56 amHi guys. I just signed up for life insurance through an agent who happens to be a friend. My current quote is $38 per month for $500,000 for a 20 year term. My wife’s will be $15 per month for $100,000 for a 20 year term. So a total of $53 per month. We are both 34.
I’m just curious....how do these premiums seem to you? Do they seem high or average?
I looked on the Zander website that Dave Ramsey sponsors and i was quoted on their website to get $500,000 for 20 year term for $20, so a savings of $18. Grated this was just a quote and not actually completing the application they send, but it got me thinking that maybe I am overpaying. Would love to hear peoples opinions on this. Thank you!
Most of those companies that are on Zander have some degree of specialization in level premium term life insurance. Their prices are competitive.
If your agent's quote was from a company that, for example, provides car or homeowners insurance, it's quite possible that you could save a lot by going with a Zander company. There are several car and homeowners companies that own life insurance companies also, and often their life quotes are not very competitive.
It's a GREAT day to be alive - Travis Tritt
Re: Is $53 too much for life insurance for me and my wife?
Thanks for the replies guys. We have two kids with one on the way. My wife stays at home with the kids so I'm the only one working. I chose 20 years since our kids are only 5 and 4. I figured something that would put them through college could be a good idea. I wanted some coverage for my spouse since we save a lot of costs on childcare.
We have some student loans of 19K and a mortgage of $228K left.
I'm a healthy guy with no medical conditions.
We have some student loans of 19K and a mortgage of $228K left.
I'm a healthy guy with no medical conditions.
Re: Is $53 too much for life insurance for me and my wife?
My friend works for State Farm where we also have our car and home. My friend gave me he $38 quote for $500,000 for 20 years. Zander seemed cheaper like I said which quoted me $20 for the same term and coverage.Stinky wrote: ↑Sat Feb 09, 2019 10:23 amCurious as to whether the quote that you received from the agent was from one of the companies on the Zander website.JB2013 wrote: ↑Sat Feb 09, 2019 9:56 amHi guys. I just signed up for life insurance through an agent who happens to be a friend. My current quote is $38 per month for $500,000 for a 20 year term. My wife’s will be $15 per month for $100,000 for a 20 year term. So a total of $53 per month. We are both 34.
I’m just curious....how do these premiums seem to you? Do they seem high or average?
I looked on the Zander website that Dave Ramsey sponsors and i was quoted on their website to get $500,000 for 20 year term for $20, so a savings of $18. Grated this was just a quote and not actually completing the application they send, but it got me thinking that maybe I am overpaying. Would love to hear peoples opinions on this. Thank you!
Most of those companies that are on Zander have some degree of specialization in level premium term life insurance. Their prices are competitive.
If your agent's quote was from a company that, for example, provides car or homeowners insurance, it's quite possible that you could save a lot by going with a Zander company. There are several car and homeowners companies that own life insurance companies also, and often their life quotes are not very competitive.
Re: Is $53 too much for life insurance for me and my wife?
Go to www.term4sale.com and put in your information. It will tell you exactly what you would pay with dozens of other insurers.
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Re: Is $53 too much for life insurance for me and my wife?
That being the case, I would raise your life insurance to at least $750k, and lower hers to $250k. If you die, she will have a mortgage, additional childcare expenses, and college down the road, and no current income or job history. It will take her some time to spin up a career. If she dies, you will have some one time costs for funeral and end of life medical, and additional childcare expenses, but you already have the income stream.
You have disability insurance for yourself, right?
You have disability insurance for yourself, right?
Re: Is $53 too much for life insurance for me and my wife?
State Farm - excellent company for auto and home insurance. However, their life insurance rates are HIGH.JB2013 wrote: ↑Sat Feb 09, 2019 10:28 amMy friend works for State Farm where we also have our car and home. My friend gave me he $38 quote for $500,000 for 20 years. Zander seemed cheaper like I said which quoted me $20 for the same term and coverage.Stinky wrote: ↑Sat Feb 09, 2019 10:23 amCurious as to whether the quote that you received from the agent was from one of the companies on the Zander website.JB2013 wrote: ↑Sat Feb 09, 2019 9:56 amHi guys. I just signed up for life insurance through an agent who happens to be a friend. My current quote is $38 per month for $500,000 for a 20 year term. My wife’s will be $15 per month for $100,000 for a 20 year term. So a total of $53 per month. We are both 34.
I’m just curious....how do these premiums seem to you? Do they seem high or average?
I looked on the Zander website that Dave Ramsey sponsors and i was quoted on their website to get $500,000 for 20 year term for $20, so a savings of $18. Grated this was just a quote and not actually completing the application they send, but it got me thinking that maybe I am overpaying. Would love to hear peoples opinions on this. Thank you!
Most of those companies that are on Zander have some degree of specialization in level premium term life insurance. Their prices are competitive.
If your agent's quote was from a company that, for example, provides car or homeowners insurance, it's quite possible that you could save a lot by going with a Zander company. There are several car and homeowners companies that own life insurance companies also, and often their life quotes are not very competitive.
You can do better.
It's a GREAT day to be alive - Travis Tritt
Re: Is $53 too much for life insurance for me and my wife?
For reference: I got $1M when I was 41 for about 59 a month for 20 year term. Your quote does look high given your age. I suggest taking a quote from protective.com. They have consistently low rates and are a reputed company. They are also Costco partner. If you go through Costco, you will get further discounts.JB2013 wrote: ↑Sat Feb 09, 2019 9:56 amHi guys. I just signed up for life insurance through an agent who happens to be a friend. My current quote is $38 per month for $500,000 for a 20 year term. My wife’s will be $15 per month for $100,000 for a 20 year term. So a total of $53 per month. We are both 34.
I’m just curious....how do these premiums seem to you? Do they seem high or average?
I looked on the Zander website that Dave Ramsey sponsors and i was quoted on their website to get $500,000 for 20 year term for $20, so a savings of $18. Grated this was just a quote and not actually completing the application they send, but it got me thinking that maybe I am overpaying. Would love to hear peoples opinions on this. Thank you!
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Re: Is $53 too much for life insurance for me and my wife?
I went with annually renewable term life insurance.
With 20 or 10 year term you pay more early on for a cheaper
price later.
I got term insurance when I had the most to insure,the birth of my first child. This was the lowest net worth (negative net worth just coming out of grad school), and lowest pay I would ever have from then on. I had to get the most from limited dollars,so I got a 250K policy to go along with about 150K through work. That would be probably about 750K now.
As time went on, the work life insurance went up with salary, but not the 250K. I now pay close to 1200 per year 30 years later,but I'll be dropping it after this year, since I am now about FI.
With 20 or 10 year term you pay more early on for a cheaper
price later.
I got term insurance when I had the most to insure,the birth of my first child. This was the lowest net worth (negative net worth just coming out of grad school), and lowest pay I would ever have from then on. I had to get the most from limited dollars,so I got a 250K policy to go along with about 150K through work. That would be probably about 750K now.
As time went on, the work life insurance went up with salary, but not the 250K. I now pay close to 1200 per year 30 years later,but I'll be dropping it after this year, since I am now about FI.
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Re: Is $53 too much for life insurance for me and my wife?
Is there a high likelihood that you will be financially independent in 20 years, when the policy would expire? If not, you need to change your plans in order to do so, increase the term of the policy, or both.JB2013 wrote: ↑Sat Feb 09, 2019 10:25 amThanks for the replies guys. We have two kids with one on the way. My wife stays at home with the kids so I'm the only one working. I chose 20 years since our kids are only 5 and 4. I figured something that would put them through college could be a good idea. I wanted some coverage for my spouse since we save a lot of costs on childcare.
And, as noted above, your need for disability insurance is probably even greater than your need for life insurance, and your non-working spouse very likely does need some life insurance. The cost of childcare for three, if nothing else, could be substantial if she is gone.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Is $53 too much for life insurance for me and my wife?
As noted above, plug in your numbers at term4sale.com.
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Re: Is $53 too much for life insurance for me and my wife?
Brings up a question of at what asset level would one feel comfortable with dropping disability insurance? Assuming low risk office job.
There are all kinds of ranges to disability so hard to answer question. I guess I don’t feel like the risk is super high. Don’t actually think we have any.
There are all kinds of ranges to disability so hard to answer question. I guess I don’t feel like the risk is super high. Don’t actually think we have any.
Re: Is $53 too much for life insurance for me and my wife?
First part is easy. You can drop disability insurance when you can survive at the level you want without your work income.BanquetBeer wrote: ↑Sat Feb 09, 2019 1:24 pmBrings up a question of at what asset level would one feel comfortable with dropping disability insurance? Assuming low risk office job.
There are all kinds of ranges to disability so hard to answer question. I guess I don’t feel like the risk is super high. Don’t actually think we have any.
Your second paragraph makes me shudder. The risk of your house burning down is pretty low, but I bet you have homeowner's insurance. Your office job is low risk, but what about that guy on his cellphone on the freeway on your drive home? What if you trip on a curb and get bilateral wrist fractures?
You don't get disability insurance based on the likelihood of being disabled, but rather based on the catastrophic consequences if it does happen. And you're more likely to be disabled than die, depending on your age.
Sorry for the strident tone, but unless you're already financially independent, you need disability insurance.
Carpe Diem.
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Re: Is $53 too much for life insurance for me and my wife?
Disability insurance is probably more needful for most folks than even life insurance. If you're dead, you don't keep consuming resources after your funeral. But you do if you're disabled, and it's more likely that you'll become disabled than die in the middle of your career.Derby wrote: ↑Sat Feb 09, 2019 3:52 pmFirst part is easy. You can drop disability insurance when you can survive at the level you want without your work income.BanquetBeer wrote: ↑Sat Feb 09, 2019 1:24 pmBrings up a question of at what asset level would one feel comfortable with dropping disability insurance? Assuming low risk office job.
There are all kinds of ranges to disability so hard to answer question. I guess I don’t feel like the risk is super high. Don’t actually think we have any.
Your second paragraph makes me shudder. The risk of your house burning down is pretty low, but I bet you have homeowner's insurance. Your office job is low risk, but what about that guy on his cellphone on the freeway on your drive home? What if you trip on a curb and get bilateral wrist fractures?
You don't get disability insurance based on the likelihood of being disabled, but rather based on the catastrophic consequences if it does happen. And you're more likely to be disabled than die, depending on your age.
Sorry for the strident tone, but unless you're already financially independent, you need disability insurance.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
Re: Is $53 too much for life insurance for me and my wife?
+1willthrill81 wrote: ↑Sat Feb 09, 2019 4:39 pmDisability insurance is probably more needful for most folks than even life insurance. If you're dead, you don't keep consuming resources after your funeral. But you do if you're disabled, and it's more likely that you'll become disabled than die in the middle of your career.Derby wrote: ↑Sat Feb 09, 2019 3:52 pmFirst part is easy. You can drop disability insurance when you can survive at the level you want without your work income.BanquetBeer wrote: ↑Sat Feb 09, 2019 1:24 pmBrings up a question of at what asset level would one feel comfortable with dropping disability insurance? Assuming low risk office job.
There are all kinds of ranges to disability so hard to answer question. I guess I don’t feel like the risk is super high. Don’t actually think we have any.
Your second paragraph makes me shudder. The risk of your house burning down is pretty low, but I bet you have homeowner's insurance. Your office job is low risk, but what about that guy on his cellphone on the freeway on your drive home? What if you trip on a curb and get bilateral wrist fractures?
You don't get disability insurance based on the likelihood of being disabled, but rather based on the catastrophic consequences if it does happen. And you're more likely to be disabled than die, depending on your age.
Sorry for the strident tone, but unless you're already financially independent, you need disability insurance.
Absolutely correct.
It's a GREAT day to be alive - Travis Tritt
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Re: Is $53 too much for life insurance for me and my wife?
I plugged in your numbers at term4sale. I see that you can buy $500K 20 year term for $20/month, but only if you are in exceptional health, and you were careful to choose your parents and siblings wisely (in terms of their disease history). This is called "preferred plus" in insurance speak. Very few people actually qualify for this status.
Very good health and family history would be "preferred" status, and would cost about 40% more. Normal good health and family history would be "regular plus", and would cost about $35/month.
Unless you are a marathon runner with all of your parents and grandparents alive and well it sounds like you have gotten a quite reasonable deal.
Check for an annual payment discount.
Ralph
Very good health and family history would be "preferred" status, and would cost about 40% more. Normal good health and family history would be "regular plus", and would cost about $35/month.
Unless you are a marathon runner with all of your parents and grandparents alive and well it sounds like you have gotten a quite reasonable deal.
Check for an annual payment discount.
Ralph
Re: Is $53 too much for life insurance for me and my wife?
I got 500k term life insurance with no medical exam for $340/year from Lincoln Financial. The product I got was geared toward "younger" people hence no requirement for medical exam; however, I was hardly young when I got it (39 years old). My wife is a few years younger and she pays about $300/year for 500k/20 year.
Re: Is $53 too much for life insurance for me and my wife?
$1.5M 20 year term starting at age 40 for $75/month for me. $250K 20 year term starting at age 41 for wife. She was a SAHM. I'm happy to say that it has been an almost total waste of money. My policy is with Banner Life. I think I got it through Select Quote, but it's been 15 years.
I don't think I really need it anymore, but I keep it because I like the odds.
I don't think I really need it anymore, but I keep it because I like the odds.
Re: Is $53 too much for life insurance for me and my wife?
1. You really need more coverage. Probably a lot more.
2. Bumping your wife’s policy to $250k or $500k will have a pretty small cost difference. At $15/mo half of your entire cost is the policy fee. She can probably get $500k 20 years for $25/month if she’s in good health.
3. State Farm is not competitive at all for life insurance. This is the problem buying from a friend. Now if you replace it with something cheaper you have created a relationship problem with your friend. If it’s a good friend that you are trying to help out, keep it for at least a year so he doesn’t lose the commission. After that he won’t care if you drop it since he already got paid.
I’m an agent myself and if a friend asked me to help him get a policy and then turned around and replaced it to save a few dollars a month I’d be pretty annoyed after having done all the work.
2. Bumping your wife’s policy to $250k or $500k will have a pretty small cost difference. At $15/mo half of your entire cost is the policy fee. She can probably get $500k 20 years for $25/month if she’s in good health.
3. State Farm is not competitive at all for life insurance. This is the problem buying from a friend. Now if you replace it with something cheaper you have created a relationship problem with your friend. If it’s a good friend that you are trying to help out, keep it for at least a year so he doesn’t lose the commission. After that he won’t care if you drop it since he already got paid.
I’m an agent myself and if a friend asked me to help him get a policy and then turned around and replaced it to save a few dollars a month I’d be pretty annoyed after having done all the work.
Last edited by BruDude on Sat Feb 09, 2019 7:56 pm, edited 1 time in total.
Re: Is $53 too much for life insurance for me and my wife?
I am curious why you signed yourself up for 5x times the life insurance as your spouse?JB2013 wrote: ↑Sat Feb 09, 2019 9:56 amHi guys. I just signed up for life insurance through an agent who happens to be a friend. My current quote is $38 per month for $500,000 for a 20 year term. My wife’s will be $15 per month for $100,000 for a 20 year term. So a total of $53 per month. We are both 34.
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Re: Is $53 too much for life insurance for me and my wife?
OP is primary breadwinner, wife is SAHM. That said, agree with BruDude, the OP and wife are both underinsured. IMO, I don't think the friend was doing the OP any favors if he had suggested the coverage amounts. A $100K policy is not going to replace the services of a SAHM for any significant amount of time. That is what the OP needs to consider - quality and amount of services SAHM is providing (substantial in my opinion), replacing that for a period of time will be costly, a $100K policy is not going to payoff the mortgage either. As for the OP - at least 10x your gross salary or some amount plus all of your outstanding and expected liabilities over the term you are insuring for; mortgage, college expenses, daycare if wife needs to become gainfully employed at some point. A $500K policy is not going to cover it.miamivice wrote: ↑Sat Feb 09, 2019 7:56 pmI am curious why you signed yourself up for 5x times the life insurance as your spouse?JB2013 wrote: ↑Sat Feb 09, 2019 9:56 amHi guys. I just signed up for life insurance through an agent who happens to be a friend. My current quote is $38 per month for $500,000 for a 20 year term. My wife’s will be $15 per month for $100,000 for a 20 year term. So a total of $53 per month. We are both 34.
Also agree with others, Snake Farm is one of the highest priced in life insurance, they constantly try to get me to buy a policy from them. Compare the prices they offer with quotes from Term4Sale or Zander, it's no contest. Their bread and butter is in the P&C market (property and casualty), life insurance is just an add-on business for them.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: Is $53 too much for life insurance for me and my wife?
$100k is not nearly enough to cover the cost of outsourcing services that a SAHM provides. Daycare along is $18k per year per kid.Grt2bOutdoors wrote: ↑Sat Feb 09, 2019 8:16 pmOP is primary breadwinner, wife is SAHM. That said, agree with BruDude, the OP and wife are both underinsured.miamivice wrote: ↑Sat Feb 09, 2019 7:56 pmI am curious why you signed yourself up for 5x times the life insurance as your spouse?JB2013 wrote: ↑Sat Feb 09, 2019 9:56 amHi guys. I just signed up for life insurance through an agent who happens to be a friend. My current quote is $38 per month for $500,000 for a 20 year term. My wife’s will be $15 per month for $100,000 for a 20 year term. So a total of $53 per month. We are both 34.
Re: Is $53 too much for life insurance for me and my wife?
If you're both in prime health, then you could probably do better on premiums. We got our policies through selectquote.com. Like others, I wonder if you have enough term life and am concerned about the lack of disability insurance. We each bought a $1M, 20-yr term policy and based our coverage on the amount required to fund college for two kids (assuming 4 years private) and pay off the mortgage, assuming the surviving parent would continue to work.
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Re: Is $53 too much for life insurance for me and my wife?
Don't forget that the $100k may be in addition to social security insurance. As an example, based on the SSI calculator, if his wife made $40,000 from 2007 to 2010, the children's survivor benefit is $930 a month.
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Re: Is $53 too much for life insurance for me and my wife?
Find out what rating class your friend's insurance company put you in, then go compare prices from Zander and term4sale.JB2013 wrote: ↑Sat Feb 09, 2019 9:56 amHi guys. I just signed up for life insurance through an agent who happens to be a friend. My current quote is $38 per month for $500,000 for a 20 year term. My wife’s will be $15 per month for $100,000 for a 20 year term. So a total of $53 per month. We are both 34.
I’m just curious....how do these premiums seem to you? Do they seem high or average?
I looked on the Zander website that Dave Ramsey sponsors and i was quoted on their website to get $500,000 for 20 year term for $20, so a savings of $18. Grated this was just a quote and not actually completing the application they send, but it got me thinking that maybe I am overpaying. Would love to hear peoples opinions on this. Thank you!
FYI I purchased a $500K 20 year policy through Zander. Was rated at preferred plus nontabaco, about the same age as you and pay $23 per month...
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin
Re: Is $53 too much for life insurance for me and my wife?
With 3 Kids, and your young (for insurance underwriting purposes) age, $500,000 coverage is skimpy.
The chance of anything fatal happening to either of you is amazingly small; so obviously the life insurance company is making a bet heavily in their favor, at almost any price of insurance. But that’s OK; that’s how life insurance companies stay in business. Of course within that paradigm you try to get the best deal.
Opting for higher levels of coverage comes with certain economies of scale, so for each additional million of coverage you’re going to pay less than for the previous million. I would suggest at least 1 million per kid, 15 or 20 year term depending on their age, if your budget can afford it.
Later on, when the kids can fend for themselves, just drop the coverage like a hot potato. Don’t bother trying to renew it. The premiums become onerous as you age—but by then they’re no longer necessary.
Smectym
The chance of anything fatal happening to either of you is amazingly small; so obviously the life insurance company is making a bet heavily in their favor, at almost any price of insurance. But that’s OK; that’s how life insurance companies stay in business. Of course within that paradigm you try to get the best deal.
Opting for higher levels of coverage comes with certain economies of scale, so for each additional million of coverage you’re going to pay less than for the previous million. I would suggest at least 1 million per kid, 15 or 20 year term depending on their age, if your budget can afford it.
Later on, when the kids can fend for themselves, just drop the coverage like a hot potato. Don’t bother trying to renew it. The premiums become onerous as you age—but by then they’re no longer necessary.
Smectym
Re: Is $53 too much for life insurance for me and my wife?
39 & 40 years old with $500k each for 20 years. Healthy, active, non-smokers, adventurers. We pay $50/month for both.
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Re: Is $53 too much for life insurance for me and my wife?
EDIT: apologies I did not read the above posts first - mea culpa. However I shall leave what I wrote as it stands, as an additional voice.JB2013 wrote: ↑Sat Feb 09, 2019 10:25 amThanks for the replies guys. We have two kids with one on the way. My wife stays at home with the kids so I'm the only one working. I chose 20 years since our kids are only 5 and 4. I figured something that would put them through college could be a good idea. I wanted some coverage for my spouse since we save a lot of costs on childcare.
We have some student loans of 19K and a mortgage of $228K left.
I'm a healthy guy with no medical conditions.
It depends on your income but you feel like underinsured to me.
228 + 19 leaves your wife with 253k to live on. OK she will get a job. But with 3 young children to juggle it won't be a great job - it will have to be one that she can juggle childcare with (as well as paying for childcare). She might only make $40k pa - it's enough to get 3 kids to 18 (given no mortgage) but it's not a lot more. Remember too she would have to fund her own retirement.
Of course if your wife can restart a high paying profession that's different - but people out of the workforce in most fields find that hard.
Yes you would need childcare if your wife was not there. Your career progression would likely be less, too - more time spent at home with the kids, depending on profession fewer/ no business trips etc. However are pregnant women insurable? I am not sure if they are.
The 20 year term feels about right - your last child will be over 18 by then. There is a strategy of having 2 policies: 1 20 year and 1 30 year, and then as your insurance needs decline with greater investment portfolio you can lapse one of the policies. The trick is to lock in a low rate now, when you are young and healthy. You may however not need insurance past 20 years from now (depending on how your savings go).
But the amount? "To leave your spouse and family in the same position as if you had not died" -- taking into account all their sources of income and wealth. I don't feel that this would do this.
Term life assurance, guaranteed premium, 20 year at your age and health is dirt cheap (or should be). There's a term insurance comparison engine that's cited around here: compare Term or something like that?
Did your friend do an insurance needs questionnaire?
My guess is you need something like $750k-1m on your life. But that's only a guess -- I don't know your income and expenses.
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Re: Is $53 too much for life insurance for me and my wife?
Agree with all who shudder.BanquetBeer wrote: ↑Sat Feb 09, 2019 1:24 pmBrings up a question of at what asset level would one feel comfortable with dropping disability insurance? Assuming low risk office job.
There are all kinds of ranges to disability so hard to answer question. I guess I don’t feel like the risk is super high. Don’t actually think we have any.
Bad back is a leading form of office disability. Very hard to quantify, treatment protocols are bad to useless (there is good stuff being done with chronic pain management, but back surgery has one of the lowest success rates of any surgery in terms of pain relief).
ME is another - they don't even agree it's an illness, but if you have ever known anyone with it, it is debilitating. MS is yet another - all the MS in the world, pretty much, occurs in northern climates (lack of sunlight is implicated).
I could go on, but as another poster pointed out, that idiot on the freeway texting on his phone ...
Re: Is $53 too much for life insurance for me and my wife?
I think the point that I am trying to make is that $100k would not nearly cover the cost of outsourcing the roles that a SAHM would perform raising kids until 18. Kids take a ton of time and it would cost a cost.Smorgasbord wrote: ↑Sat Feb 09, 2019 10:18 pmDon't forget that the $100k may be in addition to social security insurance. As an example, based on the SSI calculator, if his wife made $40,000 from 2007 to 2010, the children's survivor benefit is $930 a month.
I am also saying that putting $500k on yourself and $100k on your spouse is sure backpatting your own contributions to your family, while undevaluing your spouses.
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Re: Is $53 too much for life insurance for me and my wife?
Let's run some numbers.miamivice wrote: ↑Sun Feb 10, 2019 2:48 pmI think the point that I am trying to make is that $100k would not nearly cover the cost of outsourcing the roles that a SAHM would perform raising kids until 18. Kids take a ton of time and it would cost a cost.
I am also saying that putting $500k on yourself and $100k on your spouse is sure backpatting your own contributions to your family, while undevaluing your spouses.
JB2013 mentions that he and his wife are both 34 and have kids that are 5, 4, and one on the way. That means Mrs. JB2013 had her first kid around 2014 at the age of 29, and likely worked from 2006 (age 21) to 2013. I'll assume she made $40k a year during those working years. If she were to die in childbirth, the monthly social security benefit would be the family max of $3656 until 2033 when the kids start to turn 19. Adding SSI to the 100k policy, the total insurance on Mrs. JB2013 is about $825k. SSI payments are inflation adjusted, and the benefits to kids are separate from Mr. JB2013's income so they generally won't pay taxes on it.
Now, let's image Mr. JB2013 dies tomorrow. Based on previous posts, he makes $87,000 a year, and pre-2017 was making about $74,000. In that case, the family's SSI benefit would be $4434 a month till the kids start turning 19. Adding in the $500k policy, his total insurance is $1.38 million, or only about 65% more than Mrs. JB2013.
Re: Is $53 too much for life insurance for me and my wife?
So, if Mrs. JB2013 dies during childbirth, will 825k cover the extra expenses incurred in raising children to age 18?Smorgasbord wrote: ↑Sun Feb 10, 2019 7:35 pmLet's run some numbers.miamivice wrote: ↑Sun Feb 10, 2019 2:48 pmI think the point that I am trying to make is that $100k would not nearly cover the cost of outsourcing the roles that a SAHM would perform raising kids until 18. Kids take a ton of time and it would cost a cost.
I am also saying that putting $500k on yourself and $100k on your spouse is sure backpatting your own contributions to your family, while undevaluing your spouses.
JB2013 mentions that he and his wife are both 34 and have kids that are 5, 4, and one on the way. That means Mrs. JB2013 had her first kid around 2014 at the age of 29, and likely worked from 2006 (age 21) to 2013. I'll assume she made $40k a year during those working years. If she were to die in childbirth, the monthly social security benefit would be the family max of $3656 until 2033 when the kids start to turn 19. Adding SSI to the 100k policy, the total insurance on Mrs. JB2013 is about $825k. SSI payments are inflation adjusted, and the benefits to kids are separate from Mr. JB2013's income so they generally won't pay taxes on it.
Now, let's image Mr. JB2013 dies tomorrow. Based on previous posts, he makes $87,000 a year, and pre-2017 was making about $74,000. In that case, the family's SSI benefit would be $4434 a month till the kids start turning 19. Adding in the $500k policy, his total insurance is $1.38 million, or only about 65% more than Mrs. JB2013.
If Mr. JB2013 dies during childbirth (car accident on way to hospital), will $1.38 million be required to cover the extra expenses in raising children to 18?
That is the question that JB2013 needs to answer, to decide if he picked the right amount of life insurance.
(Personally, as a father of two kids, I am far more worried about what I would do in the absence of my wife than she is in the absence of me. A lot of what my wife does for our family is very difficult or very expensive to replace, while what I do for the family is primarily income which can readily be replaced.)
Re: Is $53 too much for life insurance for me and my wife?
Age 30, 400k private policies enacted at age 26. $23/mo for me (male, good health) and $16/mo for wife (good health. I'd say the prices you were quoted at age 34 are not unreasonable and probably about market rates. May be able to find it a bit less expensive elsewhere but make sure you check the credit ratings of the company. My thought was that by 46 we should be close to FI with a low mortgage balance and projected to hit $1M in retirement savings in our mid-40's, so a 20 year term would be fine.
I stack the 400k policies with an additional 1.5x salary, plus 360k buy-up via work as that's what I can buy-up without going through all their biometric testing. Our only debt is our mortgage at about 222,000 and we have two young kids. Don't forget that the kids (and survivor, I believe) would get SS benefits which help offset the costs of raising children, also.
I stack the 400k policies with an additional 1.5x salary, plus 360k buy-up via work as that's what I can buy-up without going through all their biometric testing. Our only debt is our mortgage at about 222,000 and we have two young kids. Don't forget that the kids (and survivor, I believe) would get SS benefits which help offset the costs of raising children, also.