Reasonable cost of life insurance?

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Topic Author
jstage
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Reasonable cost of life insurance?

Post by jstage »

Hello,

I don't/can't seem to find a reference point for life insurance costs. What is a range that seems appropriate to insure a 40 yo male, no health issues? Looking at 20 year (so ages 40-60) 2 million dollar term life. We did the term4life or whatever and got quotes and went all the way through the process to post-health exams and got formal official price from underwriters. It seems high to me (its about triple what predicted quote was and the only reason given was the medical marijuana prescription not weight or anything else). Thoughts?
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Stinky
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Re: Reasonable cost of life insurance?

Post by Stinky »

jstage wrote: Wed Jun 22, 2022 12:22 pm Hello,

I don't/can't seem to find a reference point for life insurance costs. What is a range that seems appropriate to insure a 40 yo male, no health issues? Looking at 20 year (so ages 40-60) 2 million dollar term life. We did the term4life or whatever and got quotes and went all the way through the process to post-health exams and got formal official price from underwriters. It seems high to me (its about triple what predicted quote was and the only reason given was the medical marijuana prescription not weight or anything else). Thoughts?
Are you taking medical marijuana to deal with some underlying medical condition? If so, that could have affected your rate.
Former life insurance company financial officer who sincerely believes that ”It’s a GREAT day to be alive!”
Geronkas
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Re: Reasonable cost of life insurance?

Post by Geronkas »

Right after use, marijuana impairs judgment and short-term memory. It also alters perception, making it dangerous to drive, among other activities. And if you smoke marijuana, you may be classified as a smoker and shut out of preferred rates. And whether you say you use marijuana recreationally or for medical reasons probably won’t matter in terms of the resulting life insurance rates based on use. And for medicinal marijuana users, a life insurance company will want to know about the underlying medical condition that led to the marijuana. And that medical condition can also affect the life insurance quotes you get. The goal of a marijuana user who’s buying life insurance should be to get a non-smoking rate, especially if the use is occasional. Those who ingest marijuana, such as edibles, should be able to get a non-smoking rate. Find an agent who will shop the market for you anonymously before you formally apply and try to get a non-smoking life insurance rate.
Topic Author
jstage
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Re: Reasonable cost of life insurance?

Post by jstage »

Stinky wrote: Wed Jun 22, 2022 12:40 pm
jstage wrote: Wed Jun 22, 2022 12:22 pm Hello,

I don't/can't seem to find a reference point for life insurance costs. What is a range that seems appropriate to insure a 40 yo male, no health issues? Looking at 20 year (so ages 40-60) 2 million dollar term life. We did the term4life or whatever and got quotes and went all the way through the process to post-health exams and got formal official price from underwriters. It seems high to me (its about triple what predicted quote was and the only reason given was the medical marijuana prescription not weight or anything else). Thoughts?
Are you taking medical marijuana to deal with some underlying medical condition? If so, that could have affected your rate.
No. The reason we were given for the elevated quote was simply the frequency of use reported. We can't exactly shop around anymore bc we've already applied. Anywhere else we apply wouldn't we have to say we've applied elsewhere already?
dak
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Re: Reasonable cost of life insurance?

Post by dak »

Well, you did the right thing by properly disclosing your usage and frequency. Even if you could wipe the slate clean and reapply elsewhere, answering underwriting questions untruthfully can have adverse consequences in the (hopefully unlikely) event that a claim needs to be made on the insurance.

Never give the insurance company a reason to deny your claim by giving false information on their application forms. We can debate if the information you disclosed if relevant or not, but in the event of a claim your insurance beneficiaries do not want to be in the position of fighting with the insurance provider over items on your application. That would add nothing but stress at an already stressful time.
Chardo
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Re: Reasonable cost of life insurance?

Post by Chardo »

jstage wrote: Wed Jun 22, 2022 12:52 pm
Stinky wrote: Wed Jun 22, 2022 12:40 pm
jstage wrote: Wed Jun 22, 2022 12:22 pm Hello,

I don't/can't seem to find a reference point for life insurance costs. What is a range that seems appropriate to insure a 40 yo male, no health issues? Looking at 20 year (so ages 40-60) 2 million dollar term life. We did the term4life or whatever and got quotes and went all the way through the process to post-health exams and got formal official price from underwriters. It seems high to me (its about triple what predicted quote was and the only reason given was the medical marijuana prescription not weight or anything else). Thoughts?
Are you taking medical marijuana to deal with some underlying medical condition? If so, that could have affected your rate.
No. The reason we were given for the elevated quote was simply the frequency of use reported. We can't exactly shop around anymore bc we've already applied. Anywhere else we apply wouldn't we have to say we've applied elsewhere already?
Medical marijuana is underwritten based on the underlying condition requiring the prescription. Different rules than recreational marijuana.
Chardo
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Re: Reasonable cost of life insurance?

Post by Chardo »

If you apply elsewhere, the new carrier will know you already applied. And they will know you were issued with a higher rating. All insurers subscribe to a database of previous applications. It's the first thing they check. If you don't disclose it, they will catch you, and they'll start right off wondering what else you're not telling them.
Topic Author
jstage
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Re: Reasonable cost of life insurance?

Post by jstage »

Chardo wrote: Wed Jun 22, 2022 1:45 pm
jstage wrote: Wed Jun 22, 2022 12:52 pm
Stinky wrote: Wed Jun 22, 2022 12:40 pm
jstage wrote: Wed Jun 22, 2022 12:22 pm Hello,

I don't/can't seem to find a reference point for life insurance costs. What is a range that seems appropriate to insure a 40 yo male, no health issues? Looking at 20 year (so ages 40-60) 2 million dollar term life. We did the term4life or whatever and got quotes and went all the way through the process to post-health exams and got formal official price from underwriters. It seems high to me (its about triple what predicted quote was and the only reason given was the medical marijuana prescription not weight or anything else). Thoughts?
Are you taking medical marijuana to deal with some underlying medical condition? If so, that could have affected your rate.
No. The reason we were given for the elevated quote was simply the frequency of use reported. We can't exactly shop around anymore bc we've already applied. Anywhere else we apply wouldn't we have to say we've applied elsewhere already?
Medical marijuana is underwritten based on the underlying condition requiring the prescription. Different rules than recreational marijuana.
That may be true...but that isn't what they told us. As the reason for the medical card is "general back pain" its not linked to any formal diagnosis or injurty.
Geronkas
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Re: Reasonable cost of life insurance?

Post by Geronkas »

jstage wrote: Wed Jun 22, 2022 1:56 pm
Chardo wrote: Wed Jun 22, 2022 1:45 pm
jstage wrote: Wed Jun 22, 2022 12:52 pm
Stinky wrote: Wed Jun 22, 2022 12:40 pm
jstage wrote: Wed Jun 22, 2022 12:22 pm Hello,

I don't/can't seem to find a reference point for life insurance costs. What is a range that seems appropriate to insure a 40 yo male, no health issues? Looking at 20 year (so ages 40-60) 2 million dollar term life. We did the term4life or whatever and got quotes and went all the way through the process to post-health exams and got formal official price from underwriters. It seems high to me (its about triple what predicted quote was and the only reason given was the medical marijuana prescription not weight or anything else). Thoughts?
Are you taking medical marijuana to deal with some underlying medical condition? If so, that could have affected your rate.
No. The reason we were given for the elevated quote was simply the frequency of use reported. We can't exactly shop around anymore bc we've already applied. Anywhere else we apply wouldn't we have to say we've applied elsewhere already?
Medical marijuana is underwritten based on the underlying condition requiring the prescription. Different rules than recreational marijuana.
That may be true...but that isn't what they told us. As the reason for the medical card is "general back pain" its not linked to any formal diagnosis or injurty.
Bingo! That “general back pain” is your formal diagnosis from your medical provider that qualified you for the card. You cannot get a Medical Marijuana card without a medical diagnosis. You may not consider it a formal diagnosis, but it is the diagnosis that got you your medical marijuana card, and “the general back pain” is an underlying condition by the insurance company, regardless of what they may or may not have told you.
aristotelian
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Re: Reasonable cost of life insurance?

Post by aristotelian »

We got 20year term starting in our early 30's. I imagine starting at 40 significantly increases the cost.

$2M also seems somewhat high. I have heard 10X salary as a rule of thumb. If you already have some savings built up you could probably get away with significantly less.
deikel
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Re: Reasonable cost of life insurance?

Post by deikel »

So, how high are we talking here...you are 40 after all, you want 2 million and you have an underlying condition that required medication

I am at 600 USD/yr 500k insurance, started at age 35 with some underlying problems, but no smoker. Wife is at 500k, same age when we started her rate was better at 400/yr

What is your actual number ? Why not reduce the insurance amount, 2 mil seems a lot, you don't need to make the remaining spouse instantly retired, that's bad incentive :-), you only need to replace your income until they can reasonably fend for themselves again
Everything you read in this post is my personal opinion. If you disagree with this disclaimer, please un-read the text immediately and destroy any copy or remembrance of it.
gtg970g
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Re: Reasonable cost of life insurance?

Post by gtg970g »

A good life insurance agent should know underwriting standards for companies they sell and be able to get you the best rates based on your individual circumstances. It would be reasonable to reapply but you should talk to an agent about when to reapply and to what company you should apply through.
Chardo
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Re: Reasonable cost of life insurance?

Post by Chardo »

deikel wrote: Wed Jun 22, 2022 4:03 pm So, how high are we talking here...you are 40 after all, you want 2 million and you have an underlying condition that required medication

I am at 600 USD/yr 500k insurance, started at age 35 with some underlying problems, but no smoker. Wife is at 500k, same age when we started her rate was better at 400/yr

What is your actual number ? Why not reduce the insurance amount, 2 mil seems a lot, you don't need to make the remaining spouse instantly retired, that's bad incentive :-), you only need to replace your income until they can reasonably fend for themselves again
You know nothing about this person's finances, so it's impossible for you to give any advice on appropriate coverage. 2 mil may seem like a lot to you. It can be drastically insufficient for some.
Chardo
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Re: Reasonable cost of life insurance?

Post by Chardo »

aristotelian wrote: Wed Jun 22, 2022 3:31 pm We got 20year term starting in our early 30's. I imagine starting at 40 significantly increases the cost.

$2M also seems somewhat high. I have heard 10X salary as a rule of thumb. If you already have some savings built up you could probably get away with significantly less.
What if this person earns a lot, has a big mortgage, young kids, big expenses, small savings, etc. Rules of thumb are for fictitious people. And unless someone is older or has a ton of assets, 10x salary is typically too little, often by a lot.
SpaghettiMonster
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Re: Reasonable cost of life insurance?

Post by SpaghettiMonster »

jstage wrote: Wed Jun 22, 2022 12:22 pm Hello,

I don't/can't seem to find a reference point for life insurance costs. What is a range that seems appropriate to insure a 40 yo male, no health issues? Looking at 20 year (so ages 40-60) 2 million dollar term life. We did the term4life or whatever and got quotes and went all the way through the process to post-health exams and got formal official price from underwriters. It seems high to me (its about triple what predicted quote was and the only reason given was the medical marijuana prescription not weight or anything else). Thoughts?
I'd argue against claiming no health issues if you require prescription for medical marijuana. The underlying health condition can run the gamut and explain your quotes.
aristotelian
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Re: Reasonable cost of life insurance?

Post by aristotelian »

Chardo wrote: Wed Jun 22, 2022 4:34 pm
aristotelian wrote: Wed Jun 22, 2022 3:31 pm We got 20year term starting in our early 30's. I imagine starting at 40 significantly increases the cost.

$2M also seems somewhat high. I have heard 10X salary as a rule of thumb. If you already have some savings built up you could probably get away with significantly less.
What if this person earns a lot, has a big mortgage, young kids, big expenses, small savings, etc. Rules of thumb are for fictitious people. And unless someone is older or has a ton of assets, 10x salary is typically too little, often by a lot.
I agree rules of thumb should be taken with a grain of salt but 10X the salary of the primary breadwinner would give the survivor at least 10 years to figure out a new plan. They are not going to be destitute any time soon. OP was asking how to reduce the premium so one question is whether they need $2M. Only they can answer that.
an_asker
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Re: Reasonable cost of life insurance?

Post by an_asker »

SpaghettiMonster wrote: Wed Jun 22, 2022 4:38 pm [...]
I'd argue against claiming no health issues if you require prescription for medical marijuana. The underlying health condition can run the gamut and explain your quotes.
That horse has apparently already bolted!
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yatesd
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Re: Reasonable cost of life insurance?

Post by yatesd »

I also agree that $2M is probably high, and why until age 60? Is this when your last child turns 18? No reason to over insure.

I personally pay $270 a year for $500K. I have 20 year term, 51 years old, and got the policy when I was 35.

My 401K, home equity, and free life insurance from work help fill any potential gaps.
SpaghettiMonster
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Re: Reasonable cost of life insurance?

Post by SpaghettiMonster »

an_asker wrote: Wed Jun 22, 2022 5:50 pm
SpaghettiMonster wrote: Wed Jun 22, 2022 4:38 pm [...]
I'd argue against claiming no health issues if you require prescription for medical marijuana. The underlying health condition can run the gamut and explain your quotes.
That horse has apparently already bolted!
No, I don’t mean claiming it on the application. What’s done is done. I mean to think that oneself has no health problems while requiring medicinal marijuana. It’s like a patient saying, “no, I don’t have hypertension, I just take these three anti-hypertensive medications.” I applaud the OP for being honest and although I’d expect higher quotes than those for a person with no health problems, 3X the quote is surprising to me.
FIRWYW
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Re: Reasonable cost of life insurance?

Post by FIRWYW »

gtg970g wrote: Wed Jun 22, 2022 4:10 pm A good life insurance agent should know underwriting standards for companies they sell and be able to get you the best rates based on your individual circumstances. It would be reasonable to reapply but you should talk to an agent about when to reapply and to what company you should apply through.
100% agree with talking to an agent that sells for different companies and get ideas if there is a better company. They have different actuarial calculations and weigh things differently. Regardless of stigma/perceptions for or against MJ, literature does support higher suicide, homocide, accidental death rates for sure among users and generally thought that lung disease is higher. Only now getting studies showing that, but one published last week shows higher ED, office visits and deaths from respiratory issues. Makes sense for them to charge you more but like cigarette smokers, some companies give a bigger marginal rate increase than others.
FIRWYW
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Re: Reasonable cost of life insurance?

Post by FIRWYW »

gtg970g wrote: Wed Jun 22, 2022 4:10 pm A good life insurance agent should know underwriting standards for companies they sell and be able to get you the best rates based on your individual circumstances. It would be reasonable to reapply but you should talk to an agent about when to reapply and to what company you should apply through.
100% agree with talking to an agent that sells for different companies and get ideas if there is a better company. They have different actuarial calculations and weigh things differently. Regardless of stigma/perceptions for or against MJ, literature does support higher suicide, homocide, accidental death rates for sure among users and generally thought that lung disease is higher. Only now getting studies showing that, but one published last week shows higher ED, office visits and hospitalizations from respiratory issues. Makes sense for them to charge you more but like cigarette smokers, some companies give a bigger marginal rate increase than others.
Valuethinker
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Re: Reasonable cost of life insurance?

Post by Valuethinker »

SpaghettiMonster wrote: Wed Jun 22, 2022 9:37 pm
an_asker wrote: Wed Jun 22, 2022 5:50 pm
SpaghettiMonster wrote: Wed Jun 22, 2022 4:38 pm [...]
I'd argue against claiming no health issues if you require prescription for medical marijuana. The underlying health condition can run the gamut and explain your quotes.
That horse has apparently already bolted!
No, I don’t mean claiming it on the application. What’s done is done. I mean to think that oneself has no health problems while requiring medicinal marijuana. It’s like a patient saying, “no, I don’t have hypertension, I just take these three anti-hypertensive medications.” I applaud the OP for being honest and although I’d expect higher quotes than those for a person with no health problems, 3X the quote is surprising to me.
There's a legal nightmare if you have a medical condition under treatment and you do not disclose.

The insurance company could challenge the payment in court. Litigation could take years, and be costly.
Valuethinker
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Re: Reasonable cost of life insurance?

Post by Valuethinker »

FIRWYW wrote: Wed Jun 22, 2022 11:23 pm
gtg970g wrote: Wed Jun 22, 2022 4:10 pm A good life insurance agent should know underwriting standards for companies they sell and be able to get you the best rates based on your individual circumstances. It would be reasonable to reapply but you should talk to an agent about when to reapply and to what company you should apply through.
100% agree with talking to an agent that sells for different companies and get ideas if there is a better company. They have different actuarial calculations and weigh things differently. Regardless of stigma/perceptions for or against MJ, literature does support higher suicide, homocide, accidental death rates for sure among users and generally thought that lung disease is higher. Only now getting studies showing that, but one published last week shows higher ED, office visits and hospitalizations from respiratory issues. Makes sense for them to charge you more but like cigarette smokers, some companies give a bigger marginal rate increase than others.
It's very important to distinguish between recreational MJ use and medical.

The data, as far as I am aware, is almost entirely for recreational? And recreational MJ users are more "out there" - the sample pool will include people who use other sorts of recreational drugs, have significant lifestyle issues, etc. For example many (most?) recreational MJ users also smoke cigarettes (or vape)? And almost 100% would also use alcohol.

Medical users have a medical condition - often a fatal one, like Multiple Sclerosis. Chronic pain - this can be quite debilitating. Neuropathy. Also the method of taking is not always by smoke inhalation? For example, Sativa (MS & neuropathy) is ingested by pill.
59Gibson
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Re: Reasonable cost of life insurance?

Post by 59Gibson »

You either bite the bullet pay the premium or cut term and/or face value
Chardo
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Re: Reasonable cost of life insurance?

Post by Chardo »

Valuethinker wrote: Thu Jun 23, 2022 4:29 am
FIRWYW wrote: Wed Jun 22, 2022 11:23 pm
gtg970g wrote: Wed Jun 22, 2022 4:10 pm A good life insurance agent should know underwriting standards for companies they sell and be able to get you the best rates based on your individual circumstances. It would be reasonable to reapply but you should talk to an agent about when to reapply and to what company you should apply through.
100% agree with talking to an agent that sells for different companies and get ideas if there is a better company. They have different actuarial calculations and weigh things differently. Regardless of stigma/perceptions for or against MJ, literature does support higher suicide, homocide, accidental death rates for sure among users and generally thought that lung disease is higher. Only now getting studies showing that, but one published last week shows higher ED, office visits and hospitalizations from respiratory issues. Makes sense for them to charge you more but like cigarette smokers, some companies give a bigger marginal rate increase than others.
It's very important to distinguish between recreational MJ use and medical.

The data, as far as I am aware, is almost entirely for recreational? And recreational MJ users are more "out there" - the sample pool will include people who use other sorts of recreational drugs, have significant lifestyle issues, etc. For example many (most?) recreational MJ users also smoke cigarettes (or vape)? And almost 100% would also use alcohol.

Medical users have a medical condition - often a fatal one, like Multiple Sclerosis. Chronic pain - this can be quite debilitating. Neuropathy. Also the method of taking is not always by smoke inhalation? For example, Sativa (MS & neuropathy) is ingested by pill.
Multiple sclerosis is not fatal.

MJ underwriting for life insurance is rapidly evolving. One constant is there are separate guidelines for medical and recreational. Medical is always underwritten based on the underlying condition causing that prescription. Recreational is all over the map, with carriers having very different guidelines that change often.
Chardo
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Re: Reasonable cost of life insurance?

Post by Chardo »

59Gibson wrote: Thu Jun 23, 2022 4:31 am You either bite the bullet pay the premium or cut term and/or face value
Or find a lower premium.
Admiral
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Re: Reasonable cost of life insurance?

Post by Admiral »

Smoking, whether tobacco or weed, is going to increase your premium, because insurers consider it an added risk factor.

What was the quote you got? When I was 40, I received the highest health rating, whatever it was called at the time. I pay $985 for $1m. My wife, who is two years older, pays $1100 or so, same coverage, 20 year term.

"Reasonable" is subjective. $2m is a lot of coverage.
Chardo
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Re: Reasonable cost of life insurance?

Post by Chardo »

Admiral wrote: Thu Jun 23, 2022 7:26 am Smoking, whether tobacco or weed, is going to increase your premium, because insurers consider it an added risk factor.

What was the quote you got? When I was 40, I received the highest health rating, whatever it was called at the time. I pay $985 for $1m. My wife, who is two years older, pays $1100 or so, same coverage, 20 year term.

"Reasonable" is subjective. $2m is a lot of coverage.
It varies by company. Some companies issue all MJ users at smoker rates, others vary based on method and/or frequency.

$2m is not a lot of coverage for some people.
Admiral
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Re: Reasonable cost of life insurance?

Post by Admiral »

Chardo wrote: Thu Jun 23, 2022 7:29 am
Admiral wrote: Thu Jun 23, 2022 7:26 am Smoking, whether tobacco or weed, is going to increase your premium, because insurers consider it an added risk factor.

What was the quote you got? When I was 40, I received the highest health rating, whatever it was called at the time. I pay $985 for $1m. My wife, who is two years older, pays $1100 or so, same coverage, 20 year term.

"Reasonable" is subjective. $2m is a lot of coverage.
It varies by company. Some companies issue all MJ users at smoker rates, others vary based on method and/or frequency.

$2m is not a lot of coverage for some people.
$10m is also not a lot for some people, I was speaking generally for most people, who don't have millions in assets. If one has assets such that one needs $2m (x2) of coverage, then presumably/hopefully one can afford a relatively high premium.

I'm sure inflation is not helping to keep premiums low. :greedy
Valuethinker
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Re: Reasonable cost of life insurance?

Post by Valuethinker »

Chardo wrote: Thu Jun 23, 2022 7:21 am
Multiple sclerosis is not fatal.

MJ underwriting for life insurance is rapidly evolving. One constant is there are separate guidelines for medical and recreational. Medical is always underwritten based on the underlying condition causing that prescription. Recreational is all over the map, with carriers having very different guidelines that change often.
Thank you re medical underwriting.

I had understood the prognosis for MS sufferers was of significantly shortened lifespans and indeed I had a friend whose partner died quite suddenly of it (she had been declining for many years, last 6 months or so she really rallied, then she died). I must do some more research.
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jstage
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Re: Reasonable cost of life insurance?

Post by jstage »

Valuethinker wrote: Thu Jun 23, 2022 4:29 am
FIRWYW wrote: Wed Jun 22, 2022 11:23 pm
gtg970g wrote: Wed Jun 22, 2022 4:10 pm A good life insurance agent should know underwriting standards for companies they sell and be able to get you the best rates based on your individual circumstances. It would be reasonable to reapply but you should talk to an agent about when to reapply and to what company you should apply through.
100% agree with talking to an agent that sells for different companies and get ideas if there is a better company. They have different actuarial calculations and weigh things differently. Regardless of stigma/perceptions for or against MJ, literature does support higher suicide, homocide, accidental death rates for sure among users and generally thought that lung disease is higher. Only now getting studies showing that, but one published last week shows higher ED, office visits and hospitalizations from respiratory issues. Makes sense for them to charge you more but like cigarette smokers, some companies give a bigger marginal rate increase than others.
It's very important to distinguish between recreational MJ use and medical.

The data, as far as I am aware, is almost entirely for recreational? And recreational MJ users are more "out there" - the sample pool will include people who use other sorts of recreational drugs, have significant lifestyle issues, etc. For example many (most?) recreational MJ users also smoke cigarettes (or vape)? And almost 100% would also use alcohol.

Medical users have a medical condition - often a fatal one, like Multiple Sclerosis. Chronic pain - this can be quite debilitating. Neuropathy. Also the method of taking is not always by smoke inhalation? For example, Sativa (MS & neuropathy) is ingested by pill.
Just to clarify...there is no underlying medical condition for the weed use....the card itself is an "Insurance policy". Before weed was allowed recreationally getting prescription cards (which was a joke of a process) protected you from the law if you got caught smoking. Therefore, dh possess prescription weed card. That is how there is a discrepancy between reporting no health issues but actually having a prescription marijuana card.

May just revisit necessary coverage and see if there is a different route we want to take. But yes...20 years bc that is age last kid will be 20...but ladder method my work and be cheaper bc needs are higher now then with 1 18 year old left in house...
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willthrill81
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Re: Reasonable cost of life insurance?

Post by willthrill81 »

Admiral wrote: Thu Jun 23, 2022 7:33 am I'm sure inflation is not helping to keep premiums low. :greedy
Actually, inflation should indirectly reduce premiums for a given face amount because higher inflation generally comes with higher interest rates. Inflation doesn't directly impact the premiums, but it can impact how much face amount one needs though.

The cost of a $1m policy, for instance, is not higher today than it was two years ago simply due to inflation.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
Chardo
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Re: Reasonable cost of life insurance?

Post by Chardo »

jstage wrote: Thu Jun 23, 2022 7:51 am
Valuethinker wrote: Thu Jun 23, 2022 4:29 am
FIRWYW wrote: Wed Jun 22, 2022 11:23 pm
gtg970g wrote: Wed Jun 22, 2022 4:10 pm A good life insurance agent should know underwriting standards for companies they sell and be able to get you the best rates based on your individual circumstances. It would be reasonable to reapply but you should talk to an agent about when to reapply and to what company you should apply through.
100% agree with talking to an agent that sells for different companies and get ideas if there is a better company. They have different actuarial calculations and weigh things differently. Regardless of stigma/perceptions for or against MJ, literature does support higher suicide, homocide, accidental death rates for sure among users and generally thought that lung disease is higher. Only now getting studies showing that, but one published last week shows higher ED, office visits and hospitalizations from respiratory issues. Makes sense for them to charge you more but like cigarette smokers, some companies give a bigger marginal rate increase than others.
It's very important to distinguish between recreational MJ use and medical.

The data, as far as I am aware, is almost entirely for recreational? And recreational MJ users are more "out there" - the sample pool will include people who use other sorts of recreational drugs, have significant lifestyle issues, etc. For example many (most?) recreational MJ users also smoke cigarettes (or vape)? And almost 100% would also use alcohol.

Medical users have a medical condition - often a fatal one, like Multiple Sclerosis. Chronic pain - this can be quite debilitating. Neuropathy. Also the method of taking is not always by smoke inhalation? For example, Sativa (MS & neuropathy) is ingested by pill.
Just to clarify...there is no underlying medical condition for the weed use....the card itself is an "Insurance policy". Before weed was allowed recreationally getting prescription cards (which was a joke of a process) protected you from the law if you got caught smoking. Therefore, dh possess prescription weed card. That is how there is a discrepancy between reporting no health issues but actually having a prescription marijuana card.

May just revisit necessary coverage and see if there is a different route we want to take. But yes...20 years bc that is age last kid will be 20...but ladder method my work and be cheaper bc needs are higher now then with 1 18 year old left in house...
Then you would likely fall under recreational use guidelines. Depending on frequency, that could mean anything from preferred nonsmoker to standard smoker or higher. Which can easily be more than 3x difference in premium.
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Re: Reasonable cost of life insurance?

Post by Admiral »

willthrill81 wrote: Thu Jun 23, 2022 7:53 am
Admiral wrote: Thu Jun 23, 2022 7:33 am I'm sure inflation is not helping to keep premiums low. :greedy
Actually, inflation should indirectly reduce premiums for a given face amount because higher inflation generally comes with higher interest rates. Inflation doesn't directly impact the premiums, but it can impact how much face amount one needs though.

The cost of a $1m policy, for instance, is not higher today than it was two years ago simply due to inflation.
A million ain't what it used to be.

It's now $920,000. :)
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Re: Reasonable cost of life insurance?

Post by Chardo »

willthrill81 wrote: Thu Jun 23, 2022 7:53 am
Admiral wrote: Thu Jun 23, 2022 7:33 am I'm sure inflation is not helping to keep premiums low. :greedy
Actually, inflation should indirectly reduce premiums for a given face amount because higher inflation generally comes with higher interest rates. Inflation doesn't directly impact the premiums, but it can impact how much face amount one needs though.

The cost of a $1m policy, for instance, is not higher today than it was two years ago simply due to inflation.
This is true. We're about to see even lower premiums. Higher interest rates are a big help to insurance companies.
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Re: Reasonable cost of life insurance?

Post by Chardo »

Admiral wrote: Thu Jun 23, 2022 7:33 am
Chardo wrote: Thu Jun 23, 2022 7:29 am
Admiral wrote: Thu Jun 23, 2022 7:26 am Smoking, whether tobacco or weed, is going to increase your premium, because insurers consider it an added risk factor.

What was the quote you got? When I was 40, I received the highest health rating, whatever it was called at the time. I pay $985 for $1m. My wife, who is two years older, pays $1100 or so, same coverage, 20 year term.

"Reasonable" is subjective. $2m is a lot of coverage.
It varies by company. Some companies issue all MJ users at smoker rates, others vary based on method and/or frequency.

$2m is not a lot of coverage for some people.
$10m is also not a lot for some people, I was speaking generally for most people, who don't have millions in assets. If one has assets such that one needs $2m (x2) of coverage, then presumably/hopefully one can afford a relatively high premium.

I'm sure inflation is not helping to keep premiums low. :greedy
It's actually the opposite. The biggest need for insurance is those that have fewer assets. Their death, and loss of that income, would be devastating to the heirs.
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Re: Reasonable cost of life insurance?

Post by willthrill81 »

Admiral wrote: Thu Jun 23, 2022 7:56 am
willthrill81 wrote: Thu Jun 23, 2022 7:53 am
Admiral wrote: Thu Jun 23, 2022 7:33 am I'm sure inflation is not helping to keep premiums low. :greedy
Actually, inflation should indirectly reduce premiums for a given face amount because higher inflation generally comes with higher interest rates. Inflation doesn't directly impact the premiums, but it can impact how much face amount one needs though.

The cost of a $1m policy, for instance, is not higher today than it was two years ago simply due to inflation.
A million ain't what it used to be.

It's now $920,000. :)
I agree, but it's still not correct to say that inflation is directly impacting premiums. Rather, it impacts how much life insurance one needs.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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Re: Reasonable cost of life insurance?

Post by an_asker »

willthrill81 wrote: Thu Jun 23, 2022 7:53 am
Admiral wrote: Thu Jun 23, 2022 7:33 am I'm sure inflation is not helping to keep premiums low. :greedy
Actually, inflation should indirectly reduce premiums for a given face amount because higher inflation generally comes with higher interest rates. Inflation doesn't directly impact the premiums, but it can impact how much face amount one needs though.

The cost of a $1m policy, for instance, is not higher today than it was two years ago simply due to inflation.
Why shouldn't it? Isn't the logic the same as a mortgage? If you are making monthly payments for 20 years for your term life insurance, surely that's similar to a mortgage. If the interest rates increase, so will your monthly insurance payment (or mortgage).

PS: Never mind. I get it. Mortgage is a present value loan whereas an insurance payout is like a future value loan. So it gets discounted by the interest rate...
Last edited by an_asker on Thu Jun 23, 2022 8:04 am, edited 1 time in total.
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Re: Reasonable cost of life insurance?

Post by willthrill81 »

an_asker wrote: Thu Jun 23, 2022 8:00 am
willthrill81 wrote: Thu Jun 23, 2022 7:53 am
Admiral wrote: Thu Jun 23, 2022 7:33 am I'm sure inflation is not helping to keep premiums low. :greedy
Actually, inflation should indirectly reduce premiums for a given face amount because higher inflation generally comes with higher interest rates. Inflation doesn't directly impact the premiums, but it can impact how much face amount one needs though.

The cost of a $1m policy, for instance, is not higher today than it was two years ago simply due to inflation.
Why shouldn't it? Isn't the logic the same as a mortgage? If you are making monthly payments for 20 years for your term life insurance, surely that's similar to a mortgage. If the interest rates increase, so will your monthly insurance payment (or mortgage).
No. With a mortgage, the cost of borrowing increases as interest rates increase. But with most types of insurance, the opposite is true because the insurer can earn more by investing the premiums (which they always do but only in fixed income instruments) with higher vs. lower interest rates.

All else equal, life insurance premiums cost more when interest rates are low vs. high.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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Re: Reasonable cost of life insurance?

Post by an_asker »

willthrill81 wrote: Thu Jun 23, 2022 8:04 am
an_asker wrote: Thu Jun 23, 2022 8:00 am
willthrill81 wrote: Thu Jun 23, 2022 7:53 am
Admiral wrote: Thu Jun 23, 2022 7:33 am I'm sure inflation is not helping to keep premiums low. :greedy
Actually, inflation should indirectly reduce premiums for a given face amount because higher inflation generally comes with higher interest rates. Inflation doesn't directly impact the premiums, but it can impact how much face amount one needs though.

The cost of a $1m policy, for instance, is not higher today than it was two years ago simply due to inflation.
Why shouldn't it? Isn't the logic the same as a mortgage? If you are making monthly payments for 20 years for your term life insurance, surely that's similar to a mortgage. If the interest rates increase, so will your monthly insurance payment (or mortgage).
No. With a mortgage, the cost of borrowing increases as interest rates increase. But with most types of insurance, the opposite is true because the insurer can earn more by investing the premiums (which they always do but only in fixed income instruments) with higher vs. lower interest rates.

All else equal, life insurance premiums cost more when interest rates are low vs. high.
Got it! I edited my response as you were replying!
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Re: Reasonable cost of life insurance?

Post by Kenkat »

The issue that insurance companies run into is that there is not yet much long term data around marijuana use. The insurance company is on the hook for 20 years so without sufficient positive data indicating that marijuana use does not lead to higher death rates, they will be conservative and issue at standard or smoker rates.
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Re: Reasonable cost of life insurance?

Post by willthrill81 »

Kenkat wrote: Thu Jun 23, 2022 8:06 am The issue that insurance companies run into is that there is not yet much long term data around marijuana use. The insurance company is on the hook for 20 years so without sufficient positive data indicating that marijuana use does not lead to higher death rates, they will be conservative and issue at standard or smoker rates.
I believe that you're correct. There are very likely concerns with the underlying medical condition and with the medication used to treat it.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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Re: Reasonable cost of life insurance?

Post by Admiral »

Chardo wrote: Thu Jun 23, 2022 7:59 am
Admiral wrote: Thu Jun 23, 2022 7:33 am
Chardo wrote: Thu Jun 23, 2022 7:29 am
Admiral wrote: Thu Jun 23, 2022 7:26 am Smoking, whether tobacco or weed, is going to increase your premium, because insurers consider it an added risk factor.

What was the quote you got? When I was 40, I received the highest health rating, whatever it was called at the time. I pay $985 for $1m. My wife, who is two years older, pays $1100 or so, same coverage, 20 year term.

"Reasonable" is subjective. $2m is a lot of coverage.
It varies by company. Some companies issue all MJ users at smoker rates, others vary based on method and/or frequency.

$2m is not a lot of coverage for some people.
$10m is also not a lot for some people, I was speaking generally for most people, who don't have millions in assets. If one has assets such that one needs $2m (x2) of coverage, then presumably/hopefully one can afford a relatively high premium.

I'm sure inflation is not helping to keep premiums low. :greedy
It's actually the opposite. The biggest need for insurance is those that have fewer assets. Their death, and loss of that income, would be devastating to the heirs.
I don’t agree. The purpose of life insurance is to replace income AND assets to pay for expenses. If you rely on a large income to pay for things (mortgage, college, your 3 cars ) you require a lot of insurance to replace that income and pay your bills.

Kids are expensive. I might not want them to have to sell my house if I die. I might want them to have the money to pay the mortgage—or have a guardian pay it.
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Re: Reasonable cost of life insurance?

Post by Admiral »

willthrill81 wrote: Thu Jun 23, 2022 7:59 am
Admiral wrote: Thu Jun 23, 2022 7:56 am
willthrill81 wrote: Thu Jun 23, 2022 7:53 am
Admiral wrote: Thu Jun 23, 2022 7:33 am I'm sure inflation is not helping to keep premiums low. :greedy
Actually, inflation should indirectly reduce premiums for a given face amount because higher inflation generally comes with higher interest rates. Inflation doesn't directly impact the premiums, but it can impact how much face amount one needs though.

The cost of a $1m policy, for instance, is not higher today than it was two years ago simply due to inflation.
A million ain't what it used to be.

It's now $920,000. :)
I agree, but it's still not correct to say that inflation is directly impacting premiums. Rather, it impacts how much life insurance one needs.
You assume insurance companies only raise rates when they have to. I assume they raise them when they want to and/or can get away with it. Just like most corporations. It’s easy for any company to claim costs are higher (salaries/benefits/operating expenses) and raise prices during inflationary periods. Whether this claim is true or not.
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Re: Reasonable cost of life insurance?

Post by willthrill81 »

Admiral wrote: Thu Jun 23, 2022 8:29 am
willthrill81 wrote: Thu Jun 23, 2022 7:59 am
Admiral wrote: Thu Jun 23, 2022 7:56 am
willthrill81 wrote: Thu Jun 23, 2022 7:53 am
Admiral wrote: Thu Jun 23, 2022 7:33 am I'm sure inflation is not helping to keep premiums low. :greedy
Actually, inflation should indirectly reduce premiums for a given face amount because higher inflation generally comes with higher interest rates. Inflation doesn't directly impact the premiums, but it can impact how much face amount one needs though.

The cost of a $1m policy, for instance, is not higher today than it was two years ago simply due to inflation.
A million ain't what it used to be.

It's now $920,000. :)
I agree, but it's still not correct to say that inflation is directly impacting premiums. Rather, it impacts how much life insurance one needs.
You assume insurance companies only raise rates when they have to. I assume they raise them when they want to and/or can get away with it. Just like most corporations. It’s easy for any company to claim costs are higher (salaries/benefits/operating expenses) and raise prices during inflationary periods. Whether this claim is true or not.
The risks being insured are generally of far more expense than an insurance company's overhead.

If you're claiming that life insurance premiums for a given face amount of coverage only go up, you need to provide evidence to support such a claim.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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Re: Reasonable cost of life insurance?

Post by deikel »

Valuethinker wrote: Thu Jun 23, 2022 4:29 am
FIRWYW wrote: Wed Jun 22, 2022 11:23 pm
gtg970g wrote: Wed Jun 22, 2022 4:10 pm A good life insurance agent should know underwriting standards for companies they sell and be able to get you the best rates based on your individual circumstances. It would be reasonable to reapply but you should talk to an agent about when to reapply and to what company you should apply through.
100% agree with talking to an agent that sells for different companies and get ideas if there is a better company. They have different actuarial calculations and weigh things differently. Regardless of stigma/perceptions for or against MJ, literature does support higher suicide, homocide, accidental death rates for sure among users and generally thought that lung disease is higher. Only now getting studies showing that, but one published last week shows higher ED, office visits and hospitalizations from respiratory issues. Makes sense for them to charge you more but like cigarette smokers, some companies give a bigger marginal rate increase than others.
It's very important to distinguish between recreational MJ use and medical.

The data, as far as I am aware, is almost entirely for recreational? And recreational MJ users are more "out there" - the sample pool will include people who use other sorts of recreational drugs, have significant lifestyle issues, etc. For example many (most?) recreational MJ users also smoke cigarettes (or vape)? And almost 100% would also use alcohol.

Medical users have a medical condition - often a fatal one, like Multiple Sclerosis. Chronic pain - this can be quite debilitating. Neuropathy. Also the method of taking is not always by smoke inhalation? For example, Sativa (MS & neuropathy) is ingested by pill.
That is very optimistic

Its still federally illegal (for the time being) and a lot of medical cards written out in California for example were simple legal ways to get to recreational weed use....most of those never had a serious medical underlying problem and there was a pretty wild west 'fee for card' business that some retired doctors used to make a buck.

Unspecified back pain is probably the easiest of those

Yes, there are more serious medical conditions that medical cannabis use is tested in. Proving efficacy above placebo level is actually pretty tricky (like it is for any drug, natural or less so)
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Re: Reasonable cost of life insurance?

Post by deikel »

willthrill81 wrote: Thu Jun 23, 2022 8:36 am
Admiral wrote: Thu Jun 23, 2022 8:29 am
willthrill81 wrote: Thu Jun 23, 2022 7:59 am
Admiral wrote: Thu Jun 23, 2022 7:56 am
willthrill81 wrote: Thu Jun 23, 2022 7:53 am

Actually, inflation should indirectly reduce premiums for a given face amount because higher inflation generally comes with higher interest rates. Inflation doesn't directly impact the premiums, but it can impact how much face amount one needs though.

The cost of a $1m policy, for instance, is not higher today than it was two years ago simply due to inflation.
A million ain't what it used to be.

It's now $920,000. :)
I agree, but it's still not correct to say that inflation is directly impacting premiums. Rather, it impacts how much life insurance one needs.
You assume insurance companies only raise rates when they have to. I assume they raise them when they want to and/or can get away with it. Just like most corporations. It’s easy for any company to claim costs are higher (salaries/benefits/operating expenses) and raise prices during inflationary periods. Whether this claim is true or not.
The risks being insured are generally of far more expense than an insurance company's overhead.

If you're claiming that life insurance premiums for a given face amount of coverage only go up, you need to provide evidence to support such a claim.
When you sign a life insurance you are locking in both your premiums and your face value pay out sum - Inflation is eating at both. It 'reduces' your premium and also the buying power of your face value and you get less and less insurance over time

Which hopefully correlates with an increase in net worth and less need for protection as time goes on.

If the current 8% inflation would continue, you may want to stack insurance and get another one in 5-10 years time just to keep up the protection you need. At which time you are in an older age bracket which may indeed increase your premiums due to that
Everything you read in this post is my personal opinion. If you disagree with this disclaimer, please un-read the text immediately and destroy any copy or remembrance of it.
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Re: Reasonable cost of life insurance?

Post by willthrill81 »

deikel wrote: Thu Jun 23, 2022 8:40 am
willthrill81 wrote: Thu Jun 23, 2022 8:36 am
Admiral wrote: Thu Jun 23, 2022 8:29 am
willthrill81 wrote: Thu Jun 23, 2022 7:59 am
Admiral wrote: Thu Jun 23, 2022 7:56 am

A million ain't what it used to be.

It's now $920,000. :)
I agree, but it's still not correct to say that inflation is directly impacting premiums. Rather, it impacts how much life insurance one needs.
You assume insurance companies only raise rates when they have to. I assume they raise them when they want to and/or can get away with it. Just like most corporations. It’s easy for any company to claim costs are higher (salaries/benefits/operating expenses) and raise prices during inflationary periods. Whether this claim is true or not.
The risks being insured are generally of far more expense than an insurance company's overhead.

If you're claiming that life insurance premiums for a given face amount of coverage only go up, you need to provide evidence to support such a claim.
When you sign a life insurance you are locking in both your premiums and your face value pay out sum - Inflation is eating at both. It 'reduces' your premium and also the buying power of your face value and you get less and less insurance over time
Correct, which is why it's incorrect to say that inflation increases the cost of premiums.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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Re: Reasonable cost of life insurance?

Post by Admiral »

willthrill81 wrote: Thu Jun 23, 2022 8:36 am
Admiral wrote: Thu Jun 23, 2022 8:29 am
willthrill81 wrote: Thu Jun 23, 2022 7:59 am
Admiral wrote: Thu Jun 23, 2022 7:56 am
willthrill81 wrote: Thu Jun 23, 2022 7:53 am

Actually, inflation should indirectly reduce premiums for a given face amount because higher inflation generally comes with higher interest rates. Inflation doesn't directly impact the premiums, but it can impact how much face amount one needs though.

The cost of a $1m policy, for instance, is not higher today than it was two years ago simply due to inflation.
A million ain't what it used to be.

It's now $920,000. :)
I agree, but it's still not correct to say that inflation is directly impacting premiums. Rather, it impacts how much life insurance one needs.
You assume insurance companies only raise rates when they have to. I assume they raise them when they want to and/or can get away with it. Just like most corporations. It’s easy for any company to claim costs are higher (salaries/benefits/operating expenses) and raise prices during inflationary periods. Whether this claim is true or not.
The risks being insured are generally of far more expense than an insurance company's overhead.

If you're claiming that life insurance premiums for a given face amount of coverage only go up, you need to provide evidence to support such a claim.
I did not claim that. All my other insurance premiums have gone up. Obviously life insurance is fixed so I cannot claim my premiums have risen. But it stands to reason that MOST prices go up in periods of high inflation. Not ALL prices for EVERYTHING. Insurance quotes are highly personal and subjective so any quote I get may not be relevant to you or anyone else.

I was making a general point about inflation’s impact on costs.
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Re: Reasonable cost of life insurance?

Post by deikel »

willthrill81 wrote: Thu Jun 23, 2022 8:44 am
deikel wrote: Thu Jun 23, 2022 8:40 am
willthrill81 wrote: Thu Jun 23, 2022 8:36 am
Admiral wrote: Thu Jun 23, 2022 8:29 am
willthrill81 wrote: Thu Jun 23, 2022 7:59 am

I agree, but it's still not correct to say that inflation is directly impacting premiums. Rather, it impacts how much life insurance one needs.
You assume insurance companies only raise rates when they have to. I assume they raise them when they want to and/or can get away with it. Just like most corporations. It’s easy for any company to claim costs are higher (salaries/benefits/operating expenses) and raise prices during inflationary periods. Whether this claim is true or not.
The risks being insured are generally of far more expense than an insurance company's overhead.

If you're claiming that life insurance premiums for a given face amount of coverage only go up, you need to provide evidence to support such a claim.
When you sign a life insurance you are locking in both your premiums and your face value pay out sum - Inflation is eating at both. It 'reduces' your premium and also the buying power of your face value and you get less and less insurance over time
Correct, which is why it's incorrect to say that inflation increases the cost of premiums.
It does in an indirect way. Inflation forces you to get another life insurance when you are older and have higher premiums due to higher age, in that sense inflation does negatively effect your coverage and does indeed 'increase' your overall premiums to obtain the coverage you want.
Everything you read in this post is my personal opinion. If you disagree with this disclaimer, please un-read the text immediately and destroy any copy or remembrance of it.
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