Life Insurance??

[Travelover]

IMHO, Don't mix insurance and investments. Buy term insurance for the period when you need it, then quit renewing it when your kids are grown up and you have retired. Term insurance is very competitively priced and can be purchased on line.

Invest for retirement in separate accounts with a low cost provider like Vanguard or Fidelity. When you "invest" with an insurance company, they win with smoke and mirror distortions that muddy up the waters to the point where you can never really figure out your returns or the cost of the service that you think you are buying.

 

[Robert_in_NY]

Ever see those life insurance buildings? Wonder how they got all that money? Wonder how an agent (k0ua's wife for instance) makes money? They have all of the statistics and play them to their advantage.

If it is such a wise choice then why do the insurance companies advertise life insurance with such tear-jerking emotional commercials. Scare tactics are also an effective theme. A good deal does not have to be advertised.

To me, life insurance is a losing bet. You bet you'll die, the insurance company bets you will live (term insurance) and then they get to keep your money. If you die the payout money is of no use to you, after all, you're dead.

It will come as no surprise that neither my wife nor I have life insurance.

Someday I'll tell you how I really feel about it. :laughing:

I have life insurance for a couple reasons. The original was because it was free and was a $50k policy (well not really free but by getting it I gained a multiline discount and that discount covered the life policy). I worked construction which is kind of dangerous. I also started farming which is another kind of dangerous profession (not that I try to do anything that will kill me but accidents can and do happen). So I know have $350k of total life insurance. The main factor in carrying it isn't because I want the money, it is because my daughter is 8 and her mom is out of the picture so if something happens to me I want to be able to provide for her even though I am gone. Have a will drawn up addressing how the money gets used and when she will have access to it. When she is grown up and established I will look at things again and decide if it makes sense to continue paying. But I know my situation is different then others and I really dislike how much money I pay each year to insurance for all the policies I have but it is worth it for me.

 

[riptides]

I have always viewed my insurance as a benefit to others. Not me.

The only person(s) crying at my funeral will be from the insurance companies.

 

[Bigkrank]

Don't forget life insurance on your spouse. I wish I didn't have to claim it but was thankful it was there. You always think it can never happen to you.

 

[KretZ]

Also purchased survivors benefit for my spouse that will pay her half of my retirement for life ($260.00 per month). Insurance is a rip off, but I would never leave my spouse and child without a income if at all possible.

Eddie

I don't mean to get too personal Eddie, being in the military and 5 years from my 20, I was curious. Did you mean that half of your retirement would be 260.00 dollars a month? Or did you mean that purchasing survivors benefit costs you 260 a month?

 

[daugen]

some thoughts from a guy who spent his professional career mostly in insurance and financial planning:

Buying term insurance to cover a specific time period is incredibly important for most families that are not blessed with a huge trust account.
It used to be one could only buy ten or twenty year term life, now it goes out to thirty years and more.
If you have kids, and aren't rolling in dough, you need life insurance, plain and simple. But like car insurance, you need the right coverage, and for term insurance, if you buy from a long standing A+ rated insurer, you want to pay as little as possible. Not smoking cuts the cost about in half. Paying a higher premium for term insurance is usually just wasted dollars; shop around, but then buy the policy, don't procrastinate. I will not bore you with the stories of folks who came to me after they had the medical event that scared them big time and the cost of finding insurance then was simply prohibitive.

Most folk want their families to be able to stay in their current homes if a spouse dies, either one. What is super important is understanding the surviving spouse's ability to earn a decent living on their own. If your wife is a doc or engineer, or even a hair dresser, the work is out there. But so many spouses do not have marketable skills, often from choice (home schooling kids for example) and have been out of the work place so long that leaving the surviving spouse with the equivalent of one or two years of income is no bargain.

There are many reasons where term insurance is totally inappropriate. So many local farms have been lost because the surviving generation did not have the cash to pay estate taxes or handle the maintenance overhead previously provided by the deceased. The older generation had let their insurance lapse, too costly to maintain certainly if it was term. It doesn't make any difference how many years you paid into someone's policy; it only counts if that policy is in force and works when your family needs it. Just like a life preserver, you need to wear it.

Here's a simple little rule. One child or a spouse with serious physical problems, $500K. Two kids, $1M. Sound crazy? It's not... One million bucks will allow an approximate $50K withdrawal for a long time, and that will keep most of us out of the poorhouse. You are trying to recreate an income stream that has stopped, not hit it big with a huge payday. Take your current income, multiply by 20, and if you want to make sure your kids get to go to college, or your wife doesn't have to marry that loathsome neighbor out of despair to feed your kids, then you need AT LEAST that much term insurance/death benefit. I agree with not mixing investments and insurance, unless your advisor is truly a trusted person.

there are a great number of variables for each of us that must be considered before buying life insurance. Having a special needs child for example is a huge long term responsibility.

so....
calculate what you really need to cover your basic, stay in your home, expenses until your kids reach age 23 or so. The younger your kids the more coverage you need because the money has to last longer. Comparison quote among A+ rated companies only; their rating has nothing to do with the price of their insurance. If you are a military family, USAA is a great place to start looking.

 

[dmccarty]

some thoughts from a guy who spent his professional career mostly in insurance and financial planning:

Buying term insurance to cover a specific time period is incredibly important for most families that are not blessed with a huge trust account.

...shop around, but then buy the policy, don't procrastinate. ...

Most folk want their families to be able to stay in their current homes if a spouse dies, either one. What is super important is understanding the surviving spouse's ability to earn a decent living on their own. If your wife is a doc or engineer, or even a hair dresser, the work is out there. But so many spouses do not have marketable skills, often from choice (home schooling kids for example) and have been out of the work place so long that leaving the surviving spouse with the equivalent of one or two years of income is no bargain.

...

Here's a simple little rule. One child or a spouse with serious physical problems, $500K. Two kids, $1M. Sound crazy? It's not... One million bucks will allow an approximate $50K withdrawal for a long time, and that will keep most of us out of the poorhouse. You are trying to recreate an income stream that has stopped, not hit it big with a huge payday. Take your current income, multiply by 20, and if you want to make sure your kids get to go to college, or your wife doesn't have to marry that loathsome neighbor out of despair to feed your kids, then you need AT LEAST that much term insurance/death benefit. I agree with not mixing investments and insurance, unless your advisor is truly a trusted person.

...

Good Gracious Man, that was most excellent advice, on the Internet AND FREE! :thumbsup::laughing::laughing::laughing:

Also one should not forget SS survivor benefits.

We have life insurance on both of us but I have been wanting to reevaluate the policies and very likely up the amounts. I keep putting mail from one of the current policies with the bills but I keep procrastinating on spending the time to look at the insurance coverage.

If one has a problem with an insurance company, call up the state insurance commission about the problem. I have told coworkers to do this and it is amazing how fast the insurance company solves the problem once the insurance commission gets in the picture. Unfortunately, we have a great deal of contact with our insurance companies, but fortunately, we have very few problems with the different companies. We have talked to the insurance commission to get help with interpreting policies and state law and the employees at the commission have been VERY helpful over the years.

Later,
Dan

 

[Mickey_Fx]

Like most threads, it doesn't take long to wonder off the path. Don't think anyone has answered the OP question about suggesting a good company. AM Best is an insurance rating company that has been around for a LONG time. Suggest you check them and their ratings to find, evaluate, the various Ins Co's out. Did see one poster mention looking for an A rated Co and that rating was most likely from AM Best.

Have to agree with those that said not to mix insurance and investments together. Co I worked for provided insurance for their employees. By the time I retired we had been debt free for a decade or two. We're in our 70's and are in decent financial shape so we don't see any need to have life insurance.

 

[jerrybob]

We are fortunate......we have zero debt.....we have money in the bank......we retired early. Life insurance is not necessary for us. If I die tomorrow.....the family is fine and the green plastic trash bag with my ashes will be buried in the back yard next to our dogs. The bag is paid for! :thumbsup:

 

[brin]

We are fortunate

Nahh, Jerry....something tells me you made the right choices, at least most of the time and worked your butt off...Now I will buy that...:thumbsup: