OT Life insurance

[Britcheflee]

Wife and I are going to get some life insurance - there are a lot of companies out there offering all kinds of things - would like some advice regarding picking a good one - and what kind of coverage to choose.

Thank you

Lee

 

[old]

Well can not tell you any set company but will say this. Get what is called Whole Life ya it cost more but in the long run you get more and some companies you can even take out a loan in it. DO NOT get term life because all your doing is paying for the insurance but if you out live the policy then your out that $$ and still have nothing to do what you needed if for in the first place

 

[TheOldHokie]

(quoted from post at 14:54:35 01/19/12) Wife and I are going to get some life insurance - there are a lot of companies out there offering all kinds of things - would like some advice regarding picking a good one - and what kind of coverage to choose.

Thank you

Lee

Plain old term life in whatever face amount you need. Get it from the cheapest company you can find.

TOH

 

[2ruNgineer]

probably need a lot more info than that to make a good call on what you need for insurance.

do you have kids? mortgage? what do you want this insurance to do for you? help those you've left behind? give to a cause?

as a young'an i started with variable life, but realized i was getting shanked. cashed out of that and switched to term with kids in the house, wife and mortgage. until kids are gone anyway.
a little motto i hear 'buy term & invest the rest'. over time i didn't see any bennys with variable or whole life policies. my $.02

 

[Dell (WA)]

Lee.........just enuff insurance to gitt'cha
burried.

My Alzheimer'd sister had 10-different policies
with automatic checking account payment. They
BROKE her account. Face value was almost
$1,000,000 and total conversion value was $497.
They are all CANCELED. She also has a paid up
burial vault and paid up cremation service. The
only thing she has not specified is the "music".

I have a 70yo $1000 policy that is worth about
$1987. Gonna die poor, eh? .......Dell

 

[2ruNgineer]

"all your doing is paying for the insurance"
i think that's what it's all about, and probably what he's looking for. i'd rather invest the rest without all the fees and overhead. at $10k/acre in the midwest (not ohio midwest, the real midwest) real estate prob a good investment.

 

[8N'r--WI]

Lee---you asked "would like some advice regarding picking a good one"

The BEST one is the one that is inforce when you die!

Other than that, IMO, find an agent that will...

1) Help you determine how much you need for YOUR needs and not theirs.
2) Explain how all kinds work---term, whole life, universal, variable universal...
3) Explain both pros and cons of each type
4) Never pay more than you can easily afford to keep paying on
5) Understand that your needs, the amount, and type of insurance will probably change
6) Understand you can have a combination of the different types

The reasons folks buy life insurance are as many as there are different types of it for sale...and just as many opinions on why you should or should not own it.

Don't buy too much of it so that your wife and next hubby are rich, but make sure you have enough so that she can shop around..and find another 1/2 as good as you..:>)

Good luck---Tim

 

[Bruce (VA)]

My father sold life insurance from about 1954 until he died in 1981. I do recall a few things. One of them was just what TOH said: buy the cheapest term life you can get.

Make sure the company is licensed to do business in your state.

If you need a loan, go to the bank.

If you drop dead & the wife can't afford the mortgage, you've got to much mortgage.

The list goes on. But, it will cost at least $5k to put you in the ground. Probably more. That should, IMHO, be your starting point.

 

[TheOldHokie]

(quoted from post at 15:38:56 01/19/12)

If you drop dead & the wife can't afford the mortgage, you've got to much mortgage.

Probably not a realistic assessment in this day of dual incomes. I purchased my one and only term policy when I purchased my first house in 1978. It was for 2X the original mortgage amount and it has been sufficient to cover all of the additional mortages I've held over the next 35 years. If I dropped dead tomorrow TOOH would have the house (and Garaj Mahal :roll: ) free and clear. That is the only reason I felt I needed life insurance in 1978 and the only reason I have it today. Any investment dollars go elsewhere where they generate a much better ROI. For most young people just starting out taking the difference in the premiums for WL vs term and plunking it into a 401K is a much better idea. And a hugely better idea if your employer is matching that additional contribution!!!

TOH

 

[8N'r--WI]

TOH--Agree 100%......"For most young people just starting out taking the difference in the premiums for WL vs term and plunking it into a 401K is a much better idea. And a hugely better idea if your employer is matching that additional contribution!!!"

To add to your advice.....take the difference in those premiums, ADD additional $$ so at least 10% of your income goes into a 401K......with a little luck, there may be something to spend when those young people retire.

Tim

 

[Paul in MN]

There are different types of policies to satisify different needs. The basic and typically the cheapest type is term life. Based on your health record and age, you probably get the cheapest coverage. The prices vary considerably, so you have to do some shopping. Up until age 50, I got this cheapest through my employer (or maybe union). After age 50, I could buy this cheaper in the open market... but that may be all different now. One option to consider is "Level Term" which means the same guaranteed annual payment for a specific # of years (like maybe 20 years), and it can not be refused if your health status changes. This is what I did at age 50, buying a level term for the next 15 years till 65. At age 65, my kids are grown, the mortgage is paid off, wife has Social Security, some money in the bank and a line of farm equipment to be sold at auction if I die. Besides I set up my pension so that she has 80% survivor check for the rest of her life, if I preceed her. This pension option and Soc Sec reduces the need for life insurance.

The whole life policies are a life insurance plan with a forced savings plan that gives you very limited options for how you invest your money. The annual cost is very high compared to term, and if you do not make the full payment each year at the front end, you lose your life insurance as well. Basically your money is buying term life and buying an investment through the life insurance company. In some cases this is an advantage, as life insurance payouts are tax free to the beneficiaries, so they inherit your investment $$ tax free. The insurance companies love to sell this type of policy, and the selling agent gets the full first year's payment as his commission plus an annual commission. But those details vary from one company to another. Probably less than 50% of whole life policies that are written are ever carried to maturity (this is a difficult number to find out), and it may be a whole lot less in today's economy.

As to how much you should get, that is a huge question. Most insurance agents will try to make you feel cheap and guilty if you get less than a million. But keep in mind your wife will have Soc Sec survivor benefits, plus extra benefits for your kids until they are age 18 (maybe 20 if still in school?). No, the house mortgage does not need to get paid off immediately if you die, she just has to have the monthly payments made, or she can sell it and relocate to some place with less land (cheaper). The kids will probably qualify for tuition help as they enter college.

My bottom line was to buy $300K in level term to age 65 and then kiss it off. And I had 5 kids. My investments were entirely separate from the life insurance, giving us maximum freedom to do as we wanted to.

Also if your wife works for more than 40 total quarters, she will have a survivor benefit available to you (only after you turn 60). At that age you can collect on her account (if she has passed away) and let your SS account reach full value when you are 67, then switching over to your SS account at that time for the monthly check. One other consideration is taxable income... SS checks are taxable on a sliding scale depending on how much other persion and earned income you have. So if you have no other income, the SS $ are probably tax free.

Big Huge financial question, no one easy answer as everyone has different circumstances. It took me a lot of years to learn what I have just written, and in my case the inlaws and other rellies had all sorts of judgemental advice based on how FIL did it. Try to get all the facts and then make a decision based on what you feel comfortable with. If you can't come to a long term decision right now, then buy a term policy for one year while you study the bigger picture.

Good Luck,

Paul in MN

 

[R Geiger]

If you have a large farm or other property make sure you have enough life insurance so who ev er gets the property can pay the taxes and will not have to sell the farm to pay the taxes.

 

[pikewi]

Paul in MN has offered some very good advice. I have been in insurance for more than 25 years so I won't offer anything as it may sound like a solicitation. I will say, however, you may want to study up on annuities or indexed annuities. (not the ones with the big fees)
JMHO
Pike

 

[Anonymous-0]

Way to go! John

 

[Charles Krammin]

I know a person that sold "Life Insurance" and was a "good salesman", who always pushed the best that earned investments or paid up insurance. He also pushed "annuties" for "High commissions". He now live in a luxuris retirement and uses the insurance residual income to purchase farm land for resale for investment.
Guess where the money came for this style.

I always carried high "term insurance" for mortgage and wife and kids. I used the savings to make extra farm payments. Now use the sale of farm as income and only enough insurance to bury me and wife.
Insurance salesman do not like to hear the above plan as they don't get rich.
Charles Krammin SW MI

 

[Ron-MO]

I am with some of the others, and at most just enough to bury you. I got 'suckered' into buying some plans many years ago, and a few years ago I came to my senses that I had far exceeded the worth of the policy, and still making monthly payments on it. I cashed the policy, and dumped it. The only people that actually come out ahead on those are the life insurance companies. I decided to enjoy my hard earned money while I am still on the right side of the soil so to speak. Maybe I am looking at it all wrong, but I figure I have helped my kids enough that burying me is the least they can do. My dad used to say "I came into this world naked, and may go out the same". Of course he did no such thing, but I always told him to enjoy what he worked so hard for, and wish he had.

 

[JoePilot]

They try to sell it as a savings plan, but I believe there are better ways to invest. So I buy term life only. Think about who will be hurting if you kick off. Does your spouse need support? Are your kids in college? Is the house paid for? Size the policy accordingly.

Costs more with age. May have to get a physical exam of some kind. If you have a hazardous hobby (flying for me) you may not be able to get life insurance, or it will cost a bundle. Unless it is a group plan.

Group plans are usually the least costly (employer, AARP, etc.)

Good luck!

Joe

 

[Anonymous-0]

I could not get life insurance when I was an active flight instructor. AOPA membership was the only coverage I could afford.

Eventually I carried insurance for only the amount that I was indebted. The bank worked a deal for mortgage insurance for the outstanding balance. That was 40 yrs. ago. Since then the only time I would consider life insurance is when I have a bank loan. I hope never.

John,PA

 

[Hobo,NC]

(quoted from post at 22:54:35 01/19/12) Wife and I are going to get some life insurance - there are a lot of companies out there offering all kinds of things - would like some advice regarding picking a good one - and what kind of coverage to choose.

Thank you

Lee

A disability benefit rider would be nice...
We insured each other the same,,, are what I have she has....
We could have done a deal that if one of us became disable we could collect 5K a year on till the total pay out a pond death was used up but pass...
Don't rule out insuring yer close kin folk and being the beneficiary,,, I have a paid up policy on my mom that we went 50/50 on...

We brought a Long term Health care policy on the family,,, Its not money maker for us but will save the farm :wink:,,, I am paying $240 a day for her care at this time that's room ONLY!... I plan to bring her home by the first of march,,, The LTH plan pay's 8K a month for 10 years are up to $980000.00,,, I have paid $25K out of my pocket and hope to get it back since she has met the 90 day elimination period dec 1 2011,,, Still waiting on a check tho....

Life Insurance is not much help if you loose the farm before you die...

 

[mbramble]

(quoted from post at 17:13:13 01/19/12) ..... the only time I would consider life insurance is when I have a bank loan. I hope never.

John,PA

Amen brother!!

 

[JMOR]

Unless you have young children, you don't need life insurance! And if you do have young children, all you need is term life. All else, you lose, the Ins Co wins.

 

[8N'r--WI]

Hobo--glad to hear you are getting the wife back home....and that you were insurance prepared...

If you don't mind me asking, does your LTC plan allow you to stop paying premiums once someone is on claim?

Insurance has "saved" a lot of "farms"....

Hope your wife gets back up and running on all cylinders.

Tim

 

[Hobo,NC]

(quoted from post at 17:36:35 01/20/12) Hobo--glad to hear you are getting the wife back home....and that you were insurance prepared...

If you don't mind me asking, does your LTC plan allow you to stop paying premiums once someone is on claim?

Insurance has "saved" a lot of "farms"....

Hope your wife gets back up and running on all cylinders.

Tim

YES that's how it reads BUT They are still drafting my bank account...
We have been thru a many death in both family's that totally changed out way of living,,, someone had to quit their job are put in a hardship to be their caregiver,,, We did not want that burden put on out kids are other family members so a LTH plan was in order....

 

[Ron-MO]

Long term care is probably a better investment than regular life insurance. I know when one of my parents health deteriorated I was forced to make choices that were not pleasant, and it appeared two small farms would have to be sold to pay for their care. Cost of long term care was roughly $3,000/month (much more now I am sure), and at that rate and with both pieces of property in their name I would have had to sell them to hand it over to the nursing home. As it turned out she passed away the day before she was to go into the facility, however it gives a wake up call as to how easily things can go wrong, and lose everything.

 

[TheOldHokie]

(quoted from post at 13:34:53 01/20/12) Long term care is probably a better investment than regular life insurance. I know when one of my parents health deteriorated I was forced to make choices that were not pleasant, and it appeared two small farms would have to be sold to pay for their care. Cost of long term care was roughly $3,000/month (much more now I am sure), and at that rate and with both pieces of property in their name I would have had to sell them to hand it over to the nursing home. As it turned out she passed away the day before she was to go into the facility, however it gives a wake up call as to how easily things can go wrong, and lose everything.

Keep in mind that most long term care insurance is not perpetual care. Once you hit the limit of the "long term" coverage you are back on your own and the farms will go. Right now the accepted planning cost for LTC in this area is $78K/year....

TOH

 

[Ron-MO]

Good to know. In the meantime one of the wealthiest individuals in this area owns several nursing homes (politically correct term = care facility). Owns a large farm, private plane, and when he did not like the county maintained road he had to travel home, he paid for having it paved - even when they county told him not to pave it as they would not maintain the pavement portion. Several farms have probably been sold to pay for his lifestyle, but he is probably anyone else in the same situation would not do.

 

[8Nr--WI]

Here is some more "good to know" info....called the "Partnership Program" that most states have now adopted.....
LTC Partnership Programs

 

[russb wa]

Insurance is a way to hedge a bet. The bottom bet
is your plans for your life. So, Insurance is a
way of betting against yourself, a hedge against
your probable failure.

I have been happy with smaller bets. Ones that
don't wipe me out if things go wrong, no hedge
required.

Two cents worth, ~ Avoid gambling all together,
especially with professional gamblers. YMMV