Life Insurance Question

rduell · #1 (**permalink**) 10-20-2006, 12:31 PM

I have a question about life insurance. I have heard that the best thing to do is buy term. Here is our situation...

We are both 40. 22 years ago when we were married we bought a whole life policy for each of us. My husband's is for $50,000 and we pay a little less than $35 a month for it. Mine is only for $10,000 and has riders for the 5 kids. It costs about $200 a year.

A few years ago we also purchased a $100,000 term insurance policy for my husband. It costs around $30 a month. We both have small policies through our employers, but nothing to get excited about.

What are your recommendations? I know that we have nowhere near enough life insurance to cover expenses if something were to happen to one of us. Any companies that you recommend, amounts of coverage, etc.???

PRICEPLUS · #2 (**permalink**) 10-20-2006, 02:26 PM

The wife and I found that term was best for us. You are only insuring your income. I think there are better vehicles for investing than whole life.(I am told it is good for some due to tax considerations.) For most of us term is the way to go. You need to shop around and not go with just the first offering.

Non-smokers get a better rate. Those close to their optimum weight and without certain maladies get a lower rate. Also see if you can get a rider that provides the insurance will be paid should you become disabled. A pretty nifty little thing to have if the expnse is not much more.

Tree0164 · #3 (**permalink**) 10-21-2006, 02:00 PM

You need to do a needs analysis. Do a google search for needs analysis. When we were searching for life insurance they told us to do 10x time our income which we did. We also did level term the the number of years that we would need to have our mortgage plus any children under 18. We ended up dong a level term for 25 years-this would more than cover our mortgage plus be able to pay child care expenses and college for the 3 kids.

Snoopy2645 · #4 (**permalink**) 10-22-2006, 09:38 AM

Well we just got term I got 250k for $20 a month & dh got $100k for $30 a month I am in better health I guess so I got more for less so I just went with it but if I died tommorrow dh would be in a rock in a hard spot I stay home & do everything while he works & makes all the money quite honestly I am not sure what he would do he dont know anything about paying bills I would be afraid for him & my kids so I figured more was better!!! But if he died I know 100k would take me & the kids along way I have thought about it alreadcy if he died but I dont think he can say the same so that scares me for him & the kids hes always worked hard long hours but that wouldnt be able to continue if I wasnt here ya know

LuxLiving · #5 (**permalink**) 10-22-2006, 03:20 PM

Snoopy where were you able to find such great prices????

greedy4chips · #6 (**permalink**) 10-22-2006, 09:08 PM

Snoopy,

How do you figure $100k will take you a long way if your DH dies? You won't have any income unless you work and $100k won't get you that far compared to the $250k policy on you.

Personally I think $250k is the minimum I would have on either spouse. I want the house paid for and all debts cleared up (we don't have any) if either of us dies and hopefully have 3-5 years living expenses left ($2k per month minimum would suffice $3k would be spectacular).

Rduell
I would cashout the whole life, as long as you are insurable, and purchase term insurance. Whole life and universal life are just a waste of money in many people's opinion (not the insurance salesman's opinion).

Just figure out what $35 per month would grow to if invested since the date your hubby purchased that policy and you will be sick.

$35 per month at 8% for 30 years is $56,608
$35 per month at 8% for 45 years is $184,608
$35 per month at 8% for 60 years is $622,598

at 10%
30 years is $87,800
45 years is $405,000
60 years it will be 1.6 million!!! Not a bad plan for your kids!

I used the calculator here http://www.planningtips.com/cgi-bin/savings.pl

Remember whole life is paid for your whole life so the 60 year scenario which does seem ridiculous may actually come true.

BTW $35 per month in a piggy bank for 60 years is $25,200

Homebody · #7 (**permalink**) 10-22-2006, 09:15 PM

I used Select Quote 20 years ago when DH and I got term insurance. We are 48 and 49 and pay about $50.00 a month for $250,000.00 on each of us. We need to actually do another 10 year before we turn 50.

Someone once told me that insurance is for insurance not an investment.

Snoopy2645 · #8 (**permalink**) 10-22-2006, 10:17 PM

Well I do work pt & I could continue my job its very flexible & dh does have life ins threw his job about $30k & I do not because of my job & I do have a house that I only owe a little bit on about 10k & my 2 cars are paid for dh has a vechile loan at all times. And if I died my oldest would be gone with her dad she is almost 12 & she helps alot with her sisters so if my husband died I would still have all my kids. And we both have gotten the statements about what we would get monthly & I could live off that much dh on the other hand I KNOW couldnt!!!

I am sure he could get remarried & replace me but how long would it take if that did happen ya know and I also get some CS for my oldest dd & so I would still get that & if I died my dh wouldnt so forbid anything happens to either of us I have a plan in place. I just know to many people we went to school with who have already passed away. I know my husband dont want to deal with any of it so I am trying to make sure we would all be taken care of in the event anything happened to either of one of us.

rduell · #9 (**permalink**) 10-23-2006, 03:23 AM

Thank you everyone! I am going to look into all this and then try to convince DH. LOL!

When we first started out we were told that whole life was the only way to go and just believed it since neither of us knew anything about insurance at 18 years old.

Anyone know of any good sites or companies that you would recommend?

Snoopy2645 · #10 (**permalink**) 10-23-2006, 07:00 AM

Well you may want to call around call like where you have car & home insurance first you maybe able to get a discount threw those places. And yes they also pretty much told me whole was the only way to go but I didnt like that idea it sounded screwy to me in the beginning so I went with term & now I hear nothing but bad stuff about whole so we will stay with term

Elgin526 · #11 (**permalink**) 10-23-2006, 12:22 PM

DH and I have 20 year term for $250k each, I pay about $25 a month and DH pays $75 a month (he has type 2 diabeties and high cholestorol so we pay much more for him). We have State Farm (we also have our home and cars with them, gotta love that multi-policy discount!) He also has 3x his annual pay via his company, and I have 2x my pay through mine. Assuming we have kids in the next couple of years, the 20 year term will see us through until the kids are just about in college and the house almost paid for. 25 or 30 years would have been better, but we just can't afford it with DH's health record. Fortunatly we have a resonable mortgage and in a few more years we won't have any other real debt, so while it won't be a cake walk, should the worse happen the survivor will be okay for the most part.

rduell · #12 (**permalink**) 10-23-2006, 12:32 PM

I just went to the Dave Ramsey site and clicked on the Zander link and got some quotes. Does anyone have experience with this? It looks like Banner Life Insurance Co of MA is the best bet if we wanted both of our policies through the same company. The quote they gave was $40.25 a month for $500,000 for 20 year term for my husband and $19.69 a month for me for 20 year term for $250,000. That's a TON more insurance than we have now for almost $200 less a year.

Any comments on the company? Reputable?

rduell · #13 (**permalink**) 10-24-2006, 12:08 PM

DH and I talked it over last night and decided we would send off for an application through Dave Ramsey's website. For the prices quoted (of course, we probably won't get them) we can get over 7 times the amount of insurance for him at $300 less a year. And for me it's 20 times the amount for $20 more a YEAR! So we'll see if we pass their physicals and are accepted.

Then we'll have to see about cashing in the whole life and deciding what to do with that.

greedy4chips · #14 (**permalink**) 10-24-2006, 12:18 PM

The quotes on DRs site are probably the top notch health and physical appearance type quotes, so don't be suprised if they are somewhat higher.

There are several sites that offer comparison quotes if you search on google I am sure you can find a few.

HiImSeth · #15 (**permalink**) 10-25-2006, 08:54 AM

I'm pretty sure Zander asks you to pick one of a few different options regarding to your health status, family health history, etc. So, while it may not be spot on, it should be somewhat close given the criteria you choose when performing your search/quote.

rduell · #16 (**permalink**) 10-25-2006, 09:19 AM

Yes, it did have you choose. I chose the 2nd best category (forget what it was labeled) for both of us since we both have high blood pressure. When they called they said that because of my husband's BP and weight compared to height he didn't qualify for the one we chose, but did for another at about $40 a month.

The funny thing is that my husband is not all that fat. He is just very broad shouldered and muscular (a former wrestler), so it probably threw off the body fat percentage, if that's what they use.

greedy4chips · #17 (**permalink**) 10-26-2006, 01:30 PM

Take a picture of him in shorts without a shirt and send it to them to show his body structure. It won't cost you a dime to send a digital photo by email and it could actually lower your hubbies rate.

I never tried this myself, but I have to buy XXL shirts just to fit my shoulders too even when I weighed 190 lbs at 5' 11".

tinapbeana · #18 (**permalink**) 10-26-2006, 01:39 PM

Quote:

Originally Posted by greedy4chips

Take a picture of him in shorts without a shirt and send it to them to show his body structure. It won't cost you a dime to send a digital photo by email and it could actually lower your hubbies rate.

I never tried this myself, but I have to buy XXL shirts just to fit my shoulders too even when I weighed 190 lbs at 5' 11".

yeah, height weight charts are a joke & a half (IMO) since they don't take muscle mass/body fat % into account. my size 8 pants are loose on me, but i qualify as obese by height/weight guidelines.