Life Insurance

[LivingAlmostLarge]

Everyone here preaches life insurance and longer the better.

How much do people have and for how long? And how much did they pay and how old where you when you got it?

I want to see how much cheaper it is if people got it in their 20s versus 30s and 20 versus 25 versus 30 years.

DH $2M, 34 years old, 25 year term - $1098/year
DW $500k, 32 years old, 25 year term $250/year

I am not asking about people why they have what they have. I am asking to see price differences in policies. Not I only need X, or I need Y.

That's a different question versus a survey for when how much did you pay for your policy and how old were you? Was it it worth buying at 22 versus 25 versus 28 versus 30 or 32 or 49 and 40.

[feh]

You may want to do some forum searches. This topic gets covered quite a bit.

The answer to "how much?" is: it depends. Your age, your assets, your family status, age of kids, etc.

Take me for example; I currently have a policy, but when it runs out (in about 10 years), I won't be buying another one, because there won't be any need to.

[JoeP]

Take me for example; I currently have a policy, but when it runs out (in about 10 years), I won't be buying another one, because there won't be any need to.

Yes. Big difference between need and want.

Need: Provide your survivors with money to replace your income, taking into account future expenses such as college. This isn't necessary once the house has been paid off and your kids get through college, assuming your surviving spouse can still make ends meet after that.

Want: Survivors want to live large, travel, buy toys, have a big buffer, etc. after you take a dirt nap.

[bjl584]

I currently have $0. I am not married and don't have any kids or dependents, so I don't need any. If something should happen to me, there is plenty of money for my family to take care of any funeral expenses.

[bdoubleu]

I have a $1M 30 year policy (started at age 24) for $70/month.

DH has $500,000 30 year (started at age 26) for $31/month.

We obviously plan on not needing the policies (i.e. keeping our jobs, getting raises, and, I suppose, not dying), but we both feel the premiums are very manageable for the security the policies bring us.

We didn't (and still don't) have kids yet, so we wanted to make sure it would cover our youngest through at least high school (hence the longer term). Not sure off the top of my head how much a shorter term policy would have cost.

[jIM_Ohio]

Why not also ask who has disability insurance.

Only 3% of life insurance policies ever have a claim against them... about 66% of people have a disability insurance claim during their lifetime.

[kv968]

Why not also ask who has disability insurance.

Only 3% of life insurance policies ever have a claim against them... about 66% of people have a disability insurance claim during their lifetime.

That's also a good question. Does anyone have it and how much do you pay?

My company provides short-term disabilty but I'm curious as to how much this insurance costs (e.g. Aflac).

BTW, I have 2x my salary at work for my life insurance. I'm not married and no kids so when I pass on the only expenses left for my family would be the cost of a pine box which would be covered

[Like2Plan]

I have a 20 year level term policy that I got when I was 48 that costs $1.325 per thousand dollars of coverage per year.

DH had a group term ins policy from his former employer that cost $1.676 per thousand dollars of coverage per year. We found out it would cost $42.352 per thousand dollars of coverage per year to convert from the group to a single policy. The group policy is term, the single policy is whole life and while they don't ask any health questions it is based on age (57) at the time of conversion.

DH has another policy that started out as a level term and after 15 years, it turned into an annual renewable term which can be converted to whole life based on the original health underwriting (when he was in his 30's) and current age at the time of conversion. Since he is at the annual renewable term phase (which is based on age) the policy goes up in cost every year. This year it is $10.07 per thousand dollars of coverage.

DH will be starting another job next week which offers group life ins, I don't know how much the premiums will be, yet.

[LivingAlmostLarge]

Yep add in disability, I will check it out ours. We have it at the maximum allowed 70% post-tax.

[mynarky]

DH had a group term ins policy from his former employer that cost $1.676 per thousand dollars of coverage per year. We found out it would cost $42.352 per thousand dollars of coverage per year to convert from the group to a single policy. The group policy is term, the single policy is whole life and while they don't ask any health questions it is based on age (57) at the time of conversion.

This is why people shouldn't rely on work-based life insurance. You don't own it! (at least not in most cases) and if your employer wants to stop providing it.

[LivingAlmostLarge]

It doesn't appear that by starting at 24 for $1M @ $70/month it costs $840/year for 30 years. For 25 years and $2M it costs my DH $1098/year. That's about $250 extra for $1M extra, 5 years less but starting with a man at age 34 years old so 10 years older to boot for double the policy price and not that much shorter. And one can argue our policy is 5 years longer because he's was 10 years older and will have the policy to a later age.

And a 26 year old man for $500k costs $372/year versus $500k for $250/year my policy at age 32. So 6 years older and it costs me less, granted I'm a woman.

So is it really worth it to buy life insurance at 24 and 26? I can see the perspective that you should get it when you have dependents or worry about illness. But do many people become uninsurable between 25 and 30?

I think life insurance and disability definitely when you have kids or mortgage maybe, but otherwise no. I think our premiums are not ridiculous for people who got them at 32 and 34.

MonkeyMama, how much did you pay for insurance since you always talk about getting it in your 20s? Is it worth it to have gotten it so early? But I know you had your kids early so that weighs in the decision. But is it worth to people who are single without kids.

[MonkeyMama]

Everyone here preaches life insurance and longer the better.

They do!?!

No - the plan is usually to amass enough assets that the need for life insurance is eventually moot. Life insurance is good, but you really shouldn't need it as much in your 60s (maybe not in 40s/50s) if you have a solid financial plan.

[MonkeyMama]

MonkeyMama, how much did you pay for insurance since you always talk about getting it in your 20s? Is it worth it to have gotten it so early? But I know you had your kids early so that weighs in the decision. But is it worth to people who are single without kids.

Firstly, the only reason we ever bought life insurance is for our kids. My spouse and I did not rely on each other financially.

I've said before that I don't think prematurely buying insurance is a bad thing. But there are several factors.

--First and foremost, most people "who could seriously use some life insurance" (think sole breadwinner for family) never buy any life insurance. Early is better than never.

--Insurance rates are cheap right now, so lock them in. In addition we live in a time when more and more 30-somethings are being diagnosed with diabetes, high cholesterol, obesity, cancer, etc.

--It all comes down to benefits and risks. I personally tend to err on the side of under-insurance/catastrophic insurance, and don't buy a lot of insurance "just because everyone else does." Without seriously weighing the risks and benefits... But you can be logical about it and find cases where buying insurance "before you really need it" puts you ahead in the long run. One extreme is if your family is genetically pre-disposed to health problems in their 30s (something that doesn't rule out cheap rates in your 20s). That is maybe one end of the spectrum, but there are several shades of grey right behind that. I always factor odds and risks when weighing any insurance purchase.

I am currently shopping insurance to supplement what we already have, since spouse is out of workforce for the long-term. Everything is more expensive than when I Was 25, and I am not even sure I will still qualify for the top-tier health rating (which is what all the advertised rates are). Even in our 20s our insurer said it was extremely rare we got the top health rating. Oh, and my spouse can't even get insurance (totally uninsureable since age 33). So now it is just me in the running. Which is fine since he doesn't need more insurance (but sure as heck glad he was well insured, already). I decided to keep old insurance policy and supplement, accordingly. Will be cheaper than getting a whole new bigger policy at today's rates for my age. I am still on the fence if we even need it - a LOT of factors at play. I am not in a very black/white benefit/risk space right now - I am in a "flip a coin" space. So I got some extra short-term insurance while I think about the long-term some more.

I do feel the pull of "buy insurance while you still can," but it's not just spouse - lots of friends and family with all sorts of random health issues that cropped up out of nowhere.

[EmilySepulveda]

Work based life insurance is strict no for me. It's all upto in employer. Better option is to Compare quotes online and select one which fullfill requirement.

[galanins]

Insurance benefits taxable.?

Can any one tell, are life insurance benefits taxable.?