Texas life insurance

[thomasdan]

hello, everyone.. hope everyone is doing well. It's been awhile since I've posted. Regarding my situation, still manage to have 0 credit card debt. Just a mortgage and car debt. My wife and I had to get a new vehicle since we just had our 1st child. We both drove a 2 door car. So we sold one vehicle and bought a 4runner to accommodate the baby needs.

we've been helping my mother in law with her finances. I was going through some of her paperwork and she mention that she pays close to $100 dollars a month for Texas life insurance through her paycheck at work. They automatically take it out. She's been paying it for about 5 years now. So that's close to 6k that she spent on it. Since I don't know anything about how life insurance works. I asked her what does 100 dollars get you?....she said that when she passes away, my wife and brother in law each gets 10k from the policy. Already that doesn't seem worth it. SHe stated that she plans to work another 10-12 years before she retires(giving that nothing serious/health happens to her) but doing the math.. that means she'll spend 18-20k over 15 so years for this policy to ONLY get 20 K to go to the beneficiary of the plan. Please help me explain to her that this isn't a good idea. Or please help me on how life insurances really work?

I Told her why doesn't she just put that money in a saving account or invest that money instead.

Am I not understanding it correctly? what should she be doing instead.

Hope all this make sense since I don't really understand it myself.

[disneysteve]

If she is paying $1,200/year for a policy with a $20,000 death benefit, that's ridiculous. Policies through employers are usually term life but $100/month should buy her a far bigger benefit than 20K.

She needs to call her HR department and get the details of that policy.

[thomasdan]

Thanks for your quick reply disneysteve.

I will let her know what you told me.

I also know that her employer pays some other type of life insurance too. They pay $5.68 cents a month for her. So I'm not sure why she pays for additional life insurance.

Is that pretty normal to pay extra?

Thanks for your help

[TexasHusker]

If she is paying $1,200/year for a policy with a $20,000 death benefit, that's ridiculous. Policies through employers are usually term life but $100/month should buy her a far bigger benefit than 20K.

She needs to call her HR department and get the details of that policy.

I'm 51 years old, and I'm paying about $80 a month for $1.5 million...

[thomasdan]

wow. okay. something isn't right then with her policy. I'll have her look into it.

Do you recommend her to go through a private company instead of going through her employer?

[disneysteve]

I also know that her employer pays some other type of life insurance too. They pay $5.68 cents a month for her. So I'm not sure why she pays for additional life insurance.

Is that pretty normal to pay extra?

Usually, the employer provides a multiple of your salary as insurance. For example, at my job, I get 2X my salary.

I can buy additional coverage but I don't since I have my own coverage already

[TexasHusker]

wow. okay. something isn't right then with her policy. I'll have her look into it.

Do you recommend her to go through a private company instead of going through her employer?

I do. Because if she leaves her employer, the policy often goes away or gets very expensive.

Go to selectquote.com.

I recommend going as long a term as you can get. I believe I went 30 year term because I wanted to make certain our kids were grown and on their own before it lapsed.

[disneysteve]

Do you recommend her to go through a private company instead of going through her employer?

Absolutely! You don't want your life insurance tied to your employment. Leave your job and you lose your coverage.

Assuming she's in good health, term life is dirt cheap. Selectquote or Accuquote or Intelliquote are all good sites to buy a policy.

[thomasdan]

So lets say she goes with a private company for a 30 year term. Does that mean if she is still alive after 30 years that the policy will just cancel. no pay out? and if she passes away with in 30 years. Then the beneficiary of the policy will get the agree amount base on her coverage?

Is this Term life insurance? or WHole life insurance?

Sorry for the dumb questions.

[disneysteve]

So lets say she goes with a private company for a 30 year term. Does that mean if she is still alive after 30 years that the policy will just cancel. no pay out? and if she passes away with in 30 years. Then the beneficiary of the policy will get the agree amount base on her coverage?

Is this Term life insurance? or WHole life insurance?

Sorry for the dumb questions.

Not dumb at all.

Only buy term life. Never, ever, ever buy whole life or any variant of it.

Yes, if you have a 30-year term, if you die during that term, your beneficiary gets the payout. If you outlive the term, the policy ends and you're done.

[thomasdan]

okay awesome info.

So I'm guessing that my mother in law is paying for whole life insurance(texas life insurance) through her employer then. Because she didn't mention anything about a 10, 15 or 30 year plan.

I'll have her double check to be sure.

and have her stop payment.


For my wife and I then, since she is 37 and I'm 33. AND is great health. Since we have a newborn. Do you recommend us getting Term life for 30 years? or do you have to be a certain age to apply?

[disneysteve]

For my wife and I then, since she is 37 and I'm 33. AND is great health. Since we have a newborn. Do you recommend us getting Term life for 30 years? or do you have to be a certain age to apply?

Definitely you should both have life insurance. There is no age requirement. Anyone can buy life insurance.

[thomasdan]

I just called someone from selectquote.

After a bunch of question regarding health for my wife and I.

He quoted 79 dollars for 1.25 million for me and 82 dollars for 1.25 million for my wife through prudential.

this is for a 30 year term.

does that sound pretty much right? I know prices can vary base on age and health.

thanks again for your input.

[TexasHusker]

Definitely you should both have life insurance. There is no age requirement. Anyone can buy life insurance.

Added to that, life insurance is usually meant to protect your loved ones from sudden loss of income in your untimely death. So you whatever level of income that you feel that they need annually, you should insure for 10 to 15 times that amount.

If your wife isn't a breadwinner, I don't know that you have anything to insure against, other than you would have extra childcare expenses.

If she is a significant contributor to the monthly budget, however, that's a different story.

I will likely not renew or shop for new life insurance once mine lapses, as we have pretty significant assets and business income. Wait and see.

[thomasdan]

We depend on both of our income every month to pay for things.

We don't have a lot of assets though. Just our house that we still owe.