Life insurance

[tiggerlover]

We were talking about life insurance today at work and a group said that if someone is paying $200 a month for $550,000 in coverage than they are paying too much. What are your thoughts? (I believe it was $500,000 term and $50,000 whole life).

 

[Pop Daddy]

dont get it, you will die if you do

 

[barkley]

depends on how old the person was when they purchased it and their medical history. i'm 45 and because of unanticipated health issues would probably be deemed 'uninsurable' or get charged insane rates if i tried to get any l/i. that's why i'm thankful dh and i purchased in our early 20's-and we bought both kids policies when they were infants.

 

[Lisa loves Pooh]

Seems high...

however $200 for a healthy 19yo is different than $200 for a 50 yo who smokes and is overweight.

So it is contingent upon who that policy is for.

 

[zalansky]

My DH and I finally got 20 year term insurance last summer. At the time I was 37 and he was 36 years old. I got $500,000 policy and he got $1,000,000policy.
I pay roughly $260 a year for my policy and he pays about $1,000 a year because he chews tobacco, GROSS, I know - but its an old baseball habit he is really trying to break. If you are tobacco free and in good health your rates should be very low, like mine.
I used ww .a ccuq uote. com for our policies. Good luck.

 

[tiggerlover]

The coverage was bought a few years ago for a healthy 36 yo male. I believe the term was 20 years.

 

[zalansky]

The coverage was bought a few years ago for a healthy 36 yo male. I believe the term was 20 years.

Was he in good health? If yes, that IS way too much! Thats what I pay a year for the same coverage.

 

[tiggerlover]

Was he in good health? If yes, that IS way too much! Thats what I pay a year for the same coverage.

Was and still is.

 

[Toby'sFriend]

My thoughts is that would be really high for a man that age.

My husband was 36 when we last bought a $750,000 30 year term policy 4 years ago when our 3rd child was born.

He is of normal weight, doesn't smoke, normal blood pressure etc. We pay $38.50 a month on that policy.

 

[golfgal]

Whole life coverage is going to be more expensive then the term coverage because of the cash option associated with whole life. I don't think $200/month is all that out of line for a 36 year old male for whole life. Also, if it is a 20 year term, does that mean the policy will be paid up after 20 years, meaning that you pay the premium for 20 years and then you are done paying but the coverage is still there?There are just too many variables with the premium to say if you are paying too much or not. The only way to really know that is to look at the dec pages to see what the policy entails, what it is for exactly, etc. If you want to PM me the exact coverages I would be happy to look at them and let you know.

 

[tiggerlover]

Whole life coverage is going to be more expensive then the term coverage because of the cash option associated with whole life. I don't think $200/month is all that out of line for a 36 year old male for whole life. Also, if it is a 20 year term, does that mean the policy will be paid up after 20 years, meaning that you pay the premium for 20 years and then you are done paying but the coverage is still there?There are just too many variables with the premium to say if you are paying too much or not. The only way to really know that is to look at the dec pages to see what the policy entails, what it is for exactly, etc. If you want to PM me the exact coverages I would be happy to look at them and let you know.

The only portion that is whole life is $50,000, the other $500,000 is the term. I believe (but not sure) they pay for 20 years and then get the option of renewing again.

 

[mjkacmom]

Whole life coverage is going to be more expensive then the term coverage because of the cash option associated with whole life. I don't think $200/month is all that out of line for a 36 year old male for whole life. Also, if it is a 20 year term, does that mean the policy will be paid up after 20 years, meaning that you pay the premium for 20 years and then you are done paying but the coverage is still there?There are just too many variables with the premium to say if you are paying too much or not. The only way to really know that is to look at the dec pages to see what the policy entails, what it is for exactly, etc. If you want to PM me the exact coverages I would be happy to look at them and let you know.

If I'm not mistaken, term means that at the end of the period, you are no longer covered. You pay monthly during that term (less money for shorter terms). IMO, there is no need for whole life - you're money is much better invested in stocks and mutual funds than whole life.

 

[golfgal]

If I'm not mistaken, term means that at the end of the period, you are no longer covered. You pay monthly during that term (less money for shorter terms). IMO, there is no need for whole life - you're money is much better invested in stocks and mutual funds than whole life.

Term can mean several things when you are talking about combined whole/term life policies. Also with whole life your money IS being invested in stocks and mutual funds with the added benefit of getting a death benefit with the policy. Our whole life policies had a 29% return last year, not too shabby. Whole life can be a very valuable retirement tool because often the payouts can be tax free because they are seen as a return on your premium and not income depending on how long you have paid, how much you have paid, etc.

Tiggerlover--again, it is impossible to say if you are paying too much or not without seeing exactly what you are getting. Again, the whole life portion is going to be more expensive then the term. Usually with whole life policies they endow at age 100, term policies end at what ever age they list on the policy ( our term policies end at age 70, many are age 65, etc). It could be a 20 year level term with a whole life option, etc. Also, a policy taken at 36 is going to be more expensive the one taken at 26 and cheaper then one taken at 46.

Find your copy of the policy, read what the coverages say, what kind of policy it is exactly. It will list any ages of endowment, the term, etc. It will also show if you can convert some of that term to whole, which may be a good idea depending on what else you have for retirement, etc. With the cash option you can take a "loan" on that at retirement (or whenever) and supplement or fund your retirement depending on how much you have. You can also call your agent and they can walk you through all this OR take it to a different agent and have them walk you through it all to get an unbiased look at your coverages/premiums, etc.

 

[golfgal]

I should say too that since the policy isn't that old, chances are it is really a variable universal life type policy, which is good (which is what we really have, not really 'whole' life).