OT-Need a good reliable life insurance company for term insurance.

[Colinsmom]

Do most people renew it then at the end of the term? I mean if you are still alive in 20 yrs. would you just renew so that your loved ones would have something if you pass away?

If you need insurance for longer than 20 years (say, not done having children yet), then buy a 30 year term policy. Renewal rates at the end of the 20 years are VERY VERY expensive - if you still need insurance at that time, then you are best to go buy a new policy unless you have health issues.

 

[IluvKingLouis]

Why on earth does he need to know our amount of debt?? I can see why he needs to know the other stuff!

I know this sounds very cruel but debt and credit rating is used to determine how "responsible" you are. It's assumed the more responsible you are financially the more responsible you will be with other lifestyle choices.

Please, I'm not making any judgement calls, but I sold insurance many years ago so I'm simply explaining.

Back in the 80's I moved from a quiet suburb to a downtown high rise. Because of the change in zip code my car insurance went way up. Never mind that the in the "quiet" suburb I had to park on the street, and in my downtown location I had an underground garage that had security. Insurers tend to look strictly at statistics and trends.

 

[Colinsmom]

I just emailed my agent who has our home insurance. Here is what he says he needs from me to quote life insurance:

Let me know your height and weight, any health problems, nicotine/non-nicotine, annual incomes, amount of current life coverage, and amount of debt you have. There are a lot of different things to look at but that will be a good start.

Why on earth does he need to know our amount of debt?? I can see why he needs to know the other stuff!

He is asking for that info to calculate how much insurance coverage you need. You can always ask him why he needs a piece of information - if he's a good agent, he'll explain it to you every step of the way.

 

[ldb1030]

Right, I know these companies check credit scores, ours if very good, but wondered why he would not just check my credit score, why have to add everything up and tell him?

 

[ldb1030]

Yes, you can renew (or get a new policy) once yours runs out.

The point isn't to give living relatives a big chunk of change if they don't need it. The point is having the insurance when you would need to provide for someone in the event of your death. So 20-30 years from now, the kids would be out of the house and your house will be paid off (this is how it's supposed to be, not necessarily reality) and you won't need a huge expensive (whole life)policy at this point.

Thanks! That's a good way to explain it. No more kids for me and was just thinking when my husband or I pass down the road, we would leave something for each other. Or right now, we rely on each other's incomes.

 

[IluvKingLouis]

Do most people renew it then at the end of the term? I mean if you are still alive in 20 yrs. would you just renew so that your loved ones would have something if you pass away?

The older you get, the more expensive life insurance is....and the less necessary it is. So when you need it the least, it will cost you the most. Most people have life insurance to protect their spouse and children. A lot of folks choose to carry enough to support each child through college.

After that, there is really no reason to build an inheritance through life insurance. It will never benefit you directly. You should be focussing on paying off your house, maxing out your 401K's and IRA's, and saving for your retirement in conventional brokerage/savings accounts.

Insurance premiums (once insurance is no longer needed) are better off applied to a good no load mutual fund.

 

[ldb1030]

The older you get, the more expensive life insurance is....and the less necessary it is. So when you need it the least, it will cost you the most. Most people have life insurance to protect their spouse and children. A lot of folks choose to carry enough to support each child through college.

After that, there is really no reason to build an inheritance through life insurance. It will never benefit you directly. You should be focussing on paying off your house, maxing out your 401K's and IRA's, and saving for your retirement in conventional brokerage/savings accounts.

Insurance premiums (once insurance is no longer needed) are better off applied to a good no load mutual fund.

So maybe if my husband I just took out just enough maybe to have the house paid off and college for our daughter if something happened to either one of us, that would be good?

 

[IluvKingLouis]

So maybe if my husband I just took out just enough maybe to have the house paid off and college for our daughter if something happened to either one of us, that would be good?

This can be such a gray area. You want to make sure the other can continue to live in the lifestyle they've become accustomed too, but you don't want the insurance pay off to be like winning the lottery.

Actually, insurance companies have been sued for over-insuring and having a spouse decide they'd have a much better lifestyle if their spouse was, well, "removed".

So, although insurance companies LOVE to sell insurance and will over insure to a small degree, they have to make sure if your living a modest lifestyle that the death of a spouse won't make you an overnight millionaire.

 

[zalansky]

Like others have said, life insurance is meant to replace income, not make your family rich when you die. Term insurance is what any financial expert will tell you to get.
I spent many years in insurance and yes, agents do make more commissions than going through an internet site. Of course the internet site makes a few bucks, but you're not paying large commissions as you would to an agent. I worked for a State Farm agent and trust me, he made large commissions and the most were made on life insurance.
I pay $250 year for a $500k policy. Enough said.

 

[tonilea]

Dave Ramsey (if that isn't a dirty word here lol) recommends 8-10 times your annual income. We are in the process of getting $250 K in a 20 year term. DH is 44. For us, we just need to see that DS is provided for through college. We don't have to worry about crushing debts.

IMO, we could get by with less insurance, but DH disagrees. We have little debt, a modest net worth, our home is paid for, and a 3 yr old who we hope has college in his future.

 

[ldb1030]

Like others have said, life insurance is meant to replace income, not make your family rich when you die. Term insurance is what any financial expert will tell you to get.
I spent many years in insurance and yes, agents do make more commissions than going through an internet site. Of course the internet site makes a few bucks, but you're not paying large commissions as you would to an agent. I worked for a State Farm agent and trust me, he made large commissions and the most were made on life insurance.
I pay $250 year for a $500k policy. Enough said.

Do you mind if I ask what site you got your policy on? No, I don't intend to make my family rich by any means! Just want them to have help if my income were gone....or I would want help if my husbands were gone. He makes much more than I do and I only work part time.

I still don't get why my house insurance guy can't just check my credit score but wants to know the amount of my debt?!

 

[zalansky]

I went to ww. accuquote .com
I bought a 20 year term for myself through Genworth. My husband got a 20 year term for $1 million through Prudential. It was very easy and there is no obligation. You will see quotes from many different companies and try to go with at least an A rated company. They are most solvent.
In 20 years our house will be paid for and our kids will be grown and we won't need such high policies anymore.
good luck to you.

 

[ldb1030]

I went to ww .a ccuq uo te.com
I bought a 20 year term for myself through Genworth. My husband got a 20 year term for $1 million through Prudential. It was very easy and there is no obligation. You will see quotes from many different companies and try to go with at least an A rated company. They are most solvent.
In 20 years our house will be paid for and our kids will be grown and we won't need such high policies anymore.
good luck to you.

Thanks so much for your help! I will check it out........and probably have more questions!

 

[roadtripper]

Just wanted to add here that when DH and I got our term life policies, they (SBLI) actually sent a nurse to our house to do blood testing, urine sample, and blood pressure. I got the best rate they offer, but DH's family history knocked him off the best rate, even though he exercises more than me. So other factors weigh in as well. Also, you need to be honest on the questionnaire or they can deny your heirs payment if they discover you lied about something (like smoking, for example).

 

[Lisa_M]

I don't mean to hijack the thread, but I have a few questions...DH and I are 25 y/o. Is this something we should look into now or after we have paid off our cc debt? Our credit score is good, but we do have significant debt (cc, student loans and a car loan). Right now I'm not working, but will be in the fall at the latest, . Also, DH is overweight, I wonder how would affect our rate. When you get life insurance, can you get it for as much as you want? We don't own a home,but if one of us dies before we do, I would like to have enough insurance to purchase a nice small house.

 

[Colinsmom]

I still don't get why my house insurance guy can't just check my credit score but wants to know the amount of my debt?!

I answered this back in post #23.

 

[Colinsmom]

I spent many years in insurance and yes, agents do make more commissions than going through an internet site. Of course the internet site makes a few bucks, but you're not paying large commissions as you would to an agent.

I currently work in the life insurance and annuity industry, and can tell you that the prices on those online sites are not discounted much (if at all) compared to what agents sell. The price you get depends on your age, health, and other factors at the time of issue, in addition to the length of term that you choose. I purchase a Genworth policy through my agent and am paying a slightly higher rate than you, but I have a 30 year term policy (which is more expensive than a 20 year term policy).

Perhaps the internet site doesn't get as much as the agents might get in first year commissions, but in that case, it is just staying in the companies' pockets.

 

[Colinsmom]

I don't mean to hijack the thread, but I have a few questions...DH and I are 25 y/o. Is this something we should look into now or after we have paid off our cc debt? Our credit score is good, but we do have significant debt (cc, student loans and a car loan). Right now I'm not working, but will be in the fall at the latest, . Also, DH is overweight, I wonder how would affect our rate. When you get life insurance, can you get it for as much as you want? We don't own a home,but if one of us dies before we do, I would like to have enough insurance to purchase a nice small house.

Ask yourself what would happen to your family if one of you died. Child care expenses, lost wages, standard of living, etc. If it wouldn't change at all, then maybe you can wait on life insurance. But with significant debt, I suspect that isn't true. Term life insurance is sooooo cheap at your age - with a lot of debt and a young child, I would find a way to work it into your budget.

 

[zalansky]

I currently work in the life insurance and annuity industry, and can tell you that the prices on those online sites are not discounted much (if at all) compared to what agents sell. The price you get depends on your age, health, and other factors at the time of issue, in addition to the length of term that you choose. I purchase a Genworth policy through my agent and am paying a slightly higher rate than you, but I have a 30 year term policy (which is more expensive than a 20 year term policy).

Perhaps the internet site doesn't get as much as the agents might get in first year commissions, but in that case, it is just staying in the companies' pockets.

In my case I stated I worked for State Farm, not an internet agency. The internet sure brings out all the know it alls.

And yes, the companies will send out someone to draw blood and do a physical. So make sure you are as honest as possible to get the most accurate rates.

 

[ZachnElli]

I still don't get why my house insurance guy can't just check my credit score but wants to know the amount of my debt?!

A previous poster already explained it, but it's to determine how much life insurance you will need. They base it off your income and your debt. You want your family to pay off some of that debt to keep the lifestyle they already have without your income (less bills to pay). It has nothing to do with how responsible you are, credit rating will effect your auto insurance to some degree, but not life insurance.