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Started By
Message
Should I lock in Life Insurance before 30?
Posted on 5/30/14 at 11:16 am
Posted on 5/30/14 at 11:16 am
So as a favor to a friend I met with his buddy from Northwestern Mutual. I got the typical shpiel but the only two things that interested me were locking in life insurance at a young and healthy age, and a cash value (CV) account (starting it now, but focusing on it as I get older).
I'm not too sure about income protection, work has 60% long term disability, I could plus it up to 91%.
Does it make sense to lock it in now? I am relatively healthy individual and feel I could get a good deal. Our combined income is just over 100K so I am thinking that the $1.1M he quotes me was a little high.
Anyone have strong feelings one way or the other on CV or long term disability insurance?
ETA- Does anyone have noteworthy experiences with Northwestern Mutual that I should keep in mind?
I'm not too sure about income protection, work has 60% long term disability, I could plus it up to 91%.
Does it make sense to lock it in now? I am relatively healthy individual and feel I could get a good deal. Our combined income is just over 100K so I am thinking that the $1.1M he quotes me was a little high.
Anyone have strong feelings one way or the other on CV or long term disability insurance?
ETA- Does anyone have noteworthy experiences with Northwestern Mutual that I should keep in mind?
This post was edited on 5/30/14 at 11:17 am
5
Posted on 5/30/14 at 11:24 am to SM6
Yes you should lock in rates while you are young and healthy, even if it is just term. You will get a lot of different opinions on the Whole Life insurance, but if you want to get into that discussion we can, but I won't be able to until later this evening. Here is a thread that briefly discusses it: LINK
Did he do a calculation to get that $1.1M number or just show it as an example? Get him to do an accurate death benefit calculation.
As for the disability, get it. It will be cheap unless you are in some crazy occupation. Your group is most likely taxable, so that 60% is more like 45-50%. Also, if you leave that company, you won't be able to take it with you.
Did he do a calculation to get that $1.1M number or just show it as an example? Get him to do an accurate death benefit calculation.
As for the disability, get it. It will be cheap unless you are in some crazy occupation. Your group is most likely taxable, so that 60% is more like 45-50%. Also, if you leave that company, you won't be able to take it with you.
This post was edited on 5/30/14 at 11:26 am
Posted on 5/30/14 at 11:30 am to GoCrazyAuburn
Thanks for the link I will check it out
Posted on 5/30/14 at 11:35 am to SM6
We went with straight term ... I think we have $500K each with Protective life. Husband has another policy for $1Mil .. he's a farmer and the lending agency required this to cover the crop loan ... not that the crop loan is quite that much but it wasn't expensive. That one is through Woodmen of the World.
It seems like a lot but you've got to figure in kids, education, home, day to day cost of living ... it may not be that much more.
FYI he's also got long term disability ...
It seems like a lot but you've got to figure in kids, education, home, day to day cost of living ... it may not be that much more.
FYI he's also got long term disability ...
Posted on 5/30/14 at 11:43 am to tiger91
There needs to be a sticky for whole life insurance just at the top of this page.
Posted on 5/30/14 at 11:49 am to GoCrazyAuburn
I'm also curious about long term disability.
Explain it to me like you would explain it to a child...
Explain it to me like you would explain it to a child...
Posted on 5/30/14 at 12:01 pm to SM6
I would not recommend CV life insurance.
Using an insurance policy to save for retirement is just nuts to me. Get a term life policy if you have a mortgage and/or kids. At your age, a 20-year Term Life policy would be dirt cheap. You should be able to get separate policies for you and your wife ($1 million total) for around $30-35/mo total.
Also, I would definitely get long-term disability asap.
Using an insurance policy to save for retirement is just nuts to me. Get a term life policy if you have a mortgage and/or kids. At your age, a 20-year Term Life policy would be dirt cheap. You should be able to get separate policies for you and your wife ($1 million total) for around $30-35/mo total.
Also, I would definitely get long-term disability asap.
Posted on 5/30/14 at 12:10 pm to gamemc
quote:
Get a term life policy if you have a mortgage and/or kids.
why a mortgage?
I agree with the kids part.
The whole life insurance thing is a scam if you ask me. If you have young children, and/or a spouse that doesn't work, then yes, it makes a lot of sense. They will need your income if you were to die.
But if you don't have these things, all you are doing is throwing money away. Better to save the premiums than to buy life insurance.
Now if you work offers a smoking deal like mine does (I pay $17/month for $750k), sign up. Its too cheap not to.
But a 30 year old with no kids, why the frick would you buy life insurance? have enough cash to bury yourself, and then invest the rest.
Posted on 5/30/14 at 12:16 pm to Hawkeye95
quote:
But a 30 year old with no kids, why the frick would you buy life insurance? have enough cash to bury yourself, and then invest the rest
because if he plans on having kids it is better to the coverage now, before something happens and he becomes uninsuriable
Posted on 5/30/14 at 12:18 pm to boosiebadazz
quote:
Explain it to me like you would explain it to a child..
The concept of a disability policy in general, or why supplement what you have at work?
Posted on 5/30/14 at 12:19 pm to Tigerpaw123
quote:
because if he plans on having kids it is better to the coverage now, before something happens and he becomes uninsuriable
Bingo.
A. You lock in a cheaper rate
B. Is it worth risking $30/month or whatever the premium is, to risk not being able to take care of my future family if I pass away? For me, it is a no brainer.
Posted on 5/30/14 at 12:21 pm to Hawkeye95
quote:
why a mortgage?
Most people don't want their surviving spouse to have to worry about paying any debts if they pass away. Some don't care, and just let them figure it out. Personal preference.
Posted on 5/30/14 at 12:23 pm to SM6
Every idiot should have long-term disability insurance. Most companies offer it for $20-30 a month. Too much can happen and being given 60% of your income for the rest of your life is a good cushion.
Term life insurance is what I have. I guess it's pretty much a waste of money considering I have no dependents. $15 a month gets me 400K worth of life insurance. Pretty much my parents will get free money if I drop dead.
I'm not sure how debt works when you die with life insurance- do all your creditors put in claims or is it just wiped off the books.
I sat through a LSU class a couple years ago that said single people in 20s shouldn't have life insurance. I thought it was an interesting liberal concept.
Term life insurance is what I have. I guess it's pretty much a waste of money considering I have no dependents. $15 a month gets me 400K worth of life insurance. Pretty much my parents will get free money if I drop dead.
I'm not sure how debt works when you die with life insurance- do all your creditors put in claims or is it just wiped off the books.
I sat through a LSU class a couple years ago that said single people in 20s shouldn't have life insurance. I thought it was an interesting liberal concept.
This post was edited on 5/30/14 at 12:25 pm
Posted on 5/30/14 at 12:24 pm to SM6
quote:
SM6
Also, regardless of what type of insurance policy you get, term or WL, get the disability waiver of premium rider on it. It is very cheap, and if you become disabled, the insurance company pays your premium as long as you are disabled, but you still get all the benefits. If you go with NML, their waiver rider converts your term to WL, NML still pays the premium, and you get all the cash value & death benefit tax free. Mass Mutual and New York Life do the same I believe. Most other companies just pay the term premium.
Posted on 5/30/14 at 12:25 pm to Cajun Revolution
quote:
I'm not sure how debt works when you die with life insurance- do all your creditors put in claims or is it just wiped off the books.
No, unless you assigned the policy to one of them. The check is given to your beneficiary. If she didn't want to spend it on the debt, she wouldn't have to (unless it is outlined in a will or something).
Posted on 5/30/14 at 12:28 pm to GoCrazyAuburn
So all this debt I have...say 90K between CC, Other Stuff, Student Loans and Car...what happens. I'm trying to understand this.
This post was edited on 5/30/14 at 12:29 pm
Posted on 5/30/14 at 12:33 pm to Cajun Revolution
Partly depends on the state and if there is a co-signor or not. If it is co-signed, then it is passed to the co-signor (generally a spouse, which is why people insure that liability). If there is no co-signor, the remaining debt is usually paid through your remaining estate (for a house, the bank may seize the house via foreclosure). Generally, family members who are not legally named on the liability, cannot be held accountable for that debt (however say your parents get your Life Insurance money, they may pay off the debt with that, so it isn't taken out of your estate)
ETA: This actually becomes a very complicated issue if there are no co-signors or value in the estate, so a quick easy answer isn't really available.
ETA: This actually becomes a very complicated issue if there are no co-signors or value in the estate, so a quick easy answer isn't really available.
This post was edited on 5/30/14 at 12:42 pm
Posted on 5/30/14 at 12:49 pm to GoCrazyAuburn
quote:
ETA: This actually becomes a very complicated issue if there are no co-signors or value in the estate, so a quick easy answer isn't really available.
It becomes complicated? I have no co-signers and I guess my estate is pretty much in the negative overall.
Car will sell itself and be a wash.
CC/unsecured debt will be wiped out with 401K/Savings
Pretty much student loans left.
And how long does it take for them to receive the death benefit.
Sorry, these are questions I never bothered to ask lol
Posted on 5/30/14 at 1:10 pm to Cajun Revolution
quote:
It becomes complicated? I have no co-signers and I guess my estate is pretty much in the negative overall.
Yea, just depending on the debt. Some creditors will forgive them. Some will go to court over them. You can always leave a portion of your death benefit to your estate, to cover those liabilities, and the rest to your parents.
quote:
And how long does it take for them to receive the death benefit.
It is pretty quick, if it is a well respected company. Most of my claims have been settled in a week or two.
quote:
Car will sell itself and be a wash.
CC/unsecured debt will be wiped out with 401K/Savings
Pretty much student loans left.
And if you are okay with that, that is fine. When we are looking at couples though, the 401(k) may be essential to retirement, they may not want/can't sell the car or house. That is why the insurance is there.
This post was edited on 5/30/14 at 1:12 pm
Posted on 5/30/14 at 1:12 pm to GoCrazyAuburn
The mechanics of how it works.
Who determines you're disabled? Is it a % of salary? What if your salary increases?
I don't have a policy through work, so this would be a stanalone policy.
Who determines you're disabled? Is it a % of salary? What if your salary increases?
I don't have a policy through work, so this would be a stanalone policy.
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