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LSUbase13
South Carolina Fan
Charleston, SC
Member since Mar 2008
13498 posts

Life Insurance
Hello all. Recently married here and would like to purchase life insurance. Can someone school me on:

1. Whole vs. Term policies (pros and cons)
2. Amounts? $250, $500, $1 million
3. Any physicals? Medical disclosures?
4. Reputable companies?


bstew3006
LSU Fan
318
Member since Dec 2007
2552 posts

re: Life Insurance
1. BUY Term with conversion privilege (depends on company). Term is essential for protecting your family. Whole is good, but depends on what you want it to do. Do you want a death benefit or do you want to accumulate cash? I only suggest WL if you plan on really funding it! There are multiple variations of Whole life. I personally have one for Cash accumulation. If its cash acc, look at New York Life, Mass Mutual, Northwestern. Companies with great dividends.

2. How many years do you want to replace your income? I took 70% of my gross income and multiplied it by X amount of years I wanted to replace.

3. Most companies will require a Blood/urine sample

4. New York Life, Mass Mutual, Northwestern, State Farm, there's around 800 life companies. I personally stick with the big dogs. Most companies will be within a few $$ of each other.

at the down vote
This post was edited on 1/3 at 8:24 am


LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
12403 posts

re: Life Insurance
In reality life insurance is an individualized thing, with no one size fits all. But since you asked...

1) Term is appropriate for most people, but it doesn't last forever - it lasts for a "term". It is good for needs that will eventually go away. For example, paying off a house, or paying for education. Also, some term policies can go a while - think to age 70 or 75 - which at some point hopefully you will be financially secure enough, and your expenses low enough, that you won't need it.

Whole life is a lot more expensive, but as long as you pay the premium, it will never go away. For most people, it is not necessary in large amounts (maybe 25-50K to pay for final expenses is fine). Really wealthy people use it as an additional investment vehicle.

2) Look at your needs. An oversimplification is 8-10 times salary, and adjust as needed.

3) Physicals and medical information needed depend on the company or the coverage amount, with generally more coverage requiring more info.

4) For term, there are many companies out there that are fine - it's become somewhat of a commodity. Look for a company with high financial ratings with Moody's, etc.

For whole life... in reality you need to go with Northwestern Mutual, Mass Mutual, or New York Life. Those are the three most solid companies out there.
This post was edited on 1/2 at 9:32 am


MsState of mind
Mississippi St. Fan
State of Denial
Member since Aug 2013
1542 posts

re: Life Insurance
I bought a Northwestern Mutual policy for $500k for me and my wife. I bought the term 75 so it stays in place with increasing premium until I am 75 and has whole life conversion opportunities. To me it would pay off my rental and pay off our house so in my mind that saves us $2,000 a month forever.


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yellowfin
Chicago Cubs Fan
Coastal Bar
Member since May 2006
90782 posts

re: Life Insurance
I didn't buy life insurance until we had kids, right now I keep enough term to pay off my home and cover my salary for 10 years.


baldona
Auburn Fan
Florida
Member since Feb 2016
7344 posts

re: Life Insurance
If you smoke or have a health issue, it's going to cost you a lot more. Smoking almost doubles it I believe.

Remember that life insurance is simply insurance, it's meant to cover what you can't afford yourself. Insurance companies love to add emotions, 'investments', etc. into it so they can make more money off of you.

But you simply need to buy enough 'insurance' to cover your family for the period of time they would need it. So if you have a stable retirement plan with an established time line to get out of debt, there's no reason to keep insurance once you have the wealth accumulated for your family to survive without your income.


GaryMyMan
USA Fan
Shreveport
Member since May 2007
13495 posts

re: Life Insurance
quote:

4. New York Life

Sorry but screw NY Life. They wanted $600/month for a 20 year term $1.5MM policy on me. Roughly 8 times my rate with Protective Life.

I got enough to pay off all debts including home, and put my infant twins through college. Enough so that my wife won't be in a bind, but not enough for her to push me in front of a bus.
This post was edited on 1/2 at 10:39 am


LSUbase13
South Carolina Fan
Charleston, SC
Member since Mar 2008
13498 posts

re: Life Insurance
quote:

If you smoke


The occasional cigar once a week?

Alcohol?

Anything I should cut out before shopping around for policies? Should I try and get in better shape?


bstew3006
LSU Fan
318
Member since Dec 2007
2552 posts

re: Life Insurance
Sounds like you got RATED! I have 1.5 mill for $78 I also have a 20 yr $1mm on my wife for $36 from NYL.

Might want to check to why they rated you that high! Tobacco, health issues and Job risk?
This post was edited on 1/2 at 10:45 am


GaryMyMan
USA Fan
Shreveport
Member since May 2007
13495 posts

re: Life Insurance
Oh I was definitely table-rated for a prior health issue but those prices reflect being rated at each company. My personal opinion is that going with a "big name" in the age of easy internet shopping is like going with State Farm for car insurance and never shopping around. Though your two rates look great.


LSUbase13
South Carolina Fan
Charleston, SC
Member since Mar 2008
13498 posts

re: Life Insurance
quote:

GaryMyMan


Any websites or databases that you'd recommend to shop around?


The Spleen
Alabama Fan
Member since Dec 2010
22538 posts

re: Life Insurance
quote:

Anything I should cut out before shopping around for policies?



The cigars. I just got a new policy, and they put me through the grinder with their health underwriting. Phone interview asking my entire health and alcohol/tobacco/drug history for last 7 years, record request from my doctor(s), blood and urine screening, etc. Whole process took 2 months.

This was with Auto Owners insurance for a term policy. $500k policy.


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Weekend Warrior79
LSU Fan
River Ridge
Member since Aug 2014
2473 posts
 Online 

re: Life Insurance
I do not think they checked for alcohol use, just wanted to make sure it wasn't in my system. They did ask the standard questions, do you drink, how often, how many per week...

I wouldn't go crazy, but if you have bad cholesterol or blood pressure issues, I would try to diet/exercise as best you an between now and whenever you sign up. Also, try to avoid high sugary foods/drinks a few days before; especially the day you do your blood work. The reality is, unless you push it off for several months, you most likely won't be able to make drastic changes without medication (which will show up in blood screen).

Most of the reputable companies send a nurse to your house/job that will take a urine/blood sample, have you get on a scale and check your height. Then you have a series of questions to go through.


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GaryMyMan
USA Fan
Shreveport
Member since May 2007
13495 posts

re: Life Insurance
quote:

Any websites or databases that you'd recommend to shop around?



Nerd Wallet - this is a pretty solid start. Or Policy Genius.


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Lou
LSU Fan
out here in the middle
Member since Aug 2005
7128 posts

re: Life Insurance
Term life, get enough to replace your income, or at least provide an amount for your wife (kids?) to take care of them for an extended period of time. 10X your annual salary is a nice ball park figure. If you are still young and in good health you can get a 10-15 year term life policy very cheap. Whole life costs much more, and does provide more - but if you invest the difference in premiums you will come out ahead with term, especially at a young age. I did have to take a minor physical, blood test I know when I bought term. I will reluctantly tell you about Select Quote (LINK ) You provide some basic information about yourself and multiple companies provide estimates on what they can give and how much. I say reluctantly, because your phone number could be obtained by dozens of lists and you start receiving robocalls, which I find very annoying. This may or may not happen with Select Quote, so I wanted to give you that heads up. You might also contact your agent who covers your home/auto insurance, you might get a discount if multiple policies, including term life, are bundled together. Your agent will try to talk you into whole life over term life, they get a much better commission on those.

One other note -- I highly recommend sitting down with your wife and making a detailed plan of what she needs to do with the money, should you pass away unexpectedly. Losing a loved one is very traumatic, especially a spouse, and no one should have to make major financial decisions during a period of extreme stress. It can be as simple as putting the money in a basic savings account, and transferring X amount of $ each month to pay all the bills, with a list of each bill and the date it is due. In time she can make bigger decisions about where to invest the money for a better return.

You didn't mention your age but I am guessing you are in your 20's? I commend you for being proactive and thinking about this early, a lot of people don't do that.
This post was edited on 1/2 at 11:48 am


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bstew3006
LSU Fan
318
Member since Dec 2007
2552 posts

re: Life Insurance
quote:

My personal opinion is that going with a "big name" in the age of easy internet shopping is like going with State Farm for car insurance and never shopping around


I agree, Definitely want to shop around. But know, cheaper isn't necessarily better. You better know your policy inside and out. That's the problem with the Online Commoditization of insurance. Yes, it's easier to shop, but most look at price and don't understand what they have. I'm with SF and pay a higher premium, but I know what is covered down the road.
This post was edited on 1/2 at 11:37 am


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BestBanker
LSU Fan
Around here.
Member since Nov 2011
8991 posts

re: Life Insurance
Here's your schooling. Depending on your age you can buy approximately 25 times your annual gross income in coverage. Buy as much permanent coverage as you can and term insurance to cover the difference. Leverage your death benefit and spend your tax free dividends in retirement. That's all I'm telling you.


LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
12403 posts

re: Life Insurance
quote:

25 times your annual gross income in coverage


quote:

Buy as much permanent coverage as you can and term insurance to cover the difference.


quote:

Leverage your death benefit


quote:

spend your tax free dividends in retirement


What company do you sell for?


TheBoo
New Orleans Saints Fan
The Bay Area
Member since Aug 2012
1923 posts

re: Life Insurance
quote:

keep enough term to pay off my home and cover my salary for 10 years.


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BestBanker
LSU Fan
Around here.
Member since Nov 2011
8991 posts

re: Life Insurance
I own a wealth firm. We use many. If sarcasm, sorry for offering advice. If interested, tax free assets are good.


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