Life Insurance...serious inquiry.

[blackened1313]

2nd child was born on Jan 29th. It is time for me to get life insurance. Anyone have any family members that have experience with a policy that actually paid in the event of death-without putting the family thru hell.

Amount I should get??? would like to get enough coverage to pay off the house, bills and recover funeral expenses and maybe a years salary to allow the wifey to find a JOB. Balance owed on the House is $129,000. I had put a serious chunk of cash as a down payment several years ago.

I have already received enough credits in social security to qualify but it wont be much. If the house and bills were paid off, she would only have to worry about electricity etc.

Should I go whole life or term. I know with term I am just betting against my life but...

Have to go back to work so I will check back later.

 

[charliepapa]

My uncle died almost three years ago and he had no children and I was his sole heir. His house was paid for but he still had two life insurance policies; one was with Prudential and one was a small company whose name currently escapes me. In any case, all that was necessary was to send in copies of the death certificate and they mailed a check.

Now, the death certificate had to be an original but that's not even that big a deal. The funeral home director took care of that; all you have to do is tell him how many copies you need when you're making the arrangements. Just remember, an original copy of the death certificate may be necessary to cancel things like credit cards in your name only, cell phone contracts prior to the end of the term, etc., so get extras. I think they were about $2.00 each so no big deal. I think I just asked for ten since I'd never been through that before and had no idea what I was doing.

As to term vs whole, I have both. When my first daughter was born I was 25 and had zero life insurance. My dad set me up w/his agent from NY Life and I still have that $100K policy today. If you don't have any retirement accounts, a whole life policy could be a good thing but I'd still get both. Term insurance is relatively cheap if you're young and healthy. Buy enough to pay off the house and get her through the first year. I'd also set up something and name your kids individually so they can get an education following high school or, the cash at an older age like 25. I'm thinking something like a $100K whole life (again, only if you don't have anywhere to stash retirement money) and another $150K of term.

Either way, you're doing the right thing. Good on you!

 

[crazy white boy]

Insurance

My wife is an Insurance Broker in Metairie her name is Toni give her a call
504-887-5951 she can answer your questions and will be honest about it tell her I posted her number on Bayou Shooter so she can curse me later. LOL

 

[charliepapa]

Whole life is an absolute rip off, unconditionally, it is never a good idea - expect for that 5-10% commission the broker gets paid. Buy term and save the difference. You are better off putting the money in a plain savings account. I was licensed to sell life insurance for years and never sold a single whole life policy b/c I understand how they work and need to sleep at night.

I never realized the whole was that bad. I defer to your apparent knowledge on this but if savings accounts are only paying around 1%, is the return on the whole policy really that bad? I'm quite certain I'm missing something.

 

[honestlou]

Whole life is an absolute rip off, unconditionally, it is never a good idea - expect for that 5-10% commission the broker gets paid. Buy term and save the difference. You are better off putting the money in a plain savings account. I was licensed to sell life insurance for years and never sold a single whole life policy b/c I understand how they work and need to sleep at night.

You need term life insurance **yesterday**. Make it your number one priority. I used to be a financial advisor and the people that lost the breadwinner and had no insurance always ended up losing everything unless they had substantial reserves - like as much as they would have had in life insurance.

People with insurance AND A GOOD FINANCIAL ADVISOR usually fared well if they had any self control.

Read the contract. After 2 years, most insurance has to pay no matter what, even in the case of suicide. If they are going to rate you b/c of your job, that is part of the ticket price, not whether they pay out.

I have life insurance with USAA, Ameriprise, and AAA. They are all well rated.

AAA will give you $200,000 with very little underwriting and at your age for probably $25/month if you don't smoke.

I'd still get more - $500K on a 15 or 20 year term is probably $100 a month or less and it will be the difference between tragedy AND potential poverty vs. tragedy and the ability to continue on, pay off the debts, put the kids through college, etc etc.

10X earnings is the normally accepted minimum figure.

A will with a testamentary trust to make sure the funds aren't blown on toys - new houses, cars, clothes, gadgets - to protect people from themselves is also a good idea.

I used to see 2-4 families a year got through this. Protect your family. It is too inexpensive and in this economy, if your wife hasn't been working, you need it 2X as much as everyone else...

This is spot on, and good advice. I want to add that you should think of life insurance in terms of replacing your income in the event you die, and as such, needs vary by the individual. Interest rates are very low now, so it may take a larger lump sum to provide the income your family needs. Of course, paying off the house and putting college money aside will drastically reduce the income that is needed.

Term is so cheap that you should err on the side of a little more than you think you may need. However, the point is not to make your family "rich" if you die, so balance what you need with what you can comfortably afford.

Lastly, you should look at disability insurance as well. I know very little about the current costs, etc., but depending on your job, an injury can be more devastating financially than your death.

 

[MRBULLRED]

I never realized the whole was that bad. I defer to your apparent knowledge on this but if savings accounts are only paying around 1%, is the return on the whole policy really that bad? I'm quite certain I'm missing something.

It is not.. You have people that know how to make money. Then you have people that know how to make money and keep the money that they make..

I can explain later when I get home from work.

 

[honestlou]

I never realized the whole was that bad. I defer to your apparent knowledge on this but if savings accounts are only paying around 1%, is the return on the whole policy really that bad? I'm quite certain I'm missing something.

Whole life is great if you are selling life insurance, generally not so great if you are buying. A HUGE CHUNK OF YOUR MONEY IS PAID TO THE GUY WHO SOLD IT TO YOU. Compare your whole life policy to buying the cheapest term from a reputable company, and investing the money you save (which is HUGE). Interest rates are low now, but if you are talking about a 15 or 20 year window, put your money in a stock market index fund, and you will be much better off. Hell, put your money in ammunition and you will be much better off.

New slogan: Buy term and invest the rest in ammo!

 

[Renegade]

Whole life is an absolute rip off, unconditionally, it is never a good idea. Buy term and save the difference. You are better off putting the money in a plain savings account.

You need term life insurance **yesterday**. Make it your number one priority.

THIS!!!

 

[eliska]

How much life insurance to buy is a complicated issue that includes both the "need" and "want" questions. For example, if I were to die, my wife coudl go back to work and really woudl not "need" life insurance. On the other hand, given that she would then be both mom and dad to the kids, going back to work would drastically change everyone's life. So, I "want" a certain amount of life insurance. Term life is cheap. I have used Mark LaGrange ((504) 620-4737 and MarkCLaGrange@AOL.com) for years. He taught me - in terms even I could follow - what I needed to know/consider. Good luck. And congratulations on your second child. He/she is lucky to have a parent who is thinking ahead!

 

[Yrdawg]

I work for the state, aflac and another texas company came in and sold me a couple of life insurance policies.....not much, maybe 75 k total, I have asked to cancel them so I could buy outside ins, ( several things have raised hackles about these companies )

I have been blocked for two years from cancelling because I am told that the only way to cancel is when the companies make their once a year visit is the only time I can cancel.

I missed the last visit cause we weren't notified in the area I work.

Really pissed about this.tryin not to make big waves

Any ideas ??

I have been thru the apparent channels, HR, Ins Dept, Payroll ( it's a direct pay )

 

[LACamper]

I'm also an agent...I do sell a lot of term. I prefer Universal Life (and yes, there are significant fees) but I do sell whole also. Since I work for a captive company my share is nothing to get excited about, and the dividends and interest rates aren't bad at all.

The problem with 'buy term and invest the rest' is that 90% of the people don't invest the rest. Term gets VERY expensive later in life. If you've prepared for that, great. Whole is a way to keep your rates reasonable, assuming you're going to keep the policy your 'whole' life. They are great policies for kids and young adults also.
Whole has its faults, don't get me wrong. But its worth at least considering. It can work very well in some situations.
Another option is a term policy that has a return of premium option. At the end of 20 years you get a check for all the premiums you've paid in.
If you're interested in at least comparing the types of policies (and seeing all the associated fine print) PM me your address (snail or email), date of birth, and whether you smoke or not (any major health issues will have a bearing on the price so it would be good to know up front). I'll be happy to provide an illustration...

 

[Nomad.2nd]

I'm also an agent...I do sell a lot of term. I prefer Universal Life (and yes, there are significant fees) but I do sell whole also. Since I work for a captive company my share is nothing to get excited about, and the dividends and interest rates aren't bad at all.

The problem with 'buy term and invest the rest' is that 90% of the people don't invest the rest. Term gets VERY expensive later in life. If you've prepared for that, great. Whole is a way to keep your rates reasonable, assuming you're going to keep the policy your 'whole' life. They are great policies for kids and young adults also.
Whole has its faults, don't get me wrong. But its worth at least considering. It can work very well in some situations.
Another option is a term policy that has a return of premium option. At the end of 20 years you get a check for all the premiums you've paid in.
If you're interested in at least comparing the types of policies (and seeing all the associated fine print) PM me your address (snail or email), date of birth, and whether you smoke or not (any major health issues will have a bearing on the price so it would be good to know up front). I'll be happy to provide an illustration...

No thanks, I''ll "Not" Pay lots of $ my whole life, give anyone a 20 year interest free loan, OR worry about paying something my whole life that is ment to take care of things till I've built up enough Wealth.

Dave Ramsey recomends Zander Insurrance. I have no idea because the only life I've had is the SGLI when on active duty.

 

[LACamper]

I'm not suggesting using life insurance as a retirement fund! At best, whole life can make up a super-conservative small portion of your portfolio. BUT it can be a way to keep life insurance affordable. Term assumes that you won't need it at some point in the future. For most people this is true. The house will be paid for, the kids gone, no bills. BUT this doesn't always happen. Some want to leave a legacy to their kids. Whole can do that in situations where term can't. Before you buy term price what the cost of term will be at your age in 20 years. Are you sure you won't need coverage any more?
Here's another example. I'm a big believer in starting life policies on kids when they're just born. Buy a 50K whole or UL on them. Premium is probably around $20 a month. You're not worried about death benefit. You're buying insurability. Later they may not qualify for a life policy (juvenile diabetes for example). By the time they're 20 or so the policy may be able to 'premium offset', meaning they'll continue to have coverage and not have to pay for it. Don't you wish your parents had done this for you?

I'm not saying whole or UL is for everyone. If you're a knowledgeable investor then this is probably not the way to go. For many its a good choice. I'm just saying don't rule it out before looking over a few proposals...

 

[blackened1313]

Hey thank you everyone for your info. I will pm some of yall with my info. I am interested in both whole and term.

20 years ago I had a whole life policy, I paid on it for awhile and never followed up. If only I had been paying all these years, I would be getting a nice check this year.

Ps. I know I am an idiot for walking around with no insurance but... I started the family late. It was always just me so I didnt care.

 

[blackened1313]

How much life insurance to buy is a complicated issue that includes both the "need" and "want" questions. For example, if I were to die, my wife coudl go back to work and really woudl not "need" life insurance. On the other hand, given that she would then be both mom and dad to the kids, going back to work would drastically change everyone's life. So, I "want" a certain amount of life insurance. Term life is cheap. I have used Mark LaGrange ((504) 620-4737 and MarkCLaGrange@AOL.com) for years. He taught me - in terms even I could follow - what I needed to know/consider. Good luck. And congratulations on your second child. He/she is lucky to have a parent who is thinking ahead!

I will contact him- thank you for the info.

 

[blackened1313]

My wife is an Insurance Broker in Metairie her name is Toni give her a call
504-887-5951 she can answer your questions and will be honest about it tell her I posted her number on Bayou Shooter so she can curse me later. LOL

I will do that. thank you for the info.

 

[blackened1313]

I'm also an agent...I do sell a lot of term. I prefer Universal Life (and yes, there are significant fees) but I do sell whole also. Since I work for a captive company my share is nothing to get excited about, and the dividends and interest rates aren't bad at all.

The problem with 'buy term and invest the rest' is that 90% of the people don't invest the rest. Term gets VERY expensive later in life. If you've prepared for that, great. Whole is a way to keep your rates reasonable, assuming you're going to keep the policy your 'whole' life. They are great policies for kids and young adults also.
Whole has its faults, don't get me wrong. But its worth at least considering. It can work very well in some situations.
Another option is a term policy that has a return of premium option. At the end of 20 years you get a check for all the premiums you've paid in.
If you're interested in at least comparing the types of policies (and seeing all the associated fine print) PM me your address (snail or email), date of birth, and whether you smoke or not (any major health issues will have a bearing on the price so it would be good to know up front). I'll be happy to provide an illustration...

20 years ago, I had one with New York life or something. But I was a kid and just quit paying and never followed up. Man I would be on schedule for a check right now!!!!

 

[Nomad.2nd]

I'm not suggesting using life insurance as a retirement fund! At best, whole life can make up a super-conservative small portion of your portfolio. BUT it can be a way to keep life insurance affordable. Term assumes that you won't need it at some point in the future. For most people this is true. The house will be paid for, the kids gone, no bills. BUT this doesn't always happen. Some want to leave a legacy to their kids. Whole can do that in situations where term can't. Before you buy term price what the cost of term will be at your age in 20 years. Are you sure you won't need coverage any more?
Here's another example. I'm a big believer in starting life policies on kids when they're just born. Buy a 50K whole or UL on them. Premium is probably around $20 a month. You're not worried about death benefit. You're buying insurability. Later they may not qualify for a life policy (juvenile diabetes for example). By the time they're 20 or so the policy may be able to 'premium offset', meaning they'll continue to have coverage and not have to pay for it. Don't you wish your parents had done this for you?

I'm not saying whole or UL is for everyone. If you're a knowledgeable investor then this is probably not the way to go. For many its a good choice. I'm just saying don't rule it out before looking over a few proposals...

Typical Insurrance company lies.

Pay $20 a month so they can pay more and more over priced money for the rest of their life.

The % of people who are uninsurable is so small to be statistically insignificant.

Keep pushing the party line there dude.


OR you could invest $20 per month for them for Collage.

 

[blackened1313]

If it isn't a good choice for knowledgable investors, why is it a good choice for others?

If people are paying for financial advice, isn't it the responsibility of the advisor to *completely disregard commission* and make the recommendation that is best for the client?

I had a lot of clients that weren't sophisticated investors but that did have a lot of money... I didn't invest any differently for them than I did for people that knew the score.

As far as a 50K whole life policy on kids - My mom, a teacher, saved every penny she could so that I could go to college without taking out student loans.

College > Anything else

It is reasonable to insure your children. I'd still do it the least expensive way possible and then save the rest for school, etc.

http://www.startsaving.la.gov/savings/index.jsp

My humble opinion.

She should be obligated to do so. The lady that I have homeowners insurance is like that. I inquired about car insurance trying to get 1 bill for everything and she told me to stay with GEICO because her auto insurance was garbage. That went along way with me. I wont forget her for that.

 

[LACamper]

Typical Insurrance company lies.
Pay $20 a month so they can pay more and more over priced money for the rest of their life.
The % of people who are uninsurable is so small to be statistically insignificant.Keep pushing the party line there dude.OR you could invest $20 per month for them for Collage.

My own daughter falls into that uninsurable group. So does my wife. Its not that small of a group. And how about the number of people that would be rated later? (height/wt, tobacco, mental drugs, blood pressure).

If it isn't a good choice for knowledgable investors, why is it a good choice for others? If people are paying for financial advice, isn't it the responsibility of the advisor to *completely disregard commission* and make the recommendation that is best for the client?
I had a lot of clients that weren't sophisticated investors but that did have a lot of money... I didn't invest any differently for them than I did for people that knew the score. As far as a 50K whole life policy on kids - My mom, a teacher, saved every penny she could so that I could go to college without taking out student loans. College > Anything else It is reasonable to insure your children. I'd still do it the least expensive way possible and then save the rest for school, etc. http://www.startsaving.la.gov/savings/index.jsp My humble opinion.

Agreed, saving for college is critical. Most families can afford both though. I usually just ask how much they're paying for cable tv....
My commission is never a consideration. Actually, I'm salried with a small bonus system so it really isn't a consideration. (Very small... like a trip to mcd's... )

I know of two other advisors who could offer two appropriate products without prejudice even if one paid .25% and the other paid 5%.75% of brokers know what they are selling before the client walks in, and it is based on the home office requirements, commission schedule, quotas, etc.

Not us. Again, small commission, salry. Do the right thing for the customer. Actually, I have very few just life clients. Most have auto, ho, etc. So I have to see these clients regularly. I'm not going to take advantage of them.