Buying Life Insurance...

[hatfieldenator]

Experiences? Opinions?

I'm considering buying life insurance because I'm young, healthy and have been offered very cheap rates on a large policy. I'm just curious what other people's take on this subject is. I'm currently married with no children, but would like to start a family in the near future.

 

[Brewenstein]

Two words - TERM LIFE. Anything else is a rip off. You can invest the difference in the cost between term and whole life, and make more yourself than you would via the policy. Term life is dirt cheap. You wouldn't need much now, and it is easy to add more coverage as your life changes (wife, kids, etc.)

 

[blizzard]

I have had it for a long time because it is a job benefit, but if I were single and it wasn't included I wouldn't get it on my own. With a spouse and a house payment I feel like it's worthwhile, but that's just me.

 

[jmendez29]

I read an article a while back about a reporter that got an opportunity to discuss his financial situation with a large group of multi-millionaires. In a frank discussion, he described his investment portfolio and his strategy for it including his insurance and how it all fit together. Thinking he was pretty solid from following years of standardized advice, he got a shock when he was told he didn't have nearly enough insurance (among other things).

I wish I knew where to find the article (I'll look for it when I get a chance) but what I got from it was that if you want your family to have financial protection, get insurance. Investments are for investing and building wealth, not for financially protecting your family. Term life insurance is pretty cheap, and with that as your "financial coverage" it leaves you free to invest aggressively to further protect your family.

Just something to think about...

Edit - Found it. Here it is. http://finance.yahoo.com/banking-bu...financial-advice-gleaned-day-hot-seat-nytimes
Take from it what you will, but it's probably one of the more interesting articles that I've read that doesn't follow the same standardized philosophy that I hear in EVERY other financial article that I've ever read.

 

[Airborneguy]

I'm really up in the air on this. Went through it recently and decided not to do it. I have insurance through work, and will probably stick with that until I retire at 43 and move onto my next job. At this point, I prefer to invest and rely on the work insurance. I was turned off by how much they pushed whole life, which is a straight scam in my opinion.

 

[the_bird]

The problem with only getting insurance only through work is what happens if you get laid off, or if you develop a medical condition between now and when you "retire." We get a 2x salary policy through work, and I bought some supplemental insurance through work, but I also have my own insurance that's independent of them.

Term life is dirt cheap for young, healthy people. Whole life policies and other universal life policies have their place, but they're as much about investments and estate purposes as they are about actual coverage.

Guys like us, with young families and mortgages and future college tuition bills, just need the pure insurance coverage.

Remember, it's not just the direct costs you need to cover, it's not just making sure the family can keep the house and the kids can go to school... if you die, it's also losing your earnings power.

Get a level-term policy with premiums guaranteed for at least twenty years (maybe 30, since kids are still theoretical at this point). I figure I want to have a lot of coverage through the time they're out of school, by which point I hope the mortgage is mostly gone as well.

But really, term insurance, if you buy it while young, non-smoking, and healthy... you can get a half-million of coverage for a couple hundred bucks a year (and that would be very much on the low end of the coverage you'd want to have). Probably a little more for you cops, your occupation is a little more hazardous than mine!

 

[broadbill]

I also think that many people under-buy when it comes to Life Insurance. They (wisely) consider insurance to cover their current outstanding debt obligations (house mortgage likely being the major one), but do not consider extra insurance to cover lost wages.

Its a couple of hundred bucks a year to get enough LI coverage to cover your debts. It only a couple of hundred more a year to cover your debts, your children's education, and ensure that your spouse would not have to work another day if they didn't want. Is it worth the extra money? That is something for everyone to decide for themselves.

If I didn't have kids, I'd have a lot less LI that I have, With kids, you have to factor in how the loss of your wages (over their lifetime) will effect their quality of life, education, etc.

 

[Airborneguy]

I have unlimited sick, so when the agent hit me with disability, I had to explain how I can't lose my job even if I come down with cancer. I plan to get insurance when I retire, but basically I have term life right now, for free. As far as layoffs, there's over 15,000 people under me. I'm safe at this point

I understand the points that everyone makes, and my agent actually is a nice woman who wasn't too pushy, but it makes no sense for me to cut back on my investments now to get insurance to overlap what I already have.

 

[nyer]

I have unlimited sick, so when the agent hit me with disability, I had to explain how I can't lose my job even if I come down with cancer. I plan to get insurance when I retire, but basically I have term life right now, for free. As far as layoffs, there's over 15,000 people under me. I'm safe at this point

I understand the points that everyone makes, and my agent actually is a nice woman who wasn't too pushy, but it makes no sense for me to cut back on my investments now to get insurance to overlap what I already have.

When you retire are you planning on taking your retirement as a single or joint plan? I think I'm going with the single plan and then I will buy life insurance with my wife as the benificiary. My aunt and uncle did alot of research on it before they retired and they found that they got more money by not taking the joint plan and going single with life insurance instead.

 

[Airborneguy]

The options are total rip-offs unless you have health problems at the time of retirement (if so, they are a super-bargain). Anyone you speak to nowadays will say to take the full pension and purchase private insurance.

 

[hatfieldenator]

Thanks for sharing that article link! Its really interesting to read about

 

[bottlebomber]

Im pretty sure AAAs life insurance plan pays you back a portion of what you payed in if you don't die, and that's for term not full. Ill be checking into that soon though as im about to get enrolled.

 

[the_bird]

Im pretty sure AAAs life insurance plan pays you back a portion of what you payed in if you don't die, and that's for term not full. Ill be checking into that soon though as im about to get enrolled.

That's a "return of premium" option, and it's not exclusive to AAA. You pay a lot more for that; again, if you're really looking for coverage, you'll be buying less coverage for the same premium with that option.

 

[bottlebomber]

I guess its smarter to assume that I am going to die then, and go with more coverage for the money. Since after all, that's what your doing when you buy life insurance. They are betting you wont die, and you are betting you will. Strange wager...

 

[nyer]

The options are total rip-offs unless you have health problems at the time of retirement (if so, they are a super-bargain). Anyone you speak to nowadays will say to take the full pension and purchase private insurance.

How much time do you have left? Are you doing 20 and getting out? I have a little over a year left and I can't decide what to do. I always said I wouldn't do a day over 20 but now that it's almost time I'm not so sure anymore. We are considering selling everything and moving south to get away from the insanity in NY.

 

[Airborneguy]

I have 10 years left. My goal is definitely to get out. We always talked about leaving NY, but now I'm leaning towards moving further upstate/Vermont instead. I'm heavy in Def. Comp and ITHP, so I should be able to leave even if I haven't secured a job just yet.

My boss is dealing with the same thing as you. He has 6 months left and wants to leave bad, but is starting to waffle. I guess it's hard to lose that security. I'm sure I'll be in the same boat when my time comes

 

[motobrewer]

cash-value insurance policies do have value, if they fit into your overall investment strategy. especially to offset the future tax burden of a 401k.

i bought a term policy when i started taking my motorcycle to the racetrack, lol. i was 24, non-smoker in good health. $500k is $30/mo for 20 years.

 

[nyer]

I have 10 years left. My goal is definitely to get out. We always talked about leaving NY, but now I'm leaning towards moving further upstate/Vermont instead. I'm heavy in Def. Comp and ITHP, so I should be able to leave even if I haven't secured a job just yet.

My boss is dealing with the same thing as you. He has 6 months left and wants to leave bad, but is starting to waffle. I guess it's hard to lose that security. I'm sure I'll be in the same boat when my time comes

My biggest problem will be health insurance, we don't get it once we retire. It seems like most departments are getting rid of it for retirees. We are heading to Florida in a few months to meet with a friend about buying his business so if that happens I'm out and southbound. On the other hand there is a very good chance that I will get a promotion next year that will include a nice pay raise. If that happens I might have to stick around and do 3 more years.

 

[JohnTheBrewist]

I agree with most of the comments here about term life. I've had a policy since I was 20 (Now 48). The return of premium policy's really aren't worth it, if you take the difference between the ROP policy and regular term life and invest it, you will come out ahead.