Life Insurance?

nicole0066 · March 2011

I posted this on another board too, but would love local advice. Do you currently have a life insurance policy? DH has one, but I currently do not. I really need to start looking into this soon!

Is your policy through work or another carrier? Are there specifics or costs to your policy that would be affected if you had a child before getting life insurance? For ex. I heard that some carriers don't care what the reason for hospital stay, weight gain, etc (even for pg) and that can up the cost of coverage. And, if you don't mind sharing, about how much do you pay per month for what coverage?

Thanks!

pattymctatty · March 2011

So I don't currently have life insurance, but DH does.

When we have kids, then I'll get it - for right now (this sounds horrible but...) I don't need it. I don't make enough money for my salary to make a difference if I die.

When I did have life insurance, it was 3 times my salary plus I had DH covered at the same amount as me plus the amount it would cost to cover his student loans if he died.

DH is currently covered at his salary amount. If he died, that would pay the bills for a year and give me enough time to sell the house and pay off his student loans.

ETA: coverage is through work, plus I had an extra coverage thingy with State Farm. That was just paid once a year - kind of like renter's insurance.

Janell's Nest · March 2011

DH and I both have life insurance policies though State Farm. He made more then me at the time we took out the policies so if something happened to him we'd be able to put some money away for DS to go to college and I'd be able to live for 3 years. Mine was based off of me not working at the time but he'd still be able to live off of my life insurance for 3 years as well.

We didn't take into consideration my student loans though because they're all in my name and if something happened to me then they'd die with me so it wouldn't be an issue to him. The only thing we have joint is our car so he'd only be on the hook for that.

mbgreenwalt · March 2011

DH and I have a term policy with State Farm. It isn't much, but it would cover funeral expenses and pay off a majority of the house. We pay a set amount for 3 years and then we can transition to another policy or renew for another 3 years (price will increase every 3 years).

It did not require a physical beforehand. We just had to do an oral swab to verify we weren't smokers. My policy has a underwriter to insure my future children (for example if my second child is born with a medical condition he/she can still be insured without any issues or a pre-exisiting condition).

We have a small policy for DD. Just enough to cover funeral expenses if the unexpected happened. I know a lot of people think it is weird, but after my neice died at 10 months I can't see not having it.

ETA: For my portion of the policy I pay about $30/month.

GermanGirl2007 · March 2011

We just got life insurance policies through DH's work. I truthfully am not even sure how much we pay a month for them....I still need to learn all of these details, but I know it isn't an insane amount.

DH's policy is more than 5 times his annual salary. He took the policy out based on the fact that we are planning to have children in the near future, and he wants to be able to take care of his family. We do have a mortgage and student loans, and this would cover all of it, and probably leave enough money for 3 years of living expense.

My policy is significantly lower. Mostly because I am barely working right now, and we will be living on DH's salary. My policy is enough to cover final expenses and my student loans.

Sue/Mike · March 2011

My work has a non-contract policy and if I die, the H gets a year's worth my salary up to X amount. Which wouldn't be much, since I only work PT being in school.

H has full coverage, enough so if he dies, funeral, house and his debts are more than paid and I would have some extra. I have no idea how much he pays, but it comes through whoever his employer goes through.

When we have kids, I would ideally have a FT (or more than my 0.3 as I do now) job. Then, I would definitely look into getting life, but right now we could use the money elsewhere.

thedutchgirl · March 2011

I think you are just asking about term right? That's the way to go. We both have pretty hefty policies plus extra through work. Mine is through a broker friend of the family and is with Jackson Mutual. I pay about $300 a year for $500000 in coverage. And I have an additional up to $600000 through work for free depending on how I die and if I'm traveling for work at the time. DH's policy is through work but-and this is important-it is portable. So if he got sick and had to leave his job he'd still have it as long as we paid the premium. Many many policies are not portable, which makes them useless is the event of an extended illness because the policy is gone when the money is gone. Selectquote is a website frequently recommended on Money Matters because you can shop multiple companies at once. The lower the insurance amount the less they take into account health history but some people are uninsurable based on medical history.

jennyk213 · March 2011

We both have policies through an independent carrier and DH has one through his job. He also has a small one that his parents bought for him when he was younger but I don't know anything about it.

We pay $110 a month for both of our policies which are $500k each. ETA: I checked and this is whole life insurance, not term. We kept going back and forth but finally settled on whole because it fit into our retirement planning better. His policy through work is I think 2x his annual salary and his employer covers the premiums.

luvinlifeMN · March 2011

My husband and I have no children. However, we have a mortgage that would need to be covered if one of us died as one person on their own would not have any money for extra non-essential stuff if we lost one income through death. We both have 30-year term policies for $300,000. This would cover all of our debt obligations so the survivor would easily be able to continue to live the lifestyle we are currently accustomed to. I just paid my bill, so mine is $220/year and my husband's is $245/year. We got our insurance through an independent broker. We did have to do in-home medical exams (height/weight, pulse, blood pressure, urine sample and blood sample). We took these policies out 3 years ago when we bought our house.

Prior to trying to have children we will get another policy. We will likely do 20 year policies with $300-500k of coverage. We would keep the other policy as well. This policy will cover us through the main child-raising years so the survivor would have enough to either cut back at work or continue paying for child-care, and have enough to cover some college expenses.

We did not take any extra coverage through work that we would have to pay for because if we lost our job, the coverage would no longer be in place and if we were to have health issues 10 years from now and then lost a job, we would possibly be uninsurable. We are healthy now, so we got policies now since we felt a need. Also, if you run price per $1000 of coverage, independent term insurance is often less expensive than work coverage (although not generally the case if you are unhealthy). Good luck!

so_not_boring · March 2011

Just a quick thought for anybody who might be thinking that they don't make enough, or that their income wouldn't be missed by anybody if they died... dying is EXPENSIVE. If you collapse and die, somebody is going to be stuck with the bill for the ambulance, the emergency room, any other additional medical care... if you meet your end via a long-term illness, there will be expenses associated with that as well. Even if your health insurance covered all of that, there are the funeral expenses, which you can expect to be at least $10K for very, very bare-bones services (think: rented casket...) For the sake of your loved ones, please consider having a policy for at least $20k. Sorry for being morbid...

elize964 · March 2011

In my experience it is cheaper getting quotes online. Some of the bigger companies offer discounts when ordering online, because it is less work for them. But to be safe you could compare quotes online, pick the best offer and try a local agency to see if they can match it or do better.

I recommend this site for online comparing: http://www.quotes-center.com/life-insurance-premium-calculator

mefindlay · March 2011

I have one small (no cost to me) through my school district, and 2 additional policies through NEA. Big D is covered on one of my NEA policies. We pay about $200/year for that one (each insured for 50K) and I pay about $26/year for another single policy that I think is 15K.

I am not very educated on life insurance, but I figured we'd better get some, so that's why I got the other policies. I don't know what the different types are or anything. Hopefully if anything happens we'll be covered.

I should note that I'm a teacher, so I've got different avenues to get insurance. NEA = National Education Association

mantzfam · March 2011

DH works in the life insurance business (he is not an agent) but we do not have kids and we both have pretty substantial coverage through his work as well as my own since he is a huge believer in it. As it was stated a few times above it is not only to cover the loss of salary but also funeral arrangements. It is a good idea to get it before you have kids. Life insurance can also be used in so many more ways than just as a death benefit, it can also be used as a vehicle for retirement savings. There is so much more to it than I understand, DH has tried to explain, but I would talk to your financial advisor.

maria120 · March 2011

I am insured for 200k and it costs $9/month. I actually had my physical done (at our home) while pregnant and the weight gain, etc didn't matter. My blood pressure was even higher than normal and that didn't make a difference either.

H is insured for 600k and it costs $31/month. We got both policies through a financial advisor/broker. We each have different carriers, but it was less expensive that way.

akstanl · March 2011

I actually have my physical on Tuesday. They are coming to my house. I went through www.zanderins.com. They get quotes from many companies. I just received my application paperwork in the mail today to have ready for them to take on Tuesday.

I am getting 25yr term life insurance worth 10x the amount of my annual income. In the event I die my husband could invest the money and supplement my lost income with the interest earnings. It will be a very worthwhile $264 or so a year cost.

hecklet · March 2011

Hubby and I both carry life insurance through our work (which obviously is a term plan)

Hubby has a small whole life plan that his parents took out when he was younger

We had term life policies through state farm for a couple of years which covered i believe 250,000 and that was somewhere around 20 dollars/month per person so 40 per month total.

We decided this year that instead of putting money towards a term plan we would invest our money in a whole life insurance plan. It's a great way to save for your retirement and although the rate of return isn't going to be as great as maybe doing a money market account or stocks it is a very sound way to invest your money and get a good percentage of earned interest. We look at it like the whole renting vs purchasing a home type deal. We got our plans through Northwestern Mutual and pay around 265/month right now.

nicole0066 · March 2011

Thanks for all the advice. I'm a teacher, but am only employed full time. With the way teaching is I'm probably better off finding coverage outside of work since I never know where I will be. I doubt I need much since my income is so small, but a little would be nice. Does anyone have an advisor or company they recommend that you can PM me?

Oh, and what are the major difference between term and whole life? Sorry if that's a really stupid question. I just see a lot of people choosing term policies.

Steph0871 · March 2011

Ohh. I'm glad this topic came up; H and I were just talking about life insurance. We both have 1x our salaries covered by our employers. I took out an additional $25k on H through my work (it's like 10 cents/month or something.) We weren't too concerned since we're young and have no long-term debt yet. However, we're looking at buying a house soon and having kids in a few years, so we figured we should do the adult thing and look at life insurance too

I'm off to Google, but does anyone have some summaries/reasoning behind term vs. whole? I'll be honest; I don't really know anything about life insurance... yet.

thedutchgirl · March 2011

You can probably get more info on the Money Matters board but they generally recommend term much more heavily then whole. You get a lot more insurance for less but of course you don't get your money back. Nevertheless they recommend term because there are much better investment vehicles than whole life. Also whole life is commission based, which is why some advisors try to push it so much. The theory is that you need 20 or 30 years and after that you are essentially self-insured by other investments. Whole is just not a very effective investment vehicle compared to others out there, and it is very expensive.

thedutchgirl · March 2011

Here is a recent MM post on it. http://community.thenest.com/cs/ks/forums/thread/48866754.aspx

akstanl · March 2011

thedutchgirl:
You can probably get more info on the Money Matters board but they generally recommend term much more heavily then whole. You get a lot more insurance for less but of course you don't get your money back. Nevertheless they recommend term because there are much better investment vehicles than whole life. Also whole life is commission based, which is why some advisors try to push it so much. The theory is that you need 20 or 30 years and after that you are essentially self-insured by other investments. Whole is just not a very effective investment vehicle compared to others out there, and it is very expensive.

This precisely.

If you invest the difference you're paying for whole ins vs. term ins in a mutual fund or other good investment vehicle you come out WAY ahead of where you come out using whole insurance to invest. Also, usually when you die the insurance company keeps the cash value of the policy and only pays the face value.

akstanl · March 2011

hecklet:
Hubby and I both carry life insurance through our work (which obviously is a term plan)
Hubby has a small whole life plan that his parents took out when he was younger
We had term life policies through state farm for a couple of years which covered i believe 250,000 and that was somewhere around 20 dollars/month per person so 40 per month total.
We decided this year that instead of putting money towards a term plan we would invest our money in a whole life insurance plan. It's a great way to save for your retirement and although the rate of return isn't going to be as great as maybe doing a money market account or stocks it is a very sound way to invest your money and get a good percentage of earned interest. We look at it like the whole renting vs purchasing a home type deal. We got our plans through Northwestern Mutual and pay around 265/month right now.

Did you run your own calculator on those #'s? If you invested the $225 difference each month for the next 30 years I could almost guarantee you would have a lot more saved up in your own investments vs using an insurance policy to invest your money in, and also probably a lot more coverage for cheaper than what you're paying.

hecklet · March 2011

akstanl:
hecklet:
Hubby and I both carry life insurance through our work (which obviously is a term plan)
Hubby has a small whole life plan that his parents took out when he was younger
We had term life policies through state farm for a couple of years which covered i believe 250,000 and that was somewhere around 20 dollars/month per person so 40 per month total.
We decided this year that instead of putting money towards a term plan we would invest our money in a whole life insurance plan. It's a great way to save for your retirement and although the rate of return isn't going to be as great as maybe doing a money market account or stocks it is a very sound way to invest your money and get a good percentage of earned interest. We look at it like the whole renting vs purchasing a home type deal. We got our plans through Northwestern Mutual and pay around 265/month right now.
Did you run your own calculator on those #'s? If you invested the $225 difference each month for the next 30 years I could almost guarantee you would have a lot more saved up in your own investments vs using an insurance policy to invest your money in, and also probably a lot more coverage for cheaper than what you're paying.

We dont feel comfortable investing our money someplace where it could be potentially lost. We went down different avenues and this made more sense for our lifestyle. I appreciate your input but this is what is right for us.

JosiePosy · March 2011

DH and I both have term policies (enough to cover funeral expenses and the house), and the girls were given a 10k rider on my policy.

ManciniD · March 2011

Nicole, it might be a good idea for you to look at life insurance plans if you and your DH share financial responsibilities or you have people (old parents, for example) who depend on your income.

Even if your work offers group insurance, I would suggest you still go ahead and buy a life insurance policy privately for the simple reason that your plan from work will cancel out if you quit or lose your job.

You are right in assuming that conditions like obesity or post partum depression, which could result from pregnancy, will result in higher premiums. That?s why it?s best to buy your life insurance plan before you conceive.

Other factors that affect your premium include age, tobacco use, family history, driving record, hazardous hobbies, etc.

Denise

Life Insurance?

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