Life Insurance?
by livinlife
My husband, 32 and I, 30 are looking into life insurance. Can anyone tell me which company or websites I can use to get information. There are so many out there... wouldnt know where to start. Who do you personally use? Is there a medical exam involved? What type of premiums are you paying? Is it fixed or does it go up every few years? We live in Florida also. Any help would be appriciated.
Answer(s):
Answer by roxann s
Look for term insurance not whole life - a much better value for your money - you want death protection not investment out of insurance - invest in investment programs (401 - Roth IRA ETC) not life insurance - only purchase term insurance to cover the loss of an income to protect your family
Answer by aaron p
I would check around in a few different places. A little friendly competition will give you a better result. Expect to give your actual dates of birth, general health questions, and family history to get quotes. As you mentioned, there are a number of different options out there. If you know how you would generally like your life coverage to behave, I can find something to match.
Answer by saberhilt
There are two types of Insurance; Permanent and Term.
Permanent Polcies remain at the same monthly cost for the rest of your life.
Term policies remain fixed for a set number of years. After the set number of years the policy either terminates or can be rewriten for the same length of time, but you'll now be evaluated at your new age, not the age you are now.
Permanent Policies are similiar to buying a home. The policy builds Cash value and could potential increase your death benefit. You can take a loan out against your own cash value or should you cancel the policy at a later time, you will get the cash value paid out to you at that time.
Term policies are like renting. After the set term (5, 10, 20, 30 years) each party walks away. You don't get any money back, but you'll have paid less over the course of the 10 years.
If you were to get a 20 yr term policy now, at age 50 your policy would end (unless you had already died). You could then get another policy, but they'd rate you as a 50 year old, not a 30 year old. and at each of these 20 year renewals, you'll have to go through medical screening again.
If you were to get Permanent Policy now, you'll have a higher premium now, but at age 50 you'll still be paying the same amount as you are now. At age 70 you'll still be paying the same amount as you are now. At age 90? Same amount.
To figure out how much coverage you'll need, here's a handy tool: L.I.F.E.
L: Liabilities: mortgage, car note, student loans, credit cards
I: Income replacement: 5 to 10 times your annual income (though in your case, each of you have another 30-35 years working life in you, you might want more)
F: Final Expenses: Typically $ 10-25 k
E: Education: Education for your spouse, should they need to change careers to maintain their standard of living after you pass and/or college tuition for any childre you may leave behind.
So, with a $ 200k mortgage, $ 25k car loan, and $ 15k Student Loan, your "L" is $ 240k.
If you're making $ 50k annually, you'll need $ 500k for "I."
Let's call "F" at $ 15k
"E"? Well, 2 kids at $ 20k per year for 4 years each translate to $ 160k.
This mean you'll need $ 915,000 worth of Life Insurance.
I have my Life with State Farm. It's also giving me a discount on my car insurance.
Answer by Mark S
Check the related link below for additional info regarding whole life policies.
Insurance, when it started, was meant to be for a period of time- TERM. After a while companies changed to wanting to make as much as possible while paying out as little as possible. They created whole life and all its variations. People say term is like renting.
NOPE!!! It is about understanding that the money in a whole life policy is not yours but the companies. There are five funny rules about whole life: 1) In first 2 years there is NO cash value. 2) When it does start to accrue, you get only 1-4%. 3) You can borrow, but you pay the Company a fee of 6-8% to take your money out. 4) They can and will make you wait to get your money. 5) Your beneficiaries will get one or the other. Meaning, they will receive face amount or cash value- their choice; almost always it is face amount. What about cash value? The company keeps it!! Unless you pay more in premiums for your people to receive it.
Life insurance is not the appropriate term I like using. It is more appropriately income protection insurance. If anybody relies on you for a paycheck you are OBLIGATED to get and have income protection insurance.
Buy term and invest the difference. Term is for a period of time. That time period is to be used to accumulate enough money to become self insured. Once you are self insured, you no longer need any or as much insurance as you did. This is called the theory of decreasing responsibility. When young, you need as much as possible because you have kids, debt mortgage, education and you have little in the way of available assets. But, later you had better have saved money for retirement. Now you need little to none because retirement has been taken care of, kids are grown- out of house, education taken care of, debt and mortgage is paid for.
For those of us your age, term is the only way to go. All the others are smoke and mirrors. Sometimes the agent doesn't even know about thgeir policies and how they work.If they do and don't tell you- Shame on them!!! By using term, you get max coverage for as little as possible. Make sure it is level term- premiums do not go up, make sure that the entire family is covered on one policy- multiple policies mean multiple policy fees, and increased commission, make sure that children are covered under one payment- both present kids and future ones, and make sure that the agent completes a comprehensive financial analysis for your family.
I hope this has helped.
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