I went with metlife. They are more expensive, but were AAA+…No complaint…yet…Because, well I’m not dead…yet :)… So I guess you really won’t know 🙂
I have some advice from you. ‘
*If you are young and healthy, I would consider getting a $1million-$2million term life, outside of an employer… The policy won’t be that expensive for you now…And if you wait until you think you need more, it won’t be an option for you (or will be very very expensive). It will give your family piece of mind. $1million-2million will not go very far if it has to replace your income for 20+years.
*I would do this sooner versus later. Sooner = cheaper. You don’t know what health issue will be lurking a few years from now. I learned that the hard way. When I was 30, I thought about getting term life…At the time I figured getting 1/2 million was sufficient because I was cheap…I figure I could bump up the policy later, since what could go wrong with my health? 3 years later everything did go wrong…And if I wanted to get another policy, good luck…. So again, don’t skimp on life insurance when it’s cheap. Besides, if you hit the lotto jackpot, or you end up working of the next Google, or you IPO your company, you can always terminate the policy early.
*You can skip the supplemental life offered by your employer. Although the employer’s supplemental is probably cheaper, it’s most likely not portable with the same cost if you no longer work there (IE you get laid off). If you get laid off say 5-10 years from now, and you wanted to carryover your supplemental insurance, your cost to do that will be much higher…A reason why you might want to do the supplemental insurance with your employer is if you have no choice and your health sucks…Because the policy from your employer up to 3x typically doesn’t require health exam, does not discriminate against health issues…
*For most people, it’s probably suffice to just get term life…maybe 20 years (that should be when your kids are more or less self-sufficient and when most of your large debt is already paid off..hopefully)…
There are other products that insurance co’s love to try to sell you: “whole life” and “variable annuity” which mixes life policy with an investment vehicle. They are very complicated, and are heavily fee ridden… Generally, most common people would be better off having term life and having investments seperate and not tied to insurance…Where these insurance+investment instruments would make more sense is if you are very wealthy and need additional tax shelters, because some of these mixed products have very special estate tax considerations… You probably don’t need to worry about it unless you have significant assets and those+insurance policy payout exceeds estate tax exemptions significantly…Which brings me to the next suggestion…
*If you are already thinking by life insurance, you should probably also think about a living trust as well. The last thing you want your family to have to go through is probate…Get one setup…Don’t do it yourself unless you know what you’re doing. Pay the $1000-2000 to an estate lawyer…Also, depending on what they end up doing with the estate tax exemption next year, you might need to setup an A-B (bypass trust)….If estate tax rules expire, they revert to a $1million exemption. For a married couple, you can setup an A-B bypass trust that will double the exemption (IF you manage your accounts a certain way)…So that will be $2million exemption. That’s probably the easiest thing to do…More complicated tax shelters can be setup, but talk to an estate planner/estate attorney for that…
*Your spouse should also have a equal life insurance policy. If she passes away, you’ll need to hire people to take care of your kids and/or you’ll need to work less, so it will hit your income. And it won’t cost you that much more… Generally, life insurance for women is cheaper then men, health being equal, policy being equal…. I don’t know why, but that’s just how it is.
