Opinions requested on life insurance

[Coronita]

[quote=desmond]Here is different approach. I bought two whole life, universal policies when I got married and started having kids (2). At the time 20+ years ago that was what was being pushed. One policy ($500K) was $2000 a year, the other $50 ($100k) a month. They pushed these as investment accounts and had minimum total contributions that you had to make. I contributed for 7 years ($14,000) into the $500k policy, then stopped contributing and paid for over 20 years into the 100k policy and have stopped paying on this one. Now both policies have $0 “surrender charges” and have accumulated enough “cash value” to carry them another 30+ years without any more contributions. If I die the “cash value” is deducted from my death benefit so there is no value in keeping it high before I kick the bucket. I plan to make any needed contributions later to keep them going to get the death benefit for my wife or kids. I would say this is a “rent vs. own” approach. I am not saying this is better approach, but it seems to have worked out for me. If you go this route make sure your policy pays you the “death benefit” plus the “cash value”.[/quote]

Desmond, probably one factor that also affects the outcome here is you’re timing was good because at the time when you purchased your whole life policy, investments probably were pre-bubblish (1990ish)…If on the other hand someone bought whole life or a VAR during the bubble, they would have seen considerable hit. So, I think to some extent with the insurance+investment instruments, part of it depends on timing. It probably also works out better for you because for folks with lots of assets, there are tax savings when it comes to inheritance tax. (I forget now, but this was explained to me from an estate attorney).

[BWell_SoCal]

I’ve been told by my insurance guy that it is much more important to buy a high-quality, individual disability income insurance policy before even thinking about life insurance. Even if you are covered through your employer for short-term and long-term disability, it usually only covers at most 60% of yearly salary (does not cover profit-sharing, overtime, or bonuses). The payouts are also taxed due to the premiums being paid by employer.

It is much more likely that an individual will be disabled long-term, at some point in their life, than dying. But, due to this reason, it is much harder to qualify for a good disability insurance policy.

[BWell_SoCal]

I’ve been told by my insurance guy that it is much more important to buy a high-quality, individual disability income insurance policy before even thinking about life insurance. Even if you are covered through your employer for short-term and long-term disability, it usually only covers at most 60% of yearly salary (does not cover profit-sharing, overtime, or bonuses). The payouts are also taxed due to the premiums being paid by employer.

It is much more likely that an individual will be disabled long-term, at some point in their life, than dying. But, due to this reason, it is much harder to qualify for a good disability insurance policy.

[BWell_SoCal]

I’ve been told by my insurance guy that it is much more important to buy a high-quality, individual disability income insurance policy before even thinking about life insurance. Even if you are covered through your employer for short-term and long-term disability, it usually only covers at most 60% of yearly salary (does not cover profit-sharing, overtime, or bonuses). The payouts are also taxed due to the premiums being paid by employer.

It is much more likely that an individual will be disabled long-term, at some point in their life, than dying. But, due to this reason, it is much harder to qualify for a good disability insurance policy.

[BWell_SoCal]

I’ve been told by my insurance guy that it is much more important to buy a high-quality, individual disability income insurance policy before even thinking about life insurance. Even if you are covered through your employer for short-term and long-term disability, it usually only covers at most 60% of yearly salary (does not cover profit-sharing, overtime, or bonuses). The payouts are also taxed due to the premiums being paid by employer.

It is much more likely that an individual will be disabled long-term, at some point in their life, than dying. But, due to this reason, it is much harder to qualify for a good disability insurance policy.

[BWell_SoCal]

I’ve been told by my insurance guy that it is much more important to buy a high-quality, individual disability income insurance policy before even thinking about life insurance. Even if you are covered through your employer for short-term and long-term disability, it usually only covers at most 60% of yearly salary (does not cover profit-sharing, overtime, or bonuses). The payouts are also taxed due to the premiums being paid by employer.

It is much more likely that an individual will be disabled long-term, at some point in their life, than dying. But, due to this reason, it is much harder to qualify for a good disability insurance policy.

[desmond]

[quote=BWell_SoCal]I’ve been told by my insurance guy that it is much more important to buy a high-quality, individual disability income insurance policy before even thinking about life insurance. Even if you are covered through your employer for short-term and long-term disability, it usually only covers at most 60% of yearly salary (does not cover profit-sharing, overtime, or bonuses). The payouts are also taxed due to the premiums being paid by employer.

It is much more likely that an individual will be disabled long-term, at some point in their life, than dying. But, due to this reason, it is much harder to qualify for a good disability insurance policy.[/quote]
I have also thought that you can “insure” into the poor house.

[desmond]

[quote=BWell_SoCal]I’ve been told by my insurance guy that it is much more important to buy a high-quality, individual disability income insurance policy before even thinking about life insurance. Even if you are covered through your employer for short-term and long-term disability, it usually only covers at most 60% of yearly salary (does not cover profit-sharing, overtime, or bonuses). The payouts are also taxed due to the premiums being paid by employer.

It is much more likely that an individual will be disabled long-term, at some point in their life, than dying. But, due to this reason, it is much harder to qualify for a good disability insurance policy.[/quote]
I have also thought that you can “insure” into the poor house.

[desmond]

[quote=BWell_SoCal]I’ve been told by my insurance guy that it is much more important to buy a high-quality, individual disability income insurance policy before even thinking about life insurance. Even if you are covered through your employer for short-term and long-term disability, it usually only covers at most 60% of yearly salary (does not cover profit-sharing, overtime, or bonuses). The payouts are also taxed due to the premiums being paid by employer.

It is much more likely that an individual will be disabled long-term, at some point in their life, than dying. But, due to this reason, it is much harder to qualify for a good disability insurance policy.[/quote]
I have also thought that you can “insure” into the poor house.

[desmond]

[quote=BWell_SoCal]I’ve been told by my insurance guy that it is much more important to buy a high-quality, individual disability income insurance policy before even thinking about life insurance. Even if you are covered through your employer for short-term and long-term disability, it usually only covers at most 60% of yearly salary (does not cover profit-sharing, overtime, or bonuses). The payouts are also taxed due to the premiums being paid by employer.

It is much more likely that an individual will be disabled long-term, at some point in their life, than dying. But, due to this reason, it is much harder to qualify for a good disability insurance policy.[/quote]
I have also thought that you can “insure” into the poor house.

[desmond]

[quote=BWell_SoCal]I’ve been told by my insurance guy that it is much more important to buy a high-quality, individual disability income insurance policy before even thinking about life insurance. Even if you are covered through your employer for short-term and long-term disability, it usually only covers at most 60% of yearly salary (does not cover profit-sharing, overtime, or bonuses). The payouts are also taxed due to the premiums being paid by employer.

It is much more likely that an individual will be disabled long-term, at some point in their life, than dying. But, due to this reason, it is much harder to qualify for a good disability insurance policy.[/quote]
I have also thought that you can “insure” into the poor house.

[UCGal]

I’m also comfortable being on the low side of the insurance range.

Both my husband and I work. Our only debt is our house. Our retirement funds and 529’s are pretty well funded. Our thought was that if the survivor didn’t have the mortgage to worry about – they could afford to maintain the household (including daycare/after school care expenses) on a single income. We took our mortgage debt (which is our total debt) and added $100k.

So called experts and calculators have told me I needed insurance to pay off my house – when I was single with no kids. I laughed and said that my parents could sell it and my cats would have to fend for themselves. Why pay off my house if I was dead and no longer needed to live in it.

We’ll drop insurance when the house is paid for.

In the meantime – the money we’re saving by having smaller policies is going into the kids college funds.

Congrats on the pregnancy/growing family! Parenthood is pretty darn fulfilling.

[UCGal]

I’m also comfortable being on the low side of the insurance range.

Both my husband and I work. Our only debt is our house. Our retirement funds and 529’s are pretty well funded. Our thought was that if the survivor didn’t have the mortgage to worry about – they could afford to maintain the household (including daycare/after school care expenses) on a single income. We took our mortgage debt (which is our total debt) and added $100k.

So called experts and calculators have told me I needed insurance to pay off my house – when I was single with no kids. I laughed and said that my parents could sell it and my cats would have to fend for themselves. Why pay off my house if I was dead and no longer needed to live in it.

We’ll drop insurance when the house is paid for.

In the meantime – the money we’re saving by having smaller policies is going into the kids college funds.

Congrats on the pregnancy/growing family! Parenthood is pretty darn fulfilling.

[UCGal]

I’m also comfortable being on the low side of the insurance range.

Both my husband and I work. Our only debt is our house. Our retirement funds and 529’s are pretty well funded. Our thought was that if the survivor didn’t have the mortgage to worry about – they could afford to maintain the household (including daycare/after school care expenses) on a single income. We took our mortgage debt (which is our total debt) and added $100k.

So called experts and calculators have told me I needed insurance to pay off my house – when I was single with no kids. I laughed and said that my parents could sell it and my cats would have to fend for themselves. Why pay off my house if I was dead and no longer needed to live in it.

We’ll drop insurance when the house is paid for.

In the meantime – the money we’re saving by having smaller policies is going into the kids college funds.

Congrats on the pregnancy/growing family! Parenthood is pretty darn fulfilling.

[UCGal]

I’m also comfortable being on the low side of the insurance range.

Both my husband and I work. Our only debt is our house. Our retirement funds and 529’s are pretty well funded. Our thought was that if the survivor didn’t have the mortgage to worry about – they could afford to maintain the household (including daycare/after school care expenses) on a single income. We took our mortgage debt (which is our total debt) and added $100k.

So called experts and calculators have told me I needed insurance to pay off my house – when I was single with no kids. I laughed and said that my parents could sell it and my cats would have to fend for themselves. Why pay off my house if I was dead and no longer needed to live in it.

We’ll drop insurance when the house is paid for.

In the meantime – the money we’re saving by having smaller policies is going into the kids college funds.

Congrats on the pregnancy/growing family! Parenthood is pretty darn fulfilling.

[Author]

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