ot. how much is enough life insurance…

[scaredyclassic]

Another friend died last week … ridiculous.

So I applied for more life insurance.

How much really is enough.
400k mortgage bal. 2.5 kids left to put thru college. Wife works. Not much other debt.

Feeling mortal I applied for 1 million term 20 year. Too much?

Would like them to be OK without me.

[bearishgurl]

scaredy, my advice is to get a guaranteed term policy underwritten by a reputable carrier while the getting is good. You don’t want to apply AFTER some minor problem gets reported on your medical record kept by the Big Insurance Computer in the Sky. Such as, slightly elevated blood pressure or cholesterol, heart palpitations appearing on your EKG or a small polyp removed in your colonoscopy.

For example, if any of the above conditions are found in your medical record or physical exam performed by the contractor for the carrier you applied to, the term LI premium offered to you will be much higher to start.

Also, try to get a premium which is “fixed” between ages 50 to 70 instead of signing up for a declining term policy or rate hikes every 5 or 10 years. Your initial premium will be a little higher but, overall, I think its a better deal IF you want coverage to age 70.

[CA renter]

We got additional policies last year and got a term life policy for $1MM for DH and $300K for me, but the term is only 10 years. This is in addition to our other $500K and $300K 20-year policies that we got over 10 years ago. All of these policies will expire around the same time, but we should be able to get all of the kids through college by then. We also have other assets that are dedicated to college costs, retirement, etc.

I don’t think this is too much for you, scaredy, but I tend to over-insure. Best to listen to others on this.

Sorry about your friend’s passing. That totally sucks. Hope his/her family is dealing with it as well as possible.

[flyer]

As CAr mentioned, we also tend to over-insure, but, as long as you and the family are comfortable with the number–that’s what really matters. BG’s comments about insuring before you encounter any medical issues are also spot on.

My sympathies concerning your friend. We’ve lost two friends in the last couple of years as well.

Even though we all know nothing in this world lasts forever, it is still shocking when these things happen, and definitely reminds us how short life really is.

[The-Shoveler]

Don’t want to be worth more dead than alive but I have some.

[scaredyclassic]

its very difficult for me to truly believe that i a m actua;;y in reality going to die. all of the past evidence tends to show that i will live, since i have been alive continuously all the time, at least all of the time that i am conscious of. based on past performance, i dont see how I can die. ive heard of death happenign to others, but this could just be a scam to get me to buy life insurance.

plus i feel pretty good. but then again, everyone feels good until they dont.

2ka year sounds high to me for 1 million, but what a screaming deal if i suddenly died! incredible return. that would probably be my last sad thought on earth. kaching! and then…darkness…

more likely i see the term expiring, and then dying days afterward.

[svelte]

That’s somewhere around what we have on me scaredy, so I think you did it about right.

Mistake we made is not getting a larger policy on her…as it stands now, I would have to change my lifestyle if she passed away.

[Coronita]

Get as much term insurance as you can while you are healthy.

[FlyerInHi]

Scaredy, you will live until at least 80.

When does the term expire?

[poorgradstudent]

I’m going to play Devil’s Advocate here.

Your life insurance should not be expected to put your kids through college. That’s what student loans are for.

It’s nice if it can pay off your mortgage, but if your spouse works, realistically you only have to have your life insurance cover “your share” of the mortgage and bills. But if you’re gone and your kids are moving out of the house soon, your spouse may not want to stay in that house forever. A lot of folks eventually downsize when they become empty nesters.

Life insurance is like gambling at a casino tilted heavily in the house’s favor. They’ll always make sure the math for your odds of death vs the premiums you pay are in their favor, and then collect administrative fees on top of that.

Funeral expenses and 1-2 years of income is probably “enough” life insurance.

[Coronita]

[quote=poorgradstudent]I’m going to play Devil’s Advocate here.

Your life insurance should not be expected to put your kids through college. That’s what student loans are for.

It’s nice if it can pay off your mortgage, but if your spouse works, realistically you only have to have your life insurance cover “your share” of the mortgage and bills. But if you’re gone and your kids are moving out of the house soon, your spouse may not want to stay in that house forever. A lot of folks eventually downsize when they become empty nesters.

Life insurance is like gambling at a casino tilted heavily in the house’s favor. They’ll always make sure the math for your odds of death vs the premiums you pay are in their favor, and then collect administrative fees on top of that.

Funeral expenses and 1-2 years of income is probably “enough” life insurance.[/quote]

You can always cancel the term life insurance if you no longer need it.

For example, let’s say a person gets a $1million 20 year term life because that person has a $300k mortgage, needs to put 2 kids through college etc.
10 years into the term, let’s say the person has a financial windfall (investments are good, kid doesn’t go to an expensive college, home is paid off), and there’s a sizeable nest egg. Person has the option on whether or not to continue the policy or just cancel it (probably around $800-1000/year for a male in the 40ies in relatively good health)

If one really wants to save on cost, you can get your half of that term life yourself, and half of the term life from your employer if you are w2. They employer generally ensures 2x-3x your salary, and then there’s an option to buy optional term life at a group rate without needed a doctor exam (usually up to an additional $250-300k). The only drawback is if you leave the firm, that supplemental life most likely won’t be portable. But it’s really cheap.

[scaredyclassic]

[quote=poorgradstudent]I’m going to play Devil’s Advocate here.

Your life insurance should not be expected to put your kids through college. That’s what student loans are for.

It’s nice if it can pay off your mortgage, but if your spouse works, realistically you only have to have your life insurance cover “your share” of the mortgage and bills. But if you’re gone and your kids are moving out of the house soon, your spouse may not want to stay in that house forever. A lot of folks eventually downsize when they become empty nesters.

Life insurance is like gambling at a casino tilted heavily in the house’s favor. They’ll always make sure the math for your odds of death vs the premiums you pay are in their favor, and then collect administrative fees on top of that.

Funeral expenses and 1-2 years of income is probably “enough” life insurance.[/quote]

yeah. thats where i was. thats why i only had 300k.

but i want them to think, pa was a nice guy he left us a bunch of money.

maybe i’ll change my mind again….

[scaredyclassic]

[quote=FlyerInHi]Scaredy, you will live until at least 80.

When does the term expire?[/quote]

72. right before i die.

[La Jolla Renter]

I need a 1M term policy and turning 50 soon. Does anyone know if it true that prescription controlled blood pressure is not a hit on the premium? That’s what I have heard, but haven’t checked it. Any specific companies???

Was ok with self insured until the great recession but my income and assets are still down 50%. Plus had a kid in my late 40s.

FYI, fortunately and unfortunately my dads policy put me through the second half of college. I remember when he converted to term when I was about a sophomore in high school. AL Williams was the company.

[ucodegen]

[quote=flu]
You can always cancel the term life insurance if you no longer need it.
[/quote]
This is what the insurance companies rely on. Sum up the payments with an estimated alternate return and it is no where near what the coverage is(except when the coverage goes over the age boundary of about 73.).

Insurance should only handle liabilities that could not be covered on a death (mortgage would be a good one since the wife would now have to handle raising kids on one income instead of a shared income), but it does not substitute for an IRA, savings or anything like that. Remember, it only pays out on your death.. and in the mean time, you are paying until you get tired of it.

[Author]

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