Life insurance...options?

[eblend]

Hey guys,

Currently with employer life insurance which is like $342 bucks a year for $100,000 in coverage. Does that seem mostly normal, or too high? Trying to see if I should shop around or not.

[Pacman]

I'm sure there are lots of variables that contribute to premium prices, but that does seem a tad high.

For a reference point, I just bought some life insurance with the following details:

37 year old, non smoking male and I didn't seem to trigger any of the other questions they were asking for risk assessment.

I pay $100/month for $1,000,000 on a 20 year term with TD Meloche Monnex.

[Aleks]

Originally posted by eblend
Hey guys,

Currently with employer life insurance which is like $342 bucks a year for $100,000 in coverage. Does that seem mostly normal, or too high? Trying to see if I should shop around or not.

29/month seem a bit high for only 100k. Does your employer give you 2-3 yrs worth of coverage and this is extra or do you have to pay for it all yourself?

Also depends on what your situation is (single, kids, mortgage etc) 100k may not be nearly enough if you have dependants if that's all you get.

[max_boost]

Options are almost unlimited so sit down and talk to a specialist.

[Zero102]

At 27 I am paying $129/year for a $150k personal 10 year term policy so that sounds high to me :dunno:

[Zewind]

Originally posted by max_boost
Options are almost unlimited so sit down and talk to a specialist. :thumbsup:

[Sugarphreak]

...

[chibwack]

I'm guessing you're talking about term life? I'm no advisor but I'm a big supporter of getting your own permanent policy, most places offer an age 65 perm package. It's more expensive, but the premium never changes and you don't have to pay for life insurance at all during retirement, not to mention you'll have a bit of an emergency source of savings.

Term sounds good for younger people, but my dad's 64 and says one of his biggest financial regrets is going with term, because its so expensive that its almost not even worth having

[skandalouz_08]

You have PM

[Frankie88]

need to look at your sex, age, smoking behaviour and also the product you chose, can't say anything until all info is provided, talk to your advisor!

[Masked Bandit]

Originally posted by chibwack
I'm guessing you're talking about term life? I'm no advisor but I'm a big supporter of getting your own permanent policy, most places offer an age 65 perm package. It's more expensive, but the premium never changes and you don't have to pay for life insurance at all during retirement, not to mention you'll have a bit of an emergency source of savings.

Term sounds good for younger people, but my dad's 64 and says one of his biggest financial regrets is going with term, because its so expensive that its almost not even worth having

I think the idea there is that by the time you hit retirement age you no longer NEED insurance of ANY kind. In theory one should have a fairly large net worth thereby negating the need for any kind of insurance products. Of course that all assumes the person has actually accumulated lots of cash to cover final expenses & such.

[Sugarphreak]

...

[skandalouz_08]

Originally posted by Sugarphreak


Exactly!!!! I have had this exact arguement with my insurance agent (actually every insurance agent I've ever dealt with) every single time I go in. They always give me the big "You will regret it later" speech too.

I can't believe you are an insurance guy, you are way too honest! ;)

I think everyone should be able to make their own decisions but the major question is: Do I want to leave something behind for someone else or not?

Fact is, without life insurance (and assuming you have a sizeable estate) a large portion will be eaten up by taxes once you die however if you have no one to leave it to or really don't care then there is no need to have a permanent insurance policy. It's definitely not for everyone.

[eblend]

Originally posted by Aleks


29/month seem a bit high for only 100k. Does your employer give you 2-3 yrs worth of coverage and this is extra or do you have to pay for it all yourself?

Also depends on what your situation is (single, kids, mortgage etc) 100k may not be nearly enough if you have dependants if that's all you get.

I really don't know much about it. The way our benefits here work is that we get an X amount of credits for all your standard health and dental ect, but things like critical illness, life insurance ect are paid for options and are deducted per month. My policy is with Manulife. Anyways, all I know is that I pay $30ish per month for life insurance for $100,000. If I leave, I stop paying and that's the end of that policy as far as I understand.

What are these "term life" ect things people are speaking off. I heard of people talking about life insurance as an investment as well...

Thanks for the PM...I will need to figure this out long term, but right now, I only have like 3 working days left to decide to keep it or not as our benefits reenrolment ends right when I am in Mexico for a vacation, so have to reenrol before I leave. Once I make a selection I have to stick with it for the next year.

[Sugarphreak]

...

[Xtrema]

Different goals for different folks.

You want it as a "insurance" to guard against untimely death while you are in heavy debt?

OR

You want it as "investment" for future as something to pass down to your kids/relatives?

OR both since you know you'll be in deep debt forever.

[codetrap]

Originally posted by Sugarphreak
^^ My philosophy is your death shouldn't be a lottery ticket for somebody. Sure, insure yourself so you don't leave a burden... but leaving a huge inherritance for people you want to help is usually more damaging than good.

Anybody I know who has relatives with lots of money end up obsessing over it, delaying big life decisions and even planning on the money as a way to move forward later. It is a bit sad to watch and morbid. Not only that, more often than not when the person finally dies the entire faimily gets into a huge squabble about it and faimily relationships are destroyed in the process. Your death becomes nothing more than a feeding frenzy, what a great way to be remembered :rolleyes:

I acknowledge that everybody sees things a little differently, this is just sort of my own $0.02 You know a lot of low class people! :D

My wife and I carry insurance on each other to replace income in the event of a death of either of us. The last thing I'd want to worry about if my wife died is that I'd have to go to work in a week instead of being there for my daughter. The same for her. If my daughter dies, then the insurance will cover her funeral and treatment for my wife and I, who will probably need it. In the event of both of us dying, my daughter inherits a large sum that will insure that she has a good starting point in life, with my brother being the trustee. We share similar values, and my daughter will go to his family, so it works out.

If we all die, then the funds will go into trust for all the kids in the extended family to pay for them to go to school since I know that the extended family is absolute shit in planning for the future, and those kids wouldn't have a chance at post secondary without some sort of help. If the kids don't use the funds for school, it transfers to a couple of charities that my wife and I approved of.

We laid out everything in meticulous detail, so there's no feeding frenzy, and the amount of work/taxes/losses is minimized.

[max_boost]

Originally posted by codetrap
You know a lot of low class people! :D

My wife and I carry insurance on each other to replace income in the event of a death of either of us. The last thing I'd want to worry about if my wife died is that I'd have to go to work in a week instead of being there for my daughter. The same for her. If my daughter dies, then the insurance will cover her funeral and treatment for my wife and I, who will probably need it. In the event of both of us dying, my daughter inherits a large sum that will insure that she has a good starting point in life, with my brother being the trustee. We share similar values, and my daughter will go to his family, so it works out.

If we all die, then the funds will go into trust for all the kids in the extended family to pay for them to go to school since I know that the extended family is absolute shit in planning for the future, and those kids wouldn't have a chance at post secondary without some sort of help. If the kids don't use the funds for school, it transfers to a couple of charities that my wife and I approved of.

We laid out everything in meticulous detail, so there's no feeding frenzy, and the amount of work/taxes/losses is minimized.

:werd:

Well said.

I think a lot of people are over thinking it. So many reasons to try to justify buying and not buying it. Insurance is cheap. You spend way more on other useless shit. Or maybe it's the idea that someone's going to benefit from your death that doesn't sit well.

[suntan]

Originally posted by skandalouz_08


I think everyone should be able to make their own decisions but the major question is: Do I want to leave something behind for someone else or not?

Fact is, without life insurance (and assuming you have a sizeable estate) a large portion will be eaten up by taxes once you die however if you have no one to leave it to or really don't care then there is no need to have a permanent insurance policy. It's definitely not for everyone. If the permanent term only goes to age 65, then you need to die before then for the insurance to kick in. How likely is that?

I'm dying penniless. My retirement money will go towards hookers and blow during my final hours.

In regards to life insurance, $39.69/month for $600K of coverage. There's a bit of an extra charge because I'm slightly fat.

[skandalouz_08]

Originally posted by codetrap
You know a lot of low class people! :D

My wife and I carry insurance on each other to replace income in the event of a death of either of us. The last thing I'd want to worry about if my wife died is that I'd have to go to work in a week instead of being there for my daughter. The same for her. If my daughter dies, then the insurance will cover her funeral and treatment for my wife and I, who will probably need it. In the event of both of us dying, my daughter inherits a large sum that will insure that she has a good starting point in life, with my brother being the trustee. We share similar values, and my daughter will go to his family, so it works out.

If we all die, then the funds will go into trust for all the kids in the extended family to pay for them to go to school since I know that the extended family is absolute shit in planning for the future, and those kids wouldn't have a chance at post secondary without some sort of help. If the kids don't use the funds for school, it transfers to a couple of charities that my wife and I approved of.

We laid out everything in meticulous detail, so there's no feeding frenzy, and the amount of work/taxes/losses is minimized.

Very well said. It is your insurance policy you can decide exactly who gets it and when/how much using a will/trust structure so its not a feeding frency.

[skandalouz_08]

Originally posted by suntan
If the permanent term only goes to age 65, then you need to die before then for the insurance to kick in. How likely is that?

I'm dying penniless. My retirement money will go towards hookers and blow during my final hours.

In regards to life insurance, $39.69/month for $600K of coverage. There's a bit of an extra charge because I'm slightly fat.


I think you're a little confused about what you're talking about.

A permanent term? Those 2 things don't go together. A permanent policy lasts the rest of your life while a term policy will typically go until age 80 (depending on the company) increasing in price every time your term renews.

Goodluck in dying penniless and counting on the government programs in your last years of your life! :dunno:

[ExtraSlow]

This is always a heated topic.
For myself, with a young family, I have and suggest term insurance.

For me, Permanent insurance doesn't make sense. I also don't reccomend mortgage insurnace or ballance protection insurance.

[suntan]

Originally posted by skandalouz_08



I think you're a little confused about what you're talking about.

A permanent term? Those 2 things don't go together. A permanent policy lasts the rest of your life while a term policy will typically go until age 80 (depending on the company) increasing in price every time your term renews.

Goodluck in dying penniless and counting on the government programs in your last years of your life! :dunno: Sorry, yes, I meant just permanent.

In regards to "dying penniless and relying on government programs", the plan is that I would have enough money to live on until I know I'm going to die, at which point I shall have 20 naked hookers sucking my shrivelled elderly dick until I expire. Jebus, I already have more money saved up than most people do at 65.

You should know that CPP is fully funded though, we don't have the problems that the US has with SS.

Also, what on earth does life insurance have to do with retirement?

[Xtrema]

Originally posted by suntan
Also, what on earth does life insurance have to do with retirement?

It's a form of equity you can borrow against. But it would be your last avenue as a loan source.

[skandalouz_08]

Originally posted by Xtrema


It's a form of equity you can borrow against. But it would be your last avenue as a loan source.

Exactly.

[suntan]

Originally posted by skandalouz_08


Exactly. You actually believe whole life is actually a good investment?

What planet are you from?

[Xtrema]

Originally posted by suntan
You actually believe whole life is actually a good investment?

What planet are you from?

If your insurance company do good, you are supposed to have increase equity + insurance coverage. If insurance company do bad, you will have to top up at the end of contracted term.

Nobody say it's a good investment because you are buying an investment vehicle that you have 0 control in and locked to a single provider and no transferable mechanism. And you also have 0 control on borrowing rate from a single lender. Deals doesn't get more raw than this.

Which is why I say this is your last revenue of borrowing, after you have run out of cash, secure line of credit, unsecured line of credit, then this. If you have to borrow from your insurance $, you are desperate for cash, at least in my books.

But (I have not checked lately) it is a tax sheltered equity growth and tax free/deferred for the beneficiaries. So if you got a lot of disposable income that you don't know what to do with and diverse enough in your investment, why not.

Again, re-evaluate you needs. Nobody's knows 100% what you are up to or guarding against. If you are running a business, if it fails, insurance and RRSP are exempt from creditors. You in theory (actual I have seen this in practice), can kill yourself, not declare bankruptcy and your family will still be provided for by life insurance. Of course, this is a very extreme case and LLC should cover most of these risk.

[skandalouz_08]

Originally posted by suntan
You actually believe whole life is actually a good investment?

What planet are you from?
Not whole life, but a participating life insurance policy is a great investment. However, it shouldn't be your only investment strategy. And I'm a Financial Advisor so I believe in planning for my future.

Xtrema covered some of the reasons for owning it. I only see my income increasing so once my RSP/TFSA are maxed out my Life Ins. will be an asset that grows tax-free annually alongside my Non-registered investments(taxed). Currently, my insurance policy is growing at over 7% annually, the lowest rate in years. In the future it will have a CSV (Cash Surrender Value) which I can access a portion to help kids through school or spend for other unexpected expenses. Taking the whole amount out will void the life insurance policy and I don't necessarily have to borrow the money as a loan on the policy (although it does save on taxes to borrow).

From a business standpoint it can't be taken by creditors if my current/future businesses run into financial difficulty, depending on the business I have the option to change ownership to a corporately owned policy and many more options available to me as a self-employed individual as well.

If I were to die it will cover my funeral expenses and last tax return. I'm not saying to have a million dollar permanent insurance policy as mine is small but will grow faster than inflation as long as the policy is in force. Life insurance can be used for more than just giving money to your beneficiaries.

[sputnik]

Originally posted by eblend
Hey guys,

Currently with employer life insurance which is like $342 bucks a year for $100,000 in coverage. Does that seem mostly normal, or too high? Trying to see if I should shop around or not.

Employer life insurance is always expensive because they have no age restrictions or medicals. So basically the young people in the company are subsidizing those that are 50+.

If you are young, get a plan from somewhere else and it will be way cheaper.

I pay about $700/year for $1 million coverage.

I am 33 (non-smoker in good health) and my premiums wont go up until I am 53. At which point I wont need life insurance that much any more.