Life Insurance Recommendations

[The BMW Guy]

Wife and I are pretty young and have never had life insurance. Kind of scares me that if something were to happen to me, she would be stuck with a lot of debt.

Wondering if anyone has any recommendations on where to go or who to talk to so we can discuss options. Any help would be appreciated!

[max_boost]

Life insurance is very affordable and you have a lot of options. Talk to a specialist.

[ExtraSlow]

In my opinion, don't get sucked into any kind of insurance scheme that combines the concepts of "insurance" and "investment".
I'm a proponent of Term Insurance, and I don't like Permenent/Whole Life/Universal.
Go look up the differences before you talk to the specialist.

[Amysicle]

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[Sugarphreak]

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[Teamfci]

Hi there "Beyonders" - we are a new sponsor of this site, please bare with me while I figure out how to use the forum ....


Life Insurance solutions should be customized to everyone's individual requirements and should always be based on a needs analysis and not the "product of the month".

Term Insurance is the least expensive option in the short "term" - if you had a debt or liability that you would like covered for say (10 years) ONLY then you would look at a 10 year term, always keeping in mind that a 10 year term premium will double, if not triple, on the 10th year renewal.

My best advise is sit down with a Financial Planner who specializes in Life Insurance solutions.

:)

[Sugarphreak]

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[sputnik]

Go with a cheap 10 or 20 year term policy.

Do NOT get conned into "whole life" or other investment sounding insurance policies. They are VERY expensive and their returns are terrible.

[CapnCrunch]

I have mine through Manulife.

It's a 20 year term, ~$800,000, and ~$70 a month. The guy is used is no longer selling insurance so I can't recommend anyone.

One thing I will tell you is to do your own research and know exactly what you want BEFORE you sit down and talk to a salesman.

Don't go in there hoping for the salesman to give you honest and unbiased options. You'll get upsold into some piece of crap insura-investment that makes them a large commission.

I am not a salesman, have never been one, but at a minimum I'd recommend getting enough to cover all you debts (mortgage, cars, etc, and also a funeral), and then pick a term that will end just after your youngest kid should be out of the house.

You can add a few years salary if you wife doesn't work, or add some extra if you want to leave something for your kids.

[ExtraSlow]

One thing about term insurance is that yes it gets more expensive as you get older, but usually your need for it decreases.

For a young professional who has a large mortgagem, young children and zero savings, it wouldn't be crazy to need $1 million of coverage. Ten years later, your kids are older, you have less debt, hopefully your mortgage is smaller, you might been half of that, or less.

[Teamfci]

Originally posted by ExtraSlow
One thing about term insurance is that yes it gets more expensive as you get older, but usually your need for it decreases.

For a young professional who has a large mortgage, young children and zero savings, it wouldn't be crazy to need $1 million of coverage. Ten years later, your kids are older, you have less debt, hopefully your mortgage is smaller, you might been half of that, or less.

I agree... kind of :)

You are right that Insurance protection needs (in MOST cases) reduce as your wealth accumulation increases and debts decrease...

So for example.....(this is a very general example)

Mortgage of 500,000
Dependents requirement of 500,000

Why would you buy a more expensive 20 year term product to cover one million - albeit via the risk assessment you may require a million... a thought might be to layer the coverage (in case medical health changes occur)...

10 year term for 500,000 and 20 year term for 500,000..This reduces the cost and removes the health risk down the road...you can also always reduce the coverage as time goes by...

There are many solutions.. the trick is finding the least expensive solution for the protection that you require... Every situation is different and it really does take a "planner" who is interested in the clients requirements first and one that can shop all the carriers for you to find the best cost/product.

A financial planner should always also balance paying down debt, risk protection (insurance) and wealth accumulation...



:) :)

[Teamfci]

Originally posted by Sugarphreak
^^ Welcome to the site, and congrats on becoming a sponsor :thumbsup:

Thank you for the welcome! :thumbsup:

[skandalouz_08]

Hi Amy! I didn't know you were on here. Thanks for the recommendation and glad I could help you out.


Originally posted by Amysicle
Bill @ Touchstone recommended this guy to me.

[email protected]

Des was pretty patient with answering a lot of my questions and running the numbers to give me some options. The younger you are when you sign up for life insurance, the cheaper (in general) your premiums will be.

He is going to be out of the country for 10 days at the end of this month, I think.

Edit since Sugarphreak went into more details about his experience.
Went with 20 year term for ~$600k for $30/month. We discussed the options of 10 year term and the ability to convert it into a plan that guarantees a set payout in the end. They also sent a nurse to the house for tests but this was all arranged and done within a week or two. As for the amount, he left it up to me but we discussed my debts and funeral costs, taxes and if I wanted to leave anything behind for charities to come up with a number I was okay with. It's on the higher side but we bought our first house last year, and what if we have kids in the future, etc.

[SkiBum5.0]

The main things that influenced my decision were:
- my wife keeping the house if I die - I don't want her to have to sell the house
- kids education - right now we are expecting one, but there may be more in the future
- Our goal was to make sure she could live the way she would if I was alive
- You can always "stack" coverage in the future should you need it - might be more expensive per unit though since you will be older
- check your work coverage and the small print - most have policies but they have some conditions
- if you enjoy extracurricular "activities" stop before buying insurance as most policies require bllod/urine tests.

[max_boost]

Originally posted by ExtraSlow
One thing about term insurance is that yes it gets more expensive as you get older, but usually your need for it decreases.

For a young professional who has a large mortgagem, young children and zero savings, it wouldn't be crazy to need $1 million of coverage. Ten years later, your kids are older, you have less debt, hopefully your mortgage is smaller, you might been half of that, or less. A lot of truth to this. 10 years ago I signed up for a 500k policy through statefarm and I thought it was overkill. Well if I die within the next 5 years my brother can post in the millionaire before 30 thread. :rofl:

[sputnik]

Originally posted by SkiBum5.0
- check your work coverage and the small print - most have policies but they have some conditions

Group life insurance policies are usually some of the least restrictive policies out there.

That said they are also more expensive for healthy younger people.

[The BMW Guy]

Thanks for all the advice! :thumbsup:

[The BMW Guy]

Talked to an advisor.

Any other thoughts on the 20 year permanent life insurance policy? Where you stop paying the premiums after 20 years and you keep the coverage?

Its more expensive...but I'm wondering if it is worth it. Going to put together a spreadsheet for this but thought I'd get more feedback as well.

[max_boost]

Originally posted by The BMW Guy
Talked to an advisor.

Any other thoughts on the 20 year permanent life insurance policy? Where you stop paying the premiums after 20 years and you keep the coverage?

Its more expensive...but I'm wondering if it is worth it. Going to put together a spreadsheet for this but thought I'd get more feedback as well.

Yup. That's what I have. Obviously the answer will depend on who you ask lol I'm in year 9 with approx. another 8 years ago. Talked to my agent and because it seems flexible, i.e: you can borrow money from it, if you are dying, you can take half out and go nuts and they will just pay it off when you die etc. so what the heck I decided to keep it.

At year 17 when I don't have to make any more payments, my total premiums paid=my cash out value.

Obviously I'm not a baller by any means but I'm comfortable, can make the payments and who knows what's gonna happen.

[ExtraSlow]

Originally posted by ExtraSlow
In my opinion, don't get sucked into any kind of insurance scheme that combines the concepts of "insurance" and "investment".
I'm a proponent of Term Insurance, and I don't like Permenent/Whole Life/Universal.
I'll just quote myself again.

[Cos]

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[ExtraSlow]

If you have no kids, insurance need be no more than your current debts, and in many case, could be much lower. If you have kids, you may want to include something for a few years of their care.

Keep in mind every insurance salesman has a vested interest in selling you MORE than you really need. So whatever they suggest for you, get less than that.

[Cos]

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[Sugarphreak]

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[Cos]

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[thextinct]

Any recommendations of life insurance agents in Calgary region? I am thinking of term-20 for 400K insurance. I need some questions answered and a personal appointment would be good. I tried kanetix and they are everything online/phone kind which I am no much in favor of. I prefer face to face in person more.

[sabad66]

Originally posted by SkiBum5.0

- if you enjoy extracurricular "activities" stop before buying insurance as most policies require bllod/urine tests.
Any comments on this? IMO you're better off not hiding this because you're risking getting denied should anything happen. At the very least if you smoke pot you should tell them you smoke. And i have heard most companies are actually fine if you are an occasional pot smoker (but again you would be rated as a smoker)

[skandalouz_08]

The thextinct, I PM'd you if you're still interested in talking to a life insurance advisor.

[sabad66]

I'm looking into Life Insurance for 20 years coverage, but am wondering why two term 10s right after each other is cheaper than a single term 20? For example, here are the quotes:

Term 10 for 27 year old smoker
- $520/yr * 10 yrs = $5200
Term 10 for 37 year old smoker (10 years from now)
- $735/yr * 10 yrs = $7350
Total over 20 years = 12,250

vs.

Term 20 for 27 year old smoker
- $715 * 20 yrs = 14,300


I thought a term 20 would be cheaper but clearly it isn't. What am i missing here? Is it because I might be in worse health when i hit 37 and the premiums would be higher/might not qualify? Is it because I'm not getting a 'true' quote for what it will be when i'm 37 due to inflation? (i.e. in 10 years when the first term 10 expires, it will be more than $735 a year)?

[Sugarphreak]

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[max_boost]

Don't need to burden your loved ones, set up a fund at the bank etc. Shit happens. It's not fair.

[sabad66]

Originally posted by Sugarphreak
^^ The second term of 10 years would be way more expensive because you are older. I doubt it would be more cost effective than signing up for a 20 year plan.


There is often a rider you can add to a 10 year plan that allowed you to extend it out for the same price, I think that is a better option.
That's the thing though.. it's not way more expensive. I changed my birth year to 10 years earlier and it gave me a Term 10 of $735 a year vs. my real birth date where it gives me a Term 10 for $520.

[ExtraSlow]

Ten years later, you also typically need less coverage, since your kids are older, and you probably have less debt or more assets.

[Xtrema]

Originally posted by sabad66

That's the thing though.. it's not way more expensive. I changed my birth year to 10 years earlier and it gave me a Term 10 of $735 a year vs. my real birth date where it gives me a Term 10 for $520.

You are probably in your 30s, 10 years only push you into 40s.

50s is when it starts to goes up. But then again, wish that by 50s you won't need insurance due to a) everything paid off or b) dependents already on their own.

But since many are having kids in their 30s now, I don't doubt there may be needs to have life insurance into 60s.

[suntan]

Originally posted by sabad66

Any comments on this? IMO you're better off not hiding this because you're risking getting denied should anything happen. At the very least if you smoke pot you should tell them you smoke. And i have heard most companies are actually fine if you are an occasional pot smoker (but again you would be rated as a smoker) Also if you're overweight they'll increase the premium.

[Rocket1k78]

Originally posted by sabad66

Any comments on this? IMO you're better off not hiding this because you're risking getting denied should anything happen. At the very least if you smoke pot you should tell them you smoke. And i have heard most companies are actually fine if you are an occasional pot smoker (but again you would be rated as a smoker)

Exactly, if you smoke pot just be upfront. No point in paying for insurance if its not going to cover you because you lied. When i got my policy i had just come back from a snowboard trip and did smoke a bit of weed on it. I applied for insurance about 2 months after and I told the agent the truth about the weed because she asked. She did say if i tested positive my rate would be considered a smoker and go up huge but luckily it didnt and im saying nope to dope.

The whole buying process was stressful because each person we talked to had different takes and even now were getting told to go different routes from friends. I trust my Primerica guy though, he did say he was new to the game but he said he was really honest and upfront.

[Masked Bandit]

Originally posted by sabad66
I'm looking into Life Insurance for 20 years coverage, but am wondering why two term 10s right after each other is cheaper than a single term 20? For example, here are the quotes:

Term 10 for 27 year old smoker
- $520/yr * 10 yrs = $5200
Term 10 for 37 year old smoker (10 years from now)
- $735/yr * 10 yrs = $7350
Total over 20 years = 12,250

vs.

Term 20 for 27 year old smoker
- $715 * 20 yrs = 14,300


I thought a term 20 would be cheaper but clearly it isn't. What am i missing here? Is it because I might be in worse health when i hit 37 and the premiums would be higher/might not qualify? Is it because I'm not getting a 'true' quote for what it will be when i'm 37 due to inflation? (i.e. in 10 years when the first term 10 expires, it will be more than $735 a year)?

You're assuming that ten years from now (2025) the pricing for a ten year term on a 37 year old smoker is still going to be $735 a year. I don't think that will be the case at all as due to inflation, almost all consumer purchases increase over time. Also, if you have developed other health problems during the first ten years your cost for the second ten will go up exponentially. The reason the 20 year term is more money is because you're locked in at that price for 20 years, same reason why a ten year mortgage has a higher interest rate than a three or five year version.

[Xtrema]

Originally posted by Masked Bandit


You're assuming that ten years from now (2025) the pricing for a ten year term on a 37 year old smoker is still going to be $735 a year. I don't think that will be the case at all as due to inflation, almost all consumer purchases increase over time. Also, if you have developed other health problems during the first ten years your cost for the second ten will go up exponentially. The reason the 20 year term is more money is because you're locked in at that price for 20 years, same reason why a ten year mortgage has a higher interest rate than a three or five year version.

Also to consider that baby boomers will soon be passing and life insurance companies will pay out a lot more. Just like hail made our home insurance premium goes up, baby boomers passing will hike premiums considerably as well if you join late.

Lately, I get a lot of promotional material from my insurance company on adding accidental coverage. It's something that insurance company can make more $ on due to lower rate of pay out.

[sputnik]

Originally posted by Xtrema


Also to consider that baby boomers will soon be passing and life insurance companies will pay out a lot more. Just like hail made our home insurance premium goes up, baby boomers passing will hike premiums considerably as well if you join late.

Lately, I get a lot of promotional material from my insurance company on adding accidental coverage. It's something that insurance company can make more $ on due to lower rate of pay out.

Unless the baby boomers all die before 65 the insurance companies have little to worry about.

People are living longer and the cost of life insurance goes up exponentially one you are in your 50s. The cost of holding a life insurance policy in your 70s or 80s would be ridiculous. Not to mention the fact that it is pretty unnecessary to have a life insurance policy that late in life considering your kids would probably be in their 40s and 50s at the youngest.

[Masked Bandit]

Originally posted by Xtrema


Also to consider that baby boomers will soon be passing and life insurance companies will pay out a lot more. Just like hail made our home insurance premium goes up, baby boomers passing will hike premiums considerably as well if you join late.

Lately, I get a lot of promotional material from my insurance company on adding accidental coverage. It's something that insurance company can make more $ on due to lower rate of pay out.

The big difference between baby boomers / life insurance and the hail / home insurance is that the life insurance companies KNOW they have a glut of claimants coming and have planned for it with their premium models. Hail (severe weather of all kinds) isn't something insurance companies can plan for unless we get it every damn year (which seems to be the case the last five years).

[suntan]

Originally posted by Xtrema


Also to consider that baby boomers will soon be passing and life insurance companies will pay out a lot more. Just like hail made our home insurance premium goes up, baby boomers passing will hike premiums considerably as well if you join late.

Lately, I get a lot of promotional material from my insurance company on adding accidental coverage. It's something that insurance company can make more $ on due to lower rate of pay out. Uh, why would old people have life insurance?

[skandalouz_08]

Originally posted by Masked Bandit


You're assuming that ten years from now (2025) the pricing for a ten year term on a 37 year old smoker is still going to be $735 a year. I don't think that will be the case at all as due to inflation, almost all consumer purchases increase over time. Also, if you have developed other health problems during the first ten years your cost for the second ten will go up exponentially. The reason the 20 year term is more money is because you're locked in at that price for 20 years, same reason why a ten year mortgage has a higher interest rate than a three or five year version.

This is exactly true. Look at your renewal rate on the 10 year term insurance versus the rate you were quoted for the 20 year policy. You're assuming you're the exact same health in 10 years and that premiums haven't increased over those 10 years either. There will definitely be changes.

[skandalouz_08]

Originally posted by suntan
Uh, why would old people have life insurance?

For a few reasons:

A) They need it because they didn't save enough over their lifetime so that when one spouse dies the other can continue to live with their normal lifestyle

B) To leave money to their kids/family/charity/etc. Depending where you live in the country and where you own properties your tax rate can be between 39-49% after you pass away. Do you want to leave you 51% of your estate to your family forcing them to sell your assets with a huge tax bill or do you want to leave them with everything and pay the tax bill with the insurance

c) Whether they have a tax bill or not, its also a way for them to shelter additional money from the government to pass it along tax free to their beneficiaries.

There are obviously more reasons but I thought I'd give you the top 3 that I normally see.

[suntan]

Originally posted by skandalouz_08


For a few reasons:

A) They need it because they didn't save enough over their lifetime so that when one spouse dies the other can continue to live with their normal lifestyle

B) To leave money to their kids/family/charity/etc. Depending where you live in the country and where you own properties your tax rate can be between 39-49% after you pass away. Do you want to leave you 51% of your estate to your family forcing them to sell your assets with a huge tax bill or do you want to leave them with everything and pay the tax bill with the insurance

c) Whether they have a tax bill or not, its also a way for them to shelter additional money from the government to pass it along tax free to their beneficiaries.

There are obviously more reasons but I thought I'd give you the top 3 that I normally see. Yeah good luck trying to get life insurance of any value when you're 60.

You do understand that your probability of death is 1, yes?