Life Insurance

[max_boost]

Not quite sure if it would fall into this category but it seems fitting. Just curious, how many of you have a life insurance policy? If so, what's the term? What were your primary reasons for starting the policy? To protect your loved ones? Is it part of planning for the future?

[ridiculous_]

ive had (well parents have) since i was 16...super pointless if you ask me....if u wnana go with the odds you miteaswell wait till your like 50 to get one

[Khyron]

My wife and I have no kids, so we just put a clause in the morgage that if one of us dies, the thing is paid off, as is the car (it only costs like 3 bucks a month for this insurance).

Once you have kids, you need a policy to cover them being raised.

Khyron

[sputnik]

Life insurance is to make sure your wife and kids are covered in the event of your death.

Since I am unmarried and my only debt is my mortgage there is no point in having any life insurance. If I died my house would be sold and the mortgage would be paid off.

[QuasarCav]

Originally posted by Khyron
My wife and I have no kids, so we just put a clause in the morgage that if one of us dies, the thing is paid off, as is the car (it only costs like 3 bucks a month for this insurance).

Once you have kids, you need a policy to cover them being raised.

Khyron


I agree, life insurance is a good thing if you have kids or a wife that depend on you or your income to function. I have it to pay off my debts so they wont be passed on to anyone else.

Also it's through my work so It comes right off the paycheque.

[QuasarCav]

Originally posted by Khyron
My wife and I have no kids, so we just put a clause in the morgage that if one of us dies, the thing is paid off, as is the car (it only costs like 3 bucks a month for this insurance).

Once you have kids, you need a policy to cover them being raised.

Khyron


I agree, life insurance is a good thing if you have kids or a wife that depend on you or your income to function. I have it to pay off my debts so they wont be passed on to anyone else.

Also it's through my work so It comes right off the paycheque.

[1badPT]

Life insurance serves many purposes - I hold the highest license you can have to sell life insurance so if you have any specific questions you want answered post here in the thread or pm me.

Life insurance is used by businesses in partnership situations and there are some important tax advantages incorporated businesses can get from having policies, it can also help in securing business loans, insuring people who are vital to a business' success as well as the usual estate creation, preservation that most people think of life insurance for.

Basically if you have a family or a business, you should have life insurance. And even if you don't, you may still benefit from a policy.

Also Quasarcav, if the only coverage you have is through work, you would be wise to seek some advice from an financial advisor because if your only coverage is through your group plan at work, your work owns the policy and they can cancel it at any time - likewise, you lose it if you ever change jobs. You may not feel that's a problem now, but if you lose your job or your coverage due to an illness, it would be too late at that point to qualify for your own coverage and you'd be SOL.

Khyron, do both you and your spouse earn an income right now?

Finally ridiculous_ - waiting until you're 50 is the worst advice - rates are highest and its hardest to qualify. Buy it when you're young and healthy and its easy to qualify and you get the lowest price.

[sputnik]

Originally posted by 1badPT

Finally ridiculous_ - waiting until you're 50 is the worst advice - rates are highest and its hardest to qualify. Buy it when you're young and healthy and its easy to qualify and you get the lowest price.

Buy life insurance when you actually have something worthwhile to cover. If you are single with no kids, life insurance is pretty pointless - unless you have TONS of debt. Even so, if you have tons of debt you may end up paying more anyways.

If you are the primary earner in your family and you have kids, life insurance should be a no brainer.

[jdmakkord]

Originally posted by sputnik


Buy life insurance when you actually have something worthwhile to cover. If you are single with no kids, life insurance is pretty pointless - unless you have TONS of debt. Even so, if you have tons of debt you may end up paying more anyways.

If you are the primary earner in your family and you have kids, life insurance should be a no brainer.


Generally, you need to buy life insurance when you have little liquid wealth. As you grow older, and accumulate money and assets, the need for life insurance is diminished. You are self insured at that point. I myself have a 20 year term, 150000 coverage, that would help my parents cover funeral costs, and other things if I should pass. Hell, after burying 3 friends in the last 1.5 years, it doesn't seem like such a bad idea anymore.

[1badPT]

^^^ good points.

Also if you are young and healthy and don't have anything to cover per se but having a family or a business is one of your goals, why wait until rates are expensive to get it? or worse, what happens if you develop an illness that eliminates life insurance as an option in the first place?

[sputnik]

Originally posted by 1badPT
Also if you are young and healthy and don't have anything to cover per se but having a family or a business is one of your goals, why wait until rates are expensive to get it? or worse, what happens if you develop an illness that eliminates life insurance as an option in the first place?

Wouldnt your insurance rates go up as you get older anyways? I know that after my boss had a heart attack his rates jumped quite a bit, and when my Dad turns 50 next year he was told his rate is going to go up as well.

I dont think that insurance rates are locked at the same rate as when you join.

[1badPT]

Depends on the type of policy you buy.

Whole life and "term to 100" has the same rate as what you buy in at for the life of the policy. These policies solve the widest range of problems but are also the most expensive.

Shorter terms like 10 year term have the same rates for a 10 year period and then are readjusted at the end of the term based on age only (not health). These are the most common types of policies.

Yearly renewable increases each year based on age. These are extremely cheap when you're young but the prices go up quickly with age.

Universal policies are a combination of one of the term policies, PLUS an accumulation vehicle which you can use to build wealth and even pay for future premiums with depending on the success of your investments. As you accumulate more you generally require less insurance coverage.

Where health comes into play is when you apply for coverage in the first place. Generally if you're in good health you get the best rates, if your health isn't so good, your rates will reflect that, and if you have poor health, you may not be offered coverage at all.

Your father is probably at the expiry of his term, so when his policy renews next year, he'll be renewing at the rate he'll pay for the next 10 years(or whatever his term is) - which will be more expensive than a yearly renewable contract but cheaper than a whole or term to 100 contract.

[Khyron]

Originally posted by 1badPT
Khyron, do both you and your spouse earn an income right now?


Both working - I make more, but with the house paid off she wouldn't have a problem (would probably sell it anyway).

I was planning on getting a policy in a few years, around when we'll probably have kids.

Khyron

[1badPT]

With two incomes it might be wise to speak to an advisor as well. It takes time to sell a home - and if your income isn't insured, what would she do in the time between your passing, and when the house is sold? Keep in mind that during that time she has to arrange a funeral, execute your will, take care of your final expenses and so on. While all that is happening, will she continue to work?

If you arranged your mortgage insurance through an advisor, you may want to give them a call and let them know the rest of the situation because this is a need that is often overlooked, but is easy to fulfill. They may even be able to work a single solution that takes care of both the mortgage and your income.