All Life Insurance Tips

need some opinions on term life insurance?

so I am 35, husband 34. we have 2 kids(2 and 9 months) and 25 years left on our mortgage. had medical exams come back. I am preferred plus ( cheap as heck) husband came back standard (weight and cholesterol) I originally wanted 250,000 policies, but with my husbands rating that would be like 50 dollars a month alone. The last thing I want to do is go broke paying for insurance. Is a 20 or 30 year better for us? would 150,000 policy be okay. thank you

Public Comments

1. you want to go out to the age of your youngest child through college graduation in terms of amount of coverage your right don't go broke buy as much as you can afford maybe 250k for you and less for him to get the price down and hope its the best money you ever spent for nothing meaing both of you will be healthy and alive and the end of the term
2. If $50 a month is going to break you, maybe you're not in a position to buy insurance yet. I think I'd find SOMETHING to do, to create that extra $50, even if it's babysitting for date night for another couple. Another thought - how many different companies did your agent suggest? Are they an independent, that can give you 20 - 30 different companies, or a "one trick pony"? If it were me, and the price was the same, I'd still probably stick with the 20. But I think I'd throw every extra dime at the mortgage, so that the house is paid off BEFORE that 20 years are up. Still, with young kids, something is better than nothing - but the price difference for hubby between $150K and $250K probably isn't going to be that much. I'd stretch for the $250K. Don't forget, hubby can work on his weight and cholesterol, and reapply in a couple years to see if he can get a better rate.
3. You need to go with the larger coverage amount. The difference in premium cost isn't that much. Only YOU can decide if the 20 or 30 year term best fits your needs. How long will you need the protection? The purpose of life insurance is to replace the deceased's lost income for those who depend on it.
4. What about multiple policies? A 20 year term for $200,000 and a 30 year term for $200,000. After 20 years, many of your debts will be paid - mortgage loan balance much lower. Of course, for the amount you are considering, you won't be sending either child to college if one of you dies. Sorry for the hard truth. Buying term also leaves the problem of outliving the term insurance. What will you do if both of you live longer than 30 years? What will you do if your lifestyle changes? If you buy a bigger house with a new, bigger mortgage? Have you met with an attorney to set up trusts? Have you talked to family and friends about who will serve as guardians of your kids if both you and hubby die? You have a lot more to consider than just 20 or 30 year term. Go meet with several agents. Good Luck **
5. there are a few ways to do it: 1) buy a 5 year term for 250k. by doing this, you are going for higher coverage but this MUST be a temporary measure. as soon as budget allows, maybe even in a year's time, go for at least 30 year term. 2) buy 30 year (or more) term with lower coverage, up your coverage when budget allows. 3) buy 20 year term with higher coverage, but i don't think you can extend coverage. to determine how long you need the coverage and how much, you need to do a death rehearsal. paint the scenario that upon one or both of your demise, what is going to happen? for example: both of you are working and contributing equally to the household needs. assume monthly expenses of $500 each for you, hubby and 2 kids. upon demise of one of you, the remaining should be able to continue working and at least take care his/her own expenses. so the need is only for the expenses of the 2 kids which is $1k/month. in a year it will be $12k. the younger kid is about 1 year old so assume independence at age 21 years old, you need to provide for 20 years, which means you need $240k. this is excluding education funding for tertiary education. this will help to determine how much. assuming you will like to retire at age 65, you will a least need 30 years of coverage. in this case, other than insurance, you need a will to set up a trust fund to take care of your 2 kids should the worst case scenario of both of you not being able to be there for them.
6. A 'regular" quote for $250,000 of 30 year level term for a 34 yr old male is ~$40/month. (And, that's not preferred plus, preferred, or regular plus). A 'preferred plus' quote for $250,000 of 30 year term for a 35 yr old female is ~$19/month. Go for the face amount first and then increase it to the most advantageous length...in other words does having no insurance at 55 concern you? What about 65?....75?, etc... If you have small children then going from a 30 yr to a 20 yr term will make more sense to save money over going from a $250,000 to $150,000 policy...in my opinion.
7. I've been in the financial service business for over 5 years and in my professional opinion, the only life insurance that everyone needs is term life insurance. I have term insurance and so do all my clients. I bought a 20 year term insurance at age 23 with $250,000 coverage with Waiver of Premium and pay about $20/month. If you don't know what Waiver of Premium is, its where in case you become disable for 6 months, the insurance company will pay the rest of your premiums and refund the premiums you paid during the first 6 months you were disabled. If you don't become disabled by age 60, the Waiver of Premium will cancel. I also have been investing $400/month into my Roth IRA in mutual funds. During the 37 years I invest from age 23 to age 60, I am expected to have anywhere between $1.1 million (with average return of 8%) to $3.3 million (with average return of 12%). In the past 30 years, the S&P 500 had an average return of 10.99%. The S&P 500 lists 500 large companies in the United States, many of which you are familiar with such as Coca Cola, 3M, AT&T, Verizon, Costco, Best Buy, Citigroup, Exxon, The Gap, Hewlitt-Packard, and so on. What is a mutual fund? In simple terms, there are a pool of investors such as me who invest their money through a portfolio manager. This portfolio manager will use these investments to buy stocks of different companies to meet the fund's objective. There can be as little as 25 companies or over 100 different companies in a mutual fund. With so many companies or stocks in a mutual fund, a mutual fund is considered to be diversified. Diversification leads to lower risk because your investment is spread over several companies. The great thing about having a mutual fund is that you don't have to worry about which stocks you should buy and when to sell. The portfolio manager takes care of all that for you. Most of my clients also invest their money. Between my clients and myself, I have approximately $1.5 million of assets under management. There is always a risk in investing, but with the education I provide to my clients, all those fears and concerns of the market goes away. Couple years ago, the US economy went into a recession and we are probably still in a recession. I got so many calls from my clients and asking me what to do. I ask them if they need the money right now? They all say no. I ask them do they remember me showing them the long term trend on how the market works? Some say yes and some forgot. Anyway, at the end, they all continue to invest because they realize it would be a bad idea to pull out of the market when value of their shares are so low. They also realize its very smart to invest in times when the economy is doing bad since they can buy more shares when price per share is low. The value of my account was down 26% in the beginning of January 2009. In the beginning of 2010, the value of my account was up 38%. Anyway, besides helping my clients get life insurance and invest their money, I also help them get out of debt. I don't think there's really any companies that is really tackling the debt issue except for one company and thats Primerica. As time goes on, the savings goes up and their debts and other financial obligations goes down. Eventually all their debts are paid off. At this point there are at or just few years away from retiring. With no debt and no kids to take care of and with high abundance of savings put away for retirement, there should be no needs for having life insurance. If there is, they don't need as much as they did when they were much younger. This is why I recommend everyone to get term insurance. Of course there would be people, especially life insurance agents, to tell you to get whole life or universal life and try to trick you on how great these products are. They will say things that it builds savings and it has guarantee interest and you can use it for whatever purpose. So do savings accounts, money market accounts, and CDs at your bank, but the savings in a life insurance policy don't work the same way that banks do. In life insurance, the so-called savings is really called "cash value." If you wanted to take money out from the life insurance policy, you have to put it back and pay loan interest of 8%. If you took money from your bank account, do you have to put it back and pay interest on it? No. But in life insurance, you do. If you die someday, the insurance company pays the death benefit to your beneficiary, but they keep the cash value. So why pay for two things in cash value life insurance (the life insurance and the cash value), and not just the insurance like term insurance, which doesn't build cash value? Is it me or do you find it odd that only life insurance have cash value and all the other types of insurance such as car insurance or homeowner's insurance don't build cash value? So why should life insurance build cash value?