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Which Type Life Insurance & Which Company? ?

Two parter question - I am a healthy 34 year old mother of two (10 & 14). Married two weeks ago. 14 years ago i took out a 100K whole life policy with Allstate that will be paid for in 6 years. I also have a 20 year term for 250K with Statefarm. This is what we want to do so all opinions would be appreciated: Get 35 year 500K Terms for the both of us (my husband and myself) My husband would then get a 20 year 100K whole life policy. Every 10 years we would decrease our term policies by 100K as the kids get older and the mortgage decreases (just bought house in March 08). My logic behind this is we will be 65/69 when those terms expire, our kids will be parents and the house will be paid for. Not to mention retirement benefits and other investments. My whole life policy is safe and his would have been paid off before he turned 50 and those policies should be enough to bury us. Does this make sense to do or am I throwing money down the toilet? Most of what I came up with was from research. Also during my research I have learned that maybe neither of these insurance companies are the greatest so would anyone out there reccommend another company and if so why?

Public Comments

1. First of all congratulations. Second of all doing a combination of permanent and term coverage can make a lot of sense. I wouldn't reduce the term coverage as they got older. I would just make sure you have enough to get them through their college years. So, doing $100 whole life (although I'd recommend a different type of policy - maybe a guaranteed universal life instead) with the idea that you have it to have coverage for your whole life (and not necessarily for a savings vehicle) can make sense. That's exactly what I do. The biggest issue I have with your plan is your unfortunate choice of companies. Car and homeowners insurance companies are the worst places to buy your life insurance. These companies sell it because normally the first type of insurance someone will have is car insurance. So, when they need life insurance it is instinctual to go to the same company for the life insurance. Many people that do this aren't shopping as they're doing business for convenience sake and therefore the companies have no obligation to be competitive. I love these companies to insure you home and auto, but to give you an example I just replaced a client's life insurance policy in the amount of $300,000 with a $500,000 policy with a 'life insurance' company and she's paying the same amount. I also upped her husband's from $500,000 to $700,000. In short getting 40-60% more insurance for your family is better than just buying coverage because it's convenient. If you want to compare what they're offering you I have a tool on my web site that requires no personal information to use and it will give rates from ~150 different companies. http://insurancepickle.com/life-insurance/term-life-quotes.html
2. Dear Angela, Your planning is definitely more comprehensive than what many others have done. I believe your reasoning is sound. While I am not an agent with either of these companies, I respect them as worthy competitors. It is possible that you might do better with some other carrier, but there is no way of being certain that that would be the case. Both of these companies offer products that are responsive to changing economic conditions. They also offer policies that are protected from stock market losses. If you were to take the advice of another respondent, be sure that you look at the guarantees as well as current projections. Also look at features that do not show up on a ledger, such as loan interest rates and post issue disclosures.
3. First of all, some of what you say does not make sense. This is why. You can not pay up a whole life policy in 20 years or 6 years or any amount of years. That is why it is called whole life. You pay for it for your whole life. There is a different policy called 20 pay life. And, there is another policy called Universal Life. Universal Life you can pay up anytime. You choose the amount of years by the amount you want to deposit into the account. 2) There is a minimum face limit on term policies. You probly will not be able to decrease the amount of your term policy unless you reapply for a new one. 3) State Farm sells a 30 year term, but not a 35 year term. Your $250k policy with them is cheap and a very good deal. Since you took your whole life policy out some years ago, you should not switch or change the policy to something else. I would suggest you continue and keep both policies. Switching policies is usually not in the customers best interest. There are laws to protect customers against agents trying to change your policy because usually the customer gets screwed when they switch policies. You have a good plan. DO NOT change anything. Do not downsize anything and do not change what you have. You should consult your State Farm agent with questions about your life insurance. They are a good company. But even then you can have an agent that doesn't know life insurance. I have been in the field a lot of years. Don't ever listen to anyone that wants you to switch. You have 2 good policies in place. Licensed Life Insurance Agent