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Thread: Life Insurance

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    Life Insurance

    The home/auto insurance topic reminded me of my need for life insurance. Basically I need a policy for myself and more importantly for my wife. She's a medical student and if she were to die I really doubt I'd be able to pay off her loans. I'm guessing her loans by the end of her 4th year should total roughly 160k. How much of a policy should I get and what companies have you guys used for life insurance?



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    Re: Life Insurance

    Quote Originally Posted by burn587 View Post
    The home/auto insurance topic reminded me of my need for life insurance. Basically I need a policy for myself and more importantly for my wife. She's a medical student and if she were to die I really doubt I'd be able to pay off her loans. I'm guessing her loans by the end of her 4th year should total roughly 160k. How much of a policy should I get and what companies have you guys used for life insurance?
    Med school loans are typically forgiven if you die but I can't remember if that is while you are in school only or if it counts residency. At least at UofI that is how it works.


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    Re: Life Insurance

    If you don't have any kids yet, I wouldn't worry too much.

    A $160,000 term policy would be dirt cheap I suspect if you're that worried about it.

    You can be insurance poor too. I've never bought much Life Insurance. Now I do have a darn good disabilility policy and the odds favor a disablity over death for a young person...



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    Cool Re: Life Insurance

    Are you sure you'd have to pay on her loans if she died? I'd check into that. If the loans are in her name and not yours, you may not have to pay them.

    I'm a big fan of term insurance. I havea $300K policy guaranty for 30 years at $28/month. In 30 years my 401K will be much bigger than $300K so I won't need the policy anymore.

    If you get anything besides term, investigate deeply into the fees, etc.....associated with the policy.


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    Re: Life Insurance

    I don't think your wife's student loans would be your obligation upon her death. Unless you have consolidated her loans and the consolidation was put in both her name and yours.



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    Re: Life Insurance

    Student loans are cancelled if the person dies unless they are in your name too.



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    Re: Life Insurance

    Do not... and I repeat... DO NOT get whole life insurance. Get term and take the difference in what you would have paid in monthly premium for life and what you are paying for term and invest it into a mutual fund. You will have more money in the end.

    Whole life is a scam and the monthly premium, typically, is about 50-60% commission for the sales person.



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    Re: Life Insurance

    Quote Originally Posted by jamesfnb View Post
    Are you sure you'd have to pay on her loans if she died? I'd check into that. If the loans are in her name and not yours, you may not have to pay them.

    I'm a big fan of term insurance. I havea $300K policy guaranty for 30 years at $28/month. In 30 years my 401K will be much bigger than $300K so I won't need the policy anymore.

    If you get anything besides term, investigate deeply into the fees, etc.....associated with the policy.
    Those prices seem about right. I would also suggest you just get something like that.


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    Re: Life Insurance

    Quote Originally Posted by temperflare View Post
    Do not... and I repeat... DO NOT get whole life insurance. Get term and take the difference in what you would have paid in monthly premium for life and what you are paying for term and invest it into a mutual fund. You will have more money in the end.

    Whole life is a scam and the monthly premium, typically, is about 50-60% commission for the sales person.
    invest in a mutual fund? how is it that you make this recommendation?


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    Re: Life Insurance

    Quote Originally Posted by jmb View Post
    invest in a mutual fund? how is it that you make this recommendation?
    I am referring to whole life and the "cash value" of the policy. If you take the difference between what you pay in whole life vs. what you pay for term and throw it in a mutual fund you will have more in cash value at the end of your term than what the "cash value" of the whole life policy will be.

    Do the math. You'll see. Thing is, if your whole life policy is set at $300,000.00 and the cash value is at, lets say $40,000.00, when you die you don't get any of the cash value. You simply get the value of the policy. The cash value only works if you cash in... that's it.

    The new thing now is a cash rider that is being offered on term policies.

    Example: I can pay $45 a month for a 30 year term policy. For an additional $65 a month I can purchase a cash rider that will be worth about $600.00 in 6 years. Now, if I stick that $65 a month in a mutual fund can you imagine how much the mutual fund would be worth in 6 years?

    On top of that, would you rather make money for yourself on the difference or make it for someone else?



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    Re: Life Insurance

    While whole life isn't a very good deal, there is something to be said for having a small amount of permanant insurance. Things can change. I have a $150k of term insurance along with a $50k variable life policy.

    I should probably carry more term, but I don't want to be providing my wife any incentives, if you know what I mean.


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    Re: Life Insurance

    Quote Originally Posted by temperflare View Post

    Do the math. You'll see. Thing is, if your whole life policy is set at $300,000.00 and the cash value is at, lets say $40,000.00, when you die you don't get any of the cash value. You simply get the value of the policy. The cash value only works if you cash in... that's it.
    There are several whole life policies that do pay out cash value plus the insured amount after death. To the original poster, you will most likely not be liable to pay your wife's students loan if she passed. Look into it and if for some reason you are I would setup a meeting with an agent.

    At your age term insurance is probably a good idea if you want the lowest monthly/quarterly cost for the biggest payout but when the term is up you'll be left with nothing. Another downside to term is that when the contract does end the prices generally sky rocket if you want to renew. Whole life will cost you more per month but you can cash out at any time and take the cash value with you. If you are indeed looking for something for your entire life then you might find that a whole life would suit you better. If you'd like some more information on how to contact an agent send me message. I work for an insurance company in Des Moines and we have some really excellent life policies. All of our agents are independent so if another company's products fit you better the agent can recommend that.



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    Re: Life Insurance

    While I agree that whole life on paper probably isn't the best investment strictly from a financial standpoint, sometimes it make sense because later on in life you may not be able to buy insurance. If for some reason your health precludes you from qualifying, the whole life is in place for the duration of your life.



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    Re: Life Insurance

    All in all, do your research. There are many different plans out there.

    Personally, it's a good bet that you can invest the same amount of money on your own behalf (into a solid performing mutual fund(s)) and come out ahead of a whole life policy in terms of cash value. They will invest the money for you, but take more off the top in the process leaving you with less in the end.

    If you invest it yourself, guess what? Except for the taxes, you get it and you don't have to worry about some stipulation the life insurance company has that could disqualify you from receiving the full benefit of your investment.



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    Re: Life Insurance

    Quote Originally Posted by cutshot View Post
    While I agree that whole life on paper probably isn't the best investment strictly from a financial standpoint, sometimes it make sense because later on in life you may not be able to buy insurance. If for some reason your health precludes you from qualifying, the whole life is in place for the duration of your life.
    Yes but instead of paying someone to hold your money for when you die, why not invest it so you can enjoy the money later in life.

    The only reason I have any life insurance is so my wife and girls will not have to worry about money if something happens to me.



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