Life Insurance

Cyched

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Seems reasonable. Does anyone know what to expect for a premium on something like a million dollar policy?
Depends on your health, age, and length of term

Plugged in my info for $1M 30 year and got $52-89 per month. You’ll just have to shop around for quotes.

 

BCClone

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Seems reasonable. Does anyone know what to expect for a premium on something like a million dollar policy? I assume it varies wildly from policy holder to policy holder but maybe I’m wrong.

The only thing I’ve really seen with numbers on it are the flyers our credit union is constantly sending out.
Ok, this is where you need to look at all avenues. Remember, if you have paid into SS, your kids and their care taker receive a certain amount through the age of 16(?) or so. So check that because that will help to a point. This is why you don't need the 3-4MM most likely. If you have young kids a 20 year term policy would probably be best. Remember, we don't get healthier as we age most of the time, so you want to fix that rate for a longer time.
 

BCClone

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Those of you that don’t get enough or any through your employer, who do you go through? Is somewhere like Policy Genius a good option?

I always had a good policy with my previous employer where a years salary was free and another 200k was like 8 or 9 bucks. My current employer has a 25k policy for free but nothing beyond that. I’m in my mid thirties and would probably want around a 200-300k policy again.

Tom Herman recommends the Asian massage parlor in Ames.
 

diaclone

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Interesting thread. I worked for a life/annuity company for many years in its home office (in the IT area doing development- new products, claims systems, new biz, underwriting systems, workflow, in policy owner service, illustrations, etc.). It’s late now but I think I might be able to break some things down for you as life insurance can be complex. I’ll write more tomorrow.
 

throwittoblythe

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I use the 10x income rule. I got an initial term policy through Mutual of Omaha at age 30. Then got a second term policy this year through Farmers to increase the value based on my higher wages.

I follow the approach that I need insurance to cover me while I have kids at home, a mortgage, etc, and am building wealth. When I get to 60, I should have plenty in the bank to pass to my spouse if I were to die.

One good piece of advice: if you have a spouse that is lower income or stays at home with the kids, get a small policy on him/her. If they were to pass and you were left with kids (and you are the sole breadwinner) that money can be used for nanny, tutors, etc to help support you while you’re a single parent. Plus, the cost of a $300k policy at a young age and good health is quite small.
 

brianhos

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That’s like a 3-4 million dollar policy not including cost of living increases. Do people use this as a rule for selecting life insurance? Seems excessive.
Well if you are just starting maybe. But subtract your 401/investment balance out and figure in timing/growth. I got enough so my wife would not have to work until the kids went to college, that is about ending now, so I am going to need to buy maybe a 10 year term soon in case I died before retirement. I will let her life insurance cancel when her term ends.
 
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throwittoblythe

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That’s like a 3-4 million dollar policy not including cost of living increases. Do people use this as a rule for selecting life insurance? Seems excessive.
I use the 10x income policy. So if you make $80k, get $800k in life insurance. My wife doesn’t work outside the home. So at the 10x amount, figure it gives her 10 years to get back on her feet while maintaining a similar lifestyle.
 

allin4clones

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You’re telling me the financial planners at Northwestern aren’t the same thing?
That’s like a 3-4 million dollar policy not including cost of living increases. Do people use this as a rule for selecting life insurance? Seems excessive.
As stated above, you need to crunch the numbers for what makes sense to you. I know not everyone uses this philosophy, but it makes sense to me. My wife and I have a combined $5MM+ and it costs us $90/month. Pretty cheap to me for peace of mind that wife/kids will not need to worry if I kick it. That value is under true income replacement because of raises/etc, but it was a basis at that time we started the policies. Plus I know these policies will pay. My brother had one and he passed from a farm accident at 28. His wife collected 7 figures with no issues. Had the policy less than 1 year.
 

farminclone

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I use the 10x income policy. So if you make $80k, get $800k in life insurance. My wife doesn’t work outside the home. So at the 10x amount, figure it gives her 10 years to get back on her feet while maintaining a similar lifestyle.
It really last longer than that if you invest the $800K and factor the returns in with that. At an 8% investment ROI and a full $80,000 withdrawal every year, the money would last for 16 years, including allocating income tax on the investment income at 22%.
 
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throwittoblythe

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It really last longer than that if you invest the $800K and factor the returns in with that. At an 8% investment ROI and a full $80,000 withdrawal every year, the money would last for 16 years, including allocating income tax on the investment income at 22%.
Yeah, that's a great point. Given that I'm the sole breadwinner, we have lots of life insurance on me and just a little on my wife. We've had both policies on me for a while now. Long enough that I suppose it would no longer be suspicious if my wife decides to off me. I should really start watching her behavior. :p
 
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cyfan92

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Just got a $1M policy last January from Protective life for about $50/month. I pay it once a year to save a little $ and it's actually below $50/month if you want to think of it that way
 

cycloner29

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Just got a $1M policy last January from Protective life for about $50/month
If I were you, do not say yes when your wife asks you to eat or drink something, do an internet history search every morning, take inventory of all the knives in your house, and if you have guns in the house, hide the ammo. Whenever she tells you "good night", do not go to sleep!

My wife always tell me I'm worth more dead than alive.
 
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CivEFootball

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So at what age is everyone getting Long Term Care Insurance (LTC)? For when your kids put you in the nursing home?
 

cyfan92

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If I were you, do not say yes when your wife asks you to eat or drink something, do an internet history search every morning, take inventory of all the knives in your house, and if you have guns in the house, hide the ammo. Whenever she tells you "good night", do not go to sleep!

My wife always tell me I'm worth more dead than alive.
LOL. If she wasn't talking about more kids, I'd be more careful
 
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BCClone

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It really last longer than that if you invest the $800K and factor the returns in with that. At an 8% investment ROI and a full $80,000 withdrawal every year, the money would last for 16 years, including allocating income tax on the investment income at 22%.
I would use a lower rate 5-6%. Knowing that it would get put in a little more conservative fund and taxes would be due on the gains.
 

BCClone

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So at what age is everyone getting Long Term Care Insurance (LTC)? For when your kids put you in the nursing home?
Just tell them that it eats into any inheritance you have so they have two choices: either help you out when needed, or take you out to the back pasture and shoot you when you would need to go into a care facility. Best options you have.
 

CycloneDaddy

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Just tell them that it eats into any inheritance you have so they have two choices: either help you out when needed, or take you out to the back pasture and shoot you when you would need to go into a care facility. Best options you have.
My kids know to put a pillow over my head if the only option is a nursing home.
 

shadow

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If you're a licensed CPA and an AICPA member, go thru AICPA. Their Q&A process to help figure out coverage was great. It's also a pretty good deal from what I can tell. I got a $1M term life coverage for $50 per month and I just got refunded like 43% of last year's premiums since the funds didn't get used.

In comparison, my Farm Bureau life insurance for $500K for a 20-year term is around $85 per month, but I do get refunded all of the premiums at the end of the term so not quite apples to apples. I did that because I thought it'd be nice to have about $20,000 given back at year 20 around the time my first kid starts college.

My wife won't let me do any of the life insurance where you can borrow money because her uncle did that and then died leaving her aunt and kids in not great shape.
 

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