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Buying Term Life Insurance (Again), Update #4

Written by Nickel - 4 Comments

My wife and I received our insurance ING Reliastar term life insurance policies at the end of last week and everything looked good. Thus, we wrote our checks and sent them in. As soon as we get confirmation of receipt, I’ll go ahead and contact Lincoln National Life for a prorated refund of our premiums. All in all, it took seven weeks from our initial term life application with Intelliquote to get the policies in our hands.

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Published on November 1st, 2006 - 4 Comments
Filed under: Insurance

About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

4 Responses to “Buying Term Life Insurance (Again), Update #4”

1
J Says:
November 1st, 2006 at 11:12 am
How much insurance did you buy and for how long? Did you purchase your first insurance before your kids were born? I asked this on a message board, how much to buy if you don’t have kids, but are thinking of some and want to purchase some now because your in great shape, health, age. And whether to stretch and get a lot, or just a bit and add when you have kids.
2
scott Says:
November 1st, 2006 at 11:08 pm
How much??

Well, that depends on what you want covered, kids or no kids??

pay off the mortgage?
give your spouse some options?
replace how many years of income from you?
get out of debt?

term doesnt allow you buy more without giving new blood and urine.

Permanent is more expepensive, but will allow you purchase more at a later date and use the blood and urine from today in 10 years, even if you would be sick or full of cancer.
Its called purchase options.

Since term doesnt offer this option, maybe you get the amount today as if you had kids and then you can get rid of some periodically if you want.

just a thought
3
Emma Says:
November 1st, 2006 at 11:57 pm
You should get life insurance if someone such as a spouse or children depends on your income. If you’re not married or have no kids, then you don’t really need it. You could still pick up some if you’d like to have it. But, I wouldn’t recommend any cash value insurance as it’s much more expensive and, honestly, makes no sense for people that make an average income.

If you have a pre-existing condition, you might have to settle with a whole/universal/variable policy. But that’s a huge maybe.

I believe the recommend amount is 8 to 10 times your income. With that type of coverage, you’ll definitely want to go with term life, maybe 20-year level. Hopefully, in 20 years you won’t need life insurance anymore if you saved money and had a good chunk in your retirement.
4
Fia Velasco Says:
June 6th, 2011 at 8:30 pm
No one enjoys buying life insurance. Why should they? Who likes spending their own money today for someone else to receive a payoff after they are six feet under? I believe most people, even the responsible ones who willingly purchase this valuable protection for their families, see life insurance as simply a necessary evil. You might ask yourself, why do people feel this way about life insurance? The answer is simple. All the focus has been on the benefits provided to the family upon death. However wonderful those death benefits may be, the benefits that life insurance provides during a person’s lifetime are exponentially more exciting. Most financial planners and insurance agents are not fully aware of the power of the LIVING benefits available.

Emma: Even if you saved a good chunk in your retirement (i.e., 401K, Roth IRA, etc.) that money in your retirement accounts is not yours alone? You have a 50% or more partner – Uncle Sam. People are living longer, when you’re 50, 60, 70, 80 years old, you would have wished that you bought permanent life vs. term.

I told my daughter that as soon as you turn 18 you have to buy Index Universal Life (the BEST in Permanent Life Insurance, now at 20, she has another one Global Index Universal Life), because it will be cheaper, even if she doesn’t have a family of her own yet. In 20…30 years she could have a million or more in her cash value part of her insurance, specially if she overfunds it (meaning, put more money than the premium amount). And what is good about this insurance is she can utilize the LIVING benefit feature (structured properly), meaning she can get all the money she put in TAX-FREE! (and she doesn’t have to die)! She will be able to live all of her retirement years without Uncle Sam seeing one red cent of her hard-earned money. Tax-free dollars while you’re living and tax-free dollars distributed to whomever you choose upon your death. What she is doing is not for everybody. Though it is open to everybody who can qualify for life insurance. It is best suited for 1)those who currently are contributing to a tax-qualified plan such as 401K, SEP, Simple IRA, etc., 2)those who earn relatively large income (doctors, lawyers, etc. who won’t qualify for a Roth IRA), or 3)those who want to save (people making average income) more than a few thousand dollars a year in a tax-free environment. If you are putting money in a bank for your long-term saving…you are losing out (inflation and taxation). Everyone should think like a bank. You put money in your bank account, bank gives you less than 1% or 3-5%(let’s say bank is generous), inflation is around 3%, then you have to pay tax every year on the interest. The bank, meanwhile leverages/uses your money to earn 8%-13% or more…you see where I am going????

If you have pre-existing condition, it woud be hard to qualify for a life insurance.

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