Term Life Policies

[Logan's Mom]

It was suggested to me that we get a term life policy. She suggested 25 or 30 year term life. What is it exactly? Are we locked into a policy for that long or can we cancel at any time? I didn't ask any of these questions because right now I have it through my company and don't want to pay on 2 policies, mine is good through next May.

She suggested one on our own because if something happens and I no longer work for my company, then I would need something on my own. I guess the logic was that I should lock it in now, while I'm a bit younger and healthy then later or if god forbid I get some health issue that would be considered "pre-exsisting."

The person suggesting this to us is a financial planner.

What are your thoughts? Who do you use? What are the costs for how much coverage you are getting? How do you "shop" for the best insurance rates?

[mightymoo]

We have term life policy. I'm no expert, but I'll tell you my understanding.

We applied for a 20 year term life policy. When we got it, they did physicals and things on DH and I. We pay a premium once a year. The term comes in in that they have agreed to insure us for 20 years, after that the term ends and they no longer have to insure us. However, in the interim 20 years, we could contract any sort of illness or whatever and they cannot cancel our policy or raise the rates so long as we keep paying it. We can cancel anytime (though I'm not sure how it works if I cancel mid-year or something).

Whole life is different because they are agreeing to insure you until the end of your life and these are the policies you can 'cash out' and things like that. Term is just a fixed period - its pretty much just like buying car or homeowner's insurance, just that the 20 years means they won't change the rates or cancel you during that term. You don't end up with an asset at the end like you do with whole life.

The thing is that as you get to the end of a term life policy generally you don't need that much insurance anymore, since you no longer have kids to support or incomes ot replace (if you are retired at that point).

[phathui5]

Dh and I each have a 20 year term policy, so that if something happens to one of us while the children are still living at home, we have enough money to pay off the house and stay home with the kids.

[SleeplessMommy]

More info here:

http://money.cnn.com/magazines/money...y101/lesson20/

You can buy now for (about) $250 a year or so if you have no medical issues. (for $100K to $300K) You can get quotes at quotesmith.com.

DH could have bought insurance for a nice low rate in his 20's, now he has a pre-existing condition and rates are 5-10x what they would be for a fully healthy person. He has just work life insurance, which is a little like being naked.

There is no reason not to have a "work" policy and a "personal" policy.

[Jilian]

I agree that you should have a work policy as well as a personal policy. Because if your DH is fired/laid off, etc in 10 yrs from now he loses the policy and now he's older and will pay higher premiums on a new policy. Its best to get in when you are as young and as healthy as possible.

[Logan's Mom]

Originally Posted by Jilian

I agree that you should have a work policy as well as a personal policy. Because if your DH is fired/laid off, etc in 10 yrs from now he loses the policy and now he's older and will pay higher premiums on a new policy. Its best to get in when you are as young and as healthy as possible.

laughup

Sorry, that really struck me as funny. My DH doesn't make much money at all. As a matter of fact, she is suggesting that I get additional life insurance because he wouldn't be "comfortable" with what I have after Logan's SS benefits run out at the age of 18. He has very little in a policy and she is ok with that. I really, truly wish the senario was the othe way around as I'd love to be a SAH mom, however, that just isn't in our cards.

We aren't very young but we aren't extremely old. I never checked this stuff out in my 20s and now I'm in my late 30s. OOPSSS!

No disrespect, I appreciate your advice, I'll just switch DH with me.

[Emmeline II]

Originally Posted by Logan's Mom

laughup

We aren't very young but we aren't extremely old. I never checked this stuff out in my 20s and now I'm in my late 30s. OOPSSS!

Getting LI in your 20s is better, but if you are still in good health, that will positively impact your rates. I switched to a civilian company (metlife) a few months ago at 31 and still received the best rate.