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tx 3 putt

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It's not a rip off if you have a family to provide for in the event of untimely death.

Speaking term life insurance here.

Once the kids are grown, and assuming you have a nest egg for the wife or any dependent adults, then it's probably not worth having.

Then there's "whole life" which purports to combine life insurance with an investment vehicle and be a substantial part of your investment strategy.  That doesn't make sense for most people and there are less expensive investments.

As far as buying term life, I think there are a number of online portals where you can find and apply for policies.  An agent can probably help determine the amounts of coverage, but there's also a risk of being "sold" something.

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A friend is looking to pick a policy. I’m clueless on it. Local to Houston would be great 
 
 
I’ve always felt life insurance is a rip off
Yeah, people don't seem to have a good grasp of when they need it and when they don't.

Whole life is one of the most profitable products a broker can sell. I was told once the broker gets the entire first year premium.
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Term is good if you have people who depend on your income.  If you have a 2 and 4 year old, and your wife would struggle to make ends meet if you got hit by a car, a 20 year term policy makes a lot of sense.  Adjust the term to fit the window in which people are completely dependent on you.  If the kids are 12 and 14 do a 10 year term.  As an example, I’m married with no kids and the wife has a good job.  We both took out enough term to pay off the house in the event that one of us died so the other could maintain our current lifestyle.  It’s a rounding error on the monthly budget if you’re in good health.  Whole life quit making sense 20-30 years ago unless you are uber-wealthy and  have some unusual circumstances.

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This person has 3 kids under 15. About to get back into chem plant work. 100% the kids need something of their lone parent passes 

Does his work offer a policy? Most employers give you life insurance policy for 1X annual salary for free and you can upgrade out of pocket. I do 5X annual salary for…uh, I don’t even know what I pay but it’s not much.
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Just now, CooterBrown said:


Does his work offer a policy? Most employers give you life insurance policy for 1X annual salary for free and you can upgrade out of pocket. I do 5X annual salary for…uh, I don’t even know what I pay but it’s not much.


they want both, it’s high risk hazardous work 

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I used PolicyGenius to get a quote and didn't particularly like it (I don't need someone to sell me shit but I'd like to be able to talk to a human about some of the stuff that came up, and they never got back to me on pricing 20 vs 30 year). I bugged C-Man because he had popped in on another thread and I was feeling some c-man solidarity. Still going through the process right now but it's been going well.

I was surprised at how much 30 year 10x income was. But, I'm not a spring chicken anymore and there's a lot of family cancer history in addition to stuff in my own medical history.

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Celery Man, all I can tell you is that my wife and I bought 30 year term policies a little over 20 years ago.

My dear wife passed away from cancer last year at age 60. She died 8 months after the initial diagnosis. You just never see it coming. 

Kids had already graduated college, gotten married, and were well into their own lives. But we kept paying the premiums, because it was relatively cheap, considering the potential payout. Of course, we never expected to actually have to redeem one of our policies.

The proceeds have given me an extra cushion for my retirement. Which is nice, except for the way it came about.

I’m still going to pay my premiums for the 8 years left on my policy, payable to our kids. Again, because the premium is cheap relative to the potential payout.

Good luck finding something that works for you.

 

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My ex wife and I debated about life insurance.

She called it a lottery ticket. I think there was also a stubborn and irrational notion that if I died before her, she’s a successful professional who didn’t need a MAN’s insurance proceeds to survive.

I tried to explain that basic term life insurance isn’t intended to be some kind of windfall. It’s an expectancy of sorts. Look at it like auto insurance. You insure a 2016 Honda Accord. If the car gets totaled in a wreck, insurance provides that you don’t have to financially start from scratch in getting a new car. Insurance isn’t going to give you a windfall and pay you to purchase a new Porsche. Instead, it’ll pay you for what you expected to have for the foreseeable future, a 2016 Honda Accord (less depreciation). 

Similarly with life insurance, you purchase a term life insurance to, at the very least, replace the income you expected your spouse to produce, which includes the kids’ college expenses that a surviving spouse now has to fund on his or her own. And it eases the burden in the years following death that a surviving spouse takes on in suddenly being a single parent to has to do all of the shopping, cooking, cleaning, kid transportation, and on and on. Plus, as others mentioned, depending on where you are in life, it gives that extra security in retirement that a deceased spouse might have provided with years of funding into a growing retirement account.

She never saw that perspective, so we never had life insurance. I’ve been divorced for two years now, and have been meaning to purchase some term life insurance for my kids. This thread has provided a helpful reminder to get on that.

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On 2/1/2022 at 6:41 PM, tx 3 putt said:

A friend is looking to pick a policy. I’m clueless on it. Local to Houston would be great 

 

 

I’ve always felt life insurance is a rip off 😁

Try Dawson Financial Services in Houston. Tell him that you were referred.

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Level term is inexpensive insurance to replace income or pay for increased expenses if death occurs during the prime earning years or “expensive” years when you have dependents.

30 year level term is cheap until you hit 35+, and 20 year is cheap into mid-late 40’s barring some health issue.

Permanent insurance is a tool (often mis-sold) that is useful in the right situation.  It doesn’t “suck” any more than a hammer “sucks” when what you really need is a screwdriver.  Used in the right scenario and it has its place.  In the wrong application it’s misguided at best. 

Use the right tool for the job, and when kids are young and death benefit needs are high, the right tool is normally level term.

Buy term life from a good company with convertible options regardless of future insurability and don’t sweat the pennies when the future of your family is at stake. 

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My dad is 85. He has a whole life policy for $150k that he started when he was working. I told him that if he ever had a problem making the premiums, let me know and I would pay them for him (we have a family that is comfortable discussing these things). 
I was visiting a 45 year old cousin in hospice yesterday (sad story- he had a lump on his neck a year ago, and he ignored it, hoping it would go away. It didn’t). He told me that in last fall’s benefits enrollment, he signed up for as much employer life insurance as allowed without a physical required. He has been out on disability for a couple of months. His doctor says he has three months. My question- if his employer disability ends before he dies, and they terminate his employment, does the insurance end too? Even though he is killed by the cancer that drove the disability?

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1 hour ago, statsman said:

My dad is 85. He has a whole life policy for $150k that he started when he was working. I told him that if he ever had a problem making the premiums, let me know and I would pay them for him (we have a family that is comfortable discussing these things). 
I was visiting a 45 year old cousin in hospice yesterday (sad story- he had a lump on his neck a year ago, and he ignored it, hoping it would go away. It didn’t). He told me that in last fall’s benefits enrollment, he signed up for as much employer life insurance as allowed without a physical required. He has been out on disability for a couple of months. His doctor says he has three months. My question- if his employer disability ends before he dies, and they terminate his employment, does the insurance end too? Even though he is killed by the cancer that drove the disability?

1) If your father is 85 and his whole life policy is decades old (seems so based on the OP), it may already be self sustaining.  If paying the premiums out pocket becomes an issue, you probably have a couple of options and should get those answered now, before it ever becomes an issue (if it ever does) ......a) ask the agent to run an INFORCE ILLUSTRATION using the dividends to offset the premium and / or a policy loan if the dividends don't cover it and b) ask them to show you the increase in death benefit (paid up additions) for each new premium paid.

Old policies like this presumably would be self-funding at a point, if the underlying insurer is strong.  Also, most of these policies are set to have each dividend buy a "paid up addition" which is basically trading cash today for an increase in the policy's death benefit down the road.  As an example, the premium may be $1000, the annual dividend may be $1800, and if used to buy paid up additions to the face amount, the increase in death benefit might be $2500.  Those are made up numbers but from an estate planning standpoint, you may be able to take $x out of pocket A and put $xxx in pocket B.  If he/you doesn't need the premium payment funds for immediate needs, it is likely worth continuing to pay it.  If money is tight, using the dividend or even a policy loan to offset the premium could make sense.  

Before you and your father jump to any conclusions, make sure you look at all the angles using INFORCE ILLUSTRATIONS so you can see how taking dollars from pocket A impacts pocket B.

2) On the group life question, your cousin needs to get a copy of the group life policy from his employer.  He needs to be looking for things like portability clauses, waiver of premium, or convertibility clauses.  Some policies have none of those options, but others allow for you to take the term policy with you on termination, convert it to a permanent policy, or may have a clause that waives the premium in the event of a permanent disability (meaning he can keep the policy).  It would be vitally important for him to get the policy, dig into the provisions, and ask his HR or the company's agent a lot of questions to determine what he can and can't do....don't wait until after separation of employment.  Do it now.  And, very sorry to hear about your cousin.

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Many thanks! On the former, I mainly mentioned it, not because paying is a problem, but to highlight how whole life isn’t such a good deal for the young, but when really aged, is a sure cash out. On the latter, I’m calling my cousin today and I’ll mention that, tactfully. 

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5 minutes ago, Reagan1k said:

1) If your father is 85 and his whole life policy is decades old (seems so based on the OP), it may already be self sustaining.  If paying the premiums out pocket becomes an issue, you probably have a couple of options and should get those answered now, before it ever becomes an issue (if it ever does) ......a) ask the agent to run an INFORCE ILLUSTRATION using the dividends to offset the premium and / or a policy loan if the dividends don't cover it and b) ask them to show you the increase in death benefit (paid up additions) for each new premium paid.

Old policies like this presumably would be self-funding at a point, if the underlying insurer is strong.  Also, most of these policies are set to have each dividend buy a "paid up addition" which is basically trading cash today for an increase in the policy's death benefit down the road.  As an example, the premium may be $1000, the annual dividend may be $1800, and if used to buy paid up additions to the face amount, the increase in death benefit might be $2500.  Those are made up numbers but from an estate planning standpoint, you may be able to take $x out of pocket A and put $xxx in pocket B.  If he/you doesn't need the premium payment funds for immediate needs, it is likely worth continuing to pay it.  If money is tight, using the dividend or even a policy loan to offset the premium could make sense.  

Before you and your father jump to any conclusions, make sure you look at all the angles using INFORCE ILLUSTRATIONS so you can see how taking dollars from pocket A impacts pocket B.

2) On the group life question, your cousin needs to get a copy of the group life policy from his employer.  He needs to be looking for things like portability clauses, waiver of premium, or convertibility clauses.  Some policies have none of those options, but others allow for you to take the term policy with you on termination, convert it to a permanent policy, or may have a clause that waives the premium in the event of a permanent disability (meaning he can keep the policy).  It would be vitally important for him to get the policy, dig into the provisions, and ask his HR or the company's agent a lot of questions to determine what he can and can't do....don't wait until after separation of employment.  Do it now.  And, very sorry to hear about your cousin.

It's all Inforce Illustration these days!

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Yep......

In all seriousness, an old illustration is as worthless as tits on a boar considering the changes in investment experience and interest rates.  Surprising to some, major insurance companies' portfolios have experienced some nice returns relative to other non-equity  investments because of their class A real estate holdings, etc.

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I’m 59 and term insurance is still cheap if you’re healthy.  I pay a total of about $1800 per year for two one million term policies (one is a group policy at my firm and the other I purchased through an insurance guy).  I’ll probably let one of them lapse in a few years.  Mrs. HouTex will not go hungry if I kick the bucket in the next couple of years.  

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  • 2 weeks later...
On 2/6/2022 at 8:10 AM, Bevo said:

Try Dawson Financial Services in Houston. Tell him that you were referred.

Be careful with this one.   North Western Mutual.  No way are you getting out of that office without buying that guy a new Mercedes.

Agreed with what most are saying. 99% of people with a whole life policy have no business with a whole life policy.

Definitely get as much work insurance that's free.  Then shop the $1 per cost vs a term.  You can do this online.   I'd only get a policy until you are going to retire and that assumes you don't have a working spouse.   Even thought a group policy might be cheaper and no medical the biggest issue is portability. 

I can tell you story after story of horrendous insurance sales and pitches that were completely egregious.   The insurance lobby is very wealthy and powerful. 

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3 minutes ago, midtown said:

Be careful with this one.   North Western Mutual.  No way are you getting out of that office without buying that guy a new Mercedes.

Agreed with what most are saying. 99% of people with a whole life policy have no business with a whole life policy.

Definitely get as much work insurance that's free.  Then shop the $1 per cost vs a term.  You can do this online.   I'd only get a policy until you are going to retire and that assumes you don't have a working spouse.   Even thought a group policy might be cheaper and no medical the biggest issue is portability. 

I can tell you story after story of horrendous insurance sales and pitches that were completely egregious.   The insurance lobby is very wealthy and powerful. 

Good to know. He is a friend and is a well known longhorn but I have no idea about the cost.

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  • 1 year later...

Mom died.  Dad died 20 years ago.

Found her SPJST Whole Life policy where I'm listed second as beneficiary is case dad's dead.  I emailed SPJST the policy info and got "her policy is out of force".  When asking what that means, nothing but crickets.

What could it mean? 

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