Thread: Life Insurance Thread

Guys and Gals, I just had one of those phone calls that you hate to get, but that you are proud to handle.

One of my policyholders died a couple of weeks ago, and his family just now contacted us to let us know and inquire whether or not he was carrying life insurance.

This man was only 51 years old, and died unexpectedly due to diabetes.

Thankfully, we had written a life insurance policy for this man back in September 2007. . .just over a year ago.

Right now, his family is very thankful that he took the time and had the forethought to plan ahead and take care of the needs that they are experiencing now. It's a saying we use often in the industry, but it proves so true: Life insurance isn't for you, but for those you leave behind.

Please, please please. Review your life insurance plans now! If you don't have any get some. If you have some, take some time and review it, and make sure you've purchased enough.

There's not a single one of us who shouldn't have a life insurance plan. It's a small sacrifice, especially when compared to the benefits for your family if something happens.

This isn't an ad. I don't want to sell it to you. I just want to you get it and be prepared. Believe me, it's one of the smartest financial decisions you'll ever make.

Go do it!

I also want to state that you should get a colonoscopy every year from age 20 on, regardless of family history.

In fact, maybe get two a year.

No soliciting.

Slim, pitch your services also.

As an fyi...there will be significant tax law changes forthcoming. So I would highly suggest all of you let a professional tax preparer handle your taxes this year.

Also, I am giving a free colonoscopy with every tax return...while supplies last.

Mo, tell us about fish wrap subscriptions.

I also suggest that you get all of your debts paid before you kick the bucket.

Originally Posted by NightTrainLayne

Guys and Gals, I just had one of those phone calls that you hate to get, but that you are proud to handle.

One of my policyholders died a couple of weeks ago, and his family just now contacted us to let us know and inquire whether or not he was carrying life insurance.

This man was only 51 years old, and died unexpectedly due to diabetes.

Thankfully, we had written a life insurance policy for this man back in September 2007. . .just over a year ago.

Right now, his family is very thankful that he took the time and had the forethought to plan ahead and take care of the needs that they are experiencing now. It's a saying we use often in the industry, but it proves so true: Life insurance isn't for you, but for those you leave behind.

Please, please please. Review your life insurance plans now! If you don't have any get some. If you have some, take some time and review it, and make sure you've purchased enough.

There's not a single one of us who shouldn't have a life insurance plan. It's a small sacrifice, especially when compared to the benefits for your family if something happens.

This isn't an ad. I don't want to sell it to you. I just want to you get it and be prepared. Believe me, it's one of the smartest financial decisions you'll ever make.

Go do it!

Thanks for the reminder to mail my additions to my policies in.

Seriously though...I do need to pick up some additional life insurance. My company gives us a small policy (3 times your yearly salary), but I need to bump it up.

NTL, any suggestions? I haven't really looked into the pros/cons of the different life insurance products.

Originally Posted by slim

Seriously though...I do need to pick up some additional life insurance. My company gives us a small policy (3 times your yearly salary), but I need to bump it up.

NTL, any suggestions? I haven't really looked into the pros/cons of the different life insurance products.

There's a lot of different types of products, but basically they all whittle down into two categories: Term and Perm (permanent).

Term: Set for a term like 5, 10, 20, 30 years. Rate/premium is locked in for that term, but at the end of the term either the policy ends, or the rate goes up. Pros: inexpensive, and easy to understand. Cons: Rate/premium only locked in for a short time, ratchets up as you get older, and often ends before you die.

Perm: Often called "whole" life, but also includes policies like "universal" and "variable universal" and others. The rate/premium is designed to be level for your entire life, and designed to last for your whole life. Pros: you won't outlive it, and it builds cash value. Cons: more expensive than term, and more difficult to understand and manage.

The biggest key to me is that you get enough to cover your needs. If that means all you can afford to do is term, than by all means utilize term insurance. If you can afford Perm, and you like the idea of having a level premium that doesn't increase as you get older, with cash value available to you in the future, then buy some Perm.

Many people do some of both. Some term and some permanent (you will for sure die someday afterall).

Some do all term, and invest the difference in retirement savings. This actually works really well for someone who is disciplined enough to make sure and invest the savings each month. But if you buy term and don't try to set aside the difference, you're probably getting behind the curve and setting yourself up for trouble down the road.

The first step though is to figure out how much you need. I use the acronym L.I.F.E.

L = Loans. Total up all the loans you would want paid off if you died.

I = Income. How much do you need to set aside to replace your income? Many financial planners suggest you be able to set aside 7 times your annual income if you have a dependent family (wife/children), but this decision is different for everyone. Think about how long you'd want to support your family after you're gone before they are forced to go back to work. It is often very difficult for a surviving spouse to take care of the kids and work full-time to support them. . ..especially right after they've lost their spouse.

F = Final/Funeral expenses. Set aside a decent amount for Funeral and possible probate costs. Don't go cheap, you don't know what will be facing your family when you die, from unexpected medical bills etc. Should be at lease $20k.

E = Education. Do you want to fund your childrens education? If so, decide how much to set aside.

This will give you a total. Sometimes it can be a pretty scary number, but the scarier the number, the bigger your need. If it scares you, it just means you need to act more urgently to fix it.

Subtract away any policies you currently have, and savings (maybe 401k/retirement savings as well), and this will give you a total of your need.

If you find that you can't afford your total need, don't give up. Buy as much term as you can, and plan to come back and review it and add on more down the road. Rome wasn't built in a day, start something now, and add to it later.

I often have men complain that if they leave a bunch to their wives, it just means they're leaving more money for their wives next husband. ..

Whatever you do, don't think of it that way. Leaving her and your family plenty, means that she won't feel any pressure to replace your income immediately.

Funny NTL someone sent me something about life insurance and it was term - ended at 65 - since i will prolly live past that (well it would be a for sure if I took out that kind of term insurance) i didnt see the point in that - so what do you suggest and how much

EDIT: you answered before i could hit submit - stupid boss and his stupid work

And does a person really need it if their kids are grown and on their own - so there isnt anyone they are really leaving w/o anything

Are there certain death exceptions, like if you disappear and no body is ever found, suicide, cancer, pre-existing illness?

EDIT: Still would like answers to these

Originally Posted by orangenblue420

Funny NTL someone sent me something about life insurance and it was term - ended at 65 - since i will prolly live past that (well it would be a for sure if I took out that kind of term insurance) i didnt see the point in that - so what do you suggest and how much

And does a person really need it if their kids are grown and on their own - so there isnt anyone they are really leaving w/o anything

Are there certain death exceptions, like if you disappear and no body is ever found, suicide, cancer, pre-existing illness?

Lots of good questions. Some are hard to answer in a general sense because everyobody's different and have different needs.

Indeed, I often ask folks if they plan on living past the age of 65. If so, then you probably need some permanent insurance, because after age 65 term insurance often stops renewing (sometimes it's 70 or later).

Of course, if you have a lot of debt right now that you plan to have paid off before age 65, then it may make sense to carry some term to cover the shorter-term needs, and some perm to take care of your needs later after 65.

If you have no dependents, then maybe you just want to get enough to pay off your debts, and pay for the funeral and probate so that your family isn't burdened with the funeral and worrying about paying off your house or car before they can sell it.

Most stand-alone life policies don't have exclusions in them, but they usually do have a 2-year contestibility period. So if the policy is issued and you die within two years they can look back for fraud and/or suicide.

I.E. If you find out you have inoperable brain cancer, then buy a policy without revealing it and die within the next two years they probably won't pay the death benefit, if they can prove that you witheld that information. Same with suicide. If you kill yourself within 2 years of a new policy and they can prove it was suicide they won't pay. However, after the 2 years contestibility period they can't contest it.

Some of these rules change from state to state, so check 'em out where you live, it may be different.

In addition to my Militray life insurance I bought an extra policy.

Another thing I did is I purchased the option on all my loans that if I die they are forgiven.

Good idea NTL?

I am leaving my family Hi and Dry. I want them to miss me when Im gone. And a little hunger and homlessness couldnt hurt.

Originally Posted by Davii

In addition to my Militray life insurance I bought an extra policy.

Another thing I did is I purchased the option on all my loans that if I die they are forgiven.

Good idea NTL?

There's nothing inherently wrong with the options on loans and credit cards to pay them off upon death.

The question to look at when deciding whether or not to do this is to look at the cost of this on each loan, vs. a separate life insurance policy to take care of them all at once.

A couple other factors to think about.

On loans it will only pay off the loan balance. We generally call this decreasing term. E.G., when you buy a car lets say your loan is $20,000, and you pay a monthly fee to pay this off in case you die. Three years down the road the loan may only be $12,000, but you'll still be paying the same fee, even though the loan balance is lower.

Two: This will only pay off the loan. With a separate policy your beneficiary would have the choice to either pay off the loan in full at that time, or set aside the cash and continue to make payments according to their own cash flow and investment needs.

You just have to analyze it on a case by case basis, and look at your own personal needs.