Comments on: Life insurance--where/what kind to get?

Question: Life insurance--where/what kind to get?

MrMoonPie — Fri, 28 Jan 2005 08:03:48 -0800

Life insurance--where/what kind to get?

My wife and I just bought a house, and I realized we need to get some life insurance. I have some already with my daughter (from a previous marriage) as a beneficiary. My work-provided insurance isn't having an open season for a while. So who do I call?

By: jasonspaceman

jasonspaceman — Fri, 28 Jan 2005 08:48:28 -0800

I've had to deal with insurance agencies too much in the last year so here's my advice: shop around and read the fine print. Also, do not be afraid to try shopping for insurance from a locally based company. They sometimes have better rates and take care of you better should you ever need to use your insurance. Also, if you aren't looking to invest long term now, get a term policy.

By: trharlan

trharlan — Fri, 28 Jan 2005 09:21:23 -0800

The advice that is applicable for 99% of people is "buy term and invest the rest."

There are entire books dedicated to this topic, but if you are young and in an ordinary tax situation the above advice is pretty sensible.

I would suggest buying direct. Fidelity offers its own product as well as a shopping service.

By: rocket88

rocket88 — Fri, 28 Jan 2005 10:35:32 -0800

Definitely buy term insurance instead of whole life (the investment part is a rip-off), and make sure it's guaranteed renewable. I've had good results with an insurance broker.

By: terrapin

terrapin — Fri, 28 Jan 2005 10:36:35 -0800

MrMoonPie: We are in the same boat, and have been comparing plans and types of policies (universal/term/etc). My experience is different that trharlans in that it depends ont he type of universal plan you get. Some plans are like interest-gaining accounts, others are money pits. The problem with term is that when the term ends, you may not be well enough to be able to afford the insurance you will need. Give me--or better yet, the wife--a call and we will be glad to pass on any information we have gathered.

By: trharlan

trharlan — Fri, 28 Jan 2005 11:02:58 -0800

The idea behind buy-term-and-invest-the-rest is that the "rest," if invested properly, will grow to an amount sufficiently large for self-insurance.

terrapin-- if you've done a DCF or an IRR that shows any kind of permanent life insurance to be a better buy than term, I'd love to see the spreadsheet. (I'm not snarking, btw, I've just never seen one, and I am licensed to sell life insurance)

By: enrevanche

enrevanche — Fri, 28 Jan 2005 11:03:55 -0800

Annually-renewable term.