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Life insurance help?

zardoz — Sat, 28 Feb 2009 06:35:23 -0800

It's time for me to look into purchasing a life insurance policy. I was married about a year and a half ago, and my wife and I are expecting our first child in a little less than a month. So you can imagine I've got my mind on an insurance policy in the event of my death or serious injury; they would need to be taken care of.

Can someone give me some research pointers? What's a good basic policy I can get now and perhaps augment in the future? And what pitfalls should I avoid? (Difficulty level: I'm an American living and working in Japan. My wife is currently unemployed, natch because of the pregnancy, and likely won't be working for a year or so.)

I want to put a small price on my head.

wabashbdw — Fri, 19 Dec 2008 09:51:26 -0800

Why should I refrain from buying a very modest 30-year term life insurance policy from a financially unstable company like AIG? Ok, I want to purchase a 30-year term life insurance policy. The value of this policy is within the limits guaranteed by the applicable state guaranty association. At this point, what is the benefit of paying a little more for an insurer with a strong financial position vs one that may not last 30 years?

My understanding is that if I buy the cheapest policy and the company goes under, then the state guaranty association takes over the policies and finds them a suitable home with another insurer or simply administers the policies itself. I was informed that my rates and coverage would remain the same. So why should I not save a couple bucks a month on the premium?

Party On! The finer points of term life insurance policies

brandman — Fri, 10 Oct 2008 06:24:15 -0800

Life-Insurance-Filter (again): There have been some good threads in the past on understanding/buying life insurance, but I wanted to get a bit more specific this time around. To supplement my current coverage, I've decided to buy a term policy (possibly renewable), the duration and amount of which will fit my situation. What I wanted to get some insight on are the finer points of these policies. That is, if there are specific "fine print" items to look for (or conversely, to look out for), I'd like to know what those are.

Of course, it's not just the fine print I'm interested in - I'll be evaluating the overall value of the package, based on coverage, price, rating/health of the company (!), etc. Just curious about any additional differentiators I should consider that might influence my overall decision. Thanks!

AIG Life Insurance...Problems?

mbarryf — Wed, 24 Sep 2008 05:40:57 -0800

Aaaargh! I have AIG Life Insurance (in Canada). Should I be worried? I have AIG life insurance here in Canada. I just paid a bill for next year's coverage. Should I be worried about AIG (life) insurance going down the tubes?

Should I cancel my life insurance policy and use it to pay off my consumer debt?

Anonymous — Fri, 29 Feb 2008 16:33:49 -0800

Should I cancel my life insurance policy and use it to pay off most or all of my consumer debt? I'm Canadian, 50 years old, single, self-employed, with no dependents. I have about $15,000 in consumer debt and about $200,000 owing on my house. I'm covering my mortgage payments well, and am currently spending about $300/month on servicing the credit card debt. (I have 3% interest until October, but it goes up to 9% after that). There's a good chance that things will be busier for me in the spring, and I may be able to increase my debt repayment to about $1200/month, but I can't count on that.

My retirement savings are lower than I would like them to be, but I do have house equity, several RSPs, and two life insurance policies. One policy will pay out $250,000, which will cover the house and any outstanding debts. This policy costs $25/month and has no cash value. The other whole life policy would only pay out $100,000 but can be cashed in when needed. I'm paying just over $100/month for the latter policy, and it is projected to be worth $40,000 when I'm 60, $55,000 when I'm 65, and $120,000 if I make it to 80.

To my understanding, there are three reasons to have life insurance: to cover debts when you die (my major debt is the mortgage, which is fully covered by the $250,000 policy); to provide for dependents (again, I have none); and to act as an investment vehicle (I have other investments I'd like to improve).

This whole life policy's current cash value is just under $15,000. If I cash it in and apply most or all of this to my debt, it would allow me to put a lot more money towards my other retirement investments every month ($400-$1300, counting the insurance premiums and current/projected debt payments), and give me some peace of mind and breathing space. I have been watching my budget and have been paying down my debt as much as possible, but it's been a horrible year on a number of levels and I'm actually deeper in debt than when I started. Optimistically, I'm about 18 months away from clearing the consumer debt. Pessimistically, it could be another 5 years before it's clear. If I cash in the life insurance, I could be free of debt significantly faster.

The possible drawbacks of cancelling the whole life insurance:

1) The tax hit of about $3000-$4000 on the $15,000 I get from the policy. This would mean paying only $11,000-$12,000 to debt immediately, which is still a huge improvement, or paying it all off and budgeting carefully for the rest of the year to cover the expected taxes.
2) The loss of potentially $40-55,000 (taxable income) at retirement age. I could almost certainly make this up or exceed this with other investments once my debt is gone.
3) At 50, if I do need to buy a new life insurance policy for any reason, it could be much harder to get and more expensive. But I can get $10,000 of coverage for $20/month from the same company that provides my supplemental medical insurance. I don't need lavish life insurance, just something to cover any remaining small debts and a funeral. I do need to be out of debt as soon as possible and to have a much larger retirement fund.

Given these issues, is it worth cashing in the policy? I think it is, but I could be missing something important. If necessary, you can contact me at debtclearance@gmail.com.

How to advocate for and aid a desperately ill, uninsured man in California?

Scram — Thu, 03 Jan 2008 15:36:17 -0800

How to advocate for and aid a desperately ill, uninsured man in California? Posting this for a friend:

His older brother is in his mid 40s, single, lives with their father. He has no insurance, and has previously been in good health. On 12/23 he began complaining of flu symptoms. On 12/26, after two days of Nyquil and Theraflu, he claimed to feel better. But the next day, 12/27, he was found in bed in soiled sheets. He was carried into the ER in Alhambra, CA, where he was found to have liver and kidney failure. He was immediately put on life support, and is now on a respirator as well.

The ill man has $30,000 in his checking account (his bill is already more than that). No one can access these funds, and the hospital is eager to receive some payment ASAP. His relatives need to obtain power of attorney, to access his funds and to be able to make decisions about his care. There is no will and no former spouse.

His brother is in the process of getting him on Medi-Cal retroactively. What else can he do, who else can he call, to help his brother in this crisis?

Please advise. We will pass any suggestions along to our friend immediately.

Life insurance for senior dad?

Kimpossible — Sat, 23 Jun 2007 15:48:29 -0800

Should I buy life insurance for my 63-year old father? I am thinking of getting a universal or variable universal policy for my dad. I don't mind paying the premiums because they go into a tax-deferred fund that increases in value anyway. His only health issue is high blood pressure. Which companies do you recommend?

Relatively speaking, how good is my life insurance quote?

neilkod — Wed, 28 Feb 2007 09:49:12 -0800

Help me determine how fair my life insurance quote is. I received a quote from Fidelity for $1M 20-year term life insurance for $970/year. I'm pleased with Fidelity for other accounts so I figured I'd give them a shot for life insurance.

I have no real frame of reference to see if this is a fair bid. I'd rather not go through the application experience with other companies to get comparative bids-I'd like to know where my quote fits in the overall ballpark. Additionally, I'm supposed to respond to Fidelity's bid soon.

I've tried the online quickie-quotes but those aren't really meaningful.

I'm 35 years old, in fine health, great heart, etc. Not a smoker, not a pilot/cliff diver/etc. A red flag to Fidelity is that I recently lost a bunch of weight, and that affected my rating, thusly my premium.

Need term life insurance, need to get in shape

tfmm — Thu, 28 Dec 2006 07:18:57 -0800

I need to buy term life insurance ASAP, but I'm out of shape. What's the smart thing to do? I just became sole breadwinner for my wife & child. I need term life insurance right away, but I’m now realizing that I’m not making the cut for the “preferred” category.

My question is: are there hidden consequences with my plan to purchase a 10 year term policy for the short term, then re-shop for a 30 year policy once I’ve had time to get in physical shape in the next 6-12 months? I’m 33, 6’-0”, 215 lbs, have above normal blood pressure (currently on meds for this), and have a low risk occupation. I know there is no way to hide the high blood pressure meds, but what about being overweight with higher cholesterol?

My concern is that once you are “on record” in an insurance database, you are forever marked. Would a “no exam” policy be the way to go temporarily?

Life insurance up in smoke

Anonymous — Thu, 13 Oct 2005 04:59:39 -0800

Life insurance: When my husband and I got our term policies years ago, he was a smoker and paid a higer rate. He quit about 7 years ago and we were able to get the rates reduced after he had been smoke-free for a year. However, he's been smoking again for a while and I don't know what to do. If we come clean with the insurance co., our rates go up and I'm also nervous about being dropped. If we keep going as is, I'm afraid that if he dies (God forbid) they could deny the claim due to fraud.

Am I being overly nervous? Insurance seems like an industry where telling the truth can bite you in the ass sometimes.

This is a term policy with Northwest Mutual, if that helps.