Life insurance advice

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This thread tangentially related got me thinking that I probably need to improve my current life insurance situation.

I have read up the major differences between whole and term (though haven't cracked all the intricacies of things like Universal, etc).

My wife and I are in our mid 30s and have a one year old, with plans for a second child soon.
We have an ARM mortgage that I need to refi - although we will probably be moving within a year anyway.
I max out my 401k and both our Roths currently. We have a comfortable amount in our savings and retirement accounts considering our age.
We are all healthy and family history would point to neither of us living a shortened life.
My wife could probably only earn 25% of what I earn if she went back into the workforce (our plans are for her to remain a stay at home mom for the foreseeable future).

I think that if I were to die after retirement (mid 60s) that we will have built enough wealth and my kids will be on their own that our savings should carry my wife through her golden years.
If I were to die next year I think that my parents would see to it that my child(ren) were well taken care of, and between our savings and my wife going back to work in her 40's she would certainly be able to get by.

Is there a formula that can be used? Such as insurance = 10x your salary divided by your age, etc, etc. If a trade-off comes between paying for insurance vs. putting more into retirement accounts, which wins out?

I know that a lot of this is personal risk choice - do I really want to spend $1K a year for 30 year term if I don't think I'm going to die, etc.

I'm hoping for some input on my situation as well as what others here in their late 20's - early 40's have done.

Please direct me to other threads if I should look there first. Thanks!

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BenH said:   
I max out my 401k and both our Roths currently.

If a trade-off comes between paying for insurance vs. putting more into retirement accounts, which wins out?


If you max out both Roths and a 401k, you can definitely afford to pay for a $1M 30 year term plan on yourself.

BenH said:   
I know that a lot of this is personal risk choice - do I really want to spend $1K a year for 30 year term if I don't think I'm going to die, etc.


Honestly, who thinks they are going to die tomorrow? It is always a gamble. You have to weigh the options/risks. I am 31 with a wife a couple years younger. We have a baby and probably will have more. We decided it was worth it to pay ~$1k/year for term life for (I think) 20 years. After that we figure we'll have enough in savings/retirement that if one of us dies, it should be able to cover the other. We took out enough to cover the mortgage and several years of living expenses.

Thanks for the feedback so far. Just to clarify - I am not trying to argue against the insurance - I do think it is a good idea, what I am trying more to determine is really how much I need and how that amount adjusts as I age.

From my preliminary search it looks something like $2000 a year for 1 Million in a 30 year term. So I would put in roughly $60 grand over the next 30 years. If I die, of course it was a great investment. If not, after 30 years I paid in 60K with nothing to show for it - and now I need to buy a new term policy for significantly more due to my age. Or, do I buy less than 1 Million now because my wealth should be higher (then again, if it is not, affording the higher policy will be more difficult). Or do I look at whole life.

So, I would just like to understand the thought process those in my situation use to reason this out and how much is enough, and what are ideal for term lengths etc.

Just looking for all sides so I can consider the options.

I have something like a 70K policy that was purchased by my folks when I was younger...it is all paid up - no annual premiums. I guess it is considered whole life since it is good forever - but I never have to put anything more into it (although it continues to increase in value - might be worth several hundred thousand if I live to my 60s). I also have term through work which is I think $125-150K. That is only good as long as I work there. Wondering how much more is worthwhile.

ogg said:   
If you max out both Roths and a 401k, you can definitely afford to pay for a $1M 30 year term plan on yourself.


Not that this is about "affording" - it is about what is needed. But your statement isn't really a fair one. I'm in the upper middle-class but the sole earner living in a large city with 2 dependents (hopefully 3 by this time next year). The fact that I can put 25K into retirement every year (or at least currently) is not necessarily an indicator about my earning as it is about my spending and saving habits

I see. I don't have a good number to give you. My agent had a couple different options. One was called 'return of premium' where you could cash out everything that you put into it. The second was like an investment that gave you 3% and at the end you got a part of that money back. Both of those options were significantly more per year than the regular term life. We decided they weren't worth it. So yeah, if we don't die in the 20 year term, we will have thrown all that money away. But that's what insurance is. You buy it 'in case'. But I would rather throw away $1k a year than stick my wife with a mortgage, 2 or 3 kids, and whatever other expenses if I die in 5 years.

After your 30 year term is up, ideally you should be able to save enough that you won't need to take out any more life insurance, in my opinion.

BenH said:   
From my preliminary search it looks something like $2000 a year for 1 Million in a 30 year term.
So, I would just like to understand the thought process those in my situation use to reason this out and how much is enough, and what are ideal for term lengths etc.


I didn't know where to start either. If you want to come up with the amount yourself, figure out what your wife's total burn would be (with 2 kids), her income potential after those kids were on their own - basically how long she'd need to get back to a point where she could continue your current lifestyle. That's your minimum insurance amount.
I assume that 10x salary is actually about 15 years of salary - after taxation adjustment and some loss due to inflation. Could she reduce her lifestyle?

Generally the advice is that you need 8-10x your income in term insurance. @$2k for $1M sounds high too me, but it's obviously massively influenced by your BMI and your general health.


FW Advice:
1) Shop around for the best term deal. Some companies may be more competitive with your risk demographics.
2) Skip a meal if you're anywhere near a risk level in terms of BMI before they come to draw blood. Literally 2-4 lbs can knock you into the next risk category.
3) If you're thinking about taking up scuba diving, sky diving, or becoming a pilot wait until you've taken care of coverage. I didn't renew my pilot currency (inactive for 10+ years) until after I got term insurance.

Yeah - I'm wondering how beneficial it is to talk to an agent vs do this on my own. I'm concerned of course that the agent will try to sell me what I don't need.

As I mentioned if I died today I wouldn't leave my wife with any debt (our savings would allow her to pay off the mortgage without affecting the retirement accounts) and still have some savings left over for at least a couple years. She would have to go back to work though, but between her working any the grandparents, my children should have an average middle-class life.

Appreciate the feedback - hope others will chime in with their thoughts on determining amount.

@dcg - thanks. I had heard the 10x salary before but didn't know what sort of credence it had.

I'm in good health with a normal BMI. I guess though my Motorcycle endorsement and the fact that I own one might hurt me though...

She comes from a lower income upbringing than I do, and she could move back to it and be ok - mostly because we try to live fairly frugally (save as much as possible).

I got out of college without debt (apart from a few thousand in credit cards that I racked up on my own, and paid off on my own as soon as I was employed), had a car (albeit used) when I needed one, got to see some foreign countries before I was out of high school, etc. Not extravagant, but not wanting.

If my kids were raised like her they would come out ok... but my main goal is trying to provide for my children as close as I can to how I was provided for.

BenH said:   Yeah - I'm wondering how beneficial it is to talk to an agent vs do this on my own. I'm concerned of course that the agent will try to sell me what I don't need.

As I mentioned if I died today I wouldn't leave my wife with any debt (our savings would allow her to pay off the mortgage without affecting the retirement accounts) and still have some savings left over for at least a couple years. She would have to go back to work though, but between her working any the grandparents, my children should have an average middle-class life.

Appreciate the feedback - hope others will chime in with their thoughts on determining amount



So do your due diligence. An insurance agent will probably try to sell you something that you don't need (whole life). Find a good non-captive agent who can quote you from more than one source, but I'd have quotes before I walked in the door.

If I died, I wouldn't want my wife paying off the house. At 3%, she can make more money by leaving the money in a relatively moderate investment and have it be relatively low risk via the long term nature of that investment.

She's not able to match my income, not without another 4 years in college and probably 10 years in industry. And I don't want her taking that time away from our child. Working part time might be OK, but again - I look at her potential income as ability to stretch that lump sum.

BenH said:   
I'm in good health with a normal BMI. I guess though my Motorcycle endorsement and the fact that I own one might hurt me though...


I have a motorcycle endorsement also. They didn't even ask about that. They asked me if I did scuba diving, was an active pilot, or if I participated in skydiving.
I don't know what "normal" BMI is - there are lots of levels within "normal" and they all have different rates. They did draw blood (cholesterol), gave me a health Q/A, asked about family history, and checked blood pressure.

Your quote sounds high to me. Maybe ping InsuranceExpert (here on FW) - he seems to give pretty unbiased advice.

my quote was based on real rough research - so I wouldn't back it. I'm looking for a good site online where I can get quotes without having to give them my e-mail from the get-go.

I'd also like to determine how much I need vs. what I can afford (or are willing to spend). Should I look at it more like - I should spend x% of my salary or up to $x,xxx for life insurance - or should I say I want/need $x amount and be willing to pay what I must.

Your current health level and expected life expenctancy aren't really the keyss to dictate if you ought to get life insurance. The vast majority of people in their 30's are healthy and won't die anytime soon. But accidents happen. And accidents are the #1 cause of death for people your age.


BenH said:   ...
I think that if I were to die after retirement (mid 60s) that we will have built enough wealth and my kids will be on their own that our savings should carry my wife through her golden years.
If I were to die next year I think that my parents would see to it that my child(ren) were well taken care of, and between our savings and my wife going back to work in her 40's she would certainly be able to get by.
...


Thats not bad logic, IMHO. But I'd be careful.

You say that "I think that my parents" would help. do you *know* they would or just assume they would? How much would / could they help? If your parents are multi millionaires then thats fine. But if you just assume they'd help and assume they have money to do so then thats another matter.

Also, what if say 5 years from now you and your wife die in an auto accident and your parents turn sick and end up in a nursing home? Could your parents care for your children then and still have the cash to do so after hefty nursing home bills? How old are your parents and how long will their money last?

If you and your family truly have enough money to support themselves without life insurance then thats a reasonable argument for doing with out life insurance.

If you die I'd run the numbers and figure out what your wifes actual expenses would be without you and see how long she could cover that from savings. Make sure to add in child care costs if you assume she goes back to work. I wouldn't figure on just enough money to "get by" a few years after your death. If you've got young children I'd make sure they're better cared for than "getting by" for a "few years".

Term policies for 20 years are relatively cheap. A few hundred dollars a year will get you $500k if you're in good health.

BenH said:    I'm looking for a good site online where I can get quotes without having to give them my e-mail from the get-go.
term4sale.com

Quickquote.com and term4sale will give you quick quotes on term without personal info.

Theres various calculators online that help you figure out how much insurance you 'need'. I'd run a few and see what kind of numbers they give you. Here is one. You can find more googling 'how much life insurance calculator' or similar.

Avoid whole life and all the ULs. Purchase 20 or 30 year term of 10x your income from one of the cheaper term companies.

Ben, I am pretty much a broken record on this. Name one item that you purchase for hundreds or thousands of dollars without knowing the price first. There probably isn't one.

Apply for coverage BEFORE making a decision on how much to buy. That way, you are making a decision based upon the actual price instead of a quote. As an example, if you are in great health, buying $500,000 extra coverage would add about $17/month ($180 year) to your annual premium. If you have some health issues it might add an extra $100/month ($1300/year) to your premium.

At the cheaper price, your decision would probably be different than at the more expensive price.

The quoting sites are great to get a ball park idea, but you need a good agent to help get you the best price possible.

BenH said:   Yeah - I'm wondering how beneficial it is to talk to an agent vs do this on my own. I'm concerned of course that the agent will try to sell me what I don't need.

As I mentioned if I died today I wouldn't leave my wife with any debt (our savings would allow her to pay off the mortgage without affecting the retirement accounts) and still have some savings left over for at least a couple years. She would have to go back to work though, but between her working any the grandparents, my children should have an average middle-class life.

Appreciate the feedback - hope others will chime in with their thoughts on determining amount.


You can't do it on your own. You will be working with an agent. It may be an agent who set up a website, but it will be an agent. It's not the grandparents responsibility. If you can't afford to properly insure yourself, that is one thing. If you are just going to say, "gee, grandpa can help", you, at least, need to tell him of your plans to rely on his money.

The reality is that unless you have a health issue, insurance is too inexpensive to use it as a place to save money. It is your family that is taking the risk.

Thanks for the additional feedback all. I do not want to *depend* on the assistance from my parents. They are in a pretty good financial situation and I know based on their current plans that they plan to leave us a nice egg. Not millions for sure, but enough to make things easier on my wife for at least a couple of years. I know that if something happened to me tomorrow that they would accelerate those payments.
But, I agree that I do not want to look at that as "insurance" - I mentioned it worst case scenario.

Again - most of you are *mainly* trying to convince me of the need for coverage - which I do not dispute. I am just looking for guidance to specifics.

A couple of you have mentioned the 10x salary qualifier - so I guess there is something to that.

My next, more specific questions based on your feedback:

1) Term length - what are the benefits of 20 vs 30? I would assume shorter term is less expensive, and since I am looking at this as a "if accidents happen" situation is that the better way to go (10-15 year)? Or should I look to get as long a term as possible because 20 years from now it will be more expensive for me to get even a 10 year?

2) Advice for finding a good agent? Should I look online or to a local agent? I know I need to do the purchase through an agent - but should I look to the agent for advice. Do agents usually deal with a single company or multiple, and in either case, are there particular insurers I should look to go to, or stay away from.

thanks!

BenH said:   1) Term length - what are the benefits of 20 vs 30? I would assume shorter term is less expensive, and since I am looking at this as a "if accidents happen" situation is that the better way to go (10-15 year)? Or should I look to get as long a term as possible because 20 years from now it will be more expensive for me to get even a 10 year?
Get it for term for which there ia a NEED for coverage. Err on the laonger side if you must. In your case, with a small child and one expected shortly, it would be at least 20 years before the kids can be on their own, financially speaking. How much would you have accumulated in assets by then? Will that be sufficient for any eventuality so that you dont need insurance? Would you reach this goal sooner than 20 years?

You should buy coverage slightly longer for how long you feel you need protection. If a huge windfall is coming then that typically would make the length and or amount lower. Most people who have a good windfall coming would certainly be fine with 20 year coverage. If you need insurance 30 years from now then you have made a lot of mistakes.

1) Term length - what are the benefits of 20 vs 30? I would assume shorter term is less expensive, and since I am looking at this as a "if accidents happen" situation is that the better way to go (10-15 year)? Or should I look to get as long a term as possible because 20 years from now it will be more expensive for me to get even a 10 year?

This goes back to what I said previously. Make a decision AFTER you get approved and know the price.

In general, if 30 year is affordable, AND there is a fairly decent chance that you'll still need coverage after 20 years, go with the longer time period. Sometimes, it isn't affordable and/or the need isn't there.

Advantage of shorter time period: Less expensive
Disadvantage of shorter time period: Coverage may be needed in the future, but it may be too expensive and/or you may not be insurable.

I just think that the whole world should buy insurance from me, so I don't have advice on finding a good agent. Seriously, though, the best suggestion that I can give is to get recommendations from people whom you respect, but don't completely trust the agent. Use this board to parrot back what the agent is telling you and people here can give you the straight scoop.

ok thanks all. I will research some prices and talk to agents over the next month or so when I find the time. I'll report back before I pull the trigger for any final words of wisdom.

For the term length, consider buying term insurance in layers. You can buy a 20 year policy for 2M and a concurrent 30y policy for 1M so you'll have 3M coverage for 20 years and 1M for the next 10 years (Or 1M and 500k, whatever fits your needs). It's a good way to taper coverage as your wealth increases and you can afford to self insure while covering some risk of a higher premium due to an unforseen deterioration in health.

I don't disagree with most of the advice on here. I purchased a $1 million 30 year policy from AAA, and while it was slightly higher than other sources, it discounted my home and auto policies enough to offset the discount. Premium is about $850/year and I qualified for the lowest rate based on health (I was 33 when I applied). Just keep in mind that $1 milllion- even in just a few years- won't be worth what it is today (possibly even a lot less if you're one of those that thinks massive inflation is on the way). So you might consider adjusting up accordingly.

SamAdams said:   For the term length, consider buying term insurance in layers. You can buy a 20 year policy for 2M and a concurrent 30y policy for 1M so you'll have 3M coverage for 20 years and 1M for the next 10 years (Or 1M and 500k, whatever fits your needs). It's a good way to taper coverage as your wealth increases and you can afford to self insure while covering some risk of a higher premium due to an unforseen deterioration in health.

Conceptually, it sounds good, but if 30 is affordable, I would still just go with the 30. The reason is simply that life doesn't usually play out the way that we expect.

My experience, for example, is that a successful 50 year old normally owns more life insurance at 50 than they did at 30. There are certainly exceptions to this.

SCSURFER said:   I don't disagree with most of the advice on here. I purchased a $1 million 30 year policy from AAA, and while it was slightly higher than other sources, it discounted my home and auto policies enough to offset the discount. Premium is about $850/year and I qualified for the lowest rate based on health (I was 33 when I applied). Just keep in mind that $1 milllion- even in just a few years- won't be worth what it is today (possibly even a lot less if you're one of those that thinks massive inflation is on the way). So you might consider adjusting up accordingly.

The problem with this is that at some point, it probably won't make sense to be with the same auto/home owner insurance and you'll simply have a life insurance policy in which you are paying more money. Fortunately, even if it turns out to be a mistake in hindsight, it will still be a minor one.

Maybe I have missed it, but have you priced annual-renewable (i.e. 1yr term) life insurance?

sesat said:   Maybe I have missed it, but have you priced annual-renewable (i.e. 1yr term) life insurance?

Unless one only needs a policy for less than 10 years or is planning to convert to a permanent policy, these policies are not competitively priced.

BenH said:    Term length - what are the benefits of 20 vs 30? I would assume shorter term is less expensive, and since I am looking at this as a "if accidents happen" situation is that the better way to go (10-15 year)? Or should I look to get as long a term as possible because 20 years from now it will be more expensive for me to get even a 10 year?

Consider a 1-Year guaranteed renewable term : your initial premiums will be much lower but they will gradually increase as you age. The rates, however, cannot be raised just because you become sick in the future, so you actually have better long-term protection against rate increases than with a 20-year Term. Since your income will likely increase as you age, this may make more financial sense as well.

I purchased a $1 million Group Policy from IEEE 25 years years ago when I was 28 : at the time I was in perfect health and the cost was around $400/year. Today at age 53 I have diabetes and cannot qualify for any affordable life insurance, but I still have the same $1 million policy and my annual premium is just under $1000/year. The policy is guaranteed renewable to age 65, but the rates do increase dramatically after age 55, so I expect to gradually reduce my coverage after age 55 until I retire at age 65.

20 or 30-year Level Term is also not as good a deal as it used to be because of the low interest rates that the Insurance Companies have to assume when investing part of your premium during the early years.

PS: My IEEE membership costs me an additional $165/year (was $60/year when I started at age 25), but I would pay this regardless of whether I had the Life Insurance Policy. You should check with whatever professional origanization makes the most sense for you professionally.

ananthar said:   Consider a 1-Year guaranteed renewable term : your initial premiums will be much lower but they will gradually increase as you age. The rates, however, cannot be raised just because you become sick in the future, so you actually have better long-term protection against rate increases than with a 20-year Term. Since your income will likely increase as you age, this may make more financial sense as well.

I purchased a $1 million Group Policy from IEEE 25 years years ago when I was 28 : at the time I was in perfect health and the cost was around $400/year. Today at age 53 I have diabetes and cannot qualify for any affordable life insurance, but I still have the same $1 million policy and my annual premium is just under $1000/year. The policy is guaranteed renewable to age 65, but the rates do increase dramatically after age 55, so I expect to gradually reduce my coverage after age 55 until I retire at age 65.

20 or 30-year Level Term is also not as good a deal as it used to be because of the low interest rates that the Insurance Companies have to assume when investing part of your premium during the early years.
Over the same 20 or 30 year period, 1-year renewable policies (or 5-year banded policies) are going to end up costing significantly more than level term policies.

PS: My IEEE membership costs me an additional $165/year (was $60/year when I started at age 25), but I would pay this regardless of whether I had the Life Insurance Policy. You should check with whatever professional origanization makes the most sense for you professionally.One of several issues with life insurance policies sold through professional organizations is that they are frequently 1-year renewable or have rates that are based on 5-year bands, which all end up being more expensive than level term policies. Even more importantly, they will typically only give you access to one or two companies and the OP may or may not qualify for the most advantageous for him underwriting with those.

So, how do you find a good broker if you want term life insurance?

geo123 said:   Over the same 20 or 30 year period, 1-year renewable policies (or 5-year banded policies) are going to end up costing significantly more than level term policies.

That is true only if you ignore the time value of money : With a 1-year renewable policy you can invest the savings from the lower premiums in the early years yourself and easily beat the implied investment return the Insurance company provides for the 20 or 30-year level Term policy. By investing in an IRA you also get additional tax deductions not available with a Level Term policy.

So I did some quick research on the websites and have questions about this strategy:

1,000,000 of term for:

30 year - $910 a month. This works out to $27,300 over the 30 years.
10 year - $290 a month. This works out to $2900 over the 10 years

I played with the numbers to alter my age as if I was buying 10 years of term now, then in 10 years, then in 20 years. Effectively buying 10 year term 3x over the next 30 years. The numbers look like this:

Annual Premium - Total cost over life of policy:
290 - 2900
1350 - 13500
1930 - 9300

Total spent: $35700

So if I buy 3 10 year terms instead of 1 30 year term I pay an extra $8400 over the course of those 30 years.

However it means I have $6400 more to invest over the first 10 years. With an 8.5% return I would break even investing that $6400 with the extra $8400 I would have to pay over the live of the separate terms.

Cons:
Have to find an investment with at least a guaranteed 8.5% return in order to break even.
Although rates today say it will cost me $x amount for my age 10 years down the line - these amounts may increase - especially if I am in worse health.

Pros:
Flexible - I can get out or reduce my policy after 10 years. If I decide I need less I will have saved a considerable amount by not purchasing the 30 year term.

Am I being stupid here, or is it something to consider?

ananthar said:   geo123 said:   Over the same 20 or 30 year period, 1-year renewable policies (or 5-year banded policies) are going to end up costing significantly more than level term policies.

That is true only if you ignore the time value of money : With a 1-year renewable policy you can invest the savings from the lower premiums in the early years yourself and easily beat the implied investment return the Insurance company provides for the 20 or 30-year level Term policy. By investing in an IRA you also get additional tax deductions not available with a Level Term policy.


Are you able to post some numbers to back up what you are saying?

From what I have seen in pricing, you are definitely wrong, but maybe you know something that I don't.

BenH said:   So I did some quick research on the websites and have questions about this strategy:

1,000,000 of term for:

30 year - $910 a month. This works out to $27,300 over the 30 years.
10 year - $290 a month. This works out to $2900 over the 10 years

I played with the numbers to alter my age as if I was buying 10 years of term now, then in 10 years, then in 20 years. Effectively buying 10 year term 3x over the next 30 years. The numbers look like this:

Annual Premium - Total cost over life of policy:
290 - 2900
1350 - 13500
1930 - 9300

Total spent: $35700

So if I buy 3 10 year terms instead of 1 30 year term I pay an extra $8400 over the course of those 30 years.

However it means I have $6400 more to invest over the first 10 years. With an 8.5% return I would break even investing that $6400 with the extra $8400 I would have to pay over the live of the separate terms.

Cons:
Have to find an investment with at least a guaranteed 8.5% return in order to break even.
Although rates today say it will cost me $x amount for my age 10 years down the line - these amounts may increase - especially if I am in worse health.

Pros:
Flexible - I can get out or reduce my policy after 10 years. If I decide I need less I will have saved a considerable amount by not purchasing the 30 year term.

Am I being stupid here, or is it something to consider?


The "Con" is too big to consider the strategy. It is a mistake to assume that you will be healthy in the future. If you are going to be healthy in 10 years, why don't you just wait 10 years and then buy the life insurance at that time?

BenH said:   Is there a formula that can be used? Such as insurance = 10x your salary divided by your age, etc, etc.You shouldn't be using any of these formulas, as each person's situation is unique. For instance, if both spouses work and live on less than one spouse's income, you probably need way less life insurance, if any, than if you are the sole breadwinner and your spouse stays home. If you've got young kids, you'll probably want to purchase more life insurance than if you don't. If you've got a disabled child at home who'll require expensive care and the family heavily depends on your income to do so, you'll probably need a lot more life insurance than if you've got perfectly healthy kids. The list of these variables goes on and on, and you can't come up with a universal formula to capture that.

While I certainly agree with Brody above that you can't truly decide on the amount without knowing what you'll qualify for and what it'll cost, different insurance companies may or may not be competitive at different coverage amounts. So, I think that it makes a ton of sense to have a general range of coverage that you'll be looking for and the term and then to apply with the company or companies with whom you are most likely to qualify for the best possible health category for you and which are also the cheapest for your desired coverage levels.

ananthar said:   geo123 said:   Over the same 20 or 30 year period, 1-year renewable policies (or 5-year banded policies) are going to end up costing significantly more than level term policies.

That is true only if you ignore the time value of money : With a 1-year renewable policy you can invest the savings from the lower premiums in the early years yourself and easily beat the implied investment return the Insurance company provides for the 20 or 30-year level Term policy.
This, I've never seen before, as the price difference on every convertible policy that I've ever looked at was WAY higher than a level term premium. Can you post a link to some examples that you believe support your view?

By investing in an IRA you also get additional tax deductions not available with a Level Term policy.If you are in a situation in which a couple hundred dollars in premiums affect your retirement contributions, then we have other issues to discuss here.

The range of cost on a 30 year term ($1M) for preferred plus non smoker seems to range from about $900-1200 there are a few with another $100-200 higher but most are within a couple hundred dollars of each other.

What should I be looking for "under the hood" with these policies. Why would I want to pay even $50 more for a policy from one company? There has to be all sorts of fine print of different terms...where do I start to compare?

It looks like SBLI has pretty low rates, and I already have one policy through them (Chlidren's policy paid up via my folks) - are they a good place to start? I still don't know what the other higher priced companies are offering for those higher rates.

Skipping 97 Messages...
AICPA is even less expensive than it appears. This past year, many people received 50% refunds. They are the exception to the general rule to not buy association plan coverage.



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