Life insurance advice

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Note: ALL of my response are based upon my experience of working with people who have said similar things as Ben H. I have no reason to doubt that there is something that makes Ben H different than everybody else. Therefore, as an individual, he should ignore all of my answers since he is different.


Really all entirely irrelevant as I have stated through this entire threat that my goal is to buy additional insurance. Most of my questions have focused on how to do it procedural, and in the most fiscally conservative way while still providing the necessary amount. I have debated what that necessary amount is, but if you actually read my posts my concerns were more "should I leave them a windfall...or simply enough to maintain standard of living." Not once did I state my plan was to only leave them enough to "get by", I stated that were I to die with my current coverage, and our current savings (and our current inheritance down the line) that she would be in a situation a lot better off than many people find themselves in.

There are plenty of things that have been said that could lead one to the conclusion that you might be willing to leave less than what is needed for the family to maintain their standard of living. (dependence upon inheritance from your family, dependence upon wife’s ability to earn a decent income, wife get remarried, ADD depending upon the odds, comparison to other people instead of comparison to current standard of living)



I realized I needed more insurance. I posted some questions here a week ago. I want to do some due diligence before my purchase. I apologize if it isn't quick enough for you - seems to me to be salesman mentality that I have to walk out your door today with a policy.



No. I think that you should have purchased a policy yesterday, last week, last month, last year. The insurance need isn’t new. Hasn’t this need existed ever since you knocked up your wife?




The cause is not irrelevant if my chance of dying from what AD&D covers is 70% and my chance of dying from what is only covered by standard life insurance is 30%. I understand that if I only took AD&D in that situation I still risk a 30% chance I might die of something else (in terms of all the ways I *might* die, not my % chance of dying) - and so I am still taking a risk. But if AD&D is significantly cheaper (as another poster mentioned) it may be worth considering as a part of the overall strategy.


You are missing that you aren’t taking a 30% risk. You are taking a 0% risk. You are asking your wife and child(ren) to take the risk. If insurance is needed, your wife and kids are taking a 100% risk of not having enough money if you die of something not covered in an AD&D policy (if you go that route or if you don't have enough coverage). With the cost of life insurance so inexpensive, this simply isn’t the place that people (not including you) look to save money.



I'm sure not buying life insurance is one of the lesser things that people with a drug issue are hiding from their spouse.

You have it backwards. They aren’t hiding “not buying life insurance”. They are hiding the drug use.



If I died today - sure, why not. My wife is young enough and pretty enough to find a new husband and my daughter is young enough to not even remember me. The life I would want for them is to be happy - and another million dollars in her pocket in addition to everything else I leave behind is certainly not going to guarantee happiness.

This is the real issue here. You aren’t committed to the idea that your responsibility to your wife and children goes beyond your lifespan.

I am sure that your wife is very pretty and desirable now. As a young grieving unemployed widow without lots of money and a child as her top priority, she is no longer in the “desirable” category.




You don't think there are hundreds of thousands of 35 year old single moms with a mortgage and less than $5K in their bank accounts? My guess is quite a few of them are happy too - even without a couple of extra zeroes on that balance.

I would guess that many of them would be very happy. However, if we change the demographics to “widowed 35 year old moms who must get remarried in order to maintain their same standard of living (or adjust to a lower standard) because their spouse chose to save money on life insurance”, I think that most women in this demographic would be “grieving/bitter/depressed” and not “happy”.


Sounds like salesman talk there. Once I purchase, I've...um...purchased...so why would I shop? I think it is more important to take a few weeks and determine the best course of action. Pushing for anything else is just scare tactics.

No, that is incorrect. There is a reason why I put “purchased” in quotations. When you apply for insurance, you are not locking yourself into anything. In fact, all that you are really doing is saying, “Hey insurance company, make me an offer.” Until you actually apply, it is impossible to know the price. Without the price, how can you make a decision? Even if you pay the first month’s premium, it is irrelevant from a decision making process. If you don’t want the policy, everything gets refunded. You can also apply without paying. Would you rather shop based upon quotes or based upon actual rates? What you are doing is shopping based upon quotes. I am telling you to shop based upon rates. More than half of my clients don’t buy what they originally “purchase”. We frequently change the amount and/or the time period. We often even change the insurance company.

If you know that insurance is needed, there is zero benefit to waiting to apply, but there is plenty of risk. Once again, none of that risk belongs to you. It is all on the shoulders of your wife and kids.

It is IMPOSSIBLE to know the best course of action until after you apply for coverage.

I tend to over-analyze decisions (in most cases a good trait), to explore all options, and to play devil's advocate to some of the more attractive ones. So, as we move forward here (or in other threads), don't confuse my questioning/debating a topic with my disagreement. I just have a long(er) vetting process than most.

That makes sense with almost all decisions. Life insurance is different. You don’t know your options until you know the price. You simply can’t know the price until after you apply. It’s one thing if you don’t know if you truly want to buy coverage or not. If that is the case, go ahead and go through the process. On the other hand, if you just aren’t sure of the details of what you should buy, there is risk, but no benefit to waiting to apply.

On one side of the coin, we have "saving $X/year". On the other side of the coin, we have "making sure that wife and children can maintain standard of living in the event of premature death".

Can't you see how in the aggregate those who can easily afford the premium but choose to not buy the insurance may be much more likely to be in a not very good marriage? Understand that I'm not saying that not buying insurance hurts a marriage. Rather, I am saying that when people don't buy insurance despite an obvious need, there is a good chance that a marriage issue is behind their choice not to buy.

BenH said:   BrodyInsurance said:   sabhinav said:   If someone is not concerned about death due to illness or suicide wouldn't Accidental Death and Disability (AD&D) insurance be a better alternative? I have 1.5mm coverage for less than than $200 a year.

I guess that the answer is "yes", but I can't conceive of a fact pattern in which one shouldn't be concerned about death by another cause.


Well what exactly does AD&D cover? I am reasonably sure (based on family medical history) that I won't contract a life threatening illness in the next 20 years. And whether I commit suicide or not - not even a life insurance policy will cover that (as I understand it). So, mainly I am concerned with things like auto accident, plane crash, being shot/stabbed (I do live in Chicago), etc. Are those things accidents and covered by AD&D or not?

I mean how else is death calculated: illness/natural cause, accident (what qualifies), murder/manslaughter, OD, medical malpractice, suicide, what am I missing? and what type of policy covers each?



Everyone with a life threatening illness was healthy at some point beforehand. Your chance of developing a life threatening illness may be very slim, and modern medicine may be great, but you never know. Lots of previously healthy people die suddenly (aneurysm, heart attack, etc.). Incurable cancers (brain, pancreatic, etc.) inexplicably strike previously healthy people all the time. Point is, you just never know--and that's exactly the reason for insurance. If there is a financial need after your death, that need doesn't change based on the cause. AD&D would leave a significant gap in that needed coverage. If the need is there, life insurance is the proper solution.

BenH - you are misinformed. AD&D covers accidental death. You can tell by the cost of the coverage that those are rather rare. And life insurance does cover suicide, after the first two years typically.

AD&D is NOT a substitute for adequate life insurance coverage, which one you have it, you don't need the AD&D. I have AD&D. It is offered free by my employer, my wife's employer, my credit unions. I don't pay anything for it directly.

Thanks for everyone's input. As this thread has lost all semblance of my original query intent, I don't think it is beneficial to continue here.

Special thanks to those who got to the root of my questions (like SIS).

If I have more specific questions I will pose them in a new thread. Otherwise, I plan to do a final update with my final decision/rates/etc when I have completed.

BenH, good luck to you. I think that this is pretty rare that we have a four page thread with virtually unanimous consensus based upon both what has been said and what has been "greened".
1)You need life insurance.
2)It should not be AD&D.
3)You should go ahead and apply for insurance and worry about the details (amount, time period, and even company)after a policy gets approved.

Ben, the reality, based upon what you have written is that your family has been in need of you buying life insurance for at least the last 1 year and 9 months. For how long are you going to continue to allow your wife and baby to take this risk?

FWIW, semi-educated consumers often make the mistake of thinking their studious examination of life insurance provides, by extension, equally adequate understanding of AD&D.

AD&D policies can have such limited coverage as to be nearly worthless.

One infamous product provided coverage ONLY for death or disability resulting from riding on a public escalator.

Needless to say, it was a very profitable product.

BEEFjerKAY said:   One infamous product provided coverage ONLY for death or disability resulting from riding on a public escalator.

Amidst an elephant stampede, during a hailstorm, on the 4th of July (of any year) between the hours of 3:55 and 4 PM ?

I couldn't find a link, but IIRC it was a mid-20th century product from Clement Stone's Combined Insurance operation.

Consumers greedily see AD&D products -- even more than life products -- as inexpensive lotto tickets and rarely dig down into the details.

BrodyInsurance said:   
Can't you see how in the aggregate those who can easily afford the premium but choose to not buy the insurance may be much more likely to be in a not very good marriage? Understand that I'm not saying that not buying insurance hurts a marriage. Rather, I am saying that when people don't buy insurance despite an obvious need, there is a good chance that a marriage issue is behind their choice not to buy.

You've kind of got this backwards: if one were in a bad marriage and didn't want one's spouse and children to receive necessary financial support upon one's death, then choosing not to buy life insurance is a plausible way to accomplish that. The decision not to buy easily affordable life insurance that could provide necessary financial support to one's family upon one's death doesn't necessarily imply a bad marriage, it's more likely just a bad financial decision.

Edited to remove unnecessary verbiage.

It's not about not wanting to provide. It's about not caring about whether they provide or not. I am talking about situations where one makes the conscious affirmative decision that they would rather spend on themselves than provide for their family when they could easily buy the insurance. This is due to either selfishness or not caring about one's spouse. In either case, it does not speak well for the future of the marriage.

This is ONLY about situations in which one knows that they need the insurance in order for their family to maintain their standard of living.

DrDubious said:   BEEFjerKAY said:   One infamous product provided coverage ONLY for death or disability resulting from riding on a public escalator.

Amidst an elephant stampede, during a hailstorm, on the 4th of July (of any year) between the hours of 3:55 and 4 PM ?


And one baby zebra!

Porky Pig is apparently FWF O.G.

I hope you guys are not kidding. I'll have to read my policy!

Very informative thread. Thank you, all.

After reading through this thread completely, I have one question (maybe answered but could not find it in the thread), does the per month premium that I pay stay the same throughout the term of the insurance (20 or 30 years). According to term4sale.com, premium amount doubles when I go from 20 year term to 30 year term ~ $90 per month for 20 year term to $160 per month for 30 year term.

10credi said:   Very informative thread. Thank you, all.

After reading through this thread completely, I have one question (maybe answered but could not find it in the thread), does the per month premium that I pay stay the same throughout the term of the insurance (20 or 30 years). According to term4sale.com, premium amount doubles when I go from 20 year term to 30 year term ~ $90 per month for 20 year term to $160 per month for 30 year term.

If you are looking at the "20 year guaranteed" or "30 year guaranteed", yes the premium remains the same throughout the 20/30 year term. Note that there is usually an extra fee for making monthly premium payments as opposed to an annual payment. If you look carefully, the monthly premium will be higher than 1/12 of the annual premium.

uutxs said:   If you are looking at the "20 year guaranteed" or "30 year guaranteed", yes the premium remains the same throughout the 20/30 year term. Note that there is usually an extra fee for making monthly premium payments as opposed to an annual payment. If you look carefully, the monthly premium will be higher than 1/12 of the annual premium.

Thank you uutxs. Yes, I will go for the annual plan and not the monthly. FYI, I also tried the Geico Life Insurance comparator and it showed okay results too.

IEEE group life seems alot more expensive than AICPA group life.
Am i missing something, other than the NYL "we will not contest your bene claim" assurance?
I will pay a premium so that my wife can kill me and still collect a payout, but the differential is ridiculous.

http://www.ebview.com/pdfgenerator/ViewPdf/ieee/rates/Group_Term...

http://www.cpai.com/personal-insurance/gvul/gvul-preferred-rate-...

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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