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Discussion in 'Money Talk$' started by SaggyWoman, Aug 5, 2007.
Do you have a life insurance policy, and if so, how much?
The company I work for provides me with life insurance in the amount of twice my salary.
I have a policy from work that is 2X my salary, and will double if death is caused by an accident. Jeanne is has the same coverage on that policy. I also have a 15K whole life policy on myself. With Jeanne's health it is unlikely we could get a non employeer sponsered policy on her.
The standard rule of thumb is there's no rule of thumb! Generally life insurance makes the most sense for the overwhelming majority of people (even though insurance salesmen make a killing on whole life) and your needs will vary based on how much income needs replacing and for what needs.
My children and I dont have any but Dh does. I think he has a $100,000 policy, but not sure. Something like that, through Guidestone.
I have that insurance through Guidestone as well,I believe that it is $100,000 through a certain age, and then it starts declining.
I've heard it said that you need 8x your annual salary. 8 times!!! Who could possibly need, or could afford that much life insurance?
Our church had a financial planner in 2 years ago and then again a couple of months ago. He had a list of about 15 items that, if you answered yes to any of them, meant you were in financial trouble and you needed to come to his seminar. I bet you can guess where this is going. His last statement was if you don't have 8x your annual salary in life insurance, then you're in financial trouble. I thought my eyes were going to roll out of my head at that one.
I have a 100,000 term life plan currently and wish I worked for an employer who offered it because I would buy more.
I have a small policy that is 3x my salary from the hospital, but I also have a 30yo Term policy for $250k which will cover my house if I die.
The policy from work is free, and the $250k policy is $31/mo
Working with a financial planner just before my retirement, he helped us set up our finances thus:  I took the 100% individual payment annuity option from Guidestone, which means that my wife would get no monthly income if I should die (well, make that WHEN I die!), but puts our monthly annuity payment at its maximum level; then  We purchased a life insurance policy that builds value and will pay out to her almost exactly the same per month (if she elects to take it on a monthly basis) as my annuity would have paid. If she dies first, then we terminate the policy and I take back the built-up cash value. It's a procedure that helps us now and assures income for later.
Wow, all this talk of death is a bit gloomy! Yesterday our church had a short business conference where we approved a contract for some repairs on our building. It was stated that the contractor would offer a "lifetime guarantee" on his work. One gentleman brought down the house by asking whether that was "for his lifetime or mine" .. the questioner is 94!
If you have a high income, and you have significant debt, and your wife doesn't have your income or earning potential, and your children need college money, then 8X the income might make some sense. And if you buy Term Life insurance, you can get that much insurance cheaply. If you buy the stuff they'll twist your arm to buy, you're going to pay through the nose. A $500K term life policy costs only about $30-35 a month for a 45 year old.
Insurance sales is lucrative and often based on fear. Very few people need cash value or whole life. It just doesn't pay. I'm not demeaning anyone, I'm just stating something that your high commission insurance agent won't.
Life insurance should probably be considered "Salary insurance" or "earning power insurance." You're buying it to replace the paycheck you would've earned for a period of time. As such, I hate to rain on anyone's parade, but don't buy baby insurance! Gerber and others make a fortune every year through these little ads in the Sunday paper, again, preying on your fears. These policies often leave you upside down (You pay more in premiums than the policies are worth).
PastorSBC and Tater mentioned the Guidestone benefit. If your church makes a contribution to your 403b at Guidestone, you have an automatic declining death benefit and there's a small disablility benefit, too. However, I wouldn't look to this as your sole life insurance/disablility protection.
I agree completely. I wish my employer offered more in the way of term life. It is really something I should look into on my own, since Jeanne is on SSDI and I have two kids who need to be taken care of. Term life does become MUCH more expensive the older you get, but keep in mind the older you get the LESS life insurance you will need.
Again agreed. I do have a 15K whole life policy, but that is in place to cover burial expenses only. I know that once I retire (in another 35 years or so) I would not be able to afford Term Life at that point even if someone would issue a policy.
Agreed one more time. I have Life Insurance for my dependants from work that covers the Kids for 10K at a cost of .70 a month. This would be enough for burial expenses if something happened to them.
An off-shoot of the cash value is the variable life policy. I had one of these until I got tired of not getting the value from it.
Burial expenses are why we have these policies as well.
I also have a policy that I pay for in my monthly mortgage note that pays off my house mortgage in case I kick the bucket before it is paid off.
I looked over those also, before I got this policy. There were a couple of problems I found with them one being that the policy was tied to that mortage. Also, if you refinaced then you would have to get a new policy. At least that was with the ones I looked over.
Also, I went with a term life policy because it gives you the option to not pay off the house but rather pay off other bills or just blow the money on candy! I liked them having options if and when that time came.
I don't know... I did look over those but deceided that a term policy would work better in our circumstance.
You're right. Usually mortgage insurance is a bad deal. You are almost always better off getting a higher term amount that includes your mortgage.
$600,000 on myself and $100,000 on my wife. They are both 20 year term policies. Actually mine is $500,000 plus what I have at work.
My wife doesn't work, nor does she have many marketable skills. One of the cruelest things a man could do is leave his wife in financial straights were he to meet an untimely death.