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      02-22-2013, 02:30 PM   #1
will.c
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Life insurance?

My company's policy only covers up to 50k. I'm also considering a 500k+ because I'm paying for my family's dept and they would go bankrupt should something happen to me.

I have no basic knowledge on this, and I'd appreciate if someone here can provide a quick run-down, which companies are good/cheap, death benefit vs cash value savings, etc. I'm 27, single, no health conditions, work at office.

Did some google search and stuff, but most info are too general. Still interested in ppl's personal exp if anyone would be kind enough to share.
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      02-22-2013, 02:39 PM   #2
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You want to look into an equity index universal life policy, the premium is high but its also a retirement plan as well if set up correctly.
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      02-22-2013, 04:47 PM   #3
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Each person has their needs. Most 20-30s should look at convertible term.
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      02-22-2013, 06:36 PM   #4
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i think i'm paying $46/mth for 30 years for $500k
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      02-22-2013, 07:28 PM   #5
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Note also that while life insurance is a must have especially when people are dependent on your income, it's also important to consider disability insurance. I have both. This covers you not only if "something happens" but if something happens and you cannot work for an extended period of time.

Look at Berkshire (Guardian) life insurance, they have some great policies and less "fine print" than a lot of policies I considered when doing my shopping (this was a few years ago now) ... Now I just "set it and forget it" and pay the premiums, and don't worry.

I also have their disability policy, which if I were to become disabled (my policy is awesome because disabled is defined as no longer being able to do my particular job/function) I get paid the policy payout monthly tax-free - life and disability insurance payouts are tax-free if you pay for the policy yourself; wherease an employer-paid policy has a taxable payout - until age 65. During that time I can have jobs in a different field or capacity and it would not invalidate the payout.

I bought both policies as "Murphy's law insurance" because Murphy's law states (paraphrased) that you won't ever need this stuff unless you got into a situation where you needed it and didn't have it. And if that is proven wrong, which of course it can be - Murphy's law is not a real law - then I and my family will be covered no matter what.

Finally, when deciding on a coverage amount, while this will be limited by your income and net worth, it's important to consider the monthly obligations you would leave your dependends with, and calculate how many years the payout on life insurance will last them, or with disability insurance, compare the payout to your net take home income and make sure it at least exceeds the minimum monthly obligations that cannot be cut, such as debts, student loans, mortgage, etc. Half a mil may sound like a lot, but how many years will it last your dependents before they need to source additional income? Etc.

Good on you for thinking if this at an early age and considering others in your decision making.
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      02-22-2013, 09:59 PM   #6
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Term policies - gives you the most coverage for cheap. You should get a large death benefit so your family is well taken care of - perhaps a 20 or 30 year term because the rate will be based on your age and health now!

You can also get a permanent policy such as a whole life - for 50 to 100k death benefit - the main purpose for that policy is so that it grows cash value and its more of an investment in the long run.

My girlfriend is a life insurance agent for State Farm and is very savvy in the subject if you'd like more details.

The top companies are New York life, State Farm...and MetLife is also good.
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      02-23-2013, 08:18 PM   #7
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I looked at it this way, I wanted to get a policy now when I'm young and healthy and rates are low. I wanted the policy to cover a few years salary and be able to pay off the house for my wife as well as pay for college for my two planned children If I were to pass away. That all came out to be around $900k in coverage on a 30yr term. I added $100k in universal coverage to compliment the standard policy as more of a retirement investment. The two policies together cost me less than$100/month.
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      02-23-2013, 09:59 PM   #8
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I second the term insurance for what you described. Get the term to expand out as far as you expect the debt to last.

I guess I am lucky - I maxed out my company sponsored life insurance at ~$300K and it only costs me about $10 a month.

Also ddk, that is a good disability policy. Most disability policies won't pay out unless you also qualify for disability through the government (and then the coverages are deceiving, they only cover the difference between what the government disability pays and what they quote, not in addition to as you would think)
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      02-23-2013, 10:26 PM   #9
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Be careful with insurance thru employer. You need some that is portable unless you stay with your employer until retirement or until you no longer need coverage. Use employer coverage as a bonus.
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      02-24-2013, 01:44 PM   #10
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Although I do not personally have life insurance because of the fact I have no dependents and should I die my assets can more than cover my burial expenses. If you do have dependents you should get some life insurance and assuming the rest of your financial life is in order and on the correct track I would also recommend term life insurance and not whole life.
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      02-24-2013, 09:13 PM   #11
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Great info guys, glad I asked here.

So I'm thinking a high-coverage 30-year term life through a third party to start off while I'm young, then perhaps convert it or start a smaller whole life when I get older.

My company's Metlife $50k basic life is granted so I'll take it, but it's not quite enough to cover our dept. Company's supplemental long-term life (up to $500k) is portable, but I'm not sure $54/mo for 500k is a decent rate.

Also given a short-term disability 60% or $1000/wk for up to 25 wks. A long-term disability is also avail at like $8/mo.

Overall I get a sense that it should cost me <$100 for everything inclusive.
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      02-24-2013, 10:37 PM   #12
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I pay about $800/yr for $1.2M in convertible term. I also have $200k through my company.
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