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Life Insurance?

islandmonkey8islandmonkey8 member
5000 Comments Fifth Anniversary 500 Love Its First Answer
edited June 2015 in Married Life

H

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Re: Life Insurance?

  • Money Matters Board. Jan 2.

    Check out the Life and Disability Insurance discussion.

    Do either of your employers offer group life?

    Are either of you military current or former? Or, is one of your parents or siblings military former or current? If so check out USAA. It's only for military and their families, but they have great programs and typically their rates cannot be beat.

    You need to think about what your current and futue debts are, how many kids you may have, if you want to pay for college with life insurance benefits, and how much your surviving sposuse woudl need to live on comfortably if s/he could not go back to work or chose not to go back to work. Like if you had a car accident and one of you died and the other lived but with disabilities. Also, the average funeral costs around $10k.

  • Who do you have for homeowners/ renters/ car insurance?  That company probably offers life insurance, too.  Make an appointment with your insurance agent.  They'd LOVE to try to sell you insurance and give you all sorts of brochures explaining what everything is.

    Google.

    I run across this guy on the radio frequently.  http://www.daveramsey.com/articles/article-list/category/lifeandmoney_insurance/ 

    H and I personally did not purchase life insurance until we had liabilities that would affect the other person if one of us died.  

  • Now is the best time in you and your husband's life to buy life insurance.

    You both are young and healthy so it is very affordable and that rate is locked in for the duration of the policy.

    My advice to you is contact one of the major carriers i/e Metlife, Guardian, NY Life, Northwestern Mutual, or Pacific Life. They are all stable company's who all offer competitive rates.

    Term life: You can purchase coverage ranging from 100k and up. With term durations of 10, 15, 20, 30 years. Keep in mind most company's give a price break at 500k and $1,000,000. So if you get a quote for 350k the chances are for only a dollar or two per month you can get coverage for $500k...Same goes for larger face amounts. A $750k face amount costs almost the same as a $1,000,000 policy.

    Whole Life: Is the Lexus of Life insurance. It is insurance for your entire life, hence the name Whole Life. This is a policy that accrues a cash value and it has guarantees of that value, regardless of how the economy is performing. The premimum on this policy is big. You are paying for the guarantees and is a great way to protect your family and build up a little nest egg at the same time. Usually after paying premiums for about 15 years this policy is self sustaining and the dividends are able to cover the premium so you no longer need to pay into the policy. You also can take cash withdraws or borrow against this policy with no penalty once the surrender period has expired

    Variable Universal Life: This is a permanent policy was well, however; The only guarantee is that as long as the premium is paid the death benefit face amount is covered.

    The way this policy is set up is a portion of your premium goes towards your  guaranteed death benefit the rest goes into a separate account which is invested via mutual funds. This is a equity based policy and has no guarantees on the performance of the investments in the secondary account and as you get older the internal cost of insurance does go up. So if the market is in the tank for a long time there is a good chance that your premium will go up in order to sustain the face amount/death benefit. You also can take cash withdraws or borrow against this policy with no penalty once the surrender period has expired.

    My advice is to buy a combination of both Term Life and Permanent(whole or variable universal) . The most important thing is to buy within your budget. Please keep in mind that if you buy $250k in coverage and as your family grows that is not enough coverage. I recommend at least $500k each in Term coverage and maybe $100k to $250k in permanent coverage or maybe a $1,000,000 term policy on whoever is the breadwinner and no premanent coverage on them. A million dollar police will cost under $80 a month if you are in good shape and health and have a good family medical history.

    I would not factor in group life insurance through a employer. People change jobs a lot of times over their working life and some employers do not offer group life and if there is a gap in employment that coverage lapses on the your last day working for that company..

    Good Luck and feel free to private message me if you have any questions. 

     

  • imagetooquick1:

    Term life: You can purchase coverage ranging from 100k and up. With term durations of 10, 15, 20, 30 years. Keep in mind most company's give a price break at 500k and $1,000,000. So if you get a quote for 350k the chances are for only a dollar or two per month you can get coverage for $500k...Same goes for larger face amounts. A $750k face amount costs almost the same as a $1,000,000 policy.

    Sorry, but this is going to sound like a really stupid question.  Can you explain the term life insurance?  If you have life insurance for the 30 year term duration...what happens at year 31?  Does that mean at the year 31 you would have the full policy (e.g. 350k or 500k, etc)?

    Anniversary

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    TTC since June 2012

  • imageathlete010688:
    imagetooquick1:

    Term life: You can purchase coverage ranging from 100k and up. With term durations of 10, 15, 20, 30 years. Keep in mind most company's give a price break at 500k and $1,000,000. So if you get a quote for 350k the chances are for only a dollar or two per month you can get coverage for $500k...Same goes for larger face amounts. A $750k face amount costs almost the same as a $1,000,000 policy.

    Sorry, but this is going to sound like a really stupid question.  Can you explain the term life insurance?  If you have life insurance for the 30 year term duration...what happens at year 31?  Does that mean at the year 31 you would have the full policy (e.g. 350k or 500k, etc)?

    Nevermind - I found my answer.  So, what's the point of term life insurance then?  If the coverage ends at the end of the term, why would you want term life?  Sorry - I have no clue about life insurance!

    Anniversary

    image

    TTC since June 2012

  • Term life is what will pay out if you pass away within that term. So if you have a 20 year term policy and pass away at year 10, it pays out the face value of the policy.

     They put a year term on this, because in that many years, your health can change. So you have to re-write the policy after that 20 year term is finished, and the premium will likely be different as you will be 20 years older.

    For this reason, H and I both have variable life policies. We like that the way ours is set up, we can use it towards retirement, along with it being paid up at age 50. So once we turn 50, we no longer have to pay into it. The money just sits there till we need it for retirement, or until we turn 70. Whichever comes first.  Or until we pass away.

    We go through New York Life for all of our investments and life insurance. We absolutely LOVE their core values, which is why we use them.

     Edit: This was supposed to be quoting the above post.

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  • imagebrij2006:

    Term life is what will pay out if you pass away within that term. So if you have a 20 year term policy and pass away at year 10, it pays out the face value of the policy.

     They put a year term on this, because in that many years, your health can change. So you have to re-write the policy after that 20 year term is finished, and the premium will likely be different as you will be 20 years older.

    For this reason, H and I both have variable life policies. We like that the way ours is set up, we can use it towards retirement, along with it being paid up at age 50. So once we turn 50, we no longer have to pay into it. The money just sits there till we need it for retirement, or until we turn 70. Whichever comes first.  Or until we pass away.

    We go through New York Life for all of our investments and life insurance. We absolutely LOVE their core values, which is why we use them.

     Edit: This was supposed to be quoting the above post.

    Thanks!

    Anniversary

    image

    TTC since June 2012

  • imagetooquick1:

    Now is the best time in you and your husband's life to buy life insurance.

    You both are young and healthy so it is very affordable and that rate is locked in for the duration of the policy.

    My advice to you is contact one of the major carriers i/e Metlife, Guardian, NY Life, Northwestern Mutual, or Pacific Life. They are all stable company's who all offer competitive rates.

    Term life: You can purchase coverage ranging from 100k and up. With term durations of 10, 15, 20, 30 years. Keep in mind most company's give a price break at 500k and $1,000,000. So if you get a quote for 350k the chances are for only a dollar or two per month you can get coverage for $500k...Same goes for larger face amounts. A $750k face amount costs almost the same as a $1,000,000 policy.

    Whole Life: Is the Lexus of Life insurance. It is insurance for your entire life, hence the name Whole Life. This is a policy that accrues a cash value and it has guarantees of that value, regardless of how the economy is performing. The premimum on this policy is big. You are paying for the guarantees and is a great way to protect your family and build up a little nest egg at the same time. Usually after paying premiums for about 15 years this policy is self sustaining and the dividends are able to cover the premium so you no longer need to pay into the policy. You also can take cash withdraws or borrow against this policy with no penalty once the surrender period has expired

    Variable Universal Life: This is a permanent policy was well, however; The only guarantee is that as long as the premium is paid the death benefit face amount is covered.

    The way this policy is set up is a portion of your premium goes towards your  guaranteed death benefit the rest goes into a separate account which is invested via mutual funds. This is a equity based policy and has no guarantees on the performance of the investments in the secondary account and as you get older the internal cost of insurance does go up. So if the market is in the tank for a long time there is a good chance that your premium will go up in order to sustain the face amount/death benefit. You also can take cash withdraws or borrow against this policy with no penalty once the surrender period has expired.

    My advice is to buy a combination of both Term Life and Permanent(whole or variable universal) . The most important thing is to buy within your budget. Please keep in mind that if you buy $250k in coverage and as your family grows that is not enough coverage. I recommend at least $500k each in Term coverage and maybe $100k to $250k in permanent coverage or maybe a $1,000,000 term policy on whoever is the breadwinner and no premanent coverage on them. A million dollar police will cost under $80 a month if you are in good shape and health and have a good family medical history.

    I would not factor in group life insurance through a employer. People change jobs a lot of times over their working life and some employers do not offer group life and if there is a gap in employment that coverage lapses on the your last day working for that company..

    Good Luck and feel free to private message me if you have any questions. 

    It won;t let me bold, but my post refers to the PPs second to last paragraph on group life...

    Group life makes sense only if the policy you can get into is portable, meaning you can take it with you if you leave your employer. While you are with your employer, the cost of the policy will be like cents on per $1k of insurance that you have. While the cost would increase to your out of packet if you left your company, it would still be low.

    Example, when I worked for a company that offered group life through an independent company (Minnesota Life) I paid only a few cents on each $1k of insurance that I had. When I left my job to be a SAHM, I ported the policy and now pay directly to MN Life on a quarterly basis. My policy has remained in tact, no lapses, and my amount quarterly for $330k is about $58.

    When you leave a company with group life you can call the company where the policy is held and tell them you want to continue coverage. They just send you the bills instead of your employer.

    This totally makes sense to do and it saves yoru money. Again, ONLY IF the group life policy is portable.

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