I have never had Life Insurance, nor has my wife. We are in

Submitted by Cwpnd on Fri, 02/08/2008 - 19:02

I have never had Life Insurance, nor has my wife. We are in our middle 50's. What type of insurance would be best.

Posted: 08 Feb 2008 08:02 Post Subject: I have never had Life Insurance

Welcome Cwpnd!

The process of buying life insurance includes at least four variables:
(1) Need
(2) Budget
(3) Age
(4) Health Condition

I only know that you are in your middle 50's.

I would find a professional insurance agent in your area and sit down and look at your life insurance "Need":
(These are questions to discuss - no need to answer them here.)

Do you have a mortgage?
Do you have a lot of debt?
How long do you want to keep your life insurance? May sound like a dumb question, but at your age, if you want the life insurance policy in force the day you die, I would suggest a form of permanent life insurance.

What exactly do you want to accomplish with your life insurance program?
Pay Mortgage?
Pay Debt?
Pay Final Expenses?
Leave spouse a regular income?
Money for grandkids' education?

Buying life insurance is not as simple as just going online and buying a $100,000 policy. You need an agent you can trust to help you.

If you have any further questions, just post.

Posted: 08 Feb 2008 11:16 Post Subject:

There are probably a lot of scammers out there just waiting to take your money, so maze is right, you must find some one you can trust with this planning, find a reputable company or ask around and see what your friends have. The may seem kind of freaky, but it would not hurt to ask the local funeral parlor, they deal with the results. They may have heard a lot of whose good and whose bad. Just a thought.

Posted: 09 Feb 2008 05:22 Post Subject:

Welcome to the community Cwpnd. We are happy to have you with us. Though Insurance Maze has left very little to add :evil: I'm just trying to put my two penny forward....a Term life policy may score over a whole life plan for an individual at mid 50. It'll be cheap also as compared to that of a whole life plan. Reminding you that anyway the premium rate will be much high for you as it depends upon the age of the insured.


Another point, have you considered buying a long term care insurance? It seems to be an ideal plan for the graying people. It'll take care of your health care costs, nursing home care, day-care expenses and the other supports that you may need as you grow old. You may wish to pay a thought over it as well. :D

Posted: 09 Feb 2008 05:22 Post Subject:

Thanks cwpnd, That is good sound advice that I also can use . I will remember that when I get to get insurance also.

Posted: 09 Feb 2008 03:49 Post Subject:

Before choosing a life insurance plan you may want to consider what your goal is for the life insurance.

Do you want to provide money to support your spouse in case you pass away? Do you want to provide for your children, and any granchildren?

Also, decide how long you need life insurance, how much life insurance you need, and how much you can afford to pay for the life insurance.

You also want to compare rates and plans from several insurance companies because each company has different rates and underwriting guidelines.

Also, consider the A.M. Best financial strength rating of the life insurance company you choose. An insurer rated "A" Excellent or better by A.M. Best should be a financially sound, secure carrier.

You can also look into the insurer's status with your Department of Insurance in your state to find out if they have any complaints.

I hope that helps. You may want to consider term life insurance, it may be more affordable compared to whole life, depending on how long you want coverage.

Best of luck to you and your family.

Posted: 09 Feb 2008 04:50 Post Subject:

Term life insurance is fantastic if you have documented evidence that you are going to die in 10, 20, or 30 years.

Let's suppose a person in his/her 50's buys a $100,000 20-year term life insurance policy for a premium of $45.00 per month (I just made that up).

Let's jump ahead 20-years (he/she didn't die) - now comes the Big Decision! The first term period of our life insurance has expired, so in order to keep this life insurance, we have some options:

(1) Renew the policy at a premium of $750.00 per month
(2) Let the policy lapse and have no life insurance
(3) Purchase a new life insurance policy - Remember now 70-ish
(4) Convert the term policy (if convertible) - Remember now age 70-ish

We forgot about the quadruple by-pass surgery at age 65, which makes the "purchase of a new life insurance policy" out of the question (most likely).

We don't just want the policy to lapse because we needed the life insurance when we bought it and we still need it.

According to the provisions of the term life insurance policy, it was only convertible in the first 10 years. Didn't read that part and no one told us.

So, we're down to one option -
Renew the term policy at a premium of $750.00 per month.

If someone had just shown us a permanent form of life insurance while we were in our 50's, we could have bought $100,000 of life insurance that would be good for the rest of our lives for - $125.00 per month.

Don't misunderstand me, term life insurance is an excellent way to guarantee liquidation of a "term" debt like:
Mortgage
Auto Finance
Credit Card Debt
Short Term Loan

But if you expect a term life insurance policy to be in force the day you die, you could be disappointed.

Posted: 09 Feb 2008 08:22 Post Subject:

Insurance Maze, I completely agree with you.

I have read that approximately 97% of all term policies do not pay out the death claim for any one of the following reasons:

1. The policy expires with the insured alive.
2. The policy is cancelled.
3. The policy lapses.
4. The policy is converted to permanent life insurance.
5. The policy is lost.
6. The beneficiaries were unaware there was a life insurance policy in place.

Term life insurance is just that, life insurance for a specific term. Nothing more, nothing less.

I absolutely agree with your analysis about the options available if you outlive your policy term.

These are very important points to be considered before someone chooses any term life insurance policy.

One point though, I have a term policy and a permanent policy because I know the value of both, and what they do for me and my family.

However, many individuals that take the time to protect their loved ones with life insurance, may also have a separate investment set aside to pay for their final expenses, instead of using a permanent life insurance policy. Although a permanent life insurance policy can certainly provide for more than just your final expenses.

Thanks again for your addition to this ongoing thread. It is always best to consider all perspectives when it comes to life insurance.

Posted: 09 Feb 2008 08:44 Post Subject:

If the term policy expires and you are still living do you get the premiums back or nothing at all. What if I paid for a term policy for 30 years and I am 50.Chances are I would not out live the policy right?

Posted: 09 Feb 2008 11:49 Post Subject:

First, if the term policy expires and you are still alive, you would not get the premiums back, unless you purchased Return of Premium term life insurance. The return of premium policy usually costs 20%-40% more than a regular level term life insurance policy.

However, if you outlive the return of premium term life policy you will get your premiums back, except for any expenses stated in the policy that the insurer keeps.

If you are 50 and have a 30 year term life policy, you may or may not outlive the policy. The average life expectancy for a male is approximately 77+ years. And, with better health care, better nutrition and prescriptions drugs, people are living longer.

Posted: 10 Feb 2008 01:41 Post Subject:

While it is true that well over 90% of term policies are never used, in a near-perfect scenario, the combination of term, Roth IRAs and matching 401K will lead one to some very green pastures.

Throw in a 529 (but you must be careful with them) and you have all bases covered.

But it is not a perfect world and many (or shall I say most???) do not "invest the difference." Thus, when the term policy expires, there's not enough cash to preserve retirement.

So, in some cases, Whole Life is the best option.

For what it is worth, I do not have ANY permanent coverage, although being in this business, I was diligent enough to invest. Of course...the last 4-6 weeks has not been a happy time in the equities market.

Posted: 10 Feb 2008 02:01 Post Subject:

There may be better health care and prescription drugs but they are all not within my grasp as I cannot afford these things so I look to be lucky to live past a term policy. Also it sounds like a horrific percentage of term life policies to not be used.Sounds like a great waste and great gain for insurance industry.

Posted: 10 Feb 2008 02:56 Post Subject:

hummingbird it seems that you may have misunderstood the point I was trying to get across:

Sounds like a great waste and great gain for insurance industry.



Let's look at a family of five - Mom, Dad, 4 year-old, 5 year-old, and 7 year-old. In order to provide the maximum life isurance protection, Dad feels that he needs $250,000 in life insurance.

Dad feels that all the kids will be out on their own in about 14 years (youngest child will be 18).

The premium for a permanent $250,000 life insurance policy just will not fit into the family budget, however he can pay the premium for a $250,000 term policy.

So, he buys a $250,000 20-year term policy, which will help take care of his family if he should die while the kids are still at home.

So, if Dad dies in 10 years, who has gained the most, Dad's family or the insurance company?

As far as "buy term" and "invest the difference" - no one in my 20+ years in the insurance industry has shown me a way that a person can accumulate $100,000 in cash in 20 years. The last time I checked, the compounded interest rate would have to be something like 25%.

So, term life insurance in the right situation is an excellent buy, but the style of life insurance depends on individual desires and circumstances.

PS - I don't know where the smiley faces are coming from, I didn't put them there.

Posted: 10 Feb 2008 03:47 Post Subject:

Actually...$149 per month invested for 20 years at 9% will accumulate to $100,000. A Roth would be a great vehicle for this.

11% ROR will reduce the required monthly payment to $115. If you are earning 7%...the monthly payment will increase to $195.

So it's not as tough as you might think. Naturally, a mutual fund will create some taxes for you. And the beauty of this is...if you stop or skip payments...you don't run the risk of losing everything.

Posted: 11 Feb 2008 01:48 Post Subject:

Sorry, I was having a brain freeze on the last post and didn't make myself clear.

When I made the statement:

As far as "buy term" and "invest the difference" - no one in my 20+ years in the insurance industry has shown me a way that a person can accumulate $100,000 in cash in 20 years.



I was talking about the difference in premium of term life insurance and permanent. It my example with the person in his 50's, the term premium was $45.00 per month and the permanent life insurance was $125.00 - a difference of $80.00 per month.

Where can a person invest $80.00 per month and accumulate $100,000 cash in 20 years was actually the question.

According to MSN Money here's what it would take:

Starting with $80 and depositing $80 monthly over 20 years (at a rate of return 21%, compounded monthly and taxed at your marginal rate of 28%), you will save $107,768.
Initial balance: $80
Total deposits: $19,200
Total interest earned: $122,900
Total taxes paid: $34,412
Total Saved: $107,768

Where can a person get a guaranteed return of 21%?

Posted: 11 Feb 2008 06:50 Post Subject:

OK ,But if a person takes a term policy because they cannot afford the permanent insurance there will be no difference to invest. What it sounds like to me is a gamble do I want to spend _amount of money for a term policy that will pay off if I die withion that term OR if I don't at the end of that term I may or may be able to change it to permanent or I may have just lost all those premiums. Am I understanding that correctly. Either you gain or the insurance company gains. BUT, if well over 90% of term policies are ever paid then the insurance compainies are making the most.
What smiles?

Posted: 11 Feb 2008 09:46 Post Subject:

What a great conversation you guys have going on here.
Maze, I believe you have done a wonderful job thus far. I'm afraid, however, you will always run into resistance from those who have Suze Orman's picture taped to their refrigerator door.
Someone in their mid-50s are very rarely candidates for term insurance and even Suze knows that. Because she wants someone to have the money to settle her estate when she passes on, she owns a huge Variable Whole Life policy through Mass Mutual.
I do not think 30-year term policies with Return of Premium (ROP) riders are available past age 50.
If I were an agent tasked to help these people, I would have asked them the same questions you [Maze] did: Budget, needs, goals and if they want to pass money along to their loved ones when they die. If they don't, term might be the way to go and if they do, stay away from a term plan.
Pretty simple actually.

Posted: 11 Feb 2008 10:00 Post Subject:

I'm afraid, however, you will always run into resistance from those who have Suze Orman's picture taped to their refrigerator door.



InsInvestigator, you forgot a Dave Ramsey tattoo on the rear end.

I really don't understand how some of these people sleep at night.

Too many people end up in what I call the "Term Trap", no where to go with their life insurance program.

Believe me, I am used to this argument, but no one has convinced me yet.

Glad you survived your birthday.

Maze

Posted: 11 Feb 2008 11:33 Post Subject:

Actually...there is no right answer to these questions. Not only are there different answers to each client's needs...but situations change rapidly. Someone who needed term a few years ago may now be better off converting the contract.

There is no one fit for each scenario...despite what Johnny Cochran would like you to believe. You know...if the glove don't fit...

By the way...White Death here in the Midwest tonight. And Tuesday as well.

Posted: 12 Feb 2008 01:13 Post Subject:

Maze,
Actually there was nothing to survive. I took it easy, stayed home and didn't even drink. My wife and I flew our plane up to Reno yesterday and dropped 6 or 7 housepayments - that pretty much sucked. You can't win them all and the flight home was incredibly beautiful.

I'm back today working on the first copy of a complaint against the big insurance company that's listed in the "Currently in the Spotlight" section of my website.

My personal "Get out of Debt" plan works somewhat differently than those of Orman, Ramsey, and Jimmy Cramer. You see, as long as there are dishonest, poorly trained, or delusional life insurance agents, I have job security. The aforementioned individuals are just aiding the cause.

Posted: 12 Feb 2008 04:01 Post Subject:

I could have thought of better ways to use that money but its your money...lol

Posted: 16 Nov 2008 11:45 Post Subject:

InsInvestigator has a couple links on his page that may address this. Clickl on the blue link under his name

I have visited your site Ins...pretty cool.

Posted: 24 Nov 2008 10:38 Post Subject:

Did you visit GN? It really is. I always find informational sites interesting.

Posted: 13 Dec 2008 02:17 Post Subject:

Think I have once or twice before, but have not lately, I am sure it is wonderful, as he puts forth good work in his every effort.

Posted: 14 Dec 2008 11:53 Post Subject:

It takes a good person to do this. I like the site myself. I always click on links if it is something that effects me or I find it interesting. Usually you will find something out you did not know. When it comes to insurance the more you know the better you can protect yourself and your belongings.

Posted: 15 Dec 2008 03:38 Post Subject:

I have insurance (life) through my employer, also have survivor benefits through the Veterans Administration for my dependants. I just don't think that I need anymore. I think that everyone would be well taken care of if anything ever happened to me.

Do you have life insurance fireyone. I think mine is covered, not sure how they pay out but I know there is a pretty penny there to take care of my kid.

Posted: 16 Dec 2008 01:42 Post Subject:

Yes we are all covered through my husbands work. We purchase it through their for a really low cost. My coverage isn't nearly what his is because the mine carries a really high policy and we pay extra for the added insurance of me and our daughter. The best part is even if he is no longer employed with this company we can continue coverage.

Posted: 28 Dec 2008 12:00 Post Subject:

That is good that the policy stays with you if you leave the company, it has been known to happen, mining is really hard on ones body. Sounds like you guys have a descent plan and are well covered if the worse should happen.

Posted: 28 Dec 2008 03:05 Post Subject: insurance

The Life Insurance I have, through the Military is great. I believe I can STILL keep it, even after I get out (whenever that may be..LOL) However..........i think I'd be paying a much HIGHER premiuim for it.

Posted: 29 Dec 2008 11:22 Post Subject:

You will be able to keep it and the rates are not that high, they do offer a great life insurance package that is for sure. I wish I would have kept mine in place, I can get it back if my disability gets worse and they increase my percentage, I do have a case in the system so if they approve it, I will definately pick this civilian version of military life insurance up.

Posted: 29 Dec 2008 11:55 Post Subject:

I hear the VA can be really slow at approving things Good natured. If they do and you can get good rates on a policy I would do it. Sometimesa when we are younger we tend to let go of important things easily. This day and age we need all the coverage we can get. It would be cheaper through them then I would get one.

Posted: 01 Jan 2009 02:20 Post Subject: Reply to Original Poster

There are two basic types of term and permanent insurance.l

A 55 yr old male that qualifies for the best class possible can get a $500k 10yr term policy for $885/yr. That rate is guaranteed for 10yrs and you have the option to convert to a permanent policy without any underwriting anytime during those 10yrs. There are also 20yr and 30yr term policies available. The longer the term the higher the premium. Most plans allow you to convert during the term period up to a maximum age of 70 or 75 yrs of age depending on the company.

When should one convert? Let's say you bought a 10yr term and your near the end of the term and your health has changed. You were super preferred when you took out the policy, but now you have been diagnosed with diabetes and your new term policy will be rated 400%. This would be a good time to convert your policy to a permanent policy with no additional underwriting at super preferred rates.

The same 55 yr old male buying a permanent policy today for 500k would have to pay 5431/yr if he qualifies for super preferred rates. As you can see buying term is much cheaper, but the longer you wait to buy permanent, the more expensive it will be.

I personally buy 20 yr term and review my options every 3 yrs. If my health ever changes I will convert the policy at that time, but I don't see any sense in paying so much more for a permanent policy right now.

Hope this helps!

Posted: 01 Jan 2009 05:41 Post Subject:

With the VA you have to get the coverage after a certain amount of time out of the service or after you have an increase in a disability, I have a pending claim right now so if it goes through I will definately pick up the coverage.

The last time I got an increase, it was just me, now I am married and have a kid, hind site is 20/20, should have gotten it then.

I think my claim will be approved though once it hits the BVA level, just like social security they deny you and make you produce more evidence, most of my evidence is through the VA hospital. I have quite a bit to back it up.

The feds just publicly and officially recognized the Gulf War Illness, I have a lot of those symptoms and it is getting worse, hopefully I will hear something soon, I know it is a long process, but the life insurance is really quick once they approve you.

I see a rhumatologist in January, this month, hopefully I can get to the bottom of some of this pain I am having, it is almost debilitating at times, back, shoulders, knees, elbows. I am on anti inflammatory drugs that rip up my stomach, muscle relaxors and mood pills because I am tired and crabby from no sleep. I hope to get some answers soon.

Posted: 02 Jan 2009 12:34 Post Subject:

Sorry to hear you are having such a rough time Good natured. I can understand Social security making it harder for people to get approved because of all the people who are getting on it that do not really need it. If all those records are there they should not be giving you such a rough time getting the approval. It may be a long road but hang in there. You should get it sooner or later especially wiht the VA having so many documents.

Posted: 02 Jan 2009 02:36 Post Subject: insurance

GOODNATURED......isn't it horrible that the Government 'just recently' recognized The illnesses from the Persian Gulf? They ( the Gov.) STILL haven't 'admitted' the Acient Orange, from Vietnam, yet. I'm SOO sorry this is happening. 'We' fight for our country and, when something 'goes wrong', it's acknowleged. I hope you get the benefits you deserve.

Posted: 02 Jan 2009 06:21 Post Subject:

Yeah, the government has finally acknowledged the ‘Persian Gulf War' syndrome . the VA states that the veterans who are suffering disability from the unrecognized illness may qualify to receive the benefits from the VA.

Following are some of the symptoms that VA has recognized may result from unrecognized illness.

*Fatigue
*Rheumatism, muscle and joint pain
*Headache
*Skin disorder
*Abnormal weight loss
*Neurological disorders
*Cardio and gastrointestinal disorders

I too hope that you get the benefits you deserve.

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