12-18-19, 10:51 AM | ||
Join Date: Dec 2006
Location: I love that dirty water...
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Quote:
It makes sense to me that renewing a term policy after 20 years would cost significantly more. Life insurance is really just to provide for your dependents (e.g.--children who should grow up and leave the nest) in the event of your untimely death. Rates are low when you're young because you're unlikely to need the insurance! I'm pretty sure my husband and I will not renew our policies when they expire. By then, our kids will be 20 and 17. If something happens to us, we own our home and have some other assets. I don't see life insurance as something that is needed for the duration of your lifetime, unless you have special circumstances, but even then... It sure is important for the raising kids season. A friend's brother died in a traffic accident when his wife was 8 months pregnant with their first child. They had not yet bought a life insurance policy. |
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12-18-19, 11:21 AM | |
Join Date: Mar 2014
Location: Snowman Land :)
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It's also possible my memory is fuzzy after 20 years so maybe I'm remembering it backwards!
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12-18-19, 11:23 AM | |
VF Supporter
Join Date: Aug 2005
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I don't think it was term insurance, that's why we were so surprised when the rates went up. They said the original company went out of business so we had to purchase new policies with a new company and the new rates we were quoted were outrageous. The whole thing sounded wrong but with the company out of business I think there was nothing we could do. It was about 8 years ago so the details are a little fuzzy now.
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12-18-19, 12:05 PM | |
Exchange Moderator
Join Date: Feb 2002
Location: PalmTreeVille
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if you still have a mortgage, HELOC, children's college expenses, and/or you're breadwinner for your spouse/minor children, then you need some form of life insurance. face value (i.e., the payout amount) should be equal to the balance of whatever you're trying to pay off (outstanding mortgage balance, etc). term life insurance is best and most affordable.
as far as leaving something for heirs, you get a better return by putting the same amount into a mutual fund. about parents buying life insurance for their kids, unless the parent is dependent on the child's income, or if the child's death would result in financial debt (a child's college loans for example), rather than buying life insurance, you get a better return by investing it elsewhere. if your kids are adults and on their own, no need to continue the policy. but if your goal is to leave something for them, turn around and invest the amount into a mutual fund. if one spouse is not working and the other spouse is a breadwinner, it makes sense to get a life insurance policy on the working spouse. again, the face value should be equal to total debt that the survivor would be responsible for in the event of the working spouse's death. years ago, i got this letter in the mail that the premiums for a policy my parents bought for me years ago was not being paid. the letter said that they were going to take the premium invoice amounts from the earnings in the plan. come to find out, my dad changed checking accounts and forgot to inform the insurance company that direct payments needed to be changed too. i decided to cash the policy out and give the proceeds to my parents. i informed my siblings, who did the same. this was a whole life policy too, so i was glad it was cancelled. for rates, shop around. i found the best term life insurance rates were from my husband's union - he's in the teacher's union. i even checked at Costco, the credit union, and our employers. insurance is a hard thing to discuss with people because it's about death, but if you read stories on the internet about people's experiences, it will motivate you to make the right decisions. my uncle passed away unexpectedly and his wife received the proceeds from the insurance. she regretted not using it to pay down the mortgage since that was what it was intended for. i'm sure she had other competing expenses at the time of his death. therefore it's important to look closely at the big debt items you have and how will they be paid if the breadwinner passes away. i like to follow the advice from suze orman, dave ramsey, and jane bryant. they have excellent advice - read it in bits and pieces to get informed. otherwise, people get overwhelmed and quit.
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