slo’s MONDAY 4/4 poll - Life Insurance (part 1)

[Mackenzie Click-Mickelson]

And as for single people with no financial obligations or dependents, well, they may wish to leave a windfall to people or organizations but financially, they really have no “need” for life insurance.

Life insurance is also used to pay for funeral expenses so even single people if they have family who would be responsible (or feel responsible) for this may have a small policy to help for that.

 

[disneychrista]

I have a 40k policy paid by my employer. I am no longer supporting anyone with my income, so it is no longer necessary.

 

[Pea-n-Me]

Yes, I pay about $20 a month for $500,000 on me, although we are almost at the end of the 20 year term. I was a SAHM, so that amount was to cover childcare, housekeeping, etc. if something happened to me. My parents has a policy for me which I cashed out in college to help pay for a car.

I have one term life on myself and I have life insurance through my work.

My term ends next year and I pay $32 per month for $250,000. Didn't get it until my 30s and I had a cancer diagnosis so not overly cheap. My husband's pays $23 for $250,000. As I said both of ours end next year. I doubt we will renew because if either of us goes, we have the money to take care of things and no one will be kicked out and left destitute. Nearing retirement, I'm looking for ways to cut expenses and that's running me $60 per month but would be a lot more on renewal.

As we found out when our terms ended, you don’t have to ‘renew‘; the policy stays in effect as long as you continue to pay the bill. HOWEVER, costs go up substantially, because of age. If you let it lapse it is difficult to get back unless you can meet the same criteria as when you got the policy. (Was told that directly from insurance company recently.)

We have private policies we got when young. They are super expensive now and we’re at the point of wondering whether they’re worth it. We also have policies through work. I also have an old disability policy I’ve been paying for 30 yrs that I’m wondering if I should let go. My only fear is that something happens right after I do!

 

[amcnj]

I had three 20 year term policies with expiration dates at different stages of life: when schooling for kids would be over, when the mortgage would be over, and then when at retirement stage.

Now I still have one that has a couple of years left to go which I was going to drop a few years back, but then Covid arrived and I decided to let it continue a little longer. So now every year I wrangle with the decision to let it lapse or not.

 

[soccerdad72]

4 right now - we each have one through our employers and then have separate private ones as well. We're also thinking of dropping them sometime soon - we really don't need them at this point either.

 

[georgina]

No we do not have life insurance in this stage of our lives - retired, enough income and assets to cover life expenses. When we were younger with a mortgage and kids at home - had plenty of term life insurance bought through DH's employer.

I reminded DD and her DH when they bought a house and subsequently had a baby that they needed to get term insurance on both of them ASAP.

 

[evilmommie]

Yes, we have life insurance. Multiple policies on both of us through work and our own.

We’ve known 2 families where one of the spouses died suddenly and they didn’t have life insurance and it left the family in a tough situation.

 

[2China2009]

I have a private policy $250,000 for $31/mos 30 year term. I have had many medical problems with long term needs. I can not stress enough to young married couples to get a policy for 1 million for each spouse. It is super cheap when you are young. I never picked up a life inurance policy through my jobs. IF you get sick and use your PTO time. STD and LTD you are essentially not working anymore and you loose it. Having been in healthcare for 30 years now I have seen it all. For millions of americans they are underinsured. THey have a medical emergency or illness and their surviving spouse is left with nothing. If I were to pass today I have paid off home and am debt free. That money from my policy could pay for college educations, nice down payments on a home and much more for my 2 daughters. They would be able to live in our home and just pay taxes and insurance as our home will never have to be sold. It will stay in the family.

 

[BayouQueen]

We held a generous term policy when our kids were younger that would carry us through and get them educated if something happened to main bread winner DH.
When kids became adults and we had more savings and equity in home, etc., we dropped that policy.
I still have a small term policy that I applied for ages ago. I keep paying for it because I applied for it pre-breast cancer and the premium is really low. May as well keep it.

Honestly, I think each person has to evaluate the needs of the household -- and reassess periodically.

 

[mamamary]

I have 1 private policy. My parents had life insurance on all us kids and she had it cashed out and gave it to me maybe 4 years ago.

 

[mrs. magoo]

I have 3 policies - one through work, one from my parents and one with my husband. I think that we are over insured but since both of us had our mothers die before the age of 50 we wanted to make sure the other was taken care of. For those of you who are letting your term policy expire will your spouse have enough for a funeral or have you pre paid that. Having to plan and pay for a funeral is an expensive endeavor. I would not want my children to have to do that so I will make sure that my funeral is taken care for my kids sake. My husband and I also think it is important to leave our kids with some money when we are gone - it is something both of our parents did.

 

[Dan Murphy]

Retired financial planner here. I have two. One personal and one group one that has no premium due for the balance of my life.

A few points for those who are healthy.....

if you have a term policy at work that you pay for (or planning on acquiring one), check with your financial planner to compare the costs of that company policy with one you would individually own. In most cases, life policies through workplaces have an additional premium loading factor to compensate for somewhat relaxed underwriting (therefore an overall additional risk to the insurance company) as compared to being underwritten on your own health status, Again, this assumes you are in essentially good health.

Also, company policies often (not always) do not take smoking status into the pricing calculations. The pricing assumption, again to prevent adverse risk to the insurance company, is a blended rate, assuming some smoke, some do not. If you are a non-smoker, good health, substantial discounts on an individually owned policy.

Additionally, a personal policy stays with you if you leave your company at some point, voluntarily or not, whereas a company policy ends with your lack of employee relationship.

Just a few FYI's.

 

[amylevan]

1-30 year term life policy for $250,000 that I got right before my oldest was born. It’s like $23/month.

 

[BlueStarryHat]

Life insurance is also used to pay for funeral expenses so even single people if they have family who would be responsible (or feel responsible) for this may have a small policy to help for that.

Indeed. I have one $10,000 policy for that, because nobody in my family has that much money to put out on short notice if something happens to me. I also have a $10,000 policy so that my sister's 3 kids will get a little something from Old Aunt Starry when I shuffle off. I pay $57 per month for the two policies combined.

 

[tvguy]

My wife and I each have a $250,000 term policy. Our employers provided a policy good for twice our annual pay, but we opted not to continue those when we retired. We had $500,000 each when our kids were little, but when that term expired, we renewed at the lower amount since our kids were grown, house paid off. Basically the money will replace about 8 years Social Security that will be lost when one of us dies.....hoping will live long enough to start drawing Social Security!

 

[Mackenzie Click-Mickelson]

Indeed. I have one $10,000 policy for that, because nobody in my family has that much money to put out on short notice if something happens to me. I also have a $10,000 policy so that my sister's 3 kids will get a little something from Old Aunt Starry when I shuffle off. I pay $57 per month for the two policies combined.

Yeah I was thinking a small policy like $10-$20K, not intended to wipe out debt, not intended to pay everyday expenses either for someone when they just had an unexpected death, just something that someone may consider purchasing for others to have to use for expenses related to their death itself.

I remember thinking it was a bit odd but at the same time probably quite responsible/practical to do when I first met my husband somewhere in some random conversation it was mentioned his grandmother had pre-purchased her casket with a company decades prior. When she passed away that company was still around and yes fulfilled the pre-purchasing of her casket. That type of expense, which is normal, isn't one many of us probably think about in terms of actual costs, but it was nice that it had been pre-paid and did not have to be accounted for. A life insurance policy would have at least helped had the casket costs needed to be accounted for.

 

[PAsFab5]

I have always had the max life insurance available through my employer. It’s $60 a month.

The coverage amount varies, because it is based on your salary at the time of your death and then multiplied 5x with additional money if your death is a accident, you pass early in age ect….my spouse and minor children would also get a survivor annuity each month. The kids until they are 22 and my husband until he would remarry. If he never remarried he would collect until he passed away.

I worked in employee benefits for 8 years. Processing death and life insurance was a big part of my job and left a huge impression on me, so I tend to over insure just to be safe.

 

[cvjw]

None on me. Not needed. Plenty of money to keep things going when I am gone. Reduced DH’s thru his employer from 1.5 million to about half that. When he turned 55, the premiums shot up sky high. Just wasn’t worth the high premiums when we don’t really need that much extra money.

 

[LuvOrlando]

We always had had work benefits but then someone I knew had a spouse die suddenly after leaving the job and I learned those don't follow a person and the family was ruined so when I got pregnant we picked up 3 policies with USAA to cover extra childcare until our kids were adults. 20 year term - 1 me and 2 DH since I was a SAHM and way more vulnerable than he would ever be. Still, I got a policy myself realizing if he lost me there would be huge expenses for childcare, food, nanny etc. When I got the policies in the late 90's there was an add on called a "guarantee exchange rider", meaning we could renew without a health checkup at the new age in the future and this was maybe $3 a month so I added it and planning ahead we got DH 2 policies so we could drop one and keep the other if need be. Fast forward 20 years, in the middle of Covid that rider came into play and we renewed at around the same $25 a month per policy, one of DH's is bigger so it's more but way less than it would be now. This new 20 year term will expire when we are 70 and at that time either those depending on us now should be self sufficient. In 2020 year we split up the beneficiaries to include our kids for tax reasons, it occurred to me that if our children are beneficiaries Life Ins isn't a big deal tax wise but if, say, DH got all of it and were to want to gift it to our kids then it's a big tax burden on our kids. I think it was like a 70% spouse 15% per kid or something like that, enough to help them buy a home.

My cousin's widow is burning through every dime taking friends on vacation instead of sharing with their adult child, which my cousin had genuinely expected her to do, so heads up to add in your kids as beneficiaries- grief plus money makes people really weird. My cousin would be brokenhearted if he knew, people change even someone he loved over 40 years became someone different in his absence.

Good thing we have our own policies because no way would anyone insure me now and DH has been working for businesses that don't offer life insurance, this seems very common now so we're all on our own.

Also, heads up, if you have a policy put it on autopay so they can never drop you or refuse to pay out for non-payment. Plus, check your beneficiaries from time to time, one friend lost everything to her DH's siblings because the guy worked at the same company for decades and never updated when he got married and had kids . People can rot

 

[mjkacmom]

We always had had work benefits but then someone I knew had a spouse die suddenly after leaving the job and I learned those don't follow a person and the family was ruined so when I got pregnant we picked up 3 policies with USAA to cover extra childcare until our kids were adults. 20 year term - 1 me and 2 DH since I was a SAHM and way more vulnerable than he would ever be. Still, I got a policy myself realizing if he lost me there would be huge expenses for childcare, food, nanny etc. When I got the policies in the late 90's there was an add on called a "guarantee exchange rider", meaning we could renew without a health checkup at the new age in the future and this was maybe $3 a month so I added it and planning ahead we got DH 2 policies so we could drop one and keep the other if need be. Fast forward 20 years, in the middle of Covid that rider came into play and we renewed at around the same $25 a month per policy, one of DH's is bigger so it's more but way less than it would be now. This new 20 year term will expire when we are 70 and at that time either those depending on us now should be self sufficient. In 2020 year we split up the beneficiaries to include our kids for tax reasons, it occurred to me that if our children are beneficiaries Life Ins isn't a big deal tax wise but if, say, DH got all of it and were to want to gift it to our kids then it's a big tax burden on our kids. I think it was like a 70% spouse 15% per kid or something like that, enough to help them buy a home.

My cousin's widow is burning through every dime taking friends on vacation instead of sharing with their adult child, which my cousin had genuinely expected her to do, so heads up to add in your kids as beneficiaries- grief plus money makes people really weird. My cousin would be brokenhearted if he knew, people change even someone he loved over 40 years became someone different in his absence.

Good thing we have our own policies because no way would anyone insure me now and DH has been working for businesses that don't offer life insurance, this seems very common now so we're all on our own.

Also, heads up, if you have a policy put it on autopay so they can never drop you or refuse to pay out for non-payment. Plus, check your beneficiaries from time to time, one friend lost everything to her DH's siblings because the guy worked at the same company for decades and never updated when he got married and had kids . People can rot

Insurance is definitely something you want on autopay, I learned my lesson in my 20’s when I missed a car insurance payment, my agent was kind enough to call me the day after the last day I could’ve made payment without penalty, my rates were hiked and no other company would insure me.