Private life insurance

[tsorfas]

I currently don't have a job with benefits but I would like to sign up for life insurance for a temporary period (most should get why).
Is it possible or is it a long term contract?
Is cost stupid high?
I was think probably a $400k ish policy?
Anyone knows about that stuff?

[Kurlon]

You're talking term life insurance. I dunno lengths available, generally speaking the longer you go, the lower your locked in rate. I've always been told 10x my income for coverage is the minimum.

[jasnmar]

You might wanna not mention motorcycle racing

[RyanNicholson]

I'm no expert but yea look into term life insurance. I believe the shorter the term the more you'll pay. I know it's possible to get down to one year, but they aren't stupid... if you only want it for a year its pretty obvious you're about to do something they may need to pay out on.

[Imbeek]

Term insurance means you are insured for some particular term, only. Typically a year. Typically "annually renewable term" for ten years...In other words, they agree to insure your life for a certain amount...say 400,000, for 1 year for, (depends) say $600. They also agree to insure you for another year, at some predetermined cost, each year you choose, from now until 10 years from now, and the rate goes up each year, because the older you are, the more likely to croak.

They will want some kind of blood test, and a questionnaire about how crazy you are. Motor racing, flying, scuba diving, etc. once they see the results of the form, they can bump your rate quote accordingly, and offer to insure you At greater cost than someone who doesn't do crazy stuff...OR and this is a big OR...they can offer to insure your life EXCEPT if you die doing whatever crazy activity they find too risky.

When I was flying planes, they offered me a policy excluding payout if I died in a plane crash. I told them I'd look elsewhere, and did. Found a other company to insure me.

[TheIglu]

And most insurance carriers have verbiage in the agreement that mentions things specifically excluded from the policy. I know when I was quoted for a policy, my rates went up due to motorcycle racing and flying.

[RyanNicholson]

They will want some kind of blood test, and a questionnaire about how crazy you are. Motor racing, flying, scuba diving, etc. once they see the results of the form, they can bump your rate quote accordingly, or offer to insure you for more money than someone who doesn't do crazy stuff.

Forgot about the tests actually... that was what ultimately made me decide not to get a policy. They didn't like the racing bit.

[db79]

You can get term life in the typical increments of 10, 15, and 20 years. Premiums are largely driven by your sex (M/F), age, health (and family history), occupation, etc.. The underwriters use mortality tables calculated by actuaries to assess your claim risk.

[isaac_]

Not all insurance requires underwriting (i.e. Guaranteed, not requiring test, etc). This is more expensive than an otherwise underwritten policy.

Term products come in various flavors. You should be able to obtain a 1 year term up to 25 year term. Some have an annual renewal option. Some are fixed.

Read the covenants/clauses to see under what circumstances a claim may be denied.


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[isaac_]

You can get term life in the typical increments of 10, 20, and 30 years. Premiums are largely driven by your sex (M/F), age, health (and family history), occupation, etc.. The underwriters use mortality tables calculated by actuaries to assess your claim risk.

There are states that have said you cannot underwrite on the basis of gender. I don't know which states.

Also know that insurance is state regulated not federally regulated. Rates vary state to state.


My personal opinion is there are better products than term insurance. Some life insurance products allow you to participate in "the market" and offer a richer death benefit. That said some have minimum premiums.

I'll also make a disclaimer that I'm not a financial advisor. I'm an actuary so I can help you understand a product but do not make any recommendation on products.

[db79]

There are states that have said you cannot underwrite on the basis of gender. I don't know which states.

You probably know better than I do, but even if some states cannot underwrite based on sex, gender is still statistically a factor of premiums via the tables. No?

[isaac_]

You probably know better than I do, but even if some states cannot underwrite based on sex, gender is still statistically a factor of premiums via the tables. No?

I think so. Even if they use a unisex table the premium can swing based on the mix. Of course it's even more significant for states that can use gender specific tables.

I think an even bigger factor is smoking/non smoking.

[Crimedog]

Funny, I just bought a policy. Age, health, sex are the factors in your rate. They lump you into a health category and that will determine your rates. You answer standard health questions, provide your height and weight, and then they send a doctor in to do a quick check and send blood and urine off to a lab. I bought from an agent in Newton and it's written by Ohio National. I was looking at term and was offered 250k, 500k, 1m policies in 10, 15, and 20yr lengths. I am 32 and in the top health category so I'm paying $425/yr for a 20yr $1m policy and when it ends I can convert it into a whole life policy at the same health classification.

[isaac_]

My advice Sav... Don't listen to us. Go to a financial advisor.


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[tsorfas]

You might wanna not mention motorcycle racing

I may have to because they can deny payment if I don't

[jasnmar]

It was a joke.

[PhilB]

You're talking term life insurance. I dunno lengths available, generally speaking the longer you go, the lower your locked in rate. I've always been told 10x my income for coverage is the minimum.

Coverage depends on what you need. I got a $500K policy a few years ago. I determined that by what my wife and daughter would need, mainly to keep them housed, and fed for a couple years, if I get mashed by a truck or get cancer or something. It may or may not relate to your income, although of course the salesman is going to recommend that. It probably makes more sense to judge it by your debt level. Make sure it's enough to pay off the mortgage and the vehicles and the credit cards and all that, so that if you go, your dependents can go forward with low expenses and no debt. If your dependents will need education or training to get back into the workforce, factor in the cost of that, too. For me, at that point my daughter was pretty much self-supporting and not dependent on us for much. My wife has her own business, which she would have to expand to support her, but that can be done. So I just needed to make sure she was debt-free, provided for for a couple years, and had some capital to expand her business. We didn't get a policy for my wife; I'm the main earner now and for the next 10 years at least, so if she passes away prematurely, the hit won't be in the finances. YMMV.

Term insurance means you are insured for some particular term, only. Typically a year. Typically "annually renewable term" for ten years...In other words, they agree to insure your life for a certain amount...say 400,000, for 1 year for, (depends) say $600. They also agree to insure you for another year, at some predetermined cost, each year you choose, from now until 10 years from now, and the rate goes up each year, because the older you are, the more likely to croak.

The rate may or may not go up each year. If it's a short-term renewable, then they will. OTOH, if you commit to a long term, it can be a fixed rate. My $500K policy is a 20-year term, fixed-rate at $300 a month. The upside is that it doesn't change within the term, even if I pick up a new hobby, or develop a medical condition. The downside is that it doesn't change within the term, even if I stop riding, or cure a medical condition.

The latter is the position I'm in now, actually. Part of the rate I have is an increase due to a congenital heart condition, but I have since had the surgery that fixes that, and no longer have that risk. But I'm stuck with the higher rate from it anyhow. I could theoretically cancel it and get a new policy from someone else, but now I'm over 50 (which I wasn't when I got this policy), which is a pretty big break point on their tables, so I probably wouldn't save much now.

When this term policy ends, and I'm still alive, though, if I want to renew it would be at a *much* higher rate for a term starting at the age of near 70. The plan is that we won't need it then. The house will be paid off, we won't have other debts, I'll be retired and my wife's business will be supporting us, plus our retirement savings. So then, if I kick off, i won't be a big financial problem.

They will want some kind of blood test, and a questionnaire about how crazy you are. Motor racing, flying, scuba diving, etc. once they see the results of the form, they can bump your rate quote accordingly, and offer to insure you At greater cost than someone who doesn't do crazy stuff...OR and this is a big OR...they can offer to insure your life EXCEPT if you die doing whatever crazy activity they find too risky.

When I was flying planes, they offered me a policy excluding payout if I died in a plane crash. I told them I'd look elsewhere, and did. Found a other company to insure me.

All of the above. Try to be at your best health (good weight, good blood pressure and heart rate, good fasting blood sugar level, etc.) when you get the checkup; that can make a big difference. Exercise and eat carefully and all that for a few months first; optimize your condition.

PhilB

P.S. Life insurance is a lousy investment, with a poor return. They'll want to sell you whole-life, etc., but the odds are that you'll be better off just buying insurance with your insurance money, and properly investing your investment money.

[TheIglu]

Might be easier just to name whoever your beneficiary is as the primary beneficiary of your retirement account.

[PhilB]

Might be easier just to name whoever your beneficiary is as the primary beneficiary of your retirement account.

Definitely do that, too. But that may not cover all the need. Especially if you're young, your retirement account might not be very big yet, while your mortgage might still be big, and so you may need some insurance in addition.

PhilB

[nhbubba]

Go to a financial advisor.

Heeeeeey buuuuuudy!

<=

This message isn't going to make any sense when I change that avatar.


Go to a fiduciary, not a salesman that calls themself an advisor.

[isaac_]

Lol

Interestingly theDepartment of Labor introduced some new regulation this year that will be most beneficial to the consumer. Actually I don't know when it's effective. I think it already is. But anyways, most brokers will no longer be able to sell on the basis of who pays the most but rather will now have a fiduciary agreement with the consumer. Ie the client has legal basis to sue if what they were sold was not in their best interest.


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[Kurlon]

I think that's still in the proposal stage and being fought hard IIRC.

[tsorfas]

Might be easier just to name whoever your beneficiary is as the primary beneficiary of your retirement account.

I think I have like 40k in that lol

[breakdirt916]

@life ins gurus - is there a point to buy permanent (or term into permanent) if you don't have any kids/wife as a tax free investment option where you take a loan against your death benefit after 30 b years?

[Garandman]

Look up SBLI.