Life Insurance

[JaneDoe]

Dh and I need to increase our amount of coverage, which means buying new policies. What is the best way to shop around for policies? Should I just start cold-calling insurance companies or is there a website that rates companies?

Right now our policies are through TIAA-Cref, but we're not convinced that it can give us the best rates. Thanks.

[planet]

Re: Life Insurance

I don't know whether this is as good of a deal as I think it is, but if it is I can pass on our company. We pay $300/year locked in for 20 or 30 years (have to look it up again) for 500K in life insurance. But it is term.

Since I am in a research mode wrt to policies right now I will forward anything I find of interest. I am looking at life insurance options as well since once we can afford it I would like to switch to whole life.

[SuzySunshine]

Re: Life Insurance

We just went through this - first we figured out what coverage DH had from his job. Then we called our regular agent and a couple others. The rates were all about the same but our regular agent was able to get us a better deal because of the discount with having our home and car insurance with him.

They'll just ask basics, like how much coverage do you want, your age, etc. to give you a quote and then once you decide to go with them I beleive there is a physical, we haven't actually done that or signed the papers yet.

I don't remember the limits we were told we should get, I'll check when I get home and post if someone hasn't already piped in with suggestions.

[migirl]

Re: Life Insurance

This may not be helpful to you, but when we went through this a couple of years ago we used the insurance broker who works with the residents' union at DH's program (he coordinates all of the insurance stuff for the residents - disability, life, etc.). He came to our home, we talked about what we needed, and then he gave us several choices for policies and companies. Is there a broker who is affiliated with your DH's practice that might be a good starting point?

We ended up buying my life insurance policy through our undergraduate school's alumni association since they offered me the better deal. Again, the alumni association thing may not apply to you ... but it's a thought.

Re: Life Insurance

We recently upped his and got more than we thought we needed. I know that isn't very helpful criteria but I figured that what seems like enough now might not in 15 years. :huh: One thing I noticed is that going up in bigger increments resulted in a lower cost/unit of insurance. So if you think you need $750k, might as well ask for a quote for $1 million, etc.

We have DH's life insurance though the person who did his disability policy (I think it is Ohio Life) and mine through NY Life. I would check out the ratings on companies like Makai suggested in the disability thread (Planet's thread about financial planners). I would have to check but I believe I am paying around $600 per year for a $1 million policy, 30 year term.

I think migirl has a good suggestion, maybe ask around with your DH's partners.

This is reminding me that I need to look around for an accountant!

[DCJenn]

Re: Life Insurance

Our financial planner told us to look at term life at this point. He thinks our money will be better used differently.

So, we await the USAA people to call. I'll post what I find out from them.

Jenn

[Phoebe]

Re: Life Insurance

DH's friend is a financial planner and he did the research for us.

Re: Life Insurance

As I understand, your coverages should be 10x your net salary.

That makes a lot of sense to me.

[migirl]

Re: Life Insurance

Our financial planner told us to look at term life at this point. He thinks our money will be better used differently.

That is a good point. We also went with term life, we felt it was a better deal for us at this point. DH has a small whole life policy that was purchased by his parents when he was younger. I think of it as being more of a savings vehicle than anything else. :huh:

Re: Life Insurance

JD -- I think the TIAA-CREF would be worth looking into. It has been a while since I compared but their rates were competitive with other policies.

I have a pathetically small TIAA account that I was keeping for access to reasonable life insurance. I ended up with a different policy a few years ago so I don't know if I will keep the account. But maybe I don't need an account to be able to get life insurance through them?

Re: Life Insurance

JaneDoe, some of the insurance rating services are A.M. Best, Standard & Poor's, Moody's and Fitch & Weiss. Sorry, I don't know what their websites are offhand.

I think the general rule of thumb is to have 5-10 times your gross annual income for life insurance. Motley Fool, Smart Money, and http://www.insweb.com have some good online calculators that will take your family's particular needs into account.

We have level-premium term life. I'm not sure that whole life is as strong as other investment options when it comes to the rate of return. From what I know, whole life policies are invested pretty conservatively plus commissions are high.


ETA: I can't remember where I read this (Money, maybe?), but 5x your gross will get you by short term.....cover funeral costs, pay off house and cover living expenses for a few years. 10x gross will get you by long term.....it can fund the kids' educations and allow you to continue living the same lifestyle that you have now.

[JaneDoe]

Re: Life Insurance

Thank you, Makai. I'm going to look up those rating services you mentioned.

[JaneDoe]

Re: Life Insurance

I've recently subscribed to Money magazine. In a recent article, it mentioned the website, reliaquote.com, as a source for life insurance quotes from reputable companies. Sure enough, I was able to get at least five quotes from various companies for Dh and I.

If you're shopping for life insurance, check it out.

[DCJenn]

Re: Life Insurance

I just got off the phone w/ USAA- for me for 250k it will be 16.03 a month, for beloved (younger, fitter) husband for 250k, it will be 16.65 a month. This is a 15 year term policy.

Jenn

[MDPhDWife]

Re: Life Insurance

I'm not sure that whole life is as strong as other investment options when it comes to the rate of return. From what I know, whole life policies are invested pretty conservatively plus commissions are high.

I know that both Dave Ramsey and Suze Orman don't recommend whole life policies. I'd stick with term life insurance.