Insurance, Term Life or other - Chicagoland Sportbikes
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View Poll Results: Do you have some type of insurance, either term life or other
yes 11 91.67%
no 1 8.33%
Voters: 12. You may not vote on this poll

 
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post #1 of 14 (permalink) Old 04-05-2009, 08:26 AM Thread Starter
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Insurance, Term Life or other

How many people have coverage to protect our loved ones in the even of misfortune?

Question becomes do you think you have enough? See attached worksheet to help figure it out. Turns out I was under insured in the Term Life area, well not anymore.
Attached Files
File Type: pdf ws_08.1.pdf (45.7 KB, 8 views)

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post #2 of 14 (permalink) Old 04-05-2009, 10:54 AM
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None.......I would rather put that monthly payment into an account or investment. That way, when I dont die, I still have the money. And if I DO die, yes it may be less, but at least the recipient of the life insurance policy wont have to sue to get the correct amount.

You have to read ALL the fine print. Oops you died on a bike, not covered. You died on a company trip, not covered. You died wearing yellow shoes, not covered.

Besides that, they wouldn't offer the policy, unless they make money. So statistically speaking, your better off NOT giving them the money and taking your chances. But, get what makes you sleep at night. If it makes you feel better, then pay for it.
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post #3 of 14 (permalink) Old 04-05-2009, 11:19 AM
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I would like to hear more on this topic also, from family type people with something actually to lose if they die and people who rely on them. What do these people have? Pluses and minuses too. Any reason to go with a different company versus another one? Are rates the same between companies, or are more benefits included with one or the other? I gots lots of questions.

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post #4 of 14 (permalink) Old 04-05-2009, 12:38 PM
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I pay $180/month through state farm, my wife had me get it last year especially since she is a stay at home.
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post #5 of 14 (permalink) Old 04-05-2009, 01:07 PM
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The pdf you are looking at is pretty basic. You might as well say 10 time income and in most cases, you will be pretty close. Google search Capital Needs Analysis, if you want better data. Quicken also has a nice program. Of course, I have access to some strong number crunchers. 8 out of 10 times, the results come out in the 8-12 times income range.

I constantly deal with the question of invest vs. insurance. There isn't a cut and dry answer. If you have no dependents, there is little to no need for insurance. If you have a family that you are concerned about the equation changes dramatically. Long duration term or Return of Premium Term is also an economic way of providing coverage during your earning years to provide income replacement. For most of my clients, I tend to recommend a blend of term and Universal Life. Normally 75-25 split as there tends to be a permanent needs component for most.

Saying that a company will not pay because of riding, a trip or color of shoes is just wrong. Yes, if you make a material miss-statement when completing the application, the insurance can be challenged during the first 24 months and fraud has no limit, but aside from that death benefits get paid. As far as bikes go, if the company askes questions about hazardous activities and you go to the track fess up. They may charge you extra, but you will be covered. An omission like this would be considered a material miss-statement and could be contested for 2 years. Yes, I've seen claims denied. They have been quite justified. ie. lying about having AIDs or other medical or financial issues. Also, life insurance companies are out for a profit. So what? You insure your health and car under the same circumstances. Statistically, you are better off without that coverage too. It isn't a valid argument. If you have a need, they give you the option of providing protection. Your option. Life insurance companies have historically netted high single digit returns for their investors. They are not out of line.

With almost 30 years of being an Independent Brokerage General Agent providing insurance and investment products and services in this arena to hundreds of agents and thousands of consumers, I've seen it all and have a handle on this. If you have any questions, shoot me a PM.

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Last edited by Blade Runner; 04-05-2009 at 01:09 PM.
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post #6 of 14 (permalink) Old 04-05-2009, 01:17 PM Thread Starter
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Quote:
Originally Posted by Blade Runner View Post
The pdf you are looking at is pretty basic. You might as well say 10 time income and in most cases, you will be pretty close. Google search Capital Needs Analysis, if you want better data. Quicken also has a nice program. Of course, I have access to some strong number crunchers. 8 out of 10 times, the results come out in the 8-12 times income range.

I constantly deal with the question of invest vs. insurance. There isn't a cut and dry answer. If you have no dependents, there is little to no need for insurance. If you have a family that you are concerned about the equation changes dramatically. Long duration term or Return of Premium Term is also an economic way of providing coverage during your earning years to provide income replacement. For most of my clients, I tend to recommend a blend of term and Universal Life. Normally 75-25 split as there tends to be a permanent needs component for most.

Saying that a company will not pay because of riding, a trip or color of shoes is just wrong. Yes, if you make a material miss-statement when completing the application, the insurance can be challenged during the first 24 months and fraud has no limit, but aside from that death benefits get paid. As far as bikes go, if the company askes questions about hazardous activities and you go to the track fess up. They may charge you extra, but you will be covered. An omission like this would be considered a material miss-statement and could be contested for 2 years. Yes, I've seen claims denied. They have been quite justified. ie. lying about having AIDs or other medical or financial issues. Also, life insurance companies are out for a profit. So what? You insure your health and car under the same circumstances. Statistically, you are better off without that coverage too. It isn't a valid argument. If you have a need, they give you the option of providing protection. Your option. Life insurance companies have historically netted high single digit returns for their investors. They are not out of line.

With almost 30 years of being an Independent Brokerage General Agent providing insurance and investment products and services in this arena to hundreds of agents and thousands of consumers, I've seen it all and have a handle on this. If you have any questions, shoot me a PM.

$.02
Very good information, different strokes for different folks is what I say.

I have a term policy as I do have young kids and want to make sure they are taken care of if something to my wife or I happens.

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post #7 of 14 (permalink) Old 04-05-2009, 01:54 PM
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When I was providing my parents housing, I carried enough life insurance to pay off the mortgage in the event of my death. I also carried a disability policy specifically to cover mortgage payments for 3 years if I was sick or otherwise incapacitated. It was a lot of $, but it also made for peace of mind for me and my family.

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post #8 of 14 (permalink) Old 04-05-2009, 01:56 PM
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Work has a 4X salary policy and I have separate Term AND permanent insurance on the side as well.

I keep teasing my wife that I am worth more dead than alive.

Also carry short term and long term disability.

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post #9 of 14 (permalink) Old 04-05-2009, 02:19 PM
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I have term life through work, and pay for additional on top of that. Easily worth it for the piece of mind. There is no way my wife could bring in anywhere near what I do so it really is required.

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post #10 of 14 (permalink) Old 04-05-2009, 03:52 PM Thread Starter
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Well, good to some people have and are caring for others and mortgages.

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post #11 of 14 (permalink) Old 04-05-2009, 07:52 PM

 
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Quote:
Originally Posted by TripleZ View Post
None.......I would rather put that monthly payment into an account or investment. That way, when I dont die, I still have the money. And if I DO die, yes it may be less, but at least the recipient of the life insurance policy wont have to sue to get the correct amount.

You have to read ALL the fine print. Oops you died on a bike, not covered. You died on a company trip, not covered. You died wearing yellow shoes, not covered.

Besides that, they wouldn't offer the policy, unless they make money. So statistically speaking, your better off NOT giving them the money and taking your chances. But, get what makes you sleep at night. If it makes you feel better, then pay for it.
TripleZ...I think you are very misinformed about life insurance.

You, or anyone who has ANY questions about it can shoot me a PM or email. I work for State Farm and deal with live policies on a daily basis.

P.S...I can confidently say we have never screwed anyone on paying a life policy (from any first hand experience). Get a reputable company, you'll have nothing to worry about...just piece of mind.

Last edited by PolishPete; 04-05-2009 at 07:58 PM.
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post #12 of 14 (permalink) Old 04-05-2009, 07:57 PM

 
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Oh yeah...and to add benefit to this thread...

Like others have said, the amount and type of insurance that you need is different for everyone. I'm with Bladerunner as that I recommend a smaller permanent life policy (whole or universal) along with a term policy for most of my clients.

Your life insurance need is a bell curve...when you're young, you have little need. As you age, you need more. You get married, buy a home, have kids, etc...then your life insurance needs peak. As you continue to age, your mortgage gets paid down, your kids graduate and move out, and so on...so your life insurance needs go down. You use the permanent policy to protect you in case you become uninsurable (get some sort of sickness), and if the term runs out...you'd be SOL. So, you keep both. Permanent to always have a policy, and term to fill the non-permanent needs.

Again, ask away any specific questions, and I'd be more then happy to help.
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post #13 of 14 (permalink) Old 04-05-2009, 08:45 PM
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$.02 If you buy term, always buy convertible term that is convertible for the policy's duration from a reputable company. With the volume of cases we process , the companies we represent and agent network, I get multiple calls a year from individuals with a change in health that need to convert if they want coverage to continue past the initial duration. I hate the calls from individuals with no options. The difference in term premiums are diminutive.

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post #14 of 14 (permalink) Old 04-06-2009, 10:05 AM
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I have 2 kids and a wife. I used to have term through work for 3x my salary but when I started comparing whole life through brokers I realized that the work term policies are a sham. Or at least the policies they offered at my work were. Let me explain. Basically, at work they'd give you a term policy that expires when you leave the employer. This policy was easy to sign up for during "benefits Open Enrollment" week at the end of the year. The biggest benefit of the work term policy is that you don't have to take a physical or submit bloodwork or undergo any sort of exam. But the cost is really high and the coverage is crap compared to whole life. Not only that but the premiums go up each year.

When I started looking into whole life I realized I could get coverage from $500,000-$1million for about the same price as my $300,000 term policy through work. The downside is that I had to fill out a 4 page form and submit bloodwork to get the whole life policy. This was made pretty simple. They even had an LPN come out to my house at night and stick us with the needles. The whole form and bloodwork took about 45 mins.

So my opinion is that if you have health problems you might be better off going with a policy that doesn't subject you to the exam and paperwork but for anyone who is healthy and wants coverage, just call a broker up and get whole. As for coverage amounts, the old saying is that "if you need it, you can never have enough insurance" is probably true but you have to balance that off with making the payments. The difference between $1mil and $500,000 can be enough to justify the lower coverage.

We justified it by saying that if one of us passes that we'd acknowledge that the other person would be pretty shaken up for a while but that we both have masters degrees so we'd probably be able to keep jobs. We just didn't want to loose the standard of living we had grown acustomed to under both incomes. I didn't want my wife to loose the house either. My wife and I have an agreement if one of us goes and the policy pays out. That's to not spend any of the settlement principal. The survivor will invest the money and use the interest to subsidize their lifestyle. If both of us die then we establised a living trust and a pour over will. All our assets will go into the trust which my sister in law will administer on behalf of my kids until they are 18.

I've obviously been thinking a lot about this lately since both my dad and my uncle who I was a sole caretaker of passed away in the same year. My dad without a will and my uncle had a will and trust. Setting up things before you go is the only way to do it. After the fact is too late.

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Last edited by chibeemer; 04-06-2009 at 10:09 AM.
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