Life Insurance, is it no.1 on your list?

pinoy

Golden Member
Nov 19, 2000
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Just wondering. I know its important to have one so you've got something to leave behind to your family when you're gone. After hearing stories about a 39 y.o. died of heart attack and 43 y.o. died of aneurysm, I'm thinking of getting one.

But which one will you prioritize 1st: college plan for your kids or life insurance?

Thanks for your input.
 

chambersc

Diamond Member
Feb 11, 2005
6,247
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you can always get a college plan for your kids through a life insurance policy. most big companies have 529 programs which pay out to kids education in case of accident death ( as well as a policy for you to go to your spouse )
 

Raincity

Diamond Member
Feb 17, 2000
4,477
12
81
None for me since I am already secure but if I was not secure and have kids and was in their early thirties then yes it would be high on the list.
 

Lounatik

Golden Member
Oct 10, 1999
1,845
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You better believe it.I am 40 and my company has group insurance that I take full advantage of,because it costs me something like 2.00 a week. I have a three year old and a two month old and I could not see being irresposible and stupid enpugh not to provide for them. I have a 250k policy that doubles if i get killed on the job. At least that gets my house paid off and leaves my wife with a cosiderable sum to invest for the children or use whatever she needs to help her get along.

My wife has a 150k plan that she does privately and we oay it once a year. Dont know the cost though.


Peace

Lounatik
 

kranky

Elite Member
Oct 9, 1999
21,019
156
106
It shouldn't be a choice between life insurance and a college fund. Life insurance is cheap! Look into a level 20 or 30-year term policy. You don't want to buy whole life, universal life, or any other variation - get pure term insurance to get the most for your money.

The idea is that after 20 or 30 years, you'll have enough saved for retirement and your kids will be established on their own. At that point your need for life insurance should be minimal. Hopefully you won't have a mortgage then either.

You could probably get $500,000 of 20-year term insurance for around $40/month.

Both life insurance and a college fund are important, but you must have life insurance if you have family members who are dependent on your income.

 

mattocs

Platinum Member
Jan 25, 2005
2,246
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it is a good thing to have. sh!t happens.

wouldn't you want whole life? ...as it builds cash value and the rate can't go up?
 

AdamSnow

Diamond Member
Nov 21, 2002
5,736
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I have life insurance through work...

and I'm going to plan on the fact that my kids are done schooling before I die... (might be a bad plan - we'll find out someday) and then my life insurance can pay off their mortgages, let them go on a nice vacation, etc.
 

kranky

Elite Member
Oct 9, 1999
21,019
156
106
Originally posted by: OBW96
it is a good thing to have. sh!t happens.

wouldn't you want whole life? ...as it builds cash value and the rate can't go up?

If you get level term insurance, your rate is fixed for the duration of the term.

You don't want whole life, and here's the short version why:
1. It costs more, because some of your premium is being invested (which is how it builds cash value).
2. You should manage your own investments, not depend on an insurance company to do it. And the cash value increase is only as much as what the insurance company decides - you might do much better investing that money on your own. Plus, if you manage your investments you can move them around. With whole life, you're stuck with your insurance company.
 

Tiamat

Lifer
Nov 25, 2003
14,068
5
71
If i had my own family, life insurance would be up there, college funds for kids would be along the similar lines of importance as retirement funds (pretty high importance, but medium to low critically)
 

ActuaryTm

Diamond Member
Mar 30, 2003
6,858
12
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Originally posted by: OBW96
wouldn't you want whole life? ...as it builds cash value and the rate can't go up?
While I could give a long (and Staplesque) dissertation on the subject, the simplest and most actuarially sound advice would echo kranky's sentiment: buy term, and invest the difference (the difference between term and any other insurance vehicle with a savings element built in, that is) yourself.
 

sixone

Lifer
May 3, 2004
25,030
4
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Originally posted by: kranky
Originally posted by: OBW96
it is a good thing to have. sh!t happens.

wouldn't you want whole life? ...as it builds cash value and the rate can't go up?

If you get level term insurance, your rate is fixed for the duration of the term.

You don't want whole life, and here's the short version why:
1. It costs more, because some of your premium is being invested (which is how it builds cash value).
2. You should manage your own investments, not depend on an insurance company to do it. And the cash value increase is only as much as what the insurance company decides - you might do much better investing that money on your own. Plus, if you manage your investments you can move them around. With whole life, you're stuck with your insurance company.

Listen to this man. He knows what he's talking about.

If you can get into a group plan, such as a voluntary life insurance plan at work, where you pay premiums for coverage over and above that provided by your employer, DO IT. Not only is it cheaper because of the volume of coverage, but you also have the backing of your employer if there is any question about payment of benefits. I have seen insurance companies pay claims that they didn't have to, in order to avoid losing an employer's business and to avoid the possibility of lawsuits and bad publicity. While that won't happen in most cases, it's better to keep your bases covered. That IS the point of insurance, after all.
 

Jzero

Lifer
Oct 10, 1999
18,834
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Kranky's got it. If you're young, life insurance is very cheap. It should have no bearing on saving for your children's college education.
 

RossMAN

Grand Nagus
Feb 24, 2000
78,855
355
136
Originally posted by: iamwiz82
Mine is 30 cents a week for double my salary at 23 years old so why not?

My life insurance is also affordable through my employer.

It's around $2 per pay period for 5x my salary.
 
Jan 31, 2002
40,819
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Originally posted by: RossMAN
Originally posted by: iamwiz82
Mine is 30 cents a week for double my salary at 23 years old so why not?

My life insurance is also affordable through my employer.

It's around $2 per pay period for 5x my salary.

Time to fake your own death!

- M4H
 

JulesMaximus

No Lifer
Jul 3, 2003
74,542
921
126
I have a 20 year $500k policy on myself and my wife. We just took this policy out last year.

Edit-It's through USAA and costs us $146 per quarter.