buying life insurance

[Bimmerbill]

So, I'm looking for some term life insurance. Just got married and had a kid.

If I use insure.com or some similar website ( www.accuquote.com, www.insweb.com, www.quotesmith.com, www.term4sale.com, and www.youdecide.com are recommended by a magazine I subscribe to), what should I look for besides low cost and financial rating?

[brewer12345]

How long do you expect to need insurance for? If you don't know, I would suggest 20 year term, since going out longer is expensive. If it is significantly cheaper, annually renewable term (ART) might be a good bargain, too.

First, look at annual rather than monthly premiums. Most insurers tag you pretty badly if you don't pay in a lump sum once a year.

Second, you want to make sure that the policy you buy has a minimum of 10 years conversion option, preferably 15 or 20. This allows you to convert your term policy to a permanent one without going through underwriting again. Chances are you will never need it, but the option is a valuable one.

Third, make sure that the fixed rate goes for all 20 years, assuming we are talking about 20 year term. Some companies only fix the rate for 10 years, then it goes up.

Fourth, stay away from "return of premium" term. Bad deal and sleazy product.

How to shop: Go price policies on insure.com to get an idea. Then hit up TIAA-CREF (website), Ameritas Direct (website), and USAA (I think you have to call them). If one of these three is competetive with what you see on insure.com, go with them in the order presented. All thre are stand-up companies with excellent ratings, a good history of treating policyholders well, and are mutuals (no stockholders).

If you have a question on a psecific company, feel free to ask, as I spent years analyzing this industry and had insider access to dozens of management teams.

[azanon]

Quote:

Then hit up TIAA-CREF (website), Ameritas Direct (website), and USAA (I think you have to call them). If one of these three is competetive with what you see on insure.com, go with them in the order presented. All thre are stand-up companies with excellent ratings, a good history of treating policyholders well, and are mutuals (no stockholders).

Scratch off USAA if you're not currently in the military (any grade) or if you or your parents weren't formally officers in the military. Its members only.

[brewer12345]

Quote:

Originally Posted by Azanon Scratch off USAA if you're not currently in the military (any grade) or if you or your parents weren't formally officers in the military.* Its members only.*

Not true. They will happily sell life insurance (and some other products) to anyone. I believe that the restriction around membership is mostly limited to auto and homeowners' insurance.

[Bimmerbill]

I have my insurance with USAA, being an O-3 in the National Guard. Their prices were 5 to 10 bucks more a month than what I was seeing on the web shopping sites. They are super to deal with and I have insurance, banking and some IRAs with them currently.

Yes, I was looking at a 20 year policy. That will put my daughter at 20 years old and me at 59 or 60 years old. I figure I want to insure she has a good standard of living in case I die before she reaches 18 or 21.

Thanks for the insight!

[brewer12345]

Quote:

Originally Posted by Bimmerbill I have my insurance with USAA, being an O-3 in the National Guard.* Their prices were 5 to 10 bucks more a month than what I was seeing on the web shopping sites.* They are super to deal with and I have insurance, banking and some IRAs with them currently.*

What companies are you seeing as cheaper than USAA? Does the disparity change when you look at annual vs. monthly premiums?

[Bimmerbill]

I've only gone as far as getting some quotes online. I haven't gone as far as getting monthly vs annual premiums.

Hmm, USAA seems to have capped my available insurance at $400,000 based on rank and military membership.

[brewer12345]

Quote:

Originally Posted by Bimmerbill I've only gone as far as getting some quotes online.* I haven't gone as far as getting monthly vs annual premiums. Hmm, USAA seems to have capped my available insurance at $400,000 based on rank and military membership.*

At least on insure.com, you can switch from monthly to annual by hitting a button on the quote page.

If USAA caps you out, look elsewhere. Most insurers cap you based on income and net worth.

[azanon]

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Not true. *They will happily sell life insurance (and some other products) to anyone. *I believe that the restriction around membership is mostly limited to auto and homeowners' insurance.

Please dont take this as me picking a fight...due to our past scuffles, but that being said, i believe you are wrong about this. *

My understanding is the entirity of USAA's services are members only.

[brewer12345]

Quote:

Originally Posted by Azanon Please dont take this as me picking a fight...due to our past scuffles, but that being said, i believe you are wrong about this. * My understanding is the entirity of USAA's services are members only.

Sorry, Az, you are flat-out wrong on this one. Call them if you wish.

They do not advertise it, but USAA writes life insurance policies out of a stock company that is owned by the reciprocal company that USAA members are members of. Technically, the members make an indirect profit off of the life policies that are sold to the general public.

TIAA-CREF Life Insurance Company is the same kind of set up. They will only offer the special retirement annuities to teachers, doctors, etc. in 403B plans that are sold by the parent mutual company. But they will sell life insurance, after-tax annuities, mutual funds, etc. to anyone because they are written by a stock company owned by the parent mutual.

[REWahoo]

From the USAA website: "Property and casualty insurance products are available only to persons eligible for group membership." But they sell life insurance to anyone through an affiliated company? Didn't know that, although I've been a member for more than 30 years. I've never had a reason to check and they sure don't advertise their availablity to non-members.

At least one other of their services is available to anyone, their banking affiliate USAA Federal Savings Bank. Banking with them may also give you access to their brokerage services, but I'm not sure about that.

One catch: If you don't qualify for USAA membership, it is difficult to open an account at the bank unless you physically go to a branch...and they only have one, located in San Antonio.

[laurence]

DW and I bought ten year policies, it was so cheap we could write a check for the whole ten years and not notice it. *We figured in ten years our net worth may be enough to not need it, and if we were wrong we'll pay the penalty then for another ten years.

[HFWR]

Convoy of Yankees headed your way as we speak... *

[brewer12345]

Oh, and I almost forgot. Bimmerbill, you probably also want to buy some coverage on your wife. If she passed away, I suspect you would be potentially in trouble on either the kid care or second earnings front.

[REWahoo]

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Originally Posted by HFWR Convoy of Yankees headed your way as we speak...

Glad to have them, but don't expect them to stay long. We've already hit 99 degrees and I expect this summer will be "interesting". :P

[azanon]

Quote:

They do not advertise it, but USAA writes life insurance policies out of a stock company that is owned by the reciprocal company that USAA members are members of. *Technically, the members make an indirect profit off of the life policies that are sold to the general public.

Ok, i believe you. *I guess I just bought into the "surface impression" one gets by being a member. *For instance, if you just go to usaa.com, you'll see the eligibility button... as if it is grouping all of their services as either eligible or not eligible. *But, again, I believe you.

Ive been a member over 10 years now, and I just think the world of them. *I use them for most everything, auto, home insurance, mutual funds, my checking is with them (USAA federal savings bank), my home loan is with their subsidiary (PHH mortgage services), discounts on services and rentals, and eventually i might get one of their deals on a cruise package too. *

The only negative of being a USAA member IMO, is all of the soliciation crap you get in the mail, almost daily. They dont even screen for what you're already a member of. (meaning, i'll get solicitations to join USAA federal savings bank, when i am already with the bank).

[brewer12345]

Quote:

Originally Posted by Azanon Ive been a member over 10 years now, and I just think the world of them. *I use them for most everything, auto, home insurance, mutual funds, my checking is with them (USAA federal savings bank), my home loan is with their subsidiary (PHH mortgage services), discounts on services and rentals, and eventually i might get one of their deals on a cruise package too. *

Another little secret: USAA doesn't actualy do all of their own products. For example, PHH s a private label mortgage lender that has a contract with USAA. So USAA directs all its members that want a mortgage to PHH, which may even answer the phone as USAA. They do the same thing with certain kinds of health insurance, and it wouldn't shock me if they did the same thing with credit cards.

[azanon]

Quote:

Another little secret: USAA doesn't actualy do all of their own products. For example, PHH s a private label mortgage lender that has a contract with USAA. So USAA directs all its members that want a mortgage to PHH, which may even answer the phone as USAA. They do the same thing with certain kinds of health insurance, and it wouldn't shock me if they did the same thing with credit cards.

Its all cool with me. I think they hang the moon.

[Bimmerbill]

Quote:

Originally Posted by brewer12345 Oh, and I almost forgot.* Bimmerbill, you probably also want to buy some coverage on your wife.* If she passed away, I suspect you would be potentially in trouble on either the kid care or second earnings front.

Yep, it will be a package deal, me and the wife. Trying to keep it affordable. Prolly 500k on her, 400 on me. I have SGLI for 400K, and FEGLI thru my federal job for 215K and change.

[brewer12345]

Quote:

Originally Posted by Bimmerbill Yep, it will be a package deal, me and the wife.* Trying to keep it affordable.* Prolly 500k on her, 400 on me.* I have SGLI for 400K, and FEGLI thru my federal job for 215K and change.

Aggregate amounts sound about right. We have 500 on DW and 1.1MM on me. It will go away when we have enough assets, but in the meantime I know DW is taken care of if something unlikely happens to me.