Life Insurance - necessary or necessary evil?

[brewer12345]

Thanks. If its purpose is only to provide death benefit, are the premiums competitive with level term over, say, 20 years? That is, if I am interested only in buying death benefit, what might be the reason to choose No-Lapse Guarantee Universal Life, if not premium cost?

Depending on your age, the premiums for NLGUL might be higher than 20 year term for a simple reason: if you live 20 years or lapse the policy, the insurer is off the hook with the 20 year term policy. With NLGUL, the policy lasts as long as you do and the insurer knows for sure that they will be paying a claim.

 

[samclem]

I now realize that the fed program is (comparatively) a pretty good deal. It's still hard to say that spending the $$ each month would be the best thing for my wife and I, but at least I'm fairly sure I won't find a better buy elsewhere.

 

[Martha]

uncledrz, we are self insuring--the LTC policies are just too expensive and uncertain. The life insurance concept is a new idea though, but I doubt we will go that route.

 

[haha]

This thread has certainly indicated how far this board has moved upscale. No wonder our pet dumpster diver took off.

Anyone remember "$50 a day, that's for me"?

Ha

 

[cute fuzzy bunny]

I thought it was $33 a day, thats my story...

 

[brewer12345]

"possum livin'"...

 

[Martha]

Ha! 33%, That's my story.


http://early-retirement.org/forums/index.php?topic=83.0

And I thought we were up to $150 a day.

 

[Rich_by_the_Bay]

uncledrz, we are self insuring--the LTC policies are just too expensive and uncertain. The life insurance concept is a new idea though, but I doubt we will go that route.

I share your conclusions on this, Martha. The worst case LTC scenario is unlikely and if it did occur could probably be handled with assets on hand, a lifestyle and/or housing adjustment (or reverse mtg?), etc. Just can't see diverting that much savings from the nest egg into insurance premiums at age 57.

Not to sound like I'm in denial about it, but the options for protection are too expensive, too vague, and are incomplete at best. May change my mind, but for now I'm gonna focus on saving as much as I can.

 

[brewer12345]

I share your conclusions on this, Martha. The worst case LTC scenario is unlikely and if it did occur could probably be handled with assets on hand, a lifestyle and/or housing adjustment (or reverse mtg?), etc. Just can't see diverting that much savings from the nest egg into insurance premiums at age 57.

Not to sound like I'm in denial about it, but the options for protection are too expensive, too vague, and are incomplete at best. May change my mind, but for now I'm gonna focus on saving as much as I can.

That is definately the conclusion I have come to. This has been colored by my experience with the companies that write/wrote these policies and following the LTC insurance market pretty closely.

 

[Nords]

No wonder our pet dumpster diver took off.

His absence is probably half the reason for the quality improvement. And keep your voice down, he's already checked the board at least once since he sayonara'd.

 

[cute fuzzy bunny]

Almost every frickin day...

Someone should tell him that accessing the board while logged in records your visit even if you dont post...

 

[Brat]

For those who are considering Federal LTC insurance, one of the criteria that OPM used is the insurer's record of NOT raising premiums.  (Past performance does not necessarly predict the future.)

Husband and I purchased a paid up in 10 years policy to protect from the risk of raising premiums.  Some policies have a return of premium provision (not the OPM sponsored program).  The other option is the continuing care community whose contract includes assisted living/nursing/demensia care.

Like anything else we must each consider our risks.  If you have a family history of conditions that kill relatively quickly you are at low risk of needing long term care.  Look at the population in assisted living and nursing homes... ~80% female, most of whom took care of their husbands until they passed away.  The census of senile demensia patients is not so strongly female, but their behavior is often a risk to their care-giver.  In my family it was the women who spent the most time needing care, in my mother's case 6 years (will be 90 this year).  Strong heart but brittle bones.

 

[bosco]

TheFed,

I don't know about your state, but when I lived in Washington state in the early 80s, I got sold a policy similar to yours by a high-pressure saleswoman (with nice, well, never mind...). After signing up for the policy, I did some research and for the same reasons that Brewer mentioned, I decided it was a bad deal.

There was a law in Washington that gave you 7 or 10 or some number of days to back out of the agreement even if you had signed and made the initial payment. I exercised this option. She got very upset at me, accused me of not loving my wife etc.

I then bought very reasonable term insurance through my professional association.

Check the laws of your state. You may not be legally obligated yet.

 

[brewer12345]

There was a law in Washington that gave you 7 or 10 or some number of days to back out of the agreement even if you had signed and made the initial payment.  I exercised this option.  She got very upset at me, accused me of not loving my wife etc.

Wow! That's one of the worst insurance agent pressure tactics I've ever heard.

 

[bosco]

Wow! That's one of the worst insurance agent pressure tactics I've ever heard.

It was pretty pitiful. Also completely the wrong approach in my case. I'd already decided to not take the policy. Resorting to those tactics only proved to me that I'd made the right decision.