coalcracker
Dryer sheet wannabe
- Joined
- May 19, 2010
- Messages
- 23
Hi all. I am in the process of obtaining a life insurance policy, and have decided that term is the way to go based on advice on this board and elsewhere. I have decided on 2.5M, 30 year policy based on this being ~6-7X my expected annual income as of next year; I used this simple estimate because there are so many other uncertainties at this point in my life as far as children, spouse's employment, etc.
I have 2 options: level monthly premiums at $220/month, or annual renewable starting at $120/month and slowly rising over the term of the policy. The "break even" for both options is approx 22 years, at which I would have paid the same amount of premium for each, but overall with the renewable rate payments I would pay almost double in premiums for the life of the policy based on high rates in the last 8 years. The insurance agent is recommending the renewable rate if there is any possibility I would switch to a whole life policy at some point, which I am almost certain I would not, but nothing in life is 100%. He says if I AM certain I would never switch to whole, stay with the level policy. I also have the option to do 50% level and 50% renewable, with the thought that I would either drop or switch to whole life the renewable portion of the policy when the rates begin to increase.
Any and all advice on this would be much appreciated. Thanks!
I have 2 options: level monthly premiums at $220/month, or annual renewable starting at $120/month and slowly rising over the term of the policy. The "break even" for both options is approx 22 years, at which I would have paid the same amount of premium for each, but overall with the renewable rate payments I would pay almost double in premiums for the life of the policy based on high rates in the last 8 years. The insurance agent is recommending the renewable rate if there is any possibility I would switch to a whole life policy at some point, which I am almost certain I would not, but nothing in life is 100%. He says if I AM certain I would never switch to whole, stay with the level policy. I also have the option to do 50% level and 50% renewable, with the thought that I would either drop or switch to whole life the renewable portion of the policy when the rates begin to increase.
Any and all advice on this would be much appreciated. Thanks!