Info: Life insurance.... How's and why's??

[S Phinney]

They do have a guaranteed premium return if you don’t die during your term life policy. That would probably be the only way I would go term life. That way you stand nothing to loose unless the Company went out of business. Buying sooner than later is going to be better for you. There are also policies that pay benefits if you killed yourself. Check all the exclusions to make sure you are getting the best coverage for the dollar.


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[Dozerboy]

Sorry Dozer. This is the comment I must have misinterpreted. My bad.






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No, I see now how that could of been taken from what I said.

Sorry for the derail Adam. . This brings up a good point for me needed to look at how I’m insured. I just get whatever work has.
I recently found out because my wife and I never got Quotes over the last 10years for home/auto we where over paying $3100 a year. Makes me sick to think about wasting money like that.



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[Dozerboy]

Oops

 

[malibu795]

we've been here long enough to know sooner or later a thread will get derailed lol

 

[TheBac]

One thing I think you guys have overlooked is that Adam's employer has probably already bought a life insurance policy on him, with them as beneficiary.
I know u p s does this on us drivers.....you know.....just in case.

 

[malibu795]

One thing I think you guys have overlooked is that Adam's employer has probably already bought a life insurance policy on him, with them as beneficiary.
I know u p s does this on us drivers.....you know.....just in case.

even for 1099 guys?

 

[wilrob]

even for 1099 guys?

Typically not. Sometimes though.

 

[WisconsinHick1]

I highly suggest you sit down and figure everything out. I am 34 and just finished schooling for insurance so I can get into the business. there are many options out there and each one is made for a different situation. Wil will be an extremely good asset for you. The sooner you buy the cheaper it will be and I would plan for the future as if you were purchasing a bigger house or other big expenses! Don't leave any loved ones with any major bills. A living will would also be a great investment in time!

 

[2004LB7]

I’m not a banker. Nor am I a fan of bankers. But I’m a big advocate of personal responsibility. If someone loans you money, it’s your responsibility to pay it back! PERIOD! If your dead, you can’t do that.

I don’t understand why everyone these days seems so happy to “stick it to the man”. There is no such thing as “sticking it to the man”. There is only “sticking it to your fellow man”. Shit runs downhill. If Adam defaults on his loan trust me all of us pay for it. Not the bank.


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I think I sit somewhere between you and Dozer on this stance. I definitely believe that if you borrow from someone you should always pay it back. But there is also this one item that bugs me to no end.

If you "buy" a car for example, and default on it, it get repossessed, then later the loan / title holder will sell it vehicle for its (pretty much) current (loan) value. If you owe say $10k on it they will try and sell it for said amount. This is good and legit in my mind

Now for a house, it will likely have been paid for several times over. If the first buyer signs on for $400k and lives in it for 15 years and leaves without finishing paying for his loan the bank will repossess and sell it again for what ever the current home value is. Housing in general goes up. So it very well may go back out for $500k. They will keep doing this until someone manages to finally pay it off.

I've talked to several people that are paying for homes that originally sold for about $20k around 50 or so years ago. The new owners are now paying $350,000 for the same house. Thats about double what current inflation can account for. Somewhere along the line the Bank had to have been paid back on that house. But because they hold the cards they can play the game. And we get to play by their rules.

If housing was anything like vehicles we would all be able to pick a used one for $20k that would otherwise cost over $300k.

With that being said, we all know the rules before signing up so play by them or risk getting "your" stuff taken away

I am in a similar boat to the OP and this thread has definitely made me consider getting something for myself. It would be nice if, god forbid, something was to happen to me that my house and vehicles could go to a sibling or other family member without burdening them with my debt. Really I don't think I will insure my vehicles. In one more year I will have them all payed off. The house on the other hand still has about 20 years of payments left

 

[zakkb787]

I’m 22 and unmarried with no kids or siblings. Only grandchild on one side too. Recently I was expecting to be married soon so I went and took out a policy for 25 years I think. 250k for $29 a month. I did it because being an electrician that messes with industrial stuff anything can happen and I didn’t want my family or future wife to be burdened anymore than they need to be. But now the marriage is off the table. But either way I did it for my parents. If I go, it’s gonna be bad enough on them and my grandparents too. I’m all they have. This policy will pay off my debts, and give them some money in their pockets. Hopefully get them out of debt so they both don’t have to work so much. My mom has systemic lupus and they both work part time and struggle to keep afloat. Dads body isn’t too goo after years of working himself to death at a furniture factory. So, as cheap as it is. Why not.

 

[wilrob]

I highly suggest you sit down and figure everything out.

This is what I would say the hardest part of the process is. Just take the time to step back and look at what you have, and what you want to protect. Even if you sit down with someone and don't "buy" anything, 9.9 times out of 10 you will at least leave the conversation with more knowledge about this stuff.

 

[WisconsinHick1]

This is what I would say the hardest part of the process is. Just take the time to step back and look at what you have, and what you want to protect. Even if you sit down with someone and don't "buy" anything, 9.9 times out of 10 you will at least leave the conversation with more knowledge about this stuff.

I agree 100% trying to get people to think about the future and what may or may not happen and realize what you have and will have to protect not if, when the time comes. Always get more knowledge to help you understand and be comfortable when you do choose to purchase life insurance.

 

[AZlml]

One thing I think you guys have overlooked is that Adam's employer has probably already bought a life insurance policy on him, with them as beneficiary.
I know u p s does this on us drivers.....you know.....just in case.

Excuse my ignorance but I had no idea companies did that.. so if your employer has a policy on you and they are the beneficiary and you go to get your own policy how does that work? Do your rates differ vs someone who's work did not have a policy on them?

 

[TheBac]

even for 1099 guys?

Hmm...didnt know you had "subcontractor" status. Since you said you owe them money on a loan, then it would make sense for them to "protect their investment".

AZ, you've never heard of that? Yep, they dont tell us outright that they do it, but I have my sources. They buy small policies on us with them as beneficiary -- just in case.

 

[wilrob]

Excuse my ignorance but I had no idea companies did that.. so if your employer has a policy on you and they are the beneficiary and you go to get your own policy how does that work? Do your rates differ vs someone who's work did not have a policy on them?

If you go get your own policy and already have coverage through work, then your rates should not differ than if you don't. Different companies do it different ways. I typically see it when working with partners at various firms. We call it "key person" insurance.

Extreme example: say Elon Musk passes away unexpectedly, Tesla, Space X, etc... would all be out the "value" he brought to the company. So they buy a policy on him in order to offset the loss of "value" if he dies.

Disclaimer: Elon Musk is WAY to valuable to be insured for that :rofl:

 

[SmokeShow]

The firm I work at has life insurance on all of the co-owners of the firm. Like Wil said, its a "key person" type thing.

They also provide all employees with a tiny amount of term life ins. Perhaps enough to cover a funeral. I take an additional amount on myself (I think about $250K) since I'm the sole provider for my household. That's more than enough to pay off all debts, incl. the house and to set my little boy up with college tuition for most any in-state college. I think I might have like $50K on my wife? I honestly can't remember. And I'm pretty sure we don't have anything on our boy unless it's some small free deal. Can't remember for sure on that either.

 

[Osubeaver]

The firm I work at has life insurance on all of the co-owners of the firm. Like Wil said, its a "key person" type thing.

Also an estate thing. You can run into interesting situations with death and businesses. Taxes is one part of it, but also the ownership interest. Usually business partners have insurance on each other to buy the deceased partners share of the business from the deceased's estate. Because the estate is either owed money for the shares, or the shares.

Check this scenario out: I'm 50/50 business partners with my brother. He's married, I'm not. If there were no insurance and if I would have croaked when our parents were still alive the business would have been 50% my brothers, 25% my Dad's, and 25% my Mom's (them being my estate per law). Keep in mind my Mom and Dad got divorced in the early eighties and didn't exactly get along. That would have been interesting That's why there is insurance...for business continuity.

 

[SmokeShow]

Here at least, I believe the by-laws of the s-corp state that the business will buy the deceased owner's shares from their estate.

Our business (civil/environmental engineering firm) is heavily client based - not unusual. Partner leaves or dies and their clients go with them, that's a big deal at a firm our size (<50 people). So as far as I know, it's kind of to curve that part of the business's interest moreso than the purchase/ownership of shares.

 

[anthonynick29]

How old do you need to be to start considering life insurance? I've thought about it for a few years now, as I'm about to turn 25. But it doesn't seem like such a high priority with student loans and other expenses I have going on right now.

 

[wilrob]

How old do you need to be to start considering life insurance? I've thought about it for a few years now, as I'm about to turn 25. But it doesn't seem like such a high priority with student loans and other expenses I have going on right now.

As other people have said, the younger the better. Typically costs of premiums increase with age. On the flip side, don't let someone talk you into getting a policy that is completely unnecessary.

At your age, paying down debts/committing to some sort of retirement funding/disability insurance is more relevant. If you are really considering it, I would say convertible term insurance would be in your wheelhouse.