Poll

Do you have life insurance?

Yes
49 (79%)
No
13 (21%)

Total Members Voted: 62

Author Topic: Do you have life insurance?  (Read 7800 times)

Offline shaulyaakov

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Re: Do you have life insurance?
« Reply #60 on: May 14, 2020, 07:24:41 PM »
30 year term, plus supplemental through my employer.

My employer plan is so cheap (2x salary covered, cheap buy ups), but obviously very risky if unemployed.

I got the policy in my mid 20s on the hopes of keeping a high dollar amount of affordable coverage till my mid-50s when tuition and other main childcare expenses would hopefully be (mostly) over.

Offline shaulyaakov

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Re: Do you have life insurance?
« Reply #61 on: May 14, 2020, 07:25:15 PM »
Oh really. Dropped by how much? Is there a way to “refi” a term policy without having to do the hassle of a medical all over again (and risk a lower rating)?
No.

But you can overlap coverage I believe.

Offline skyguy918

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Re: Do you have life insurance?
« Reply #62 on: May 14, 2020, 07:28:00 PM »
My employer plan is so cheap (2x salary covered, cheap buy ups), but obviously very risky if unemployed.
You sure it's so cheap? It's usually YRT, which means the price goes up each year (since it's only covering a year at a time and now you're a year older). So it sounds cheap, but in the long run it gets cost prohibitive.

Offline AsherO

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Re: Do you have life insurance?
« Reply #63 on: May 14, 2020, 07:31:55 PM »
You sure it's so cheap? It's usually YRT, which means the price goes up each year (since it's only covering a year at a time and now you're a year older). So it sounds cheap, but in the long run it gets cost prohibitive.

Yearly Renewable Term?

I would think it’s a group-type of policy that costs less per person.
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Offline Lou Bob

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Re: Do you have life insurance?
« Reply #64 on: May 14, 2020, 07:32:34 PM »
Oh really. Dropped by how much? Is there a way to “refi” a term policy without having to do the hassle of a medical all over again (and risk a lower rating)?
you won't lose the rating on your current policy.
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Offline AsherO

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Re: Do you have life insurance?
« Reply #65 on: May 14, 2020, 07:34:21 PM »
you won't lose the rating on your current policy.

I don’t want to add coverage, I’m liking the idea of getting a new term policy for cheaper, or maybe more coverage for the same $$
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Offline skyguy918

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Re: Do you have life insurance?
« Reply #66 on: May 14, 2020, 08:08:30 PM »
Oh really. Dropped by how much? Is there a way to “refi” a term policy without having to do the hassle of a medical all over again (and risk a lower rating)?
I bought it at age 29. 5 years later/older, same insurer, same coverage, 20yr level is <5% more than my current premiums - another similarly rated insurer has the same for a dollar or two less than my current premium. A 15yr policy (ie covering the same remaining years as my current policy) from another similarly rated insurer is almost 30% cheaper.

There's no way to 'refi' without the medical, but you can apply for the new policy, go through full underwriting, and only take the new policy/cancel the old policy if you get the same health rating.
Yearly Renewable Term?

I would think it’s a group-type of policy that costs less per person.
Yes.

Group does reduce some costs, but there is no underwriting - they have to price everyone as the same risk class, and likely assume significant anti-selection risk. It's very unlikely that it's as cheap (actuarially speaking) as it seems. The fact that you're only paying for say age 30, versus ages 30-50 levelized, is more likely the culprit. It's also possible that it's subsidized - though I find that unlikely if they're already giving away 2x salary coverage right off the bat.

Offline ExGingi

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Re: Do you have life insurance?
« Reply #67 on: May 14, 2020, 08:23:04 PM »
You sure it's so cheap? It's usually YRT, which means the price goes up each year (since it's only covering a year at a time and now you're a year older). So it sounds cheap, but in the long run it gets cost prohibitive.

Actually group plans are often banded by age in 5 year bands. It's a bargain for anyone that would get a rated policy otherwise. For people in perfect health it's usually not the best option. While sometimes it might be portable, but one would need to act on that within a short time period after separation. It is likely not convertible.
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Offline skyguy918

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Re: Do you have life insurance?
« Reply #68 on: May 14, 2020, 08:33:09 PM »
Actually group plans are often banded by age in 5 year bands. It's a bargain for anyone that would get a rated policy otherwise. For people in perfect health it's usually not the best option. While sometimes it might be portable, but one would need to act on that within a short time period after separation. It is likely not convertible.
Don't know if the banded thing changes the argument much - haven't really thought about it since my company's group plan is not banded. For a healthy individual it may make sense to use it as a stop gap (which I'm currently doing) before making changes to your 'regular' insurance, but beyond that - not so much. Even for someone who can't get a preferred rating, the group premium will become a huge burden in later years. Aren't there better options out there to secure longer term, cost effective insurance?

Offline ExGingi

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Re: Do you have life insurance?
« Reply #69 on: May 15, 2020, 02:53:55 PM »
One of the major Mutual Life Insurers just released new term rates which are 20%-30% cheaper (for 10, 15 and 20 year level term) than their previous rates on (policies issued by their stock subsidiary, but still convertible into parent company permanent plans).
I've been waiting over 5 years with bated breath for someone to say that!
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Offline ari3

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Re: Do you have life insurance?
« Reply #70 on: May 15, 2020, 05:55:43 PM »
One of the major Mutual Life Insurers just released new term rates which are 20%-30% cheaper (for 10, 15 and 20 year level term) than their previous rates on (policies issued by their stock subsidiary, but still convertible into parent company permanent plans).
Why would that be?

One would think their investment portfolios are hurting and more people dying (although in the scheme of things it's not that many more) would cause rates to rise

Offline ExGingi

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Re: Do you have life insurance?
« Reply #71 on: May 15, 2020, 06:06:09 PM »
Why would that be?

One would think their investment portfolios are hurting and more people dying (although in the scheme of things it's not that many more) would cause rates to rise

The biggest effect on insurers is from the low interest rates. My guess is that it's not that significant for term insurance of 20 years or less (look at the premiums vs the death benefit, while earning a bit less makes a difference, it's not that huge in the big scheme). Guaranteed term rates require reserves, that anyway earn close to nothing. It's about managing the guarantees and the reserves, and that is probably why it is issued by the stock subsidiary, that doesn't issue Whole Life insurance, but rather mostly Annuities.

Remember that probably close to 99% of these policies are expected to not pay a death benefit (unless converted).

I'm not an actuary, but I believe the above factoids are inputs that are taken into account in pricing these policies.

Several companies aren't selling 30 year term, and or suspending or limiting sales of Guaranteed UL.
I've been waiting over 5 years with bated breath for someone to say that!
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