by zhl203 » Mon Apr 04, 2011 04:15 pm
Hi,
I just got married in 2010 and my wife and I are thinking about buying life insurance for both of us now and we need some help.
1. We want to buy whole life. We try to compare rates/policy benefits across different insurance companies. Other than the monthly premium and death amount, what are other criteria I should compare to decide which policy is better (crediting rates? The higher the better?)?
2. When buying whole life from a mutual company (e.g., New York Life), the policy earns dividends. But what if buying policy from a stock company (e.g., MetLife)? Do you forgo the dividends and therefore the policy should be cheaper? Then how should you compare the policy from mutual vs. stock companies?
3. My employer offers Group Universal Life insurance. How should I compare to my other options? What would be the right questions you would ask my employer?
4. We will be 30 in the summer, and our research indicates that after the age of 30, premium rates usually go up (regardless of physical conditions). How critical is to buy the policy before 30? My employer told me I’ll have to wait until the open enrollment period (i.e., November time frame) in order to enroll, by which time we already passed the age of 30. What would you do? Wait until November or just buy it before reaching 30?
Your help/opinion would be greatly appreciated.
I just got married in 2010 and my wife and I are thinking about buying life insurance for both of us now and we need some help.
1. We want to buy whole life. We try to compare rates/policy benefits across different insurance companies. Other than the monthly premium and death amount, what are other criteria I should compare to decide which policy is better (crediting rates? The higher the better?)?
2. When buying whole life from a mutual company (e.g., New York Life), the policy earns dividends. But what if buying policy from a stock company (e.g., MetLife)? Do you forgo the dividends and therefore the policy should be cheaper? Then how should you compare the policy from mutual vs. stock companies?
3. My employer offers Group Universal Life insurance. How should I compare to my other options? What would be the right questions you would ask my employer?
4. We will be 30 in the summer, and our research indicates that after the age of 30, premium rates usually go up (regardless of physical conditions). How critical is to buy the policy before 30? My employer told me I’ll have to wait until the open enrollment period (i.e., November time frame) in order to enroll, by which time we already passed the age of 30. What would you do? Wait until November or just buy it before reaching 30?
Your help/opinion would be greatly appreciated.
Posted: Mon Apr 04, 2011 07:26 pm Post Subject:
Generally speaking, you need to work with an experienced agent who will do more than just show you products based on your "criteria/questions" above. You also are mixing a discussion of apples and oranges and pineapples in your questions above.
You don't indicate what you motive for wanting "whole life" is. Are you lacking in fiscal discipline and unable to save money in any other manner? Or are you simply looking for a policy with a 3%-5% fixed internal rate of return?
About the only reason you might consider a participating policy is if you intended to use your dividends to purchase paid up additional insurance, increasing your total death benefit/cash value over time. There may only be a modest difference in premiums between some stock and mutual insurers.
My employer offers Group Universal Life insurance. How should I compare to my other options? What would be the right questions you would ask my employer?
I would ask your employer, "Why are you considering group universal life, and not annual renewable term?" The answer is likely to be, "I want to give my employees a way to save money for retirement." To which I would respond, "Then why not offer them a qualified retirement plan instead of a nonqualified life insurance policy?"
The discussion/comparison of Group Universal Life, while perhaps a factor in total insurance amount, does not belong in the discussion of personal life insurance. In the event your employment ends, you lose the GUL (but not your cash accumulation). You would have the opportunity to CONVERT your GUL to an individual policy without proof of insurability, but it would be at your attained age, which could make the cost very high. If you have reduced your personal insurance amount by the GUL amount, you could end up being forced to accept that conversion policy, even though you might not like the premiums.
Personal insurance needs should normally be considered exclusive of employer sponsored insurance (especially since most group life policies have face amounts of $50,000 or less) for the reason that the group insurance can be terminated by the employer or lost when one's employment ends.
You'll be 30 in the summer and you are concerned about increasing premiums. Well, with some companies, you are already considered age 31. Don't be overly concerned about premiums at your age. The fact is, premiums are increasing with every year of age for everyone age 12 and older. The bigger increases begin somewhere after 40, and usually very noticeable between and after 45-50.
If you want your employer's insurance, fine. If you need personal insurance, you'll be better off applying for that coverage now. As most agents other would tell you, "You don't know what might happen between now and November."
Feel free to email me with more questions on a confidential basis.
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