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Life Insurance question

Done-it-again

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What do I need to know? I have been putting this off for to long and need to added it.

Term or whole life? I'm 42 soooo theirs that... Looking at adding for the wife as well....

I know term is cheaper but whole life you can barrow against once it has money in it.....
 

rrrr

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Whole life has become an obsolete product. Secure a term policy that will carry you into old age, and invest the money you would be spending on a whole life policy for retirement.
 

Done-it-again

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Whole life has become an obsolete product. Secure a term policy that will carry you into old age, and invest the money you would be spending on a whole life policy for retirement.
Thanks for the info.... how far in to old age should you go?
 

ArizonaKevin

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what are your goals with life insurance? I tend to believe that life insurance is a terrible investment vehicle for most people, and is consistently outperformed elsewhere. If you are purely looking for a death benefit, can be accomplished through a term policy. Easiest way to figure out how much coverage you need is through the LIFE Acronym. Liabilities, income replacement, final expenses, and future education (if applicable).

All due respect, but at 42 you are on the older side to be getting your first policy, it may be pricier than you expect. Something I used to do for my clients was to have staggered policies. Let's say your math comes in at $1mil in coverage. You can do a 10yr policy of 250k, 20 year of 250k, then 30 year of 500k. As you age and as your children age, your needs for a death benefit will probably continue to reduce.
 

DLC

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what are your goals with life insurance? I tend to believe that life insurance is a terrible investment vehicle for most people, and is consistently outperformed elsewhere. If you are purely looking for a death benefit, can be accomplished through a term policy. Easiest way to figure out how much coverage you need is through the LIFE Acronym. Liabilities, income replacement, final expenses, and future education (if applicable).

All due respect, but at 42 you are on the older side to be getting your first policy, it may be pricier than you expect. Something I used to do for my clients was to have staggered policies. Let's say your math comes in at $1mil in coverage. You can do a 10yr policy of 250k, 20 year of 250k, then 30 year of 500k. As you age and as your children age, your needs for a death benefit will probably continue to reduce.
That’s a great idea!
 

JD D05

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What do I need to know? I have been putting this off for to long and need to added it.

Term or whole life? I'm 42 soooo theirs that... Looking at adding for the wife as well....

I know term is cheaper but whole life you can barrow against once it has money in it.....

Term is the cheapest yes. If you go with term purchase a policy with strong conversion privilege's, that company is North American to name one. You can convert at any age to any product within the portfolio at the time of conversion with a guarantee at the same rate class. They also having living benefits which can give you the opportunity to access money in the event of a critical illness. Term has no ROI but it serves a purpose.

The correct term is permanent life insurance. Under that term you have Whole life, Guaranteed Universal Life, Index Universal Life, and Variable Universal Life.

Whole Life has higher costs but you get a guaranteed return. Products to go with here are Northwestern Mutual, or Mass Mutual.

GUL is basically term insurance for life, it is the lowest cost permanent coverage. No cash value to access but can have good riders attached. This is a very popular product.

IUL is a policy that has an investment cash value element. Usually has a 0% guaranteed floor with a cap depending on company of 8,9,10% mostly tied to the S&P. You use after tax dollars to fund it so the gains are not taxed through wash loans etc. Lot's of flexibility with this product. It is very popular for high net worth individuals utilizing premium financing. This is the best product to achieve compounding interest.

VUL is like IUL but variable. More upside potential but also the possibility of negative returns. The term "zero can be hero" isn't in play here.

I rushed this response because I have meeting starting now....HA
 

ArizonaKevin

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Thanks for the info.... how far in to old age should you go?
To the question of how far into old age one should have coverage really depends on your personal situation, there are a lot of different ways to skin this cat. What I used to recommend was to have a GUL referenced above in place to at least cover funeral and final, the last thing you want in the event of an untimely death is for your family to get saddled for a bill. Funeral and final would usually land somewhere in the 25k-50k range. Further than that, 30 years from now (the length of the longest term offered by many companies) do you anticipate needing to have your income be replaced for your family? Are you anticipating still being in large amounts of debt that require you to be alive for them to continue to get consistently paid? How old will your kids be? Is it assumed they will be on their own feet by then? Depending on how you answered those questions will tell you if you need to increase the coverage on the GUL referenced above.
 

Havasu blue label

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Whole life farmers our a 30 term 1 million you and your family should be set at 70 years old
 

Havasu blue label

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Set your kids up along side the term and when they hit 21 it transfers to them and builds with yours you can put money into it tax free
 

badgas

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What do I need to know? I have been putting this off for to long and need to added it.

Term or whole life? I'm 42 soooo theirs that... Looking at adding for the wife as well....

I know term is cheaper but whole life you can barrow against once it has money in it.....
NEVER buy Whole life, Universal life or any any other funky named gimmick policy.

Get term life. Rule of thumb that we follow is 10x the household income. Use a broker not a captive agent, this way you get competitive bids.

Invest in your IRA, 401K etc. Buy insurance for one reason only and that is insurance. These gimmick policies are great for the people who sell them but not so great for the consumer.

My Daugher and SIL just used Zander Insurance they said it was very painless. You can do an online quote in minutes.
 

Done-it-again

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Term is the cheapest yes. If you go with term purchase a policy with strong conversion privilege's, that company is North American to name one. You can convert at any age to any product within the portfolio at the time of conversion with a guarantee at the same rate class. They also having living benefits which can give you the opportunity to access money in the event of a critical illness. Term has no ROI but it serves a purpose.

The correct term is permanent life insurance. Under that term you have Whole life, Guaranteed Universal Life, Index Universal Life, and Variable Universal Life.

Whole Life has higher costs but you get a guaranteed return. Products to go with here are Northwestern Mutual, or Mass Mutual.

GUL is basically term insurance for life, it is the lowest cost permanent coverage. No cash value to access but can have good riders attached. This is a very popular product.

IUL is a policy that has an investment cash value element. Usually has a 0% guaranteed floor with a cap depending on company of 8,9,10% mostly tied to the S&P. You use after tax dollars to fund it so the gains are not taxed through wash loans etc. Lot's of flexibility with this product. It is very popular for high net worth individuals utilizing premium financing. This is the best product to achieve compounding interest.

VUL is like IUL but variable. More upside potential but also the possibility of negative returns. The term "zero can be hero" isn't in play here.

I rushed this response because I have meeting starting now....HA
To the question of how far into old age one should have coverage really depends on your personal situation, there are a lot of different ways to skin this cat. What I used to recommend was to have a GUL referenced above in place to at least cover funeral and final, the last thing you want in the event of an untimely death is for your family to get saddled for a bill. Funeral and final would usually land somewhere in the 25k-50k range. Further than that, 30 years from now (the length of the longest term offered by many companies) do you anticipate needing to have your income be replaced for your family? Are you anticipating still being in large amounts of debt that require you to be alive for them to continue to get consistently paid? How old will your kids be? Is it assumed they will be on their own feet by then? Depending on how you answered those questions will tell you if you need to increase the coverage on the GUL referenced above.

My wife is a homemaker, so it's not a paying job. lol.... So to a point it would need to cover my salary for a period of time and to pay off the home and any outstanding bills. Don't have large amounts of debt, but what's large? I owe on a home and a travel trailer, nothing else My twin girls are 9 now, so 39 after a 30yr term.

Just looking at setting up the fam in case of my demise or vise versa with my wife.... I own a company and travel commercially around the country.
 

JD D05

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NEVER buy Whole life, Universal life or any any other funky named gimmick policy.

Get term life. Rule of thumb that we follow is 10x the household income. Use a broker not a captive agent, this way you get competitive bids.

Invest in your IRA, 401K etc. Buy insurance for one reason only and that is insurance. These gimmick policies are great for the people who sell them but not so great for the consumer.

My Daugher and SIL just used Zander Insurance they said it was very painless. You can do an online quote in minutes.

They aren't gimmicks you might not like them and that's fine. Can they be setup incorrect yes absolutely. IUL for example...IF you suppress the death benefit down and maximize the cash value growth they come with positives a 401k does not have. First off a guarantee of a 0% floor means just that, you don't wake up one morning and have a massive hit. Is the cap as high no but 8-9-10 % return isn't anything to balk at combined with the downside protection. But the biggest plus in not paying taxes on the gains.
 
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ArizonaKevin

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My wife is a homemaker, so it's not a paying job. lol.... So to a point it would need to cover my salary for a period of time and to pay off the home and any outstanding bills. Don't have large amounts of debt, but what's large? I owe on a home and a travel trailer, nothing else My twin girls are 9 now, so 39 after a 30yr term.

Just looking at setting up the fam in case of my demise or vise versa with my wife.... I own a company and travel commercially around the country.
A lot of people tend to overlook the homemaker when it comes to life insurance, if something were to happen to her I would imagine your career would have to adjust to the increased demands placed on you for child care. If something were to happen to either of you, would you think the other would sell the travel trailer? Are you upside down on it? If the plan would be to sell and you're right side up then I wouldn't factor it into your math. Sounds like the need to insure your ability to pay for future education will drop in 10-15 years, sounds like you will probably want to replace your income (think about how many years of income you'd want to provide) for about 20 years, then depends on how many years you have left on your mortgage.

As a business owner you may be in somewhat of a different situation than the rest of us, what's the equity position you have in your company? If something were to happen to you, could your wife sell it? Could it be ran in your absence and continue to provide financial support to your family?
 

JD D05

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My wife is a homemaker, so it's not a paying job. lol.... So to a point it would need to cover my salary for a period of time and to pay off the home and any outstanding bills. Don't have large amounts of debt, but what's large? I owe on a home and a travel trailer, nothing else My twin girls are 9 now, so 39 after a 30yr term.

Just looking at setting up the fam in case of my demise or vise versa with my wife.... I own a company and travel commercially around the country.

It all depends on how well you want to setup your family in the event of your death and what type of lifestyle you want for them. As mentioned above from AZ with you being a business owner. Do you have a partners? Could your wife sell the company? Could she run it? If you have a partner a buy / sell policy is a good idea. That is a life policy that is used to purchase the ownership that would transfer to your wife in the event of your death...assuming she did not want to be a part of it.
 
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Jay Dub

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What do I need to know? I have been putting this off for to long and need to added it.

Term or whole life? I'm 42 soooo theirs that... Looking at adding for the wife as well....

I know term is cheaper but whole life you can barrow against once it has money in it.....
100% term. lock in a policy that at least gets you thru kids and college years.
 

EmpirE231

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Will her new husband need a new boat? These are things to consider 🤣

I prefer term life, Choose a term and dollar amount that will cover you to the point nobody needs you around any longer. If you are covered til age 60, and the kids are through school at that point, and your home is paid for, with money in savings / investments etc, does anyone at that point need a life insurance payout (IF you were to die at that point)?
 

Roosky01

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Term Life long enough to get you to the age of comfort where your retirement stash takes care of things. If you are a tobacco user stop now and give yourself time to clean out before the exam!
 

JD D05

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Will her new husband need a new boat? These are things to consider 🤣

I prefer term life, Choose a term and dollar amount that will cover you to the point nobody needs you around any longer. If you are covered til age 60, and the kids are through school at that point, and your home is paid for, with money in savings / investments etc, does anyone at that point need a life insurance payout (IF you were to die at that point)?

Estate taxes.
 

badgas

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They aren't gimmicks you might not like them and that's fine. Can they be setup incorrect yes absolutely. IUL for example...IF you suppress the death benefit down and maximize the cash value growth they come with positives a 401k does not have. First off a guarantee of a 0% floor means just that, you don't wake up one morning and have a massive hit. Is the cap as high no but 8-9-10 % return isn't anything to balk at combined with the downside protection. But the biggest plus in not paying taxes on the gains.
The fact that you surrender the investment and only get the death benefit when you die makes them trash.

Just do investments and insurance separately and you will be WAY !!! ahead financially.

I have a few friends that sell this crap and they won't ever own it for themselves, they will only buy term becasue they see that is a crappy product that is loaded with commission and has bad returns etc.

BTW I'm not against sales people making money, I have been a commissison only salesman for 26 years.

Some people out there also think pay day lenders are good idea.
 

JD D05

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The fact that you surrender the investment and only get the death benefit when you die makes them trash.

Just do investments and insurance separately and you will be WAY !!! ahead financially.

I have a few friends that sell this crap and they won't ever own it for themselves, they will only buy term becasue they see that is a crappy product that is loaded with commission and has bad returns etc.

BTW I'm not against sales people making money, I have been a commissison only salesman for 26 years.

Some people out there also think pay day lenders are good idea.

That is true but the death benefit has a corridor and grows with the CV depending on the age well above the CV. Commission is always based on the death benefit amount in life insurance. For the middle class people that purchase IUL the death benefit is much lower over term meaning the commission is almost always lower.
 

ArizonaKevin

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That is true but the death benefit has a corridor and grows with the CV depending on the age well above the CV. Commission is always based on the death benefit amount in life insurance. For the middle class people that purchase IUL the death benefit is much lower over term meaning the commission is almost always lower.
Interesting, back when I sold it I got paid on the premium.
 

bowtiejunkie

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At age 32 (wife was 30), we each got a 20 year term policy. Mainly, wanted it to cover paying off mortgage, plus some left over. There’s 8 years left. My employer pays 2x salary if I die (but obviously only if I’m employed). I don’t feel the policies are necessary at this point (investments have far exceeded goals), but not going to cancel (only $32/mo for both policies).
 

badgas

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That is true but the death benefit has a corridor and grows with the CV depending on the age well above the CV. Commission is always based on the death benefit amount in life insurance. For the middle class people that purchase IUL the death benefit is much lower over term meaning the commission is almost always lower.

We are going to just disagree on this and that's fine.

Get a term policy for the death benifit you desire say $1,000,000.00

The term policy will be WAY less. Invest the difference and play that out over 20-30 years you will be WAYYY ahead financially

If you sell this, I can't convince you. If you have been sold this stuff I would encourage you to run some numbers on un winding it and see what a better spot you will be in.

Peace
 

JD D05

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If I left someone a paid off house, and some savings etc, possible rental properties and they bitched about the estate taxes.... I would be turning in my grave, wishing I had spent the money on faster sand cars and boats lol

Ya I totally get that. Right know the estate tax limit is 11M the current administration wants to lower that to 1-3 Million. More than likely all of those items you left would be subject to estate taxes and the people you left it to might be able to afford the estate taxes...
 

JD D05

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We are going to just disagree on this and that's fine.

Get a term policy for the death benifit you desire say $1,000,000.00

The term policy will be WAY less. Invest the difference and play that out over 20-30 years you will be WAYYY ahead financially

If you sell this, I can't convince you. If you have been sold this stuff I would encourage you to run some numbers on un winding it and see what a better spot you will be in.

Peace


This is real numbers and IUL was illustrated at 5%.
1644445168676.png
 

Done-it-again

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A lot of people tend to overlook the homemaker when it comes to life insurance, if something were to happen to her I would imagine your career would have to adjust to the increased demands placed on you for child care. If something were to happen to either of you, would you think the other would sell the travel trailer? Are you upside down on it? If the plan would be to sell and you're right side up then I wouldn't factor it into your math. Sounds like the need to insure your ability to pay for future education will drop in 10-15 years, sounds like you will probably want to replace your income (think about how many years of income you'd want to provide) for about 20 years, then depends on how many years you have left on your mortgage.

As a business owner you may be in somewhat of a different situation than the rest of us, what's the equity position you have in your company? If something were to happen to you, could your wife sell it? Could it be ran in your absence and continue to provide financial support to your family?
Hard to quote everyone...

I'll probably look at a 25yr term for about 2-3 mil (that was in my head). I'm partners with my father who is retired and I get the company if something happens to him. Can the business be sold, perhaps never looked at it, it's pretty niche. As far as I know, my wife wouldn't run it if I was gone shes not involved, the employees could but would they want too, IDK.

No tobacco user, so ok with that. Just need to find a reputable place to sign up....
 

JD D05

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We are going to just disagree on this and that's fine.

Get a term policy for the death benifit you desire say $1,000,000.00

The term policy will be WAY less. Invest the difference and play that out over 20-30 years you will be WAYYY ahead financially

If you sell this, I can't convince you. If you have been sold this stuff I would encourage you to run some numbers on un winding it and see what a better spot you will be in.

Peace

I have term now. I had an IUL for 10 years and it performed really well. Long story short the down payment I had saved up for my new home was stolen...So I had to make a decision to not buy the home or cash in the IUL....so I cashed in the IUL. The key there I was beyond any surrender charges, I know I averaged a 9.2% without paying any taxes when I pulled it.
 

badgas

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Hard to quote everyone...

I'll probably look at a 25yr term for about 2-3 mil (that was in my head). I'm partners with my father who is retired and I get the company if something happens to him. Can the business be sold, perhaps never looked at it, it's pretty niche. As far as I know, my wife wouldn't run it if I was gone shes not involved, the employees could but would they want too, IDK.

No tobacco user, so ok with that. Just need to find a reputable place to sign up....
My Daughter just used these guys. I think Pacific Life was the insurance company but she got a better price going through Zander than going direct to Pacific Life. Use a broker ! they will put the companies up against each other for you, don't be captive to one brand the price will always be higher.


 
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bowtiejunkie

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We went through AAA. When I bought my first house, I talked to the life insurance agent at a local office and she set me up on a date with a lady at the office. Well, ended up marrying that gal, so we bought the term policies through the agent that set us up. Win win win!
 

Done-it-again

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We went through AAA. When I bought my first house, I talked to the life insurance agent at a local office and she set me up on a date with a lady at the office. Well, ended up marrying that gal, so we bought the term policies through the agent that set us up. Win win win!
I looked at AAA years ago, like 15 and they set me up with a guy in India that I could not understand..... F' that, I could have been buying a goat and a camel for all i knew..
 

Cdog

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I have a $500k policy. Give them enough to move on but not enough so that’s worth for you to be gone. 😂

I went through select quote when I was 33 or so. They pulled blood and did an interview. Cost us $25 a month.
 

Havasu blue label

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We have a 30 year term as well and bundled the five of us 1 million for me 1milion for her and 250 thousand for the kids 10 years ago ages 56 m 54 f kids 26 -28-30 years grand kids are next whole life 75 thousand then 2 years you ad it to 250 thousand for the rest of there life
 

LuauLounge

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Have the business buy insurance on you both.
Might be helpful to talk to your CPA and/or financial advisor.
There was an article not too long ago where dad started a company that grew very large. He didn’t do any estate planning and when he passed the business had to be sold to pay the taxes. All the kids were part of the business and formed another operation to survive, but it could have been avoided.
 

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what are your goals with life insurance? I tend to believe that life insurance is a terrible investment vehicle for most people, and is consistently outperformed elsewhere. If you are purely looking for a death benefit, can be accomplished through a term policy. Easiest way to figure out how much coverage you need is through the LIFE Acronym. Liabilities, income replacement, final expenses, and future education (if applicable).

All due respect, but at 42 you are on the older side to be getting your first policy, it may be pricier than you expect. Something I used to do for my clients was to have staggered policies. Let's say your math comes in at $1mil in coverage. You can do a 10yr policy of 250k, 20 year of 250k, then 30 year of 500k. As you age and as your children age, your needs for a death benefit will probably continue to reduce.
I like this staggered approach. I've always said that I don't want to be worth more dead than alive, and the reduction in coverage as you age would be consistent with the reduction in your future earnings as you age. Great idea.
 

Ballyhoo

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We are going to just disagree on this and that's fine.

Get a term policy for the death benifit you desire say $1,000,000.00

The term policy will be WAY less. Invest the difference and play that out over 20-30 years you will be WAYYY ahead financially

If you sell this, I can't convince you. If you have been sold this stuff I would encourage you to run some numbers on un winding it and see what a better spot you will be in.

Peace
100% 👍🏻
 

socalrzr

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I want it to be a sad day, not a glad day!

Actually going soon to set up a trust and life insurance
 

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If you don’t have long term care insurance, I’d consider that first. Statistically, you are 6 times more likely to become seriously disabled than you are to die. Plus, at 42, it’s still relatively cheap and good for life if you pay the premiums. I’m assuming you have disability insurance already.
 

JD D05

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If you don’t have long term care insurance, I’d consider that first. Statistically, you are 6 times more likely to become seriously disabled than you are to die. Plus, at 42, it’s still relatively cheap and good for life if you pay the premiums. I’m assuming you have disability insurance already.

Very true. Disability is the best purchase anyone can make during working years. If you ask people what there number one asset is most people say my home. In reality it your ability to work.
 
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DILLIGAF

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My wife is a homemaker, so it's not a paying job. lol.... So to a point it would need to cover my salary for a period of time and to pay off the home and any outstanding bills. Don't have large amounts of debt, but what's large? I owe on a home and a travel trailer, nothing else My twin girls are 9 now, so 39 after a 30yr term.

Just looking at setting up the fam in case of my demise or vise versa with my wife.... I own a company and travel commercially around the country.
Have your company pay for the TERM policy
 

DILLIGAF

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If you don’t have long term care insurance, I’d consider that first. Statistically, you are 6 times more likely to become seriously disabled than you are to die. Plus, at 42, it’s still relatively cheap and good for life if you pay the premiums. I’m assuming you have disability insurance already.
Agree. I was able to pay cash for one years ago. I am not aware of them being offered anymore. Good thing is it increases 5% every year for no charge to me. Best decision I have ever made.
 

Paradox

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Agree. I was able to pay cash for one years ago. I am not aware of them being offered anymore. Good thing is it increases 5% every year for no charge to me. Best decision I have ever made.
Yep, I should have done the same but didn’t. That said, I have two policies (John Hancock and New York Life) that are both in large classes for which the rates cannot be raised unless it is done to the entire class. It’s been over twenty years and I have yet to see a rate increase.
 

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Very true. Disability is the best purchase anyone can make during working years. If you ask people what there number one asset is most people say my home. In reality it your ability to work. We have a few life policies that have true LTC riders that can be very attractive.
I've posted before that my disability insurance policy saved our retirement when I had to stop working at age 52. No one thinks it'll happen to them, but it does.

I have no idea what the premiums are now, but I was paying a little over $500/month for a policy that covered about 75% of my income. It had a time modifier that has increased the payouts more than 50% over the years since 2009.
 
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