One of the things I love about running ChristianPF is that I learn so much from the readers. A couple days ago I wrote about my reasons for deciding against life insurance until I had kids. After a bunch of comments from readers who offered some interesting perspectives, I began to see the issue from a different angle…
No one likes to kick themselves
At my old employer, every couple months, just about everyone in the office would pitch in a couple bucks and buy lottery tickets to win the $100 million jackpot. Every time they came around to my desk, even though I knew they would not win, I just had to put in a couple bucks.
(Side note: I am well aware that Proverbs says “wealth from gambling quickly disappears…”. We can discuss my gambling foolishness in a later post…)
The reason I felt as if I couldn’t pass up the opportunity was because even though it was a one-in-a-billion chance, if the whole office won, and I hadn’t put in my $2, I would be kicking myself for a long time! I mean can you imagine if your whole office not only quit with a couple mil each on the same day, but left you as the only one left?
I still don’t NEED the life insurance
I still feel confident that we don’t NEED the life insurance right now, but just like I was willing to spend $2 to prevent me kicking myself with the lottery deal, I think $15 a month is probably worth it as well…
Where do you find great term insurance?
I said all that, just so I could ask if any readers could offer me a head-start as I begin my search for life insurance. I am healthy, skinny, don’t smoke, and contrary to what I put in the comments of the last post, I don’t partake in shark-diving or base-jumping. 
So, if you have any suggestions or recommendations of companies that offer Term Life I would love to hear about them in the comments below…
{ 27 comments… read them below or add one }
Join the military. SGLI has great rates and no wartime exclusions!
I’ve enjoyed the last few posts. They really related to me (marriage finances and term life insurance). Of course I neglected to add my 2-cents in the comments until now…
My wife and I are in the process of applying for life insurance. We’re both young and free of complications, so I figured we could lock in a lower rate now for 20-30 years. Like auto insurance we can always change the coverage in the future. It’s easy to drop the amount or cancel and increasing may mean adding a second policy on top to extend or if rates are still good, just go through the application process all over again. Apparently the rates have been dropping as time goes on with increased longevity. The “dilema” is whether or not we stay healthy and our parents might develop something as they age, in turn hurting our family history record they ask about.
I originally contemplated the need for life insurance after hearing about it in Dave Ramsey’s Financial Peace study a few months ago. I neglected to act immediately, but am getting around to it now after much thought and investigation. Like the true premise of insurance, I’d rather pay a few thousand over the next 20-30 years for the security that my wife won’t have to worry, for many years, about the financial burden of supporting herself and also if/when kids and a house come into the picture.
So, as Dave recommends, I wandered onto Zander Life Insurance’s website and did a quick quote (the name and contact info isn’t required). There were a bunch of companies listed and I was like, how am I supposed to choose? I ended up doing some independent research on insurance company ratings. There are a handful of them out there, so I first went with the one that rates the toughest… duh?
Anyways, I did a bunch of online quotes and liked a few listed on Zander, SBLI (Savings Bank Life Insurance of MA). They had top ratings. So did Midland National. I called directly rather than through a middle-man agent, but there are pros and cons to a “captive” vs independent agent. I’ve also heard some industry/career associations offer discounts with some companies.
We just had a visit from a nurse to take a sample of our urine and blood to medical review. We’re waiting on the results and underwriting to find out the premium cost. I’ve read if you get under $100k you don’t need a medical exam (they usually do them at your home, so it’s pretty convenient).
One tip the nurse told me. One doesn’t need to mention every little medical bit, only major stuff. It only complicates underwriting and potentially higher premiums if I were to list off every antibiotic I ever took… or refer them to doctors I visited once for silly symptom last year. I guess I’m too honest for my own good (no I didn’t list every antibiotic I’ve taken).
If you’re interested here are a few useful links…
This website got me started:
http://insurance.freeadvice.com/insurance_help.php/101_160_438.htm
Supposedly a tougher rater:
http://www.weissratings.com/products_lh.asp
Which led me to the actual ratings (I picked Financials under Sector/Industry and Life and Health Insurance under Subindustry). It was a pain to find some companies:
http://www.thestreet.com/tsc/ratings/screener.html
This one had some tips on the medical exam:
http://articles.moneycentral.msn.com/Insurance/InsureYourLife/TheLowdownOnLifeInsuranceMedicalExams.aspx?page=1
That enough to get ya started?
Probably too much. I usually go overboard with my “researching.”
Envoy,
while I have always wanted to go through boot camp, I think at this point in my life the great rates from SGLI aren’t going to be enough to get me to sign up
I bought mine through Zander Insurance, the company Dave Ramsey endorses. It was a simple enough process but it took a little while. You have to go through the process online which doesn’t take too long, then they send you the actual application you have to fill out, then you get a physical, paperwork is filed, the company reviews it and if they have any more questions they may need to get paperwork from your doctor which takes even more time. It’s no big deal but just be aware it won’t happen overnight.
Northwestern Mutual might be a good place to look. Their company is sound financially and based on christian morals/values. The only problem is that you actually have to find someone that works specifically for them to get it.
My wife and I purchosed through Thrivent Financial for Lutherans before The Boy was born last year. We got quotes from several places, and Thrivent’s was the best. If you or a family member aren’t Lutheran, you can still join for a small (~$10) annual fee. http://www.thrivent.com
Thanks Mike, I will check them out…
Jessica, NW Mutual doesn’t offer Term right?
I have very affordable insurance with Met Life. If you live in the St. Louis area, let me give a shout out to Mark Brcic with AT Insurance, a local insurance agent who I’ve found to be very fair, smart, and helpful.
I’ve enjoyed the last few posts regarding marriage finances and term life insurance. Probably because they have both been very relevant to me in my current situation in life. Of course I neglected to add my 2-cents in the comments until now…
My wife and I are currently in the process of applying for term life insurance. We are both young and felt it advantageous, as others have mentioned, to lock in a low premium for a 20-30 year term. We also felt it advantageous to avoid a negative family history in the event our parents develop diabetes, high blood pressure, etc.
Similar to auto insurance, we can always adjust our life insurance. We can always drop the coverage level or cancel it early with no hassle and if we ever need a higher coverage level we can add a second policy on top; or, if rates are still good, go through the application again (although that would be a hassle). Apparently rates have been decreasing over the years due to increased longevity.
I originally contemplated the need for life insurance after hearing about it in Dave Ramsey’s Financial Peace study a few months ago. I neglected to act immediately, but am getting around to it now after much thought and investigation. Like the true premise of insurance, I’d rather pay a few thousand over the next 20-30 years for the security that my wife won’t have to worry, for many years, about the financial burden of supporting herself and also if/when kids and a house come into the picture.
So, as Dave recommends, I wandered onto Zander Life Insurance’s website and did a quick quote (the name and contact info isn’t required). There were 10+ insurance companies listed. Apart from premium price I was completely at a loss as to which one to consider. I also did quotes with larger names like State Farm. I did some searching and found that there are several groups that review insurance companies. I ended up focusing on a group that supposedly grades the toughest, so it seemed like the first to work with. I narrowed Zander’s results to two, SBLI of MA and Midland National. I ended up settling with SBLI and called them directly. There are inherent pros and cons associated with going with a “captive” or an independent agent.
My wife and I also just had our visit from a nurse to perform a medical exam. She drew small urine and blood samples. We’re waiting on the results and underwriting to find out the premium cost. I was told it takes about a month, I’m hoping sooner. I’ve read if you get under $100k you won’t need a medical exam (they usually do them at your home, weird, but it was convenient for us).
The nurse provided a tip after my “detailed” side came out during her questioning. Report only major medical information, don’t list every antibiotic and medication you’ve ever taken or list a doctor you’ve visited for silly symptoms. The underwriting only cares about the major stuff and the trivial notes have the potential for complicating and increasing premiums. I guess I’m too honest for my own good (and no I didn’t list every antibiotic I’ve ever taken).
We are close to the end of getting life insurance because we have a baby on the way, and found a Dave Ramsey ELP to be invaluable in the process. He provided us with quotes from like 15 different companies, at amounts that were different for the both of us (my husband and I make different amounts). He helped us understand why the amounts were different for the various companies, it turns out that some of the companies aren’t the most solid financially.
Our insurance wasn’t $15 dollars, it is probably going to be closer to $100 for the both of us. This is because we have a house and are following Dave Ramsey’s recommendation of having 8 to 10 times the amount of your income, and we wanted 30 year so that we had it the whole time that our kids were living in the house.
Take a look at this page for more info about what Dave recommends for life insurance:
http://www.daveramsey.com/etc/cms/index.cfm?intContentID=4635#lifeInsurance
Interesting discussion, and it has me thinking about getting that policy again. I know the importance of having insurance – I saw my healthy 27 year old wife have a blood clot last year, and end up having over 250k in medical expenses. luckily we had good health insurance, and we only paid about 2,000 of that. I can’t imagine what my wife would have to go through if I passed away unexpectedly. Unfortunately it happens more often than we would like to think!
After doing the quote on Zander (recommended by dave ramsey) it looks like my premium for 500k of 20 yr term life insurance would be in the $35-40/month range. I may have to look around a bit more – as I’m not really sure how good of a rate that is.
What kind of rates are others seeing for 20 yr term insurance?
you can get free quotes through websites like insure.com, but as with most things in life, cheapest is not always best, and i think that can be said for Term Life. There are the big 3 mutual companies that are best known for their whole life/universal life policies (New York Life, Northwestern Mutual which was mentioned above, and Mass Mutal) but they also offer Term Life. Their premiums will be on the pricier side compared to other companies BUT they have among the highest credit ratings from the rating agencies (yes, yes, i know we can’t trust them for mortgage-backed securities, but i think the insurance companies are different save AIG), but they will offer convertible policies in case you EVER want to switch to whole life without going thru the whole underwriting exercise again. other companies will probably offer lower rates but PLEASE make sure they are highly-rated because you want the company to be around if/when you need to cash in the policy! DISCLAIMER: i did buy my wife a New York Life 20-year Level Term policy ($500k) last summer. she is early 30s in great health and we pay $36/month.
I sorted my life insurance at a online company called Rainbow, i understand there are just a broker but they got me the cheapest insurance with all the cover i wanted in place. Better still it was a quick and easy application. Has anyone else used this company? They’re found online at http://www.rainbowgrp.co.uk/Insurance/LifeInsuranceMain.aspx
Oops! Sorry for the double posting. My first post attempts didn’t actually post until I removed the URLs. But, this morning the original posted? (bob, feel free to remove duplicates)
Similar to Kristen, I’m looking at 8-10 times my income for 30 years. If I make the best rating class, I’ll be paying $31/month. If I don’t make the highest class it’ll be roughly $40/month. We’ll probably get less coverage on my wife. If we elect for only 20 years the monthly rate drops to $20 or $27/month. I’ll find in the next few weeks.
All of the major insurance providers will provide term insurance. When choosing between insurance companies, I would go with a financially sound mutual insurance company. Mutual means that they don’t have stock holders to pay dividend to. They are owned by the people that own the insurance.
There are 3 companies that are consistently in the top ratings for insurance companies, Northwestern Mutual, Mass Mutual and New York Life. I would choose among these 3. If you don’t know anyone that sells one of these companies, look them up online. I have found that insurance people are some of the easiest (often too easy!) people to find in the market place. Look up their website and contact the local office.
I would also spent the extra +-1$ a month to get the disability waiver on the policy. If you were to happen to get sick or hurt, the insurance policy would pay the premiums for you. If you were to get permanently sick or hurt, you could have it converted to permanent insurance and again, the policy would pay itself.
Best value (not cheapest but…)term life insurance for most families:
Primerica Life Insurance Company
Duluth GA
Sometimes your best bet is to go through the insurance company that you are already with. We have been with State Farm since before we got married, and they give us a nice deal and exceptional service. We bundle our life with car, home, and rental.
Good luck. I think you will be glad that you did it. If only for peace of mind for your wife….
We also went through Zander. I ended up with West Coast Life, and my wife’s – can’t remember. Her’s was a little less expensive, but both of us got $1mm each, 20-year term, and it costs about $75/month. Bought it 1-2yrs ago, and I’m 30 now.
I was curious how VABill determined the best value?
My husband and I got our life insurance from Primerica Life Insurance Company. They are in an amazing financial position right now and have been around for over 30 years. We liked them because they are one of the only companies that sell only term. They don’t try to trick anyone into the unwise cash-value policies. Find an agent near you that you like (they also give you a free financial plan which we loved whether or not you get insurance with them). They also teach invest the difference, emergency funds, and having no debt. The company is international, so there should be an office near you.
My goal in life is to give the best term life insurance policies that makes sence for each family. Only term….
Michael Ward
I’m sure with your background and knowledge of finances, you know that term life insurance is the only way to go. I am a high school teacher and i sell insurance and educate families on getting to financial independence through Primerica Financial Services. You should find a local office, and get a free quote.
I’m so glad you are addressing this issue in a personal way. I just found your blog today through my long-term following the simpledollar.
Beth
Texas
I am a huge proponent of mutual insurance companies. I like these companies not only because the are top rated financially strong but also for the values that they have. These are companies that don’t need to inflate stock prices in the short run. There stockholders are the policyowners. So the board of directors has a responsibility to the policyowners not just someone who picked up shares of the company as an investment. That being said these companies usually cost a few dollars more a month. The benefit of the extra cost is added flexibility and convertibility. The one thing I can tell you about your financial situation is that it will change and probably pretty drastically throughout your life. Flexibility and options are a key thing.
A few words of caution from experience. I’ve had a few experiences with Thrivent Financial. They are a religious association and are governed differently than insurance companies. This means their contracts are written differently. They allow for drastic changes to their contracts that are not allowed of a traditional insurance company. If there is a dispute they by taking out the policy you are agreeing to go through their own arbitration process which can be both timely and expensive. Just to let you know.
Primerica is a strong company financially but is being sold off by CitiGroup. They have announced intentions to do and IPO and pocket the proceeds. Chances are very likely that that company will go through a dramatic change. As previously mentioned, they only have a hammer (term insurance) so does that make everything a nail?
Interesting discussion since I have just purchased a whole life policy and feel it was a very wise choice. I know the traditional arguments for term, but a longer view showed me that when you reach later life, you will not be able to afford the cost of that 20-30 year term policy once that period ends, and you have nothing to show for it. Of course if you are independently weathly by then, you won’t have to worry. Buying permanent coverage at a younger age locked in my premium and it will be paid for in later years WITH cash available to be used. Just my thought. Found great service and a strong company in NY Life.
We started off with the intent to go Return of Premium but in the end settled on just term for 200k, level term for 20 years. I’m $20 as I’m a teacher and it’s an NEA plan. Hubby is less than $8 for the same amount. He’s early 30′s and I’m later 30′s, an add- on as a spouse and we are paying annually instead of month to month. That will save us over $500 over the life of the coverage. I think going with places you are already members of (work, AAA, credit union) might be a good start. I did a lot of research but in the end, I was too energetic to get a bunch of quotes. I was shocked when I when to work and none of my female co-workers had no clue what their family was doing about life insurance. I guess nobody likes to talk about it too much. It was a little depressing while doing it (thinking about death) but now I’m much more content.
*sorry, typo* I WASN’T too energetic to get actual quotes.
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