My mother just turned 75, and she has been informed that one of the two $20,000 term policies she holds is about to expire, and they will not renew her at the current rate (which was pretty cheap since she got it years ago) – they will only convert it into a whole-life policy with much higher premiums, which she (and I) cannot afford.
So, the amount of insurance payable upon her death has just been halved. (The other policy is secure, through her former company’s credit union.) We are far from rich (not quite dirt poor, but not far from there, either), and I am now searching for some kind of affordable small policy in the $10K-20K range to help cover what we’re losing. Thing is, there are thousands of insurance companies on the Web, not to mention all the 1-800 commercials (“Your premiums will never increase, and you can’t be turned down for any reason…”). Can anyone recommend a good informational website that can help me sort through the clutter – one that gives good, unbiased advice and recommendations (i.e., not a shill site for an insurance company or broker)?
And any personal advice you could give would be most welcome, too. <s>
You can pay as little as $0 or as much as $100,000 (or more) for a wedding. The deal is similar with funerals/burial (although the bottom end is about $500). It is a choice you are making, and you will pay for it, either straight out of your pocket, or in premiums that, over the years, may add up to even more money.
As for the “your premiums will never increase” insurance, if you look closely, most of them are not life insurance, but rather “accidental death” insurance. There is a big difference between the two, because accidental death insurance reserve the big payout for accidental deaths, and pays less (or nothing at all) for other causes of death. Seniors are, in general, at very low risk of accidental death. These companies also advertise “no medical needed”. Well of course! The more medical problems you have, the less likely you are to leave the house, and the less likely you are to die from an accident.
Even worse are “accidental death by accidental means” policies. But the bit about “your premiums will never increase” insurance is also true of whole life insurance. At 70+, however, you’re gonna pay a ton in relation to benefit because, let’s face it, Mom’s not a good bet anymore. There’s an outfit called Purple Cross that specializes in funeral insurance stuff–might give them a try, but I know little about their operation.
As for me?
3 kegs of beer: $200
500 lbs of kiln dried cedar scraps: $50
1 can of lighter fluid: $2
Getting the relatives arrested for suburban bonfire with no permit: Priceless
If your mother still has a $20k policy, that should be more than adequate. After all, it sounds as if you’re only concerned about covering burial costs, and a $20k funeral would be a mighty elaborate affair, probably out of character for someone of modest means.
The only other reason to have life insurance is to provide for one’s dependents. I’m just guessing, here, but I don’t imagine your mother is providing support for anyone.