I’ve got a current policy of $100,000 and my wife and I want to get more. My mother got the policy on me so I have no idea what to look for.
I got something from my mortgage company that they offerand the prices were around $20 a month for $250,000 (for each of us). What should I pay attention to? They all can’t be the same can they? Are there certain stipulations or anything else I need to be aware of before deciding?
Oblong If you are young and in good health, term life insurance is very cheap. You can look at sample rates at http://www.term4sale.com/
I would tend to buy life insurance directly from a life insurance company. Many plans offered through other organizations are in fact group plans. With group plans you do not have a policy, just a certificate. Group plans are more subject to changes than individual policies. The main benefit of group plans is that they may be cheaper, however individual life insurance is so competitive that this price difference often does not exist.
Would the plan offered to you pay $250,000 or $500,000 in case you and your spouse died in the same accident? This will tell you if the insurance is issued on your single lives, or on a joint basis which makes it cheaper.
If you have more specific questions I will try to answer them.
I’ve personally always done fine with SelectQuote. It’s a 1-800 number.
Be careful of mortgage insurance, if that’s what the mortgage company is offering.
Mortgage insurance is a life insurance that pays off your mortgage if you die. That means that the longer you live, the lower the benefit you would receive. It’s pretty much a waste of money. Much better is to get a life insurance that is sufficient to cover the mortgage, that does not decrease in value over time.
Frankly, unless you are an expert, your best bet is to find a life insurance agent. Do you have insurance on your car, your house, property, etc? Do you use an agent for that? Ask that person about life insurance.
Or, if you already have a policy that your mother bought you, call the company and ask for an agent nearby.
You need to be a bit careful of agents, like car salesmen, they’re on commission. However, the good ones are knowledgable and will look at you as a source of future business as your insurance needs increase.
This isn’t mortgage insurance, it is life insurance offered through the mortgage company. The prices I’ve seen are pretty much the same. I’m not worried so much about price as I am about any stipulations.
Is there anything to look out for? Are there different types of life insurance? Are there any typical restrictions (so I can look out for atypical restrictions).
I have an agent for car and home insurance, maybe I’ll just go through him.
Whooosh, not askin’ for much, are ya? Just a quick, two paragraph summary of life insurance?
We’ll try. There are two basic types of life insurance, although there can be lots of wierd variations:
Term Life is a one-year only contract. If you die during that year, your beneficiary gets paid off. At the end of any year, you can terminate the policy and you walk away, no penalties, no benefit. Kind of like rent; at end of the year, it’s done. Of course, you can renew each year, and the price will go up based on your age that year. Thus, term insurance is very cheap if you’re under 35 (say), and very expensive if you’re over 50 (say).
Whole Life is a long-term contract. You pay more than for term insurance, but the amount of premium is set once and stays flat forever. YOu’re overpaying in your younger years, and the insurance company builds up a cash reserve in your credit, so that you pay the same amount (which is underpaying compared to term insurance) in your older years. The insurance companies will tell you that this acts like a tax-effective savings program, which it sort of does. The “interest” on the savings program is piss-poor in high stock performance years like 1999, but probably looks good for 2001.
Then there are two types of companies: mutual insurance companies, the policy-holders are the stock-holders (so to speak), so you get dividends back for good performance of the company. Non-mutual companies, you generally don’t.
Insurance premiums are mostly based on your age, but they will want to run a medical screening – they hate it when someone gets diagnosed with terminal cancer and so runs out to buy a zillion-dollars worth of term-life insurance. Based on the medical findings and related questions about life style (Do you work with dynamite in your spare time? Do you travel often to places where there are insidious tropical disease? etc), they could increase your rates.
The other thing to think about are individual rates compared to group rates. If you can find a “group” that offers group rates, it will be much cheaper. It’s like buying single car, compared to buying a fleet of cars – the price of any one car is way cheaper if it’s part of a fleet. The typical group is an employer, and the employer may offer voluntary optional employee-paid life insurance. Those rates will be MUCH cheaper than if you tried to buy insurance on your own. Other groups can include church groups, sports clubs, etc.