July 9th, 2006 | 
Author: 
bbq asked:
here is my original question
here is my original question
http://answers.yahoo.com/question/index;_ylt=AloaSJ00r.VoSPxXAt2Z2jbsy6IX?qid=20070807141947AAb1AOI
very good answers and i want to explain a bit more. i am 34, my husband is 40. we dont have any retirement investments (for the most part). My concern is with term life ins that what if i get a 10, 15, or 20 yr policy – will i be able to renew for another term without question or by that time will i be subject to questions and medical exams or outright denied ? I just want to make sure either one of us will be alright either way. no kids.
Tamesha Sylver
Posted in Insurance | 
Tags: Insurance, Life Insurance, Medical Exams, Question Index, Retirement Investments, Term Insurance, Term Life Ins, Whole Life, Yahoo
Only the insurer can give you information on a specific renewal policy. However, go for term as insurance is definitely not a good investment.
When a term policy expires, you have to essentially start over. Based on your health at that time, you may or may not even be able to get coverage. And, if you can, it will be higher simply because of your age at the time. The higher your age at the start of that term, the higher your monthly premium.
Term insurance is really only good if you have children or if you are carrying a mortgage with only one spouse working (in that case you will want a term policy that is enough to pay off the house should the breadwinner die). Whole insurance is a complete waste of money regardless.
If you have no children, and if both of you can afford your current monthly mortgage payment on your own, then you do not need life insurance. Invest that money. You may want to consider a small burial policy, but I would not go with a big insurance policy unless you have kids or have a big mortgage that requires both incomes to cover.
No you won’t be able to renew 20 yrs from now (or whatever) without any questions. The rate may go up, or they could even not give you insurance if you are then in really bad health. Still, you have to consider your situation and how much insurance you really need and for how long. Before having kids me and my wife didn’t even get insurance (except what was given us thru our jobs). The rationale was simple, if either of us passed away the other one would be sad and grieving, but financially they could still take care of themselves. Now with kids we got insurance (term) so that if either of us passed away the kids standard of living could be maintained but once the kids hit 18 they are on their own (to a point), and again we will no longer need insurance.
So, the obvious question to me is, since you are both adults assumedly able to take care of yourselves, do you need any insurance at all. If one of you is the primary bread winner, maybe they would need insurance, but even in this case, in 20 years would you be better off and then maybe not need insurance. If you think you need insurance for say 40 yrs, maybe you could just get the 20 yrs insurance with the assumption you’ll get a new policy in 20 years. There is a little risk of what your cost would be in 20 years, but this is life – there are no guarantees.
Anyhow, consider your situation and choose according to what you think you will need down the road.
Consider this. You are 34, go get price quotes on whole life insurancefor say $1,000,000.00. Now go get price quotes on term life insurance for $1,000,000.00 for say 20 years. Now lets figure the difference in price. If you buy the term life insurance and take the difference and invest it wisely for 20 years, at the end of 20 years, you will not need to renew your term insurance because the money you have invested will have grown to a point where you will be able to self insure yourself. Your husband’s will be even higher.
If you or he should happen to die within those 20 years, you get the same return on the insurance for about 1/10 of the cost. If you or he do not die in that 20 years, you will have enough money that you can actually enjoy some of it yourself without being dead and letting someone else have it all. In 20 years you will have $500,000.00 give or take. At 54 or 60 either one or both of you should be set for life.
With term insurance once the term is up two things happens, first the premiums go up, and usually by a lot (3 to 5 times what you were paying before) and they go up every year. There is no medical requirements to keep the policy but it quickly becomes more expensive than if you had locked in the premiums with a whole life insurance policy.
2) thing that happens is that most people drop their insurance not because there is lack of need for the insurance, but because the insurance becomes too expensive, so because there in many cases is still a need for the insurance (Estate Planning, Charitable giving, etc.) you will have to go out a get requalified for insurance from a different carrier… this means that is a possiblility of not being approved the second time around do to changes in age and health.
You menetioned on other item in the above question, that you have no children and no retirement savings or investments. While life insurance is not intended to be an investment vehicle, it is a great addition to your portfolio because it can be a better asset than bonds in your overall portfolio. Don’t let anyone compare the Cash Value in a life insurance policy to an asset like an idividual stock or an agressive Mutual Fund. Also a Cash Value product should never be your sole place to put your retirement savings, but again it can be a great addition to your portfolio, or in your case a great place to start. I would urge you to sit down with a qualified financial services proffesional who can help get started in the retirement planning as well as help you get the right type of insurance.
It sounds to me based on your conserns about what happens after the term on the insurance is up, that you have already made you desision of what type of insurance to buy, and it is a good one. Next step is to make sure you get a good financially strong company to back the whole life policy.
What you described is a term plan that is guarantee renewable and convertible. Renewal means that they won’t kick you out of the plan after the initial level period you select (in case you’re on your death bed). Convertible means that if you get 20 years out and you still need life coverage, but have had a change in health, you are guaranteed the right to a permanent plan without any further underwriting.
The term market is so competitive, most of the quality companies out there throw this on the policy for free, but check with your agent to be sure.
You can buy a term policy now, with a “renewable and convertable” option, where you do NOT have to “qualify” – no medical, no questions, no denials, just the new premium amount.
I ALWAYS recommend a renewable and convertable rider on a term policy.
You REALLY need to meet with someone who can help you develop a financial game plan. And then EXECUTE ALL the steps in that plan.
The big question which is very difficult to answer is “What will your financial picture be in 20 (or 30) years?” That includes what will your future expenses (and debts) be at age 54/60 (20 years) or 64/70 (in 30 years). Will you have enough money to retire? Will your debts be paid so that IF one of you dies after age 50, will the other manage? What if that death was prolonged and expensive (as in expensive medical treatments and loss of income)? What if one of you need nursing home or extensive home health care when you are 80?
These are complicated questions but very real ones.
Many term policies are convertible to permanent policies WITHOUT proving you are healthy BUT they are also expensive to convert. Be sure to ask how much the premiums will be if you convert at age 50.
Keep in mind that you CAN own both term and permanent insurance and that there are other kinds of permanent insurance other than Whole Life.
Go meet with several agents and planners. Expect to pay a fee.
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Hello,
There are term policies that have death benefits available to age 95 with a level premium. The cost may be 5% higher than a traditional term plan but the death benefit is pretty well certain to be paid. Also with term policies you are able to receive 50% of face value in the event of terminal illness up front. So I would suggest a term plan in conjunction with your own savings plan. If you are in TX, I can assist with the process. If not you can contact American Fidelity for the Alternative 95 term plan. The company is A+ and located in Oklahoma City, OK.
Great additional question. Let the anti-whole lifers answer that one! Yes, you do have to start all over when your term policy expires, and coverage could be denied. One thing is certain: Your premiums will be dramatically higher 20 years from now with a new term policy. With a whole life policy, you lock in your premiums for life. They can’t go up no matter what physical problems you have in the future.
If you think you can turn your monthly premium savings into $1,000,000 in twenty years, then by all means get a term policy and invest the savings, as suggested above.
Great question that needs to be answered.
“Term life insurance provides the face amount of the policy upon the death of the insured. If the insured does not die, then the term life insurance ends. It also may offer an option to renew up to a certain age, regardless of your health, but typically at a higher premium or lower face amount.”
So you can renew the policy very easily without the need to have a new checkup. However since your age have increased, you may have to pay a higher premium.
Hope that helps you! Keep doing your research!
Dave
For more information on Life Insurance and other financial topics visit
As long as you can qualify for the insurance, you can reapply at the end of the first term period. Depending on your needs, you may need 30 or 35 year term- make sure that it is level term. Do not get Annually renewable term or a term policy with a return of premium rider. There is no reason that you should get a term policy that decreases in value for the time period you are talking about.
However, you and your husband should sit down with an agent who can ask you questions about when you want to retire, how much you would like to retire on, type of plan to put together and any other dreams and goals you may have. All of which would be incorporated into a financial plan that is customized to your wants and desires.
ok, please read this…my company guantees insurability after the term runs out REGARDLESS OF HEALTH ISSUES. The premiums will be based on your age at the time of insurance policy termination or end of that policy. I know this is 100%true, so dont let the other guys tell yoiu any different. buy term and invest the diff. and let YOUR MONEY GROW FOR YOU NOT THE CASH VALUE GUYS. Dont listen to that one guy intexas. My company can do a finanical needs Aynalsis for no cost to you, and show you a direction towards retire ment. It is the best F.N.A. in the industry and we have your best interests at heart.