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Should I get this life insurance policy?

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  • Should I get this life insurance policy?

    I just started my first attending job. I do not currently have any dependents (early 30's, single) so based on everything I read in the WCI investor books I wasn't going to get life insurance because I'm not supporting anyone. However looking over my benefits, I have the option of enrolling in a policy worth twice my money with no medical exam for about $17 a month. The policy will be valid until I leave the organization or retire, should i do this? I don't think policies I can get independently are too much more expensive, also if i stay at the organization long enough I'd have this insurance benefit for no additional fee. TIA!

  • #2
    Sure

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    • #3
      I'm a little confused.
      What do you mean by "enrolling in a policy worth twice my money"

      And what do you mean by getting the benefit for no additional fee if you stay there long enough? The insurance is free after a certain number of years of service?

      If you're going to get insurance you don't need, best to shop around and know what the actual price is from an independent agent instead of assuming this policy is better.

      Who are you going to put as your beneficiary?

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      • #4
        Just my opinion, but I'd only purchase life insurance if there is a need or you knew there would be one in the near future (i.e. getting married or starting a family). Insurance premiums do go up slightly each year, but term life insurance is very cheap and you'll be able to buy some in the future when there is actually a need.

        Having said that, $17 is a drop in the bucket to have additional coverage should anything happen to you where for some reason you wouldn't qualify for life insurance in the future (very small % of this happening). If you were on the very conservative end of the spectrum, then I'd also rather buy a slightly more expensive individual term life insurance policy on your own for the added flexibility that you can keep it regardless of employment.

        I was relieved to see this post wasn't about a $40k/year premium for a VUL or whole life insurance policy
        Andrew Musbach, CFP® | Co-Founder & Financial Advisor at MD Wealth Management, LLC | Podcast Host - The Physician's Guide to Financial Wellness

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        • #5
          Originally posted by Oto19 View Post
          I just started my first attending job. I do not currently have any dependents (early 30's, single) so based on everything I read in the WCI investor books I wasn't going to get life insurance because I'm not supporting anyone. However looking over my benefits, I have the option of enrolling in a policy worth twice my money with no medical exam for about $17 a month. The policy will be valid until I leave the organization or retire, should i do this? I don't think policies I can get independently are too much more expensive, also if i stay at the organization long enough I'd have this insurance benefit for no additional fee. TIA!
          What is the value of "twice my money" comment?
          Double check the rate because often when they state a cost it is per paycheck.
          You should also inquire about rate increases as you get older, typically every 5 year age bands of 35, 40, 45, 50, 55, 60, and 65.
          Scott Nelson-Archer, CLU, ChFC
          281-770-8080 Direct / [email protected]

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          • #6
            My guess, is that the life insurance policy payout is 2x the OP's salary. If one is a highly compensated employee like a physician, then it could be a relatively substantial benefit for the cost and convenience.

            When I purchased a condo (and was single, no beneficiaries), I purchased a term insurance policy to pay off my mortgage so that my parents (policy beneficiary) could settle my estate without duress.

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            • #7
              I agree and would assume 2x of the income. The issue is what is the income, age, gender, current health status and the rate structure (payments per month along with rate increases) as that drives what the cost. Term is cheap in general, assuming great health at 32 apx they can get $1 million of benefit for about $22 per month. If their situation is $250k of income x2 thus the benefit is $500k for $17 (1-2 payments per month) that may not be as good of an idea as $1 million for $23 per month. If the OP comes back maybe we can get the details to really help them out.
              Scott Nelson-Archer, CLU, ChFC
              281-770-8080 Direct / [email protected]

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              • #8
                Seems like you might get one of the online quotes. Term life is a commodity. No reason to guess.
                "This policy will be ........" That is until something changes. Usually that commitment is to the employer, not necessarily the employee.
                Whether you need a policy is a different question.

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