Life Insurance

[lakelife]

Needing to pick some life insurance. Was planning on just getting like a 3mil dollar 30 year term policy for myself.

27, no kids, home mortgage and about to have a practice loan here shortly

 

ADA offers some stuff, lots of old dentists think its great but you have to continue to be a ADA member to have it which isnt terrible but its whatever.

They also offer an annual term renewable for 3 mil that looks decent to but I also hear mixed things on stuff like that from other people. Soooo....do I just go with the straight up cheap 3 mil term I see on term4sale.

 

Here is the ADAs stuff below...I get that it goes up each year but just like disability I plan on self insuring by my mid 50s. So I could just drop it before it gets to big.

ANNUAL RENEWABLE TERM LIFE PLAN			20 YR LEVEL TERM LIFE PLAN
MEMBER		COVERAGE AMOUNT $3,000,000	COVERAGE AMOUNT $3,000,000
Plan Year	Age	Standard Annual Rates	Standard Annual Rates
1	27	463.41	1,980.00
2	28	463.41	1,980.00
3	29	463.41	1,980.00
4	30	473.18	1,980.00
5	31	511.50	1,980.00
6	32	547.41	1,980.00
7	33	583.31	1,980.00
8	34	625.15	1,980.00
9	35	677.99	1,980.00
10	36	711.65	1,980.00
11	37	748.64	1,980.00
12	38	794.88	1,980.00
13	39	866.71	1,980.00
14	40	930.53	1,980.00
15	41	986.93	1,980.00
16	42	1,047.78	1,980.00
17	43	1,146.77	1,980.00
18	44	1,251.54	1,980.00
19	45	1,376.69	1,980.00
20	46	1,514.35	1,980.00
Total Premium		$16,185.24	$39,600.00

 

[jfoxcpacfp]

No spouse or kids. What is the purpose of the life insurance? Do you plan on marrying/starting a family soon?

[MR Insurance Consultants]

Like Johanna mentioned, there isn't much of a need for life insurance right now. Are you simply considering putting a policy in place to secure a lower premium and take advantage of good health?

The annually renewable option doesn't look too bad in all honesty. The 20 year Term rates you listed look very high though. Have you already done some research or spoken with an agent about the health category for which you'd likely qualify? At age 27, you might be able to get a better health category than "Standard". While most insurers use similar underwriting criteria, some are purposely more competitive in niche markets. Term4sale.com is great to get estimated pricing, but at the end of the day you should speak with an experienced, knowledgeable and objective agent who can help you find the best "cheap term" option and compare those options to the ADA policy. There are plenty of agents that participate on this site, and you can find a local agent using Term4Sale too.

[LBKCLU]

Keep in mind that Great West (ADA) has a policy premium credit discount that is not guaranteed and reevaluated semi-annually. If you can purchase a policy for about the same premium (or less) that is guaranteed, without having the need to maintain membership in the ADA and rely on the premium credit discount, I would go elsewhere.

[Joseph]

What is the purpose of life insurance?

Please explain.

[docnews]

Group plans are for the lazy or the unhealthy. Take the time, look at term4sale.com, and call an objective agent who sales term. I'm 28 and average health (might even live in the same state based on your photo choice) and I recently got at $100/month level policy for 30 years $2 million.

 

Others questions of your need for this are legitimate as well. Remember disability insurance is a responsible gift to yourself, but life insurance is a honorable gift to your family.

[lakelife]

Sorry didnt clarify obviously...married, kids will be in next year or two. I have looked at term4sale and found lots of good quotes. Had my disability agent run me some numbers and all were super competitive for 30 year term, 3million with what I saw on there for around 1900 annually. Kind of plan on doing this once so just want to get enough and be done with it.

 

If I get term I am going to go with a company other than the ADA. I guess Im just trying to see why the renewable one is not as good. Its super cheap now if something tragic were to happen to me. And in 20 years when it starts to get more expensive I will have self insured and can drop it. Am I off base here?

 

 

 

[The White Coat Investor]

Your approach is fine. I see no reason to go through the ADA unless you're having trouble with the standard approach (i.e. seeing an independent and making sure he's selling you something that is very low cost like what you'd see on term4sale or evaluateinsurance.com (both of whom advertise on the site as do 3 people who have already replied on this thread.) All of whom would love to sell you a policy and won't BS you.

[LBKCLU]

If you are married and do not have children but assume you have one in the next year or two, what you have illustrated above will not even get that child out of college. From your comment, it seems that you will be looking to have more than one. This does not even take into consideration that your children may go into an occupation like dentistry, medicine, law or other professions that require them in incur debt and continue to rely on you for financial support.

While you will do well financially, it is unlikely that you will be financially successful enough to get rid of your life insurance entirely in 20 years for variety of reasons. The longer you assume that you keep the Annual Renewable Term, the worse things will look compared to a level premium term policy.

Also, keep in mind (not that you are purchasing the ADA plan anyway), the current Premium Credit discount for the Annually Renewable Term Life Plan is 53%, which reduces your premium in advance, and is reflected in the above quote. Note: The ADA declares a Premium Credit when the Plan's experience is favorable, but Premium Credits are not guaranteed and are reevaluated semi-annually.

 

[Jenn]

Level term best option. I like that you're doing 30 years- especially if spouse nonworking. We did 15 year term when we had a 4 year old, and you guessed it, had to get another one when her sister came a few years later. It was cheap enough we kept it after we no longer needed life insurance just as a lottery ticket- until the fixed term ended and the gamble was costing more, probably, than going out to get another fixed term life policy.

[Toshi]

LBKCLU wrote:

If you are married and do not have children but assume you have one in the next year or two, what you have illustrated above will not even get that child out of college.

Click to expand...

$3M won't get kids out of college? I must live on a different world. I'm choosing to carry a sum of net worth + life insurance == $1.5M. Every 5 years or sooner I intend to drop $500k in coverage.

[LBKCLU]

I'm saying that the term insurance will be gone before his first child makes it out of college if he only plans on keeping it for 20 years - certainly not that a $3,000,000 death benefit won't pay for his children(s) college.

He said "Im just trying to see why the renewable one is not as good. Its super cheap now if something tragic were to happen to me. And in 20 years when it starts to get more expensive I will have self insured and can drop it. Am I off base here"?

 

[lakelife]

LBKCLU wrote:

I’m saying that the term insurance will be gone before his first child makes it out of college if he only plans on keeping it for 20 years – certainly not that a $3,000,000 death benefit won’t pay for his children(s) college.

He said “Im just trying to see why the renewable one is not as good. Its super cheap now if something tragic were to happen to me. And in 20 years when it starts to get more expensive I will have self insured and can drop it. Am I off base here”?

Makes sense. The thought isn't necessarily wrong just may not be realistic. And good to know about the premium credit stuff. Sounds like the 30 year term is the way to go. Thanks everyone for the thoughts.

 

[Toshi]

LBKCLU wrote:

I’m saying that the term insurance will be gone before his first child makes it out of college if he only plans on keeping it for 20 years – certainly not that a $3,000,000 death benefit won’t pay for his children(s) college.

He said “Im just trying to see why the renewable one is not as good. Its super cheap now if something tragic were to happen to me. And in 20 years when it starts to get more expensive I will have self insured and can drop it. Am I off base here”?

 

Click to expand...

Ah, I now see that it was about the term. In 20 years, like him, I certainly plan to be self-insuring...