So, I've read the threads. I know it's generally not good. Here's my conundrum, wondering if anyone has any thoughts.
I am required to purchase a certain amount of universal life insurance through my practice. Annual premium could be a lot worse than it is for a universal life policy (~$1,200/year for $2M of coverage until my mid 30s, then goes up to ~$1,300 for mid 30s, then goes up to ~$1,500, then to ~$1,700 for my 40s, etc--the numbers start getting gross as I get closer to my 50s). As I get more senior in my practice, I will be required to increase that life insurance amount to $5M.
Within that context, I think I need several million of additional life insurance cover ($2-3M) for myself now (as opposed to later when it will be required by my practice anyway). (I'd like to get life insurance coverage for my spouse as well, but probably not going to be affordable.) I could either go and shop 10-year term policies (10 years because that will get me to the stage where I'm just required to buy the GUL), or I could buy the policy increase through the GUL. Going up to $5 on the GUL would increase my cost from ~$1,200 to ~$2,900 until my mid 30s, then ~$3,100 in my late 30s, then ~$3,700, then ~4,300.
So, what I'm grappling with is really... in 5 years, assuming I'm still where I currently am (which is NOT BY ANY STRETCH a safe assumption), I'm going to be stuck with this anyway. So do I just swallow the pill now to start the clock on getting the return to be nominally less terrible, or do I just get term to fill the gap for now, and defer the pain until I absolutely have to incur it.
My gut is to get term to fill the gap. A big part of that instinct is that I can't know for sure whether I'll get the promotion that will necessitate the increase from $2M to $5M. If I don't stay (either by choice or because I'm politely shown out), I would certainly have the option to keep the policy, but with only 5 years into it, I imagine it would be better to cut bait and cash it out.
Exacerbating all of this is that, though I've read enough to know it's bad, I'm not entirely sure I even know the right questions to ask to fully evaluate how bad it actually is.
I am required to purchase a certain amount of universal life insurance through my practice. Annual premium could be a lot worse than it is for a universal life policy (~$1,200/year for $2M of coverage until my mid 30s, then goes up to ~$1,300 for mid 30s, then goes up to ~$1,500, then to ~$1,700 for my 40s, etc--the numbers start getting gross as I get closer to my 50s). As I get more senior in my practice, I will be required to increase that life insurance amount to $5M.
Within that context, I think I need several million of additional life insurance cover ($2-3M) for myself now (as opposed to later when it will be required by my practice anyway). (I'd like to get life insurance coverage for my spouse as well, but probably not going to be affordable.) I could either go and shop 10-year term policies (10 years because that will get me to the stage where I'm just required to buy the GUL), or I could buy the policy increase through the GUL. Going up to $5 on the GUL would increase my cost from ~$1,200 to ~$2,900 until my mid 30s, then ~$3,100 in my late 30s, then ~$3,700, then ~4,300.
So, what I'm grappling with is really... in 5 years, assuming I'm still where I currently am (which is NOT BY ANY STRETCH a safe assumption), I'm going to be stuck with this anyway. So do I just swallow the pill now to start the clock on getting the return to be nominally less terrible, or do I just get term to fill the gap for now, and defer the pain until I absolutely have to incur it.
My gut is to get term to fill the gap. A big part of that instinct is that I can't know for sure whether I'll get the promotion that will necessitate the increase from $2M to $5M. If I don't stay (either by choice or because I'm politely shown out), I would certainly have the option to keep the policy, but with only 5 years into it, I imagine it would be better to cut bait and cash it out.
Exacerbating all of this is that, though I've read enough to know it's bad, I'm not entirely sure I even know the right questions to ask to fully evaluate how bad it actually is.
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