Time to get some Life Insurance....

[bubbsy]

Hey CP,

Better late than never I suppose.

I'm a 33 year old, with a small growing family (wife and toddler, with the intention of maybe popping out another one in the next year or 2). Am looking to get me some life insurance, and am really uneducated in the entire topic.

Does anyone have any good books, sites they'd recommend to read as i dive into this? I'm not even sure where to start looking or who some viable options are (heck, i got a costco life insurance flier here in toronto today).

Much appreciated!

[Slava]

I don't know about a book, and I'm not licensed in Ontario so you won't get a sales pitch from me, but I can help you with some information. Ask away and I will post whatever answers you're after. Feel free to PM if you would like information that you don't really want on the forum.

[FLAMESRULE]

We just got LI. I'm 34 and wifey is 31 both healthy, no medical issues etc. We are looking at having kids soon as well and figured now was the time.

I used my work benefits broker and she was great. I am cheap and feel like its a lot of $$, but for peace of mind its totally worth it. I know my wife and kids will be well taken care, and same for me, if one of was to bite it.

I wont put up our numbers, but we pay about 0.05% of total value per year. We set it up to match income, no debt or wife working with kids etc.

PM if you want more info.

[DoubleF]

I've had some for a while, but no idea on the specs.


You should probably start with learning about term, whole/universal etc. types of life insurance. Not the best site per se, but I like the explanation here:
http://www.gailvazoxlade.com/article...insurance.html

I'm no expert but I would suggest whole/universal. In a nutshell, term is like buying 20 years and then it expires. Whole/universal is until your death which makes more sense if you have kids and expect them to receive the funds.

For the one I got, I think I pay for 15-20 years or something and never pay another cent again. I think it was the performax gold from manulife, but not saying you have to go with that. I think I got the $100k one as I was not able to afford more when I first bought life insurance. I view it as a supplement to what I will leave behind, pay bills in the mean time etc. and not to cover everything as the link above says to do.

[Slava]

Well the best way to do things is either buy a smaller whole life plan and layer some term coverage on top or to buy term and then convert that to whole life when you're older and want less coverage for the rest of your life. That's a really general overview, but in a nutshell I would lean in that direction because you have more need for the coverage when you're young and in debt, very generally speaking.

[MoneyGuy]

Don't follow the advice on whole life or universal life. I'm an advisor and contend that 95% of cases require term insurance, despite what some commission-hungry agents will try to push (not Slava). I've never seen any book that touts whole life or UL.

I know some good, client-centred advisors in southern Ontario. PM me if you want a referral.

Books? Facts of Life by Grimes and Goldberg is excellent.

This is a very long thread populated by some great advisors who provide good advice. If you want good advice, go to redflagdeals.com/personal finance and look for the stickied thread on top of the page. Post your questions and advisors will give free information and advice. They'll even run quotes for you, if you ask.

Edit: whole life is very expensive, sometimes two or three times the cost at some ages. Buy term and invest the difference, right.

[DoubleF]

Originally Posted by Slava

Well the best way to do things is either buy a smaller whole life plan and layer some term coverage on top or to buy term and then convert that to whole life when you're older and want less coverage for the rest of your life. That's a really general overview, but in a nutshell I would lean in that direction because you have more need for the coverage when you're young and in debt, very generally speaking.

That actually sounds super logical. I guess I'll top it up with term in a few years when I start the kids debate.



Side question: What is the reasoning behind term vs whole situationally (assumption of 100% one or the other)?

I settled with whole because I bought in at age 24 (end funding at 39 or so) and have life insurance for "free" for another (let's say) 30 years. At least that's what I was led to believe.

[Street Pharmacist]

Is there any value to mortgage insurance?

[Slava]

Originally Posted by DoubleF

That actually sounds super logical. I guess I'll top it up with term in a few years when I start the kids debate.



Side question: What is the reasoning behind term vs whole situationally (assumption of 100% one or the other)?

I settled with whole because I bought in at age 24 (end funding at 39 or so) and have life insurance for "free" for another (let's say) 30 years. At least that's what I was led to believe.

The Performax Gold policy is quite stable and depending on how the illustration was run you could definitely have no more premiums after 15 years. I have run them to pay in one years, so it's definitely possible.

It's hard to say that there is an all or nothing solution. The way I see it, some of the coverage is needed today and to cover off certain issues or debts for example. But later on in life you might not need that same amount... although you want some coverage. That's where the idea of layering or at least leaving yourself the option comes in.

Originally Posted by Street Pharmacist

Is there any value to mortgage insurance?

It's hard to answer with a straight yes or no. If you know it pays and are sure that's the solution you want then sure, there is value. If you want the funds to go to someone and have them make a decision on whether to pay the mortgage off though, it doesn't make as much sense. There are other issues and concerns, but that's the starting point for looking at other coverages.

[V]

Originally Posted by Street Pharmacist

Is there any value to mortgage insurance?

If you like to pay high premiums for diminishing coverage, then it's probably great for you. Don't expect to be paid out either, when you do croak.

[MoneyGuy]

Originally Posted by Street Pharmacist

Is there any value to mortgage insurance?

Short answer is no. Longer answer is, if you want a temporary measure until you can get real insurance in place go for it, but replace it as soon as you can.

Google CBC Marketplace In Denial and prepare to be alarmed. The expose on that crap was on the CBC home page last time I checked. I direct clients there all the time.

[MoneyGuy]

Originally Posted by V

If you like to pay high premiums for diminishing coverage, then it's probably great for you. Don't expect to be paid out either, when you do croak.

Worse, it is underwritten at the time of claim so you are never certain it will actually pay.

[TurdFerguson]

Have you considered calling Patrick? He just took out life insurance.

[bubbsy]

Originally Posted by MoneyGuy

Short answer is no. Longer answer is, if you want a temporary measure until you can get real insurance in place go for it, but replace it as soon as you can.

Google CBC Marketplace In Denial and prepare to be alarmed. The expose on that crap was on the CBC home page last time I checked. I direct clients there all the time.

That just made me physically ill. Once I setup life insurance, can I cancel out of the useless td mortgage insurance I signed upto?!

[TurdFerguson]

Generally I think that debt insurance is, if nothing else, WAY to expensive compared to term insurance. It's a tack on money maker by lenders that they try to append to (sneak) into transactions.

[MoneyGuy]

Originally Posted by bubbsy

That just made me physically ill. Once I setup life insurance, can I cancel out of the useless td mortgage insurance I signed upto?!

Yes you can, at any time. If you replace an insurance policy the replacing agent is legally required to do a replacement declaration. This doesn't apply to creditor insurance, which tells you how little regard the industry has for that crap.

[Street Pharmacist]

Originally Posted by MoneyGuy

Short answer is no. Longer answer is, if you want a temporary measure until you can get real insurance in place go for it, but replace it as soon as you can.

Google CBC Marketplace In Denial and prepare to be alarmed. The expose on that crap was on the CBC home page last time I checked. I direct clients there all the time.

Wow

[DylanScores]

PM'd you Money Guy