Life Insurance

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ohjodi
Posts: 942
Joined: Sun Aug 30, 2015 3:57 pm

Life Insurance

Post by ohjodi » Tue Apr 02, 2019 4:17 pm

I know about banking, but I don't know much about life insurance :-| I'm mostly thinking out loud, here, and would appreciate any thoughts you might have.

I currently do not have any.

I will be 50 in June. The rates are in age brackets, so it will likely be a bit lower if I get a policy while I'm still 49.

I'm single, no kids. I mainly want a little to help my sisters pay for any death expenses (I will be cremated), and whatever expenses they might have like travel or missing work.

State Farm quoted me $27/mo for $10k. Whole life, rate will not increase.
Mutual of Omaha just quoted the same thing.

While $5k would be plenty, there is an additional factor. At some point, I might be raising my nephew, 12. My dad and step-mom currently have him. His mother (my step=sister) died 7 years ago. My parents are 77. Who knows if they'll be around in ten years. Actually, they adopted him, so legally he's my brother, lol I don't think they have life insurance, because up until two years ago when they got my nephew, they really didn't need it. Now it's very expensive and/or they don't qualify.

So $10k would be a better option, I think, especially since with inflation, $10k won't buy as much 10-20 years from now. This would leave enough to take care of my "frugal" cremation, and also for any expenses he might have with moving or who knows.

Anyway............do you have a preferred life insurance company, or do you know of ones to avoid?
ohjodi

colonialgirl
Posts: 1514
Joined: Sat Aug 29, 2015 2:01 am
Location: Central Illinois

Re: Life Insurance

Post by colonialgirl » Tue Apr 02, 2019 6:26 pm

Whole life builds cash value and is a more expensive option.

Term life insurance is the cheapest life insurance as you are only paying for insurance of your life for a set term. I personally, having worked in insurance for years would never buy anything but a term life. There are also variable options which have an investment option for the cash value and are a great option for someone like grandparents wanting to leave something to grandkids that will outpace inflation.

You 10k life sounds fine for your final expenses - although if you are really serious I would call around for quotes regarding cremation services. When my brother in law died they wanted $7500 to do it in Springfield IL. My niece had preshopped cremation for my sister and was able to find it for $1000 in Springfield Mo. You should also explore prepaid cremation services vs costs for insurance.

I don't mean this to be too personal but Jodi you have been quite candid about your limited financial resources. When you factor in the needs of a 7 year old child with 11 years of cost to support his life, you are going to need substantially more insurance if you want that coverage and it will frankly cost you much more. I think you have to do more planning regarding your nephews needs and the costs of such and see what other factors are in play - for example will you be able to get state benefits, social security benefits, etc for him. He should be able to draw SS as a minor if something happens to your parents. Overinsured can be as big a financial error as being underinsured.

Above ALL - remember insurance reps are salesmen - not financial advisors. Their primary goal is to generate their own income not look out for your needs. Be very careful.

I hope this helps. If you have any questions, just give me a shout.

clemencia2us
Posts: 4207
Joined: Fri Aug 28, 2015 9:21 am

Re: Life Insurance

Post by clemencia2us » Tue Apr 02, 2019 10:18 pm

At least buy a burial policy

Cremation can be very inexpensive. Check around.

clemencia2us
Posts: 4207
Joined: Fri Aug 28, 2015 9:21 am

Re: Life Insurance

Post by clemencia2us » Tue Apr 02, 2019 10:20 pm

And i agree with colonial girl about your nephew's future needs

Look into that also. He might be okay and not need anything from you

Ask if he is already getting benefits.

ohjodi
Posts: 942
Joined: Sun Aug 30, 2015 3:57 pm

Re: Life Insurance

Post by ohjodi » Tue Apr 02, 2019 11:23 pm

colonialgirl wrote:
Tue Apr 02, 2019 6:26 pm
Whole life builds cash value and is a more expensive option.

Term life insurance is the cheapest life insurance as you are only paying for insurance of your life for a set term. I personally, having worked in insurance for years would never buy anything but a term life. There are also variable options which have an investment option for the cash value and are a great option for someone like grandparents wanting to leave something to grandkids that will outpace inflation.

You 10k life sounds fine for your final expenses - although if you are really serious I would call around for quotes regarding cremation services. When my brother in law died they wanted $7500 to do it in Springfield IL. My niece had preshopped cremation for my sister and was able to find it for $1000 in Springfield Mo. You should also explore prepaid cremation services vs costs for insurance.

I don't mean this to be too personal but Jodi you have been quite candid about your limited financial resources. When you factor in the needs of a 7 year old child with 11 years of cost to support his life, you are going to need substantially more insurance if you want that coverage and it will frankly cost you much more. I think you have to do more planning regarding your nephews needs and the costs of such and see what other factors are in play - for example will you be able to get state benefits, social security benefits, etc for him. He should be able to draw SS as a minor if something happens to your parents. Overinsured can be as big a financial error as being underinsured.

Above ALL - remember insurance reps are salesmen - not financial advisors. Their primary goal is to generate their own income not look out for your needs. Be very careful.

I hope this helps. If you have any questions, just give me a shout.
That's a bit to think about, thank you.

He's now 12, and was getting Social Security from his mother's benefit, about $650 a month. But now that my parents adopted him, I think he's getting a higher amount based on my dad's social security, since he's retired. Not sure how that works.

You're right about my limited income. And I do get assistance with rent, Medicare/Medicaid, etc. What I wonder about term life, though, is how much of a financial asset/investment that would be. Would it have an actual dollar value to me, while I'm alive? All these agencies ask me about what money I have, if I own property, stocks, coins/metals, life insurance, and even burial plots. Owning too much in financial things could reduce or end some assistance, entirely. That would cost me more than what the insurance is worth.

In any case, I just want a small policy to help my family with my death expenses, and have a little left over to help them get my nephew re-situated...which will likely be with one of my sisters.

With the way our economy is, and how jobs keep disappearing, kids aren't making it out on their own even in their 20's, anymore. It will only get worse. Our Walmart now has 22 self-check lanes, and only 7 with an actual human.

I also don't think he's got the ability to be fully independent. That could change, obviously. I have another nephew who is 20, and he's probably never going to drive a car. He freaked out in the high school parking lot when my sister was just having him drive a little. We live an a SMALL town, and he still can't tell you how to get somewhere, because he just never has paid attention.

I don't think my 12 year old nephew is as bad as this, but he strikes me as one who wouldn't be able to really pay attention to driving.

Anyway, I ramble.

It only hit me recently that I could end up parenting a kid, after all, LOL Yikes!
ohjodi

ohjodi
Posts: 942
Joined: Sun Aug 30, 2015 3:57 pm

Re: Life Insurance

Post by ohjodi » Tue Apr 02, 2019 11:31 pm

clemencia2us wrote:
Tue Apr 02, 2019 10:18 pm
At least buy a burial policy

Cremation can be very inexpensive. Check around.
Yes, I'll start looking around. I think I heard that if you donate your body to science, eventually they cremate you and send the ashes to your family, for free I might actually do that. It's not that we're that broke at all, it's just I really don't care about what happens to me after death.

My step-sister's ashes are buried in a plot that I can actually use, too, so that will be easy. I think you can put up to three sets of ashes in one plot.

Maybe this is what they mean by "the sharing economy" lol
ohjodi

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