Considering a Whole Life Policy

[Freewheelin CPA]

Hi,

I'm a 27 yr old single CPA, no kids. I am currently the Accounting Supervisor (i.e. Controller) for a medium sized business. I currently have long-term disability insurance through NWML. Its about $50 a month, and provides me with $2400 a month in income, and I have a policy through work that provides me with about $2000 a month.

I am now looking at whole-life insurance. The NWML 65-L plan.

Going to start out at $75k. Just looking to lock in my insurability at a decent rate while i'm still young and healthy. I'm a non smoker, 6-1 about 160 lbs, and very physically active. Actually that's part of why I already have the disability coverage... I do a lot of extreme sports & tend to injure myself (broken bones, tendonitus, infected cuts, ect)

Anyway I just want have enough coverage to pay off any debts if I were to pass, but at the same time I want my premiums to be building towards something, and not just pissed away like they would through a term policy.

I have no plans to be married or have kids (at least not intentionally!) anytime soon. This plan also gives me the option to purchase another $150k of coverage every 3 years at the existing rates. I like the whole life b/c if I were to never have kids, I could convert to an annuity at 65 and use it for a retirement income stream.

This $75k of coverage will cost me somewhere around $90-100 a month, which is about the max I'm willing to pay at the moment.

Is there anything I am overlooking in my thought process here? Does this look like a good option for me?

Thanks in advance.
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whoops just realized this is in the agents & brokers forum... could a mod move me to the correct one?

Sorry for being a noob!

 

[STIBROKER]

Hi,

I'm a 27 yr old single CPA, no kids. I am currently the Accounting Supervisor (i.e. Controller) for a medium sized business. I currently have long-term disability insurance through NWML. Its about $50 a month, and provides me with $2400 a month in income, and I have a policy through work that provides me with about $2000 a month.

I am now looking at whole-life insurance. The NWML 65-L plan.

Going to start out at $75k. Just looking to lock in my insurability at a decent rate while i'm still young and healthy. I'm a non smoker, 6-1 about 160 lbs, and very physically active. Actually that's part of why I already have the disability coverage... I do a lot of extreme sports & tend to injure myself (broken bones, tendonitus, infected cuts, ect)

Anyway I just want have enough coverage to pay off any debts if I were to pass, but at the same time I want my premiums to be building towards something, and not just pissed away like they would through a term policy.

I have no plans to be married or have kids (at least not intentionally!) anytime soon. This plan also gives me the option to purchase another $150k of coverage every 3 years at the existing rates. I like the whole life b/c if I were to never have kids, I could convert to an annuity at 65 and use it for a retirement income stream.

This $75k of coverage will cost me somewhere around $90-100 a month, which is about the max I'm willing to pay at the moment.

Is there anything I am overlooking in my thought process here? Does this look like a good option for me?

Thanks in advance.
- - - - - - - - - - - - - - - - - -
whoops just realized this is in the agents & brokers forum... could a mod move me to the correct one?

Sorry for being a noob!

hahahahaha.....are you skateboarding........but what sold you on whole life....at the lest compare 30 Year term.... GRT UL and ROP Term......

 

[DHK]

This plan also gives me the option to purchase another $150k of coverage every 3 years at the existing rates.

Uh... no. You can purchase additional coverage without needing to re-qualify medically at the current underwriting classification based on your age at that time. So, it's based on your age, not necessarily the current rate at your age of 27.

Is there anything I am overlooking in my thought process here? Does this look like a good option for me?

Thanks in advance.

I would consider getting an additional term insurance rider to increase your face amount of coverage.

This serves 3 purposes:
1) Locks in your insurability at a higher amount
2) You can convert that term over time to more whole life coverage. (Your income will be going up as a young CPA, right?)
3) More appropriate death benefit coverage should you get married and start a family.

Just something else to consider.

 

[Freewheelin CPA]

hahahahaha.....are you skateboarding........but what sold you on whole life....at the lest compare 30 year term.... GRT UL and ROP Term......

Haha not a whole lot of skateboarding. Worst injury was probably a broken tibia snow skiing. I raced competitively for a long time and still ski like it (aka I go FAST).

Does a 30 year term have the option of an annuity conversion? It was my understanding that it did not?
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Uh... no. You can purchase additional coverage without needing to re-qualify medically at the current underwriting classification based on your age at that time. So, it's based on your age, not necessarily the current rate at your age of 27..

Whoops yeah this is what I meant. Not having to re-qualify medically.

I would consider getting an additional term insurance rider to increase your face amount of coverage.

This serves 3 purposes:
1) Locks in your insurability at a higher amount
2) You can convert that term over time to more whole life coverage. (Your income will be going up as a young CPA, right?)
3) More appropriate death benefit coverage should you get married and start a family.

Just something else to consider.

I was not aware there was an option to convert from term to whole life. What are the pros / cons of doing this compared to going for a whole life from the get-go? Lower premiums up front I'm sure, but how does this effect the premiums post-conversion?

I really don't need more than 75k coverage unless I were to marry / have kids. The rest of my family is very well off.

 

[LGilmore]

One, good for you.

Two, if you need another look with another WL company, pm me.

The points made about a term rider and option to increase are worth consideration. Future insurability is something a lot of people never think about, but when your health changes (mine did) and the only policy waiting is a tabled or even a no sorry we won't cover you, you'll thank your lucky stars you planned ahead.

You also might want to consider a higher face amount to get a better dividend stream.

As a long time owner of whole life, the best thing is 20 years out the guarantees and dividends and the small premium (now) put a smile on my face every year.... EVERY YEAR as they are much greater than the premium put in

Can't say that about my Roth or IRA, or my real estate holdings in Eastern WA.

Whole life insurance is dull and boring, but it is consistent as hell and they don't take back your gains.

 

[STIBROKER]

are you using this as an investment or to cover future debt's is the main question.......

 

[VolAgent]

Good points so far.

My advice, buy as much convertible term as you can get. You never know how your needs with change, nor your health. Also, make sure that term has a wavier of premium rider for disability, that converts and will pay the WL premium. There are companies that will do this. Not sure about NWML.

If you are going to buy a WL, go for at least 100k. Better banding, and usually better dividends, just make sure it comfortably fits your budget.

 

[Freewheelin CPA]

One, good for you.


As a long time owner of whole life, the best thing is 20 years out the guarantees and dividends and the small premium (now) put a smile on my face every year.... EVERY YEAR as they are much greater than the premium put in

Can't say that about my Roth or IRA, or my real estate holdings in Eastern WA.

Whole life insurance is dull and boring, but it is consistent as hell and they don't take back your gains.

Eastern WA huh? I live there! I will have to inquire about a rider, something I had not considered.

I definitely do not take my health for granted. I have multiple friends who have died in freak accidents, and another who just was diagnosed with MS (at my age), and was out of work for months.
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are you using this as an investment or to cover future debt's is the main question.......

Investment / savings. Not to cover future debts.
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Good points so far.

My advice, buy as much convertible term as you can get. You never know how your needs with change, nor your health. Also, make sure that term has a wavier of premium rider for disability, that converts and will pay the WL premium. There are companies that will do this. Not sure about NWML.

If you are going to buy a WL, go for at least 100k. Better banding, and usually better dividends, just make sure it comfortably fits your budget.

I did discuss the waiver of premium for disability and plan on including that. Is there any reason why 100k would pay out a better dividend rate than 75k? Are dividends scaled on the policy value (a diff rate for 50k-100k, 100k-200k, etc etc) ?

 

[dgoldenz]

I'd be switching over to Guardian's DI before I did anything else, but that's just me...

 

[Freewheelin CPA]

I'd be switching over to Guardian's DI before I did anything else, but that's just me...

What makes theirs so much superior?