Life Waiver Necessary W/ Disability?

[one321]

I am shopping around for both term life insurance and disability insurance. The term life insurance from Northwestern Mutual that I am looking at comes with a $35 waiver of premium fee. If I also get disability insurance, is there any reason for me to paying the waiver of premium fee on my term life policy? I figure, if I become disabled, I will keep paying my life insurance premiums with my disability insurance check. Why pay for disability insurance both on my term life policy and my disability policy? Thoughts?

 

[somarco]

It depends.

With some carriers, and NWML may be one of the, when the policy goes on WP it automatically converts to a permanent plan. If so, that could be a valuable option.

Ask your agent.

 

[one321]

It depends.

With some carriers, and NWML may be one of the, when the policy goes on WP it automatically converts to a permanent plan. If so, that could be a valuable option.

Ask your agent.

If the term life policy goes to WP, it can be converted to their 90 Life or a lower premium permanent plan.

I'm good about investing/saving and keeping low to no debt. I just wonder if I would be better off taking that WP fee and investing it instead of using insurance as an investment.

Assuming the only insurance I want is the insurance I have purchased, I think paying the term life premium with the disability insurance check would be an okay option. That's what I am currently thinking, but I'm definitely open for advice.

 

[somarco]

wonder if I would be better off taking that WP fee and investing it instead of using insurance as an investment.

Life insurance should not be sold, or bought as an investment.

There are plenty of reasons why you may need a permanent plan at some point in the future.

What kind of investment vehicle is worthy of a $35 monthly "investment"?

 

[one321]

Life insurance should not be sold, or bought as an investment.

There are plenty of reasons why you may need a permanent plan at some point in the future.

What kind of investment vehicle is worthy of a $35 monthly "investment"?

I guess I just don't see myself depending on life insurance. If I or my spouse die within the term then we will be covered, but I fully plan on having enough wealth in savings and investments when we are in our 50s so we can take care of ourselves and not depend on life insurance, term or permanent. And I'm figuring that if one of us does become disabled, we will still be able to pay the term life premiums.

I am certainly not an insurance expert, so do point out my errors. In the end, I'm just trying to balance the risks with the costs.

 

[Franz Kafka]

I fully plan on having enough wealth in savings and investments when we are in our 50s so we can take care of ourselves and not depend on life insurance, term or permanent.

Savings are essential and therefore needs to be dependable. Investments by definition are NOT dependable. 8-10% expected returns you may have been shown on your investments are completely meaningless. IMO a participating permanent WLs (especially NWM ones) are a great way to accumulate your savings that grows tax-deferred and can be accessed later tax-free even before 591/2. When you have both savings and investments in place you can leave your investments alone in a down market and use your savings to fund your retirement. When the market's up you can switch. Also with proper permanent coverage you only have to plan for one life of retirement instead of 2.

And I'm figuring that if one of us does become disabled, we will still be able to pay the term life premiums.

WP on term is expensive because it can be converted into permanent and the carrier will have to come up with the big premium (as long as you are disabled). If you ever become permanently disabled, you won't have enough discretionary income to continue contributing to your investments. Converted permenant policy will be your only on-going savings.

I am certainly not an insurance expert, so do point out my errors. In the end, I'm just trying to balance the risks with the costs.

You balance your risks with guarantees that will give you "minimum" protection on your retirement plan. What's the true cost of $35 WP? Talking heads will say $35x12 months x 30 years x 8% = whatever you MAY end up with. What's the cost if you become permanently disabled and NWM pays for your permanent policy for life?
Investment is about taking a higher risk for a POSSIBLE higher reward. Insurance is about protecting your family and assets in case investment falls apart. AJMO

 

[one321]

Okay. Thank you two for your thoughts and advice.