30 Year Term or Permanent

[csalter]

I thought things were all set but recently found out that at 53 my wife is going to have a baby. (Just when I thought I was going to have fun!)

Anyhow, I am trying to decide if I should get a 30 year term policy or to buy a permanent policy. I will retire in 8 years, but in case something happens between now and say 20 years from now. My wife will need extra income for the baby. I am thinking of taking out a $600,000 policy. That will take me to 83. My wife would get 75% or 50% of my pension when I die. The insurance would take the baby through at least 21 and college would be covered hopefully with college costs currently in upwards of $50, 000 and $60,000 per year. I figured I might as well go through the 30 year term policy. If I don't survive past the term, my wife and now 4 kids will be the beneficiaries. If I do survive, then all is well. I can always stop paying if I want to if i can see that the finances are still secure.

There seems to be a big difference between the permanent and 30 year term policy premiums too.

Any thoughts?

 

[Jerard]

I thought things were all set but recently found out that at 53 my wife is going to have a baby. (Just when I thought I was going to have fun!)

Sounds like you did.

 

[LGilmore]

Look at a gul as well. Basically lifetime term coverage. It might be nice to have a 40 year plan.. just take a look and see what's best. Not saying a over b, just advising to look.

 

[ctg]

Why not both? Of course I'm simplifying things, but how about a term to cover immediate expenses, (mortgage, income loss, tuition, etc) and a permanent for long term?

And a convertible term would be great, so when you outlive the term policy, you can up the ante.

 

[csalter]

Re: 30 Year Term or Permanent Go to Top
Look at a gul as well. Basically lifetime term coverage. It might be nice to have a 40 year plan.. just take a look and see what's best. Not saying a over b, just advising to look.

I have looked at gul rates and they seem to be around $500/month for $600/month. While the 30 year terms seem to be around $265-$320 per month depending on health. Also, doesn't the cost of insurance go up as you get older on the gul's.



Why not both? Of course I'm simplifying things, but how about a term to cover immediate expenses, (mortgage, income loss, tuition, etc) and a permanent for long term?

And a convertible term would be great, so when you outlive the term policy, you can up the ante.

I have considered the term and permanent together, but have tried to figure out if I should just do the one permanent policy to keep it simple. What makes this a little complicated is which joint survivor election I will use for my wife. If I choose to have more money while I am alive that would reduce how much she would receive upon my death. So with the insurance always in force she would have tax free benefits from the policy. She would be 70 upon my death at 84 and probably would not need as much money as there would be no mortgage or kids to take care of at that time.

I was thinking that with the convertible policy the premium would go up significantly because I would be so much older.

 

[LGilmore]

"Also, doesn't the cost of insurance go up as you get older on the gul's. "

Doesn't matter. Remember lifetime term. As long as you pay the premium they start you with, you're good. A GUL is not a cash value product. What it is depending on how long you work the guarantee, a level term policy.

To what age was the gul you were looking at? You can ajust the guarantee level with some from 90 to 121.

but if it doesn't work for you at least you looked.



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[dgoldenz]

"Also, doesn't the cost of insurance go up as you get older on the gul's. "

Doesn't matter. Remember lifetime term. As long as you pay the premium they start you with, you're good. A GUL is not a cash value product. What it is depending on how long you work the guarantee, a level term policy.

To what age was the gul you were looking at? You can ajust the guarantee level with some from 90 to 121.

but if it doesn't work for you at least you looked.



​

Some of the GUL products still have pretty solid cash value guarantees...others not so much. Lincoln Benefit Life's liquidity guarantee rider is one that comes to mind.

 

[WinoBlues]

Did you ever make a decision on the other policies you were looking at?

 

[csalter]

Did you ever make a decision on the other policies you were looking at?

I did. I was doing the pension max and decided to not pay for the insurance. The premiums vs the free policy provided by my pension for my wife just could not be beat.

However, this time I am forced to buy insurance with a new baby on the way. Also, I bought the Genworth Long term care policy so that my assets will be covered.

 

[csalter]

Why not both? Of course I'm simplifying things, but how about a term to cover immediate expenses, (mortgage, income loss, tuition, etc) and a permanent for long term?

And a convertible term would be great, so when you outlive the term policy, you can up the ante.

I considered the convertible. Prudential has a convertible term policy, but if I convert although the medical is already taken care of based upon my health now, because of my age the insurance jumps up quite a bit.
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Looking at a 30 term policy from Banner at $283/month. If health comes out okay, that seems to be good for term. Agent says that if would be difficult for me to get their preferred best at $265. I can live with the $283.

I have not heard of any gul policy quotes that are in this ballpark. The guaranteed universal life policies are starting around $500 per month. So since I will be 83 when this policy ends and my wife will be 70, all should be well. It makes no sense to me at that point to carry on a permanent policy and pay significantly more unless I just want to leave money to someone.

Does anyone think I can get a rate better than what I have? The agent said this was the best out there with Banner.

Is my thinking on target?
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