20 Year/$1,000,000 Term Life Policy Question

[delling1000]

Hi, my wife (F 31) and I (M 32) are looking for term life insurance policy for 20 year term life, $1 Million each. Our current plan is to be financially independent in ~10 years, but we are also planning to start a family.

I used policygenius, term4sale, and select quote. Rates for my wife start at $23 and $30 for me with Brightouse. The agent recommended brighthouse due to the quick underwriting process. The difference with Legal and General, Pacific life, Penn Mutual, and Banner is less than $2. Is there a recommended company between these?

Also do you recommend paying monthly vs annually?

 

[learningasigo]

@delling1000 PennMutual has the best option for you to to convert to permanent insurance in the future should you ever want to do that. Hence I would choose them out of the companies you listed. That being said if you plan to be financially independent in 10 years, Id suggest speaking with advisor that can actually help you make these decisions in the long run. They don’t all suck.

 

[evanburnside12]

@delling1000 Get a full conversion rider at least. Unless you really think your investment account is going to be worth $1 million in 20 years.

 

[kumarsumit]

@delling1000 They’re all great options!

Choose one that will have convertibility options down the road. Every month I will prob meet with 5-10 people in their 60s-70s who had a term policy that expired and now feel like they need to get another one. At which point their options are very limited and very expensive.

Legal & General, as well as Penn both have great convertibility options.

 

[grenbh]

@delling1000 I enjoy reading these questions. Which ever one you go with, the insurance company will make you an offer based on what their underwriter sees. If you don't like their offer, find out why and work with your insurance person to find the insurance carrier that will look at you in a more favorable way. Keep smiling.

 

[quaythuxsmb]

@delling1000 My wife and I (a few years older than you) just shopped around for policies, including Banner (Legal and General). My policy with them came through relatively quickly (2.5 weeks after applying and no medical exam) but my wife's is still pending about a month later. Our agent warned us that they can be slow, but they are definitely the cheaper option for us (comparing to NY Life) and offer 25 years.

 

[ladyeag]

@delling1000 It's crazy how many people earlier are trying to push you towards cash value either in a conversion or not getting your term policy.

You can do some research by looking up these companies at AM Best, but honestly you'll be fine with any of them.

I'd rather have the ability to keep term at the end of my term policy, then convert to any any permanent policy. These people here don't know how their policies work that they sell.

 

[lightacandle]

@ladyeag Yeah, totally crazy to suggest a product that actually pays the policy owner and protects the policy owner at the same time. Shame on those people. I mean who would want a policy that can eventually fund itself and be used for other purposes. Crazy indeed.

I get it though. Not all licensed financial professionals are aware of the various products and how to structure them best suited for their client.

 

[ladyeag]

@lightacandle Please show me a policy that does what you think it does, why talk hypotheticals and make up stories. If policy's good it'll speak for itself

 

[lightacandle]

@ladyeag I have read your reply. Here is the point. There is factually nothing "crazy" (your words ) about public comment suggestions for someone with a 10 year wealth plan to consider cash value life insurance (which depending on the carrier may have term riders) Its rather funny to read someone talking about hypotheticals when there are cash value life insurance companies have existed over 100 years with excellent ratings. There are great books available for you to read. money wealth life insurance is a good one. Look before you LIRP. and many others.

 

[javelinda]

@delling1000 Social media is not the best place to seek professional advice that being said, today is your lucky day as I am actually a licensed financial advisor. So the answer depends on what you're looking for in your policy besides price. People are so concerned with price that they forget about value. Do you care about living benifits and do you have a plan in place when your plan expires?

 

[delling1000]

@javelinda I don’t care about living benefits, when the plan expires, we plan to be financially independent.

 

[lightacandle]

@delling1000 What happens if you cannot work or experience a critical illness before then?

Have you factored that in?

 

[lightacandle]

@delling1000 Also, I don't know a single person with a 10 year plan that doesn't involve cash value life insurance. Not one. I recommend that you read the book Money wealth Life insurance.

 

[evanburnside12]

@delling1000 Is that by investments in the stock market? I hope you aren't assuming 8+% average an annual returns when valuations are at historic highs.

 

[delling1000]

@evanburnside12 Im assuming 6% after inflation.

 

[evanburnside12]

@delling1000 When the average S&P PE ratio is near 30? Good luck with that.

 

[resjudicata]

@evanburnside12 Spoken like someone who doesn’t really understand P/E ratio

 

[evanburnside12]

@resjudicata You're rejecting the idea that P/E ratios are correlated with long term returns?

 

[resjudicata]

@evanburnside12 No but not in the term that you are stating. A higher PE suggests high expectations for future growth