Do you recommend a broker to purchase a term life insurance?

[helpthiscompany]

Hi. I’m (34F) planning to buy a term life insurance. My husband (34M) will be buying one too. We both make about 160k each and have 2 kids ages 4 and 7.
We are also looking to mortgage a house of about 500k.

Is 2million each (me and my husband) a good amount to buy a 20 year term insurance?

Do you recommend going via a broker to find the best deal? If so, how would I go about finding a broker? Also, wouldn’t brokers be biased or limited to the insurance companies they are in partnership with?

 

[kim5398]

@helpthiscompany Yes use an independent agent or firm to help you shop coverage. I think your death benefit totals are in the right ballpark but there are many ways to structure different policies outside of just term which is just one type of coverage you would want to look at.

 

[javelinda]

@helpthiscompany I'm a financial advisor and brokers are good choice especially since you already have a framework with which to start. The only distinction I would make in your scenario is since you both make over 6 figures I would consider going with a Financial Advisor (someone actually registered with FINRA/Fiduciary) rather than an insurance broker simply because you have much more considerations than just income protection that needs addressed. You both need a will, a way to maximize your ability to move from the need to work category to the choose to work category. A Financial Advisors looks at your financial future from all areas to make sure you have all your I's dotted and your T's crossed. Remember the only reason you really need insurance is because you don't have the money accumulated yet. We can show you how to do both and transition to having 4 million saved in 25 30 years so that you no longer need to pay premiums when your term expires. That's the difference between an insurance broker and a financial advisor.

 

[qity]

@javelinda Except that most financial advisors don't know jack about insurance, just like most insurance agents know little about financial planning.

A full service firm (RIA) will have referral sources for everything so there is no conflict of interest. They'll have insurance brokers, CPAs, attorneys, etc. already set up for their clients.

If a financial advisor gets paid on any of those other services, it can be a conflict of interest. FINRA reps do not have a fiduciary duty. RIAs and CFPs do. They may fall under reg BI, but it's not the same.

An RIA firm can be a one-stop shop for everything you're describing except they'll have different experts in each area advising their clients under one umbrella.

The advice is more objective and expert with that structure.

(Not saying any of this specifically about you, just in general).

 

[javelinda]

@qity I agree 100% that's why I choose to start an RIA

 

[kim5398]

@qity I concur. Even some life insurance agents don't know much about the products they sell. It really takes a true specialist in some cases to get the right policy from the right carrier.

 

[612to907]

@qity Most? That is a outrageous claim. Edward Jones, Ameriprise those FAs yes you could be right. Companies like Mass Mutual, Northwestern Mutual and New York Life their FAs started with Life Insurance and every good FA should know how important Life Insurance is.

 

[qity]

@612to907 Those examples are a small % of the overall FA market. Mass and Northwestern together don't even have as many advisors as LPL.

Go into any wirehouse or independent office and you'll see what I mean. I was a wholesaler for 12 years before starting my own agency and met with thousands of advisors.

Most had no idea about any type of insurance and would rely on the wholesalers/insurance specialists in their offices to place those cases.

 

[612to907]

@qity That’s fair, I can’t argue that. I’ve worked/work on both sides. Previously worked at a broker and did no insurance, now I’m an FA with a mutual company.

 

[dhanley]

@helpthiscompany Go perm if you can. Bit more costly but it’s yours for life (or until one of you passes on).

 

[lonlyman44]

@dhanley They can convert term to perm too in most cases. But also, they need to have living benefits. And someone to actually walk through the Debt, Income, Mortgage, Expense/Education method to make sure they don’t get too much or too little. Especially while kids are young.

 

[littlelovey]

@dhanley Definitely don’t do this if your main goal is being protected through life insurance

 

[wenura]

@helpthiscompany The question I would be asking you and husband is who can you trust really has your best interest at heart. You are both successful but you are both reaching the point where is price the the not the only implant factor.

My agent got laughed at when we offer a product at 34 a month another company offer the same product for 26 a month. This customer is the same person that once there car hit 10 years he took off comp and collision. Probability says he is correct in his decision. I have learned in insurance I can’t deal with probability but I have to deal with consequence.

 

[lonlyman44]

@helpthiscompany Sounds like you have the right idea. You really need to use the DIME formula to make sure you are getting the right amount. You don’t want necessarily too much insurance or too little.

And yes, finding someone who can do the leg work and make sure you get the right plan is very important. At your ages and in good health you should easily get Term with living benefits and it won’t be expensive.

If you want more advice, feel feel to reach out. Best to you!

 

[bellah]

@helpthiscompany At your age you might even be able to get a 30 year term policy, thats pretty much what I did at a similar age. Two million is reasonable for your income, mayyyyybe even a little low depending on your lifestyle with 320K a year in combined income. After paying off your house and a funeral, would the remainder be enough for the survivor to pick up the pieces while maintaining the same quality of life? Dont forget about college for two kids.

Either way I would recommend a broker for sure.

 

[chrispaul]

@helpthiscompany Given your income and financial responsibilities, $2 million in coverage each may be a reasonable starting point for your 20-year term life insurance policies. However, the exact amount can vary based on your specific circumstances and goals. It's essential to assess your needs and consult with a financial advisor or insurance professional to determine the most appropriate coverage amount for your family.

Regarding finding a broker, working with an independent insurance broker can be beneficial. Independent brokers have access to multiple insurance companies and can help you compare quotes and policies from various insurers, allowing you to find the best coverage at a competitive price.

 

[aigli]

@helpthiscompany There are independent insurance consultants who work with dozens of companies and aren't beholden to any in particular.

This is your best route because he/she can get multiple quotes and have them compete against each other for your business. It's a pain to shop your policy with multiple companies, so most agents only check with a few companies that they're affiliated with. But some agents make it a point to try and stand out vs. larger competitors by working harder to shop your policy until they get you a good rate.

Sometimes they can be hard to find as they don't have the marketing budget of the large national firms, but you can find them if you look for "independent life insurance agent" and ask how many different companies they work with.

One guy that I know personally who specializes in high-risk or "uninsurable" people is americanterm.com.

 

[tkien]

@helpthiscompany I’m a licensed financial advisor and help clients with their life insurance and retirement planning. If you’re still looking for help I could answer some questions for you and clear up a few things.