Good policy?

[jas9108]

Hey, my friend of 14+ years has a sister who sells life insurance and we did the whole process, it's just time to sign now. I have standard health because I do have some chronic illnesses that aren't typically life threatening, it doesn't say in the contract anything about my health, just says they're allowed to do a full physical. For a $500,000 policy, that will have a set 30-year amount, it will be 33.83 (27.15 for the policy, and 6.68 for the policy fee) for the 30 years. Then after that the prices will yearly proceed as such:

2054 $5,475.00

1. 2055 $5,915.00
2. 2056 $6,395.00
3. 2057 $6,895.00
4. 2058 $7,475.00
5. 2059 $8,175.00
6. 2060 $8,955.00
7. 2061 $9,855.00
8. 2062 $10,815.00
9. 2063 $11,875.00
10. 2064 $13,015.00
11. 2065 $14,235.00
12. 2066 $15,595.00
13. 2067 $17,175.00
14. 2068 $19,015.00
15. 2069 $21,195.00
16. 2070 $23,755.00
17. 2071 $26,735.00
18. 2072 $30,195.00
19. 2073 $34,175.00
20. 2074 $38,735.00
21. 2075 $44,035.00
22. 2076 $50,295.00
23. 2077 $57,835.00
24. 2078 $66,735.00
25. 2079 $76,235.00
26. 2080 $86,075.00
27. 2081 $97,375.00
28. 2082 $112,955.00
29. 2083. $130,855.00
30. 2084. $148,615.00
31. 2085. $168,995.00
32. 2086 $192,235.00
33. 2087 $217,855.00
34. 2088 $245,555.00
35. 2089 $275,335.00
36. 2090 $307,555.00
37. 2091 $341,215.00
38. 2092 $376,175.00
39. 2093 Terminated

While reading that I see it jumps really high and that's making me nervous. But I know nothing about life insurance other than that it's good to have. My dad had his policy from 22 till he died at 52, and my mom unfortunately didn't get a policy until this year so I'm not sure I trust her opinion. I'm a 26 yo female who is married (childfree). I don't smoke, do drugs, or drink really at all. Is this a good policy? It's through American Family Insurance Company.

 

[livingontheedge]

@jas9108 Why not just get a whole life with a large PUA rider and build up to 500k death benefit+ and then at the end of 30 years if you want to stop paying premium you can RPU it and be done or if you want you can keep buying more PUA if you want

 

[jas9108]

@livingontheedge Ok this is why I asked reddit! I didn't realize that there was a whole life option and I didn't know what a PUA or RPU are (I had chatgpt explain lol). I don't know why my insurance person didn't mention a whole life plan because that's actually what I wanted. Seems kinda ridiculous to me to do a 30 year plan at 26 because I obviously don't plan on dying before 56. Thank you!! This was the most helpful.

 

[livingontheedge]

@jas9108 Ofcourse, Always helps to educate yourself. Happy to help if needed.

 

[quaythuxsmb]

@jas9108 You aren't buying this 30yr Term for what happens after age 56. You're buying it now for what might happen unexpectedly BEFORE that. By 56 you should have plenty of money set aside for retirement that could be used by your family in the event of your death. If you don't have a family yet, just wait to get a policy. My 36 year old wife just got a $1M 20yr term for $48/month. If you are worried your health will get worse, a 30yr policy purchased today at your quoted rate, is good peace of mind for relatively cheap.

 

[jas9108]

@quaythuxsmb But if I don't want to pay after the 30 year term, then I have no life insurance policy in place and will have to find a new one which will cost more starting at 56. I think whole life is the option that makes the most sense for me.

 

[quaythuxsmb]

@jas9108 Sure, but what are you actually getting the policy for? Is it to protect your family from an unexpected loss and to replace income that will be missed? If that is the case, you won't need a policy as you close in on retirement (or are already retired), assuming you are actually putting money into a 401k or other retirement account. If you just want a payday so your family gets money when you die, then term is not the answer, but consider how much extra your monthly cost will be for a whole life policy vs term, and what you could expect to have saved up if you banked the difference in cost over those 30 years (hint: it is absolutely guaranteed to be worth more in a Roth IRA).

 

[eternalgrace7]

@quaythuxsmb May I ask what company? I am 36 with two kids looking for a term like this but nervous about it being over $100/month

 

[quaythuxsmb]

@eternalgrace7 We used a NY Life agent who got us quotes for both NYL and Banner. Neither required my wife to even get any blood work done and she had just given birth to our daughter 3 weeks prior, and still got a preferred rating. It's free to get a policy written up, zero risk.

 

[ska88]

@jas9108 Go and watch Ryan Griggs’ series on YouTube “Whole Life Mechanics”. It will explain how whole life works. Really worth the time to grok this.

 

[clewis]

@livingontheedge So don’t invest in an Roth IRA ahaha

 

[livingontheedge]

@clewis It depends on what you want in life, me personally I wouldn’t, that’s what the average person does. I have a bit more desires than to be average lol If you do what the average person does., you will be average. If you want to be above average, you need to do things differently

 

[quaythuxsmb]

@livingontheedge So instead of spending $400/yr, spend $4000?

 

[livingontheedge]

@quaythuxsmb There is price, cost, and value to every decision

 

[javelinda]

@jas9108 That is an excellent price for $500k on a 30 year you must be young. My advice to you would be to invest in a Roth IRA with the idea that your life insurance will expire in 30 years that way by the time your insurance expires you'll have like 800k saved up and you won't need insurance anymore

 

[jas9108]

@javelinda What's a Roth IRA?

 

[atheist_1223]

@javelinda Well since she is child free she does not need insurance now then .

 

[jas9108]

@atheist_1223 I'm married though so I do need life insurance to protect my partner incase anything happens.

 

[javelinda]

@jas9108 Exactly! That’s why seeking advice on Reddit isn’t the best idea lol that dude doesn’t know what he’s talking about fortunately for you I happen to be a licensed financial advisor shoot me a message so we can chat more.

 

[javelinda]

@atheist_1223 So I guess if she’s dies we can just make a go fund me then