Looking to purchase whole term life insurance

[sivires]

I'm mid-20's/F looking to get whole term life insurance just to protect my kid in the future. I don't think I'll be able to buy a house in this lifetime but I want to make sure she will be able to get a home no matter what.

That being said, I have an appointment tomorrow to get some quotes, and I have a documented mental illness. No hospitalizations, but I am in regular treatment and currently on short term disability leave to handle it. I don't do disability leave regularly, this is the first time I've done it. How does this affect the premium? I really want to get locked into a lower premium young and not wait till later.

I did some light google research and read some stuff from Cigna calling me a moderate risk, but how does this translate into dollar amount?

 

[sean33606]

@sivires Since it is for her benefit, consider having her as the insured. Cost of insurance is lower on children and that will avoid the concerns about your current insurability. Instead of her getting a lumpsum upon your passing she would inherit ownership of the policy at that time or when you decide to give her ownership. That can provide a pool of funds that can pay for college, wedding, first home downpayment, future retirement income, etc that will stay with her and continue to grow and then pass down a death benefit to future grand children. If properly structured, permanent life insurance can be one of the best ways to create tax free generational wealth

Talk to your NYL agent about whole life and variable universal life for this purpose, compare the benefits and cost of both. NYL is the best in the business, strongest ratings and a massive surplus so they will be around for the long haul insuring (no pun intended) they’ll be there for your daughters hopefully long and prosperous life

 

[heatherfeather]

@sean33606 Yes this is a great suggestion!!!

 

[jhohua]

@sean33606 A minor cannot have more insurance than their parent/guardian. If their parent doesn’t have life insurance, they can’t either

 

[sean33606]

@jhohua This is true I forgot to mention that. If parent is deemed uninsurable than the child can have insurance coverage, term coverage is an affordable way for a parent to meet that criteria

 

[willowyse]

@sivires There’s a pretty decent chance you’re gonna pay a decent amount more than your peers for life insurance. How much more? It’s hard to say for sure, that’s what the underwriters are for.

You might also want to consider doing a level term life insurance policy that has a conversion privileges throughout the duration of the term. You mentioned that you don’t think you can afford to be a homeowner. I’m guessing that also means you are on a tighter budget and whole life insurance is significantly more than term life. You might not be able to afford an adequate amount of whole life coverage. You might be best served by a life insurance broker. Be open about your health history with them, they will know what insurance companies will be more cost effective to work with.

 

[sivires]

@willowyse I’m talking to NY life tomorrow. I want to be useable in my lifetime too, I might be a little glum today about the homeowner thing but I’m not exactly poor but I do have a high overhead for now (my kid is in private school and it’s destroying me but she’s so happy).

I can afford about $200-$400 a month.

 

[willowyse]

@sivires Maybe a compromise then — some WL and some term. If you’re paying for private education and you have a pretty decent salary, it’d be easy to justify your life insurance needs into the seven figures and above especially with the rising costs of goods and services. $200-400 per month will probably not buy that amount of WL coverage, it might buy that amount though with a combination of WL and term. NY Life is a solid life insurance company to work with but I still think it’s worth working with a broker. They can shop dozens of insurance companies for you simultaneously to try to find you the most cost effective options.

I thought about it a bit and I think with my insurance company, a past history of depression that’s treated by a psychiatrist will probably increase you premium costs by 2-3 times over a pref rating for term life insurance, I don’t have a good idea of how much the increase will be for WL. All insurance companies evaluate risk differently though. Good luck in your quest for coverage!

 

[sivires]

@willowyse Thank you! This was very helpful and something I didn’t know about. Young mom, immigrant family but really want to break the cycle. Don’t know what to do in regards to financial planning because I’ve had such a toxic relationship with money.

I’m hoping the life insurance will set her up. If you know anything else I should be doing, please let me know.

As of right now, I’m trying to anticipate everything she will need.

So far I have:
- Scholarshare 529
- Gerber Baby Life Insurance

What else can I do? Aside from life insurance.

 

[jeshurun1111]

@sivires Swap the Gerber policy for one from NYL, it’ll perform far better in the long run.

 

[sivires]

@jeshurun1111 Even if Gerber is fixed at 28 bucks? I literally got it day she was born lol.

 

[jeshurun1111]

@sivires Yes, NYL will be within a few dollars of that price for $50k.

 

[learningasigo]

@jeshurun1111 @shadowmoon1503 zzz is completely correct here (as she normally is).
Swap the gerber policy out. Any mutual life insurance policy will preform better for a juvenile policy.

Further life insurance is actually more expensive on a 1 day year old rather than a 1 or 2 year old. And that increased mortality is carried with them their entire life.

I never allow my clients to get policies on their kids until they the kids are at least 6 mos old for exactly this reason.

 

[willowyse]

@sivires Build an emergency fund, at least 3-6 months worth of living expenses ideally. This will be a never ending battle.

Contribute into your retirement accounts. If you have an employer sponsored plan, make sure you’re getting the max match from your employer. Then fund your IRAs and employer sponsored plan with as much as you can afford or until you meet the contribution limits (which would be a very good problem to run into). Pick the right investments of course, determine with a tax advisor (or google) whether you should do Roth or traditional contributions.

Also treat yourself and the kiddo every now and then. Life has to be worth living.

 

[sivires]

@willowyse Kiddo’s life is pretty awesome and filled with love. Disney annual pass holder, private school attendee, and after school martial arts class pending. I just want to make sure it remains awesome when I’m dead and gone lol.

I’ll be sure to research everything you listed. Thank you so much!!

 

[willowyse]

@sivires AP? Wanna adopt a 37 year old male and my wife? Super jealous!

 

[sivires]

@willowyse Was a major splurge on my end! Ran out of luck, she’s 97th percentile for height so I couldn’t keep sneaking her in. If you and wifey are California residents, make sure you check out the $75 3 day park hopper deals! You can spread it out across the year !

 

[imaginaryfiction]

@sivires I’m not sure your condition but and IUL might be a good option for you. You’ll get a death benefit and your money grows over time. You decide how much you put in and how long you put in. You can get an illustration to see projected growth and the face value. You can illustrate $200 and $400 to see the difference and which would be best for you. This money can be used in retirement years as well.

 

[mynamejeff]

@sivires Depends on the death benefit and depends on the type of policy. I'm not familiar with whole term life insurance. Do you mean whole life or term insurance?

 

[sivires]

@mynamejeff I’m sorry, I meant whole life.