Need some guidance

[demetre]

All right. I’m aware that this has been asked many times. I’ve been a lurker mainly. Don’t really post much on Reddit tbh. Anyways. I need help on how to go about it. How do one even find an agent that doesn’t “sell” but actually takes time to explain and explain what policies are etc. I’m 28. W a family. Trying to really look towards the future and protect all of us. I’ve seen many who said term life 40. Or whole life etc. I’m not exactly clear on what I’m supposed to look for. To make the best choice in a sense. Generally I’d like a broad knowledge sense or guideline. Something i can refer to.

 

[hannahjane]

@demetre Ask family, friends, co-workers for a recommendation.

Ultimately, you’re going to need to feel this out yourself and be strong enough to back away if you’re feeling pressure.

Here is my 2 cents as a non-agent but someone connected to the business:

Don’t think of life insurance as a one-time transaction. Start by obtaining term insurance to cover 10x your salary or as much as you can reasonably afford. The shorter the term length the cheaper the premium. My spouse and I bought 30 year terms to cover our mortgage and 20 year terms to protect our young family. 5-6 years later we revisited and bought more term since our finances changed. Several years later we added some permanent coverage. For context, the permanent insurance we added was whole life policies designed to be fully paid in 10 years. The death benefit was roughly 10% of our term amounts and the premium
costs were nearly equal to our term premiums in total.

If all else fails you’re welcome to run by what any agent proposes through this sub - use a throwaway account if you want to add specifics for people to help confirm/refute recommendations.

 

[kagenonikki]

@hannahjane 30 times salary for those in their 20s and 30s is the best way (replaces lost income of working years). Then 10-20 times in your 40s and 50s

 

[hannahjane]

@kagenonikki I don’t disagree but affordability is important.

 

[demetre]

@hannahjane This is where i get lost. You got term which is mainly just death benefit. Correct ? One to protect each other. And another for kids. And then you bought another term 5-6 years later. Why add another term to the 30 year and 20 year already have ? And WL added after that. Which pays out in 10 years. I know we try not to divulge a lot of info. Helping me see the bigger picture or what you guys envisioned. Would help.

Sorry if i ask.

 

[hannahjane]

@demetre Correct. Term provides a death benefit in the cheapest premium but as a trade off the coverage effectively ends at the end of the period.

The second time I bought term we simply added more 20 year coverage to get to go from 10 to about 20x current salary.

The whole life doesn’t pay out in 10 years but we are done paying premiums at 10 years. The coverage will continue to grow beating inflation and last my whole life leaving final expenses covered and some extra for the family.

 

[seekeroftruth0]

@demetre It all starts with the “why” my friend.
Do you need life insurance to cover debts, a mortgage, etc? How much debt do you have?
The answer to this will give you insight into how much of a death benefit you need.

If so, how long until those debts will be cleared? The answer to that question will give you insight into how long your term will need to be.

Do you need it to replace your income? Are you the sole financial provider of your income or do you have a spouse that contributes?
If you needed it to replace all or some of your income, how many years of income replacement do you need?
The answer to this will give you insight into how much of a death benefit you need.

Whatever the answer is for face amount, add 5-10k for funeral expenses.

Most carriers have options that are a combined term/whole. For example it would be 500k for 30 years, and after that expires you’ll have 25k for the rest of your life.
I very frequently meet with couples in their 60s/70s who had Term their whole life, then it expired, now they’re worried about replacing each others income or funeral expenses and can’t afford the coverage they need because they’re old.
Keep that in mind.

You’re young enough that you’ll get really great rates that will be locked in. As inflation continues to grow, the cost of your insurance will not. These two reasons are legitimately the only reasons I might recommend whole life to someone who is younger.

I’ve always met with clients in their later years who got a whole life policy in place when they were younger and they never regret it.

In my appt process I’ll always walk through all of someone’s monthly expenses with them - so they know how much they need to keep up with monthly.
Then we’ll get conservative estimates of their take home and their spouses take home so we can roleplay a few different scenarios.
I could share that Financial Roleplay Form with you so you guys can do it yourselves.

Good luck!