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  #11  
Old 04-02-2020, 01:37 PM
Chuck Chuck is offline
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Originally Posted by Breadmaker View Post
I meant for the first few policy years before ultimate rates kick in.
That makes sense. But of course, nobody should buy 10 year term if they think they're likely going to need it for more than 10 years (assuming they can afford longer term).
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Old 04-06-2020, 02:12 PM
STLIrish STLIrish is offline
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What is actuaries opinions of accelerated death benefits? Some of these term policies have them and other don't. Are they valuable? What is an example of an "actuarial present value of the available death benefit you wish to accelerate"? Do you have to give up a large portion of the face amount for some much smaller amount paid today?

Some policies have terminal illness only and one has terminal illness, critical illness, and chronic illness.

Thanks!

Last edited by STLIrish; 04-06-2020 at 11:00 PM..
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  #13  
Old 04-06-2020, 06:11 PM
JoJo JoJo is offline
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Yes, you are giving up some % of the future benefit for a portion of that % today.

terminal illness... likely they will discount the DB at say 1 years worth of interest.

the discount on critical and chronic will be much more than this, and the rate will depend on age at time of discount and likely other factors.

Most of them also have a fixed acceleration fee, like $100 or more.

They are all optional - you can get a quote at the time of possible claim and chose to take the acceleration or not, depending on whether you think it's a fair deal or not.

So if there is no cost associated, it doesn't hurt.
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  #14  
Old 04-09-2020, 07:28 AM
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Originally Posted by STLIrish View Post
Health Actuary here who is applying for life insurance for myself and wife. It's been 10 years since I took MLC (LTAM) but have been surprised by the whole life insurance process from a consumer standpoint.
I read most of this thread thinking you were talking about a Whole Life product - clearly I'm not a Life actuary.

Why are you looking at 10 year policies? Do you think you'll be secure enough to not need it after 10 years?

I bought 20 year term when my oldest was on the way and now I regret it. My youngest will be 17 and looking at college when that policy expires.

I wish decreasing term insurance was more of a thing, because every year I have more assets and less liability. Maybe consider getting a 10 and a 30 on each of you?
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Old 04-10-2020, 03:59 AM
STLIrish STLIrish is offline
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Sorry, I can see how my wording was probably confusing. I've edited my original post.

Why do you regret your 20 year policy?

I'm expecting to be financially independent sometime between 5-10 years from now. I've already bought 10 year term policies on each of us for $1M but am thinking of adding another 15 year term for each of us for another $1M.

Maybe that's overkill but I don't really want to have to go through this long process again. One of the companies doesn't even have electronic policies. My agent just mailed me a paper copy to sign and mail back, along with other things to fill out. That seems pretty ridiculous for the year 2020.
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Old 04-10-2020, 09:21 AM
Steve Grondin Steve Grondin is offline
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I'm expecting to be financially independent sometime between 5-10 years from now.
Financially independent can mean lots of things. The way I think about life ins coverage is "would my death adversely impact my loved ones' financial status more than I'd like". This changes over time, so I try to predict what those future needs will be and buy accordingly.

I think the regret on the 20 year term was policy ended just a few years before the major life events (college expenses) were over.
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  #17  
Old 04-10-2020, 10:52 AM
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Why do you regret your 20 year policy?
When my policy expires I'll have one kid in the middle of college and one approaching college.

Sure I would have some coverage through my employer and my wife would have a big 401(k) that I'd leave her, it just seems like bad timing to end coverage.

I have a huge face amount, I keep thinking I should call the company and see if they will reduce the face and extend the term - but as you said the process is archaic. I'd be lucky to even find someone who knows I have a policy, much less negotiate something like that.
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  #18  
Old 04-10-2020, 01:49 PM
STLIrish STLIrish is offline
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Originally Posted by Steve Grondin View Post
The way I think about life ins coverage is "would my death adversely impact my loved ones' financial status more than I'd like".
That's a good way to think about it. I struggle with how much term life to buy. On one hand, either of us could financially support the family alone if the other person dies but we'd just have to work longer to achieve financial independence and retirement. So with that, we really don't "need" term insurance but I also don't want her to have to work a lot longer, have more stress being the sole provider, etc. I'm naturally conservative so I'll probably buy too much.

Life insurance is interesting in that the people who need it most may not be able to afford it and the people who can afford it may not financially need any at all.

At least Social Security has some great survivor benefits and many companies provide life insurance at 1-2x your salary.
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