Personal Finance

Life Insurance Q&A - w/ FAQ Section

  • Last Updated:
  • Oct 12th, 2017 11:41 am
Newbie
Jan 1, 2007
50 posts
3 upvotes
Toronto
Allaboutthedeals wrote:
Mar 8th, 2017 4:12 pm
Hi,
I am paying 38.50 weekly.
No Medical Check was asked. I think I am better off finding my own Life insurance for my and myself.
Should I get Term insurance for 30 year until I am 65?
$38.50 weekly is about $2000 a year.
That sounds a bit overpriced if the coverage is only the decreasing balance of the mortgage.
There are many factors to what is the best course of action... My suggestion is to speak with your insurance advisor to discuss which type of cover would best suit your needs.
Member
Sep 23, 2013
230 posts
107 upvotes
Windsor, Ontario
Allaboutthedeals wrote:
Mar 8th, 2017 4:12 pm
Hi,
I am paying 38.50 weekly.
No Medical Check was asked. I think I am better off finding my own Life insurance for my and myself.
Should I get Term insurance for 30 year until I am 65?
When dealing with temporary insurance, you cover the length of the need. For example, if you have a mortgage that would be paid off in 9 years, you get a 10-year term to along the length of the mortgage. If you're raising children and they will depend on your paycheque for the next 20 years, get a 20-year term to coincide with it. As your insurance needs disappear or decrease, your life insurance should decrease with it or you can start converting it to permanent insurance if you start to enter the estate planning years.

Edit* PostClean is correct, you're paying quite a bit of money for that plan. Something doesn't make sense, I recommend finding a licensed life insurance advisor and talking to them.
Deal Addict
User avatar
Dec 27, 2009
3376 posts
1323 upvotes
Ottawa, ON
SteveDfsin wrote:
Mar 8th, 2017 8:33 pm
When dealing with temporary insurance, you cover the length of the need. For example, if you have a mortgage that would be paid off in 9 years, you get a 10-year term to along the length of the mortgage. If you're raising children and they will depend on your paycheque for the next 20 years, get a 20-year term to coincide with it. As your insurance needs disappear or decrease, your life insurance should decrease with it or you can start converting it to permanent insurance if you start to enter the estate planning years.

Edit* PostClean is correct, you're paying quite a bit of money for that plan. Something doesn't make sense, I recommend finding a licensed life insurance advisor and talking to them.
Is it mortgage life insurance? That tends to be very pricy (and a bad idea compared to regular term life insurance).
Newbie
Mar 7, 2017
29 posts
1 upvote
I was thinking of get a term insurance until I was 70. That means 36 year term. Got a quote online for about 38 $ a month (200k). What do you guys think?
Member
Sep 23, 2013
230 posts
107 upvotes
Windsor, Ontario
Chickinvic wrote:
Mar 8th, 2017 11:40 pm
Is it mortgage life insurance? That tends to be very pricy (and a bad idea compared to regular term life insurance).
I'm talking about independently owned life insurance. "Mortgage Life Insurance" is nothing but a marketing term, it's all just life insurance. The difference being, one type is attached to a loan, owned by the lender and is post-claim underwritten; the other is an independently owned contract that is underwritten before issue.
Sr. Member
Jan 8, 2006
932 posts
228 upvotes
lasallejai wrote:
Mar 8th, 2017 2:53 pm
Banks do underwriting when a claim is filed, "proper" life insurance companies do underwriting at the time of application.
And that's make all the difference per that documentary.
Newbie
Jan 1, 2007
50 posts
3 upvotes
Toronto
Allaboutthedeals wrote:
Mar 9th, 2017 7:17 pm
I was thinking of get a term insurance until I was 70. That means 36 year term. Got a quote online for about 38 $ a month (200k). What do you guys think?
If you're asking strictly on price-wise. The price looks about right for that coverage.
If you're asking whether that's good enough to replace mortgage insurance or for your financial goals, you'll need a licensed advisor to dig deeper to see if that's what's best for you.
The price you mentioned doesn't look like it includes disability / CI riders, something you might want to consider. If you have separate disability or CI policies that cover enough, that's a different story.
Sr. Member
User avatar
Apr 16, 2009
828 posts
184 upvotes
Vancouver
Hello everybody!

Looking into getting some insight into life insurance for the wife and I.

We're both 26, in decent shape, no smoking, have stable jobs (I work for the military, she works as an engineering consultant).

House in the near future, no kids in the near future.

Curious on people's thoughts on the insurance that SISIP provides. Is it a good product?

Thanks guys!
Deal Addict
User avatar
Dec 27, 2009
3376 posts
1323 upvotes
Ottawa, ON
DefconZero wrote:
Mar 10th, 2017 1:53 pm
Hello everybody!

Looking into getting some insight into life insurance for the wife and I.

We're both 26, in decent shape, no smoking, have stable jobs (I work for the military, she works as an engineering consultant).

House in the near future, no kids in the near future.

Curious on people's thoughts on the insurance that SISIP provides. Is it a good product?

Thanks guys!
I think it is a good product (hubby is in military, 47 years old - actually he retires next Monday). We are keeping the SISIP insurance after he retires.
Deal Addict
User avatar
Sep 15, 2009
2696 posts
1002 upvotes
Toronto
kenchau wrote:
Mar 8th, 2017 9:42 am
Does it make sense for parents to buy whole life insurance for their newborns, since premiums will be dirt cheap and their child will be set for life from a life insurance perspective?

Let's assume you get $300+K coverage or something to account for inflation by the time they get older.
That depends on a number of factors. A) do you have the extra cash flow to dedicate towards something like this without impacting your own retirement and risk management goals? B) is it important to you that you protect your child's insurability (you can also do this with a child term rider on your own policy)? C) is it part of a long term plan? (i.e. the objective of child life insurance is traditional for what would be necessary to bury them and take time off work to grieve).

My wife and I bought both Whole Life and Critical Illness on our daughter after 30 days old. The CI is to protect our family financially (and to provide for uncovered treatments) should she fall ill as well as a 20 year paid up whole life policy that will insure she will have some level of guaranteed life coverage for when she has a family of her own. A lot can change in 30 years. We do not know what her health will be like and want to not only protect her, but her future family (our grand kids) as well.
Last edited by wesboag on Mar 10th, 2017 5:06 pm, edited 1 time in total.
Deal Addict
User avatar
Sep 15, 2009
2696 posts
1002 upvotes
Toronto
DefconZero wrote:
Mar 10th, 2017 1:53 pm
Hello everybody!

Looking into getting some insight into life insurance for the wife and I.

We're both 26, in decent shape, no smoking, have stable jobs (I work for the military, she works as an engineering consultant).

House in the near future, no kids in the near future.

Curious on people's thoughts on the insurance that SISIP provides. Is it a good product?

Thanks guys!
Thank you for your service!

Whether you are active in danger zones (on the ground in high risk areas) or in an office setting in Canada will have a potential differing impact on rates and/or qualification. The key is to determine whether the military personnel have current or past deployment orders. Usually if they have never had deployment orders, nor have current ones, then they would underwrite them as any other occupation - typically that is.

If military personnel currently have active deployment orders, then they would likely be declined. If not, then the application would be accepted as it would another applicant.

With all that said, apart from the above, it is actually pretty poorly priced and is essentially a non-guaranteed Term 5 policy (increases every 5 years). If you are insurable for an individually owned policy, I would opt for that.
Sr. Member
User avatar
Apr 16, 2009
828 posts
184 upvotes
Vancouver
wesboag wrote:
Mar 10th, 2017 5:43 pm
Thank you for your service!

Whether you are active in danger zones (on the ground in high risk areas) or in an office setting in Canada will have a potential differing impact on rates and/or qualification. The key is to determine whether the military personnel have current or past deployment orders. Usually if they have never had deployment orders, nor have current ones, then they would underwrite them as any other occupation - typically that is.

If military personnel currently have active deployment orders, then they would likely be declined. If not, then the application would be accepted as it would another applicant.

With all that said, apart from the above, it is actually pretty poorly priced and is essentially a non-guaranteed Term 5 policy (increases every 5 years). If you are insurable for an individually owned policy, I would opt for that.
This is exactly the answer I was looking for :). Thanks!

I have not been deployed, and will not be deployed before my release (16 months and counting!) therefore an individual policy for my wife and I seems to make the most sense.

What seems to be recommended these days company/planwise?

The biggest thing for my wife and I will be when we decide to get a mortgage. Otherwise we aren't planning on having kids (just dogs!), so won't need to worry about that.
Deal Addict
Jan 21, 2014
2064 posts
474 upvotes
Does it make sense for me to stop buying life insurance now? I started buying term life insurance 25 years ago with $350K policy initially and then raised to $500K after the first 10 years. I also have a group insurance I purchased from work ($500K). The reason I bought that much because I am the only one working and my daughter always wanted to study medicine when she was young. So I wanted to leave enough behind to help my family if something happened to me. Today, I am into a 5th year of 20 years term policy and it costs $1620/year for the $500K. I just realized I probably don't need this anymore. We have enough savings now so if something happens to me, my wife would still have enough money to live comfortably for the rest of her life. My daughter is already in med school with all tuition fees paid for by scholarships, so she doesn't need much of my help. Stopping the policy now will save me $24000K and I still have $500K from work (providing I am still employed). Am I doing the right thing stopping the insurance (even though we could afford it if we continue)?
Newbie
Jan 1, 2007
50 posts
3 upvotes
Toronto
mkl38s wrote:
Mar 12th, 2017 3:22 pm
Does it make sense for me to stop buying life insurance now? I started buying term life insurance 25 years ago with $350K policy initially and then raised to $500K after the first 10 years. I also have a group insurance I purchased from work ($500K). The reason I bought that much because I am the only one working and my daughter always wanted to study medicine when she was young. So I wanted to leave enough behind to help my family if something happened to me. Today, I am into a 5th year of 20 years term policy and it costs $1620/year for the $500K. I just realized I probably don't need this anymore. We have enough savings now so if something happens to me, my wife would still have enough money to live comfortably for the rest of her life. My daughter is already in med school with all tuition fees paid for by scholarships, so she doesn't need much of my help. Stopping the policy now will save me $24000K and I still have $500K from work (providing I am still employed). Am I doing the right thing stopping the insurance (even though we could afford it if we continue)?
Personally I don't recommend stopping life insurance... In the end it depends on what your goals are with life insurance.
To put it in perspective, it sounds like you still have 15 years remaining in your 20 year term. If anything were to happen within these 15 years, would the extra money make a huge difference? E.g. maybe it can help your daughter pay off her future mortgage? Will she be opening her own clinic? If she will be, machinery and equipment will cost a lot, perhaps the coverage might help her pay off potential loans used for equipment?

To look at it at another angle, let's assume you use the $1620 / year to invest, at a rate of 10% year over year (which isn't easy), by the 15th year, the amount you have in your account will be just about 90k.
Alternatively, if you dump a lump sum of 24k into an account and let it sit for 15 years at 10% year over year, by the 15th year, the amount you have in your account will be about 200k.

If anything were to happen to you within the next 15 years, the term life insurance would most likely be of much more benefit.
However, once the 15 years have passed, everything you've put into the term life insurance will be gone where in that case your investments would definitely excel.

The question is then, whether the $24000 (or less if you stop later on) is worth the extra coverage for the next 15 years?
In addition, does your term life insurance include any riders like critical illness or disability insurance? If it does, do you have coverage elsewhere? If it does have such riders and you don't have coverage for C.I. or Disability anywhere else, it might be beneficial to keep the coverage.

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