Another dumb decision (m)

iVillage Member
Registered: 03-26-2003
Another dumb decision (m)
5
Wed, 04-23-2003 - 10:28am
I went to the bank yesterday evening to put money in, it was a $20 bill, I know it was late in the evening, I don't have our vehicle during the day, but, I don't think cash should be pending, you have it right there in your hand what's to wait for to put it in. They also had a guy there selling life insurance and of course like an idiot I bought some for myself it's $12.50 a month for me and the kids and I guess i'm wondering if it's a good idea or if I'm just to poor to have life insurance but, I do worry about something happening to me and not leaving anything to take care of my kids. What do I do? I'm definitly changing banks as soon as I use the rest of my checks for this account? Do I keep the insurance? I'm thinking maybe I could have the policy lowered to $25,000 and that costs $5 a month until I get bills paid off. And to make my week complete the "check engine" light is on in our truck and it needs to have an E-check next month so whatever's causing that can't wait any longer to be fixed so that's more money we don't have.
Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
Wed, 04-23-2003 - 10:58am
Hmmm....the $12.50/month doesn't sound too bad for life insurance. I'm assuming it's term so that's good. I know it's rough to come up with extra money but I think you should keep it.

I know when DH was working, they offered spouse life insurance and we had some on me because with the small kids, DH would have to probably hire a nanny, definately daycare if nothing else and well there are things like mortgage, clothes, etc... just lots of issues. We had some on DH too (it was the benefit of the companies) because if he died my income source would have completely stopped. Not good, not to mention other expenses.

So...in my opinion it is worth the $12.50/month.

Becky

iVillage Member
Registered: 03-26-2003
Wed, 04-23-2003 - 11:40am
Becky thank you so much for that, I'm so afraid to make another wrong decision financially that i'm afraid to make a decision at all. You really made me feel good.
Avatar for mrslove2000
iVillage Member
Registered: 03-26-2003
Wed, 04-23-2003 - 6:54pm
Not a dumb question at all! The amount you listed seems like a good price for term insurance. I would definately keep it. In the banking business I have seen it too many times when people think "Aww, it won't happen to me, I don't need insurance." Only to have a tragedy strike and then I have a widow/widower sobbing that they need help.

As for the first part of your dilemna, check around with another bank. It sounds like your current bank is not "Online" meaning that your deposits (especially cash) are credited to your account immediately. Now keep in mind, if you want your cash to be available that means that your checks can post immediately too thus causing your balance to fluctuate depending on the activity. Does that make sense? It could cause big headaches if you use the automated line to verify your account balance. Also, there is a designated cut off time for each bank so that the "cash" or checks brought in for deposit can be credited or debited from your account. These operators usually start working about 3 pm and end around midnight or 1 in the morning. If the bank didn't have a cut off time (ususally around 2 or 3pm) the operators that process the paper work would be working until 4 or 5 in the morning.

Hope this helps

Susan

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iVillage Member
Registered: 03-27-2003
Wed, 04-23-2003 - 7:23pm
It depends, in my mind, on how much insurance the $12.50 buys, for how long, what the terms are, and, especially, how much insurance you need.

There are lots of ways to calculate your insurance needs, and they'll all come up with a different number. Basically, you need to figure out how much it would cost your dh to take care of "final expenses" (burial and the like) and then replace your "services"--that is, childcare, housekeeping, cooking, income, anything else you contribute to the family that is necessary (other, obviously, than the emotional aspects which can never be replaced).

Then, by all means buy the insurance. When we couldn't afford to pay our bills, the life insurance nevertheless always got paid, because while you may be eligible now, in two years something in your life may have changed and you may no longer be eligible, and you may not even know it until they do the tests and find out. So buy the insurance you need, and then keep it!

But, make sure it's term insurance (NOT whole life, variable life, universal life, or any other type of insurance that has a "cash value" attached to it--they're too expensive and not a good investment), and shop around a bit. There are two basic types of term insurance--the kind that has a "level" premium for ten or twenty years and the kind that slowly increases over time (called annual renewable). We have the latter kind, because the premiums are lower in the early years and increase slowly as we get older, but they never get very high. It made sense to us to pay less now and more as our income (presumably) rises. Level premiums start out a little higher but they never increase. Either is a good option with the right company. You need to make sure that you can continue to carry your coverage no matter what happens in your life--that they cannot drop you for any reason other than nonpayment (or reaching the maximum age, which is usually sometime around retirement age or later). In fact, make sure they can't ever drop you for any reason other than nonpayment (the official terminology is "non-cancelable"). If they can drop you for any other reason, you might as well not bother, because they could drop you the minute you get sick or take up a hobby that they decide is high-risk.

There's a ton of information out there, a lot of it easily accessible, about life insurance. Learn all you can, shop around, and then by all means, do what you have to to purchase the amount of insurance you need. In the meantime, it probably doesn't hurt to keep the policy you just bought, as long as you're not paying too much for too little coverage. For comparison, if you're interested, I am in excellent health (I fall into the lowest category of risk available on the health scale), 29 years of age, a non-smoker, and engage in no "high-risk" activities on a regular basis. My life insurance policy is 180,000 (we want my husband to be able to stay home with our children should anything happen to me--you may not need this much coverage if your dh would hire a babysitter or care for the children in some other means while maintaining his income) and I pay a little under $18 a month (annual renewable, which means that when I turn 30 my premiums go up by a few bucks, and likewise at 35, and so on). The company is USAA. This is about rock bottom for cost. The closest quote I got when shopping (I was 27 at the time) was about $27 for the same basic coverage. Men typically have to pay more, because their life expectancy is shorter.

I don't know how much of that is helpful to you, and I hope I haven't just overwhelmed you. The subject of life insurance is extremely complex, and there are a lot of shysters out there who will charge you way too much for far too little coverage. Just do your homework, though, and you'll do just fine.

Good luck and blessings,

Heather

iVillage Member
Registered: 07-26-1999
Thu, 04-24-2003 - 12:54am
I think that it is a very good idea. In fact I keep telling myself I will do the same thing, but I keep putting it off!! Not pleased with myself. In my case the insurance would be for my mum to pay for cremation expenses, any outstanding debts that creditors might go after her for, and to cover the money that she has lent/given me over the years. There would also be a bit left over so that she would have a bit of money in lieu of me being there to support her.

You didn't say how much coverage you get for $12.50 a month. You can shop around online and maybe find something cheaper. I just spent a few hours doing this. You can go to metacrawler.com and search for 'life insurance' and then pick through the results you get. You can find websites that will do a comparison of several different companies. One company that stood out as being good was Manulife (this was the company I was going to choose; I don't work for them)...One thing that is important to check out is the credit rating of the company that you have your policy with...you want the company to be financially able to back all the claims. I looked at "kanetix.com" too.

One thing to remember is that the premiums you pay for the policy are a LOT LESS if you don't smoke. That means being tobacco free for a minimum of one year...but some companies are only tobacco and you can still smoke cigars...I used to work in the industry for a brief time.

Hope some of this helps you. I definitely think it is the right idea.