What kind of life insurance is right for me and my husband?

Question

I am trying to find life insurance for myself and my husband. My husband has skin cancer which is in remission. I'm 27 and he's 36. I need something that will benefit both of us. We do not have life-threatening illnesses at the moment. What is the best type of insurance for us? We have two kids ages 9 and 6. My husband is disabled and I work from home as a writer.

Answer 1

You do need to consult a professional but, unfortunately, most insurance professionals are salesman out to make commission and they do not put what is best for you first.  I don't know about your husband since he is disabled, he may have a really difficult time finding life insurance that is affordable and maybe it's not even practical to have it on him if the rates are too outrageous.  I do know, however, that the only life insurance that makes sense is term because it is covering your life, period, and that is what life insurance is supposed to cover.  That is also why it is much more affordable than whole or whatever else packages they come up with.  You don't want to use life insurance as an investment because the return is terrible compared to a normal investment set up for the purpose of investment only, i.e. mutual funds.

Answer 2

Well, you're going to have to find someone willing to take him.  As a disabled person with a history of cancer, it's not likely to happen, unless you're willing to throw obscene amounts of money at the insurance company.

What's the GOAL of the policy?  You don't mention that.  If you just want to get the kids grown and through school, term is fine.  If you want hubby to have money to live off of, when he's in his 80's and you die at 79, you probably want to buy term, and get a quote for whole life, and invest the difference.

Answer 3

Being disabled is going to make it not so easy to find him coverage.  You just need a good insurance broker to help you with that.  Getting quotes online would be pointless.

You probably want to do a term life insurance for yourself - and a 20-yr term would last 20 years and at least get your 6 yr old to 26.  That's assuming money's tight.  If it's not consider going longer and/or consider a return of premium option which has many benefits.

Jeff

Answer 4

Since you are the main breadwinner and it seems that you are relatively healthy I would recommend a fairly large term life policy on your life so your husband and kids would have income after something were to happen to you.  As a 27 year-old healthy female you should be able to get a very large term policy for very a surprisingly small monthly premium.  

Your husband is going to be more complicated.  If your family really relies on his disability income then some kind of life insurance to replace that would be a good idea.  You will need to find you a really sharp independent agent that knows the various underwriting guidelines of the different companies.  There might be a company out there that will give you a decent rate.  I'll attach a link to a fellow blogger of mine that writes a lot of articles about special underwriting situations and how they affect coverage.  He might be of some help.

Answer 5

The Pickle is right about your husband.  You should talk with a few different insurance brokers who have experience dealing with high risk life insurance.  Being currently disabled, with a cancer history will present a challenge.  Expect to answer questions about his disability and cancer to get intelligent information in return.

Unfortunately, your options online right now are either get 800-Whoever who doesn't understand underwriting, or have your contact information sold to several random sales people and hope one of them can help you.  I hope consumer options can change soon.

edit: The amount your are insured for is much more important than the type of life insurance contract you have.  No one cares if you have polka-dotted insurance or plaid insurance if the death benefit isn't enough to help out with the kids.  

Term insurance tends to be a better fit in your general situation, but I could be wrong because we hardly know anything about you.  I suggest you talk with at least three different agents to get multiple perspectives.

Answer 6

The difference is that with term life you pay an annual premium for a policy that covers a period of years—10, 20, even 30 years. If you die during that period—the “term”—then the insurer will pay a lump sum to the person you designate, known as the beneficiary. The lump sum is decided upon at the beginning. It should be enough to replace your income for a period of time—say 5 to 7 years. At your age, term life is inexpensive. A 30-year-old woman can get a 10-year policy with a death benefit of $250,000 for as little as $108 a year. Your husband will pay more because of his health history.

The alternative to term life is permanent life insurance, such as whole life, which insures you until you die. If you have whole life, then a death benefit is guaranteed to be paid (assuming you do not default on the policy). Whole life is much more expensive than term life, because the death benefit is guaranteed to be paid.

Answer 7

I'm a financial representative and providing life insurance is one of the things I do for clients. God forbids if the breadwinner dies, where would the family be without life insurance? Life insurance can't protect you against harm or death, but it can replace your income. The problem is that many families that own life insurance don't have adequate coverage, but they pay lots of premiums for it. That's because they own the wrong type of life insurance. Take a look at the facts and you decide which product is the best:

Whole life insurance

1) Its level term to around age 100 that builds cash value.

2) Since it builds cash value, premiums are higher than term insurance that doesn't build cash value.

3) There is no cash value growth in the first 2 years because premiums are used to pay for the insurance and commissions to the agent.

4) After first 2 years, you are guarantee a rate of anywhere between 1-4% (varies between companies)

5) If you wish to take money out from the cash value, you have to borrow it and pay loan interest of 6% to 8%.

6) If you die someday, the insurance company keeps your cash value, but pays the death benefit. Death benefit will be reduced by any loans you taken from the cash value.

Universal life insurance

1) Annual renewable term until around the age of 100 that builds cash value.

2) Flexible premiums as long as there's enough cash value to pay for the insurance.

3) While premiums may remain level in the beginning, the internal cost of the insurance goes up every year. That means less and less of your premiums goes into the cash value. Eventually, the premiums you pay will be insufficient in the future to pay for the cost. What would happen is that you would either have to pay more premiums or a portion of your cash value will be used to pay for it.

4) Same cash value features as whole life.

Term insurance

1) Various of level term products to choose from (from 1 year to 35 years).

2) It does not build cash value, so premiums are initially lower than whole life and universal life.

3) Most term insurance are guaranteed renewable to around the age of 95 to 100 without providing a proof of insurability. If your health was to decline because of old age, you can renew your policy without any hassle.

4) When you renew, premiums will be based on your current age. So premiums will go up after the initial level term.

Those are the facts.

Personally, I have sold term insurance 100% of the time. Why? Its because my clients can get lots of coverage for low amount of premiums. Since premiums are low, I help setup investment accounts for my clients so that they can build wealth. If you had lots of money saved right now, would you still need life insurance? Probably not. But you probably don't have lots of money saved right now and if something were to happen to you, would your family be financially ok? As you get older and continue to invest, you may or may not need life insurance when it is time to renew the term insurance. If you were to invest $200/month for the next 30 years and the average rate of return in your portfolio was 12%, you would have about $700k saved for retirement. That's probably not enough to live on, but at least its better than having money sitting in a life insurance policy. If you were to die during the term, your family gets the death benefit and all your savings and investments. If you die after the term, at least you will leave money behind to your family. With the cash value life insurance, in most policies, your beneficiary will only get the death benefit, but the insurance company keeps the cash value.

If I were you I would buy a 30 year term insurance. I would put you as the primary insured on the policy because you are younger and put your husband as a spouse rider. You may want to add a child rider of $10k to $25k coverage on to the policy as well. As you can probably see here, you can cover the whole family in one single life policy.

Answer 8

Whatever carrier you decide to go to make sure you consult a professional who will look after the contract.

You dont wont this scenario happen to you:

You find an insurance company that will underwrite you - you think that's a great deal. But if something should happen - they would state that because of your husband's pre-existing conditions (regadless of whether it was the cause or not) insurance company is not liable to pay, despite you paying agreed-upon premium.