What type of term life insurance to get?

Question

I am a 23 year old male that has type II diabetes. I have around $40,000 worth of debt from student loans, and I'm going to be getting married in a year. My parents currently have me covered so that if I die, they can afford my burial and other costs.

I am more concerned about getting a 10 year term life insurance policy to help my wife if I die after we get married. Once we have kids, I would plan on getting something like a 30 year term life insurance policy. Anyways, does anyone have any recommendations on how much coverage I should get and what companies have good rates (especially for diabetics?)

Answer 1

You're very young to have type II diabetes, and final offers will depend on your level of current control and history.  I foresee offers of at least 'standard table 2', which should still be darn affordable at 23.  My wife got standard table 8 at age 25, and it's an easy bill to pay.

Check with a few different independent life brokers.  They should be able to shop your situation around to see who has the best offer.  Expect a knowledgeable broker to ask detailed questions.  West Coast Life, Prudential, and John Hancock come to mind off the top of my head, but I know there are other ones that handle diabetes well.  A good broker should have easy access to all of these companies and more and consider them for you.

Answer 2

You need to talk an independent agent that knows the different life insurance companies treat type 2 diabetics.  A really good agent should be able to work with the various underwriting departments and find the best policy for you without you having to apply with 10 companies.  You are not going to find what you need from a quote site or the agent that sold you your auto or homeowners insurance.  

Your future wife won't be responsible for your student loan debts if something happens to you as long as you only keep it in your name and don't roll it into your jointly owned mortgage or a debt consolidation.  Term insurance in the amount of several times your annual income should help your wife with your final expenses and replace your income for a couple of years while she adjusts to life without your income.  After you have kids you can layer on another level of protection to provide for them.

Answer 3

Life insurance is really different for everyone.  There are so many different companies out there that it can be difficult to find a policy thats right for you.  The best thing you can do is some research and to compare quotes from different companies online.  You want to make sure you find a policy that will provide your family with all they need to pay for your burial, all other expenses, and some extra to help support them after you are gone.

The site below is a great resource because it allows you to compare quotes for all of the different life insurance companies for free so you can find the best policy for you.

Good Luck!

Answer 4

Life insurance is for different reasons

Final Expenses- should be whole life you said your parents have something for that.

Term life should cover things like loan debts (student, credit card, mortgage) and income replacement.  College expenses if you expect to save the money for your kids.

Here is a formula for you:

Take your current debt + (your current income * number of years you want to support your family after your gone 3-5 years is typical) + (the projected cost of college for your children * the number of children) minus any existing life insurance and you have the amount you need now.  re-evaluate every three to five years or when major events happen marriage, birth or adoption of a new child a raise or promotion, purchase of a new home.

Answer 5

With type II diabetes, you will not be able to buy a life insurance policy at standard or preferred rates.

My recommendation is for you to buy as much insurance as you can afford now, even though the premiums will be rated up, due to your health situation. The reason I say this is because, if your health worsens, it will be more difficult, if not impossible to purchase more insurance later.

Buy the 30 year term now, as much as you can get, but with your health situation, I believe you should also buy a participating whole life, using the dividends to purchase additional paid-up insurance. You will be protecting yourself in the long run.

What's going to happen to that 30-year term policy in 30 years? You will have two options, renew at a significantly higher premium, or convert to a whole life or universal life at a much higher premium. The premium will be higher to start with anyway due to your health.  

With a combination of the whole life and term, at the end of the term, you still have your whole life policy, at the same premium you started with, but your death benefit in the whole life will be more than it was when you bought it, by using dividends to purchase paid-up additions. It can't be canceled, unless you fail to pay the premium. Then there is provision you can ad to the policy at the time it's written, and that is APL (automatic premium loan). In other words, if you happen to be short of funds at sometime or other, the company will automatically keep the policy in paying status by deducting the premium from the cash value. You can make up that premium payment later, along with a little interest. But you won't lose your insurance. You can't do this with term.

There are alot of other benefits in a whole life policy that a local agent can explain to you. Ask your auto insurance agent about your options.

But with your health situation, this is what I would recommend.