Happy and HeathyHolidays to Everyone. My employer covers my health insurance and the wifey has her own. I am really fortunate to have such a good benefits such as health, pension, TDA/401K and what not working for NYC. Outside of that, is it worth taking a life/whole life insurance (where premiums keep creeping up)? Thanks.

 

Not sure I understand your question - a whole life insurance policy --by design-- keeps premiums and death benefits fixed for as long as you own the policy. If you are being offered a LI policy where premiums go up over time, then is not a whole life policy.

 

It is a "Group Universal Life", and the HR Director misled kinda misled lots of us. I think about dropping it and just use the monthly premium against our mortgage's principal. But then I think about my wife and son if something happens to me re mortgage as the value of the insurance would way cover the loan. If you have to choose, which one would it be?

 

You seem to have defined your LI needs as enough to cover your mortgage loan --if my observation is accurate, then you should consider a term LI policy, say for example a 20 or 30-year term policy with a death benefit enough to cover your mortgage loan. But I'm one who believes in permanent LI -- i.e. a true whole life policy. Another strategy you should consider is a combination of term and whole life policies. That has been my strategy and coincidentally, my 20-year term LI policy will expire at the end of this month - and I will not need a replacement for it as I no longer need that extra coverage. BTW, **I'm not a life insurance sales agent**

 

I just set up a new term life policy. It has a term of 30 years. That seems like plenty of coverage to me. By that time, I'll be retired or nearing retirement, my toddler will be in his 30s, and the mortgage will be long gone (unless we buy again in the future, of course). After that, any additional coverage seems moot.

FWIW, I say make the coverage higher than just the mortgage. If you are young-ish and in good health, then term LI isn't that big a cost. Mine is about $150 a month and would pay out about 20X my current annual salary. That's enough to keep my family well cared for in the event of tragedy. For me, the peace of mind is worth the cost.

 

You have to analyze your own financial situation to assess how you would leave your family financially if you die. No one solution, everybody's needs are different. At the minimum you should probably have a term life policy that would at least leave money to your widow so she doesn't get caught short, it will be a lot cheaper than a whole life policy.

 

Thanks for the advise.

 

Yeah-term life seems to be the best option. Thanks

 

If you have worries about your wife being able to cover your mortgage and higher education costs for your son without your income, I'd get a term policy that will cover those expenses in the case of your early death. Once the house is paid off and your son is launched in life, you can re-evalute the need for it

 

When my wife and I finally decided we needed help plotting our financial future (after the tech bubble meltdown), we consolidated our portfolio, created a financial plan that included 20 year term insurance. Plan was that by the time we’d gone through our peak earning years and our kid was done with university, we’d have built a big enough nest egg that we would not need it. We had both owned whole life policies that a frat brother had sold us. It was expensive for what it was and hardly seemed worth it. It really depends on where you see yourself down the road.

 

You need some sort of life insurance to help your family if there is a sudden death. You might think you are in perfect health, but things happen. A good friend of mine, in perfect health, developed pneumonia because he didn’t go to the doctor when he had a chest infection. He was dead a week later. And he’d been too cheap to spend the $30 a month on a employer funded life insurance policy that would have paid out 4x his salary. His wife didn’t work and was raising a small toddler. She had to start a goFundme site to pay living expenses.

Odds are, your family will not need to ever collect on a life insurance policy. But if you die suddenly and there isn’t a policy, what would they do?

Term insurance is cheaper and the perfect vehicle while you are working. Whole life insurance is a scam — it costs more with the idea its an investment that you’ll get it back in 30 years or so. But if you compare the cost to the amount you get back, you’re loosing money.

 

Many moons ago my then future wife and I both bought insurance policies. Since we were both starting out and didn't have a lot of money, we didn't get a full whole life policy, but opted for a hybrid that was offered at the time (not sure if it still is or not). It was a part whole life policy, and the dividends from it paid to top up with term insurance.

At the time it was a way for us to get a whole life policy (seen as the gold standard at the time), and a decent amount of coverage, without having to pay too much in premiums...

 

Of course you won't get back what you put in because the 'missing' portion is the cost of the insurance coverage. If they gave you all the money back they wouldn't have the assets to pay for those who died. Whole Life can work but each situation is different, it's not a scam. Working people are usually better off with a straight term policy which is pretty cheap when young but gets very expensive when older.

I'm surprised the OP isn't given some term coverage as an employee, that's usually one of the first perks you get because it really doesn't cost the employer that much when they are covering a huge group of people. OP should check with HR to verify that his benefits don't have a life insurance component. Of course you can't take it with you when you leave the company so outside term insurance would still be desirable.

 

My only regret regarding my current and active WL policy that I bought some 30+ years ago when in my early twenties, is that I did not sign up for a higher death benefit

WL policies are like NATO straps, some people love them, many others despise them.

 

Now that is for OF-Nato either you love it or hate it. I love it btw. Thanks for the guidance.

 

Guessing many of us had college friends in the insurance biz.

 

Ha! Actually it was a couple of years after college when a seasoned sales agent (representing one of the largest LI companies) and a total stranger, convinced me on a WL policy Looking back and from where I sit now, the statements being delivered in my inbox every quarter turned out to be a very nice thing..

 

Ours were crap. Cancelled them.

 

TERM, the rest are trash