My wife(30) and I (28) recently opened up a term to 100 insurance plan that we pay off in 20 years (I believe the option is called '20 pay).
We each have $100K of coverage ($200K total/combined). It costs us $107 per month for 20 years and then we are covered until our death. I don't have the paperwork in front of me but the one 'perk' I can remember is that 50% of the policy can be taken out to cover nursing home bills. Granted 50K doesn't go that far. . .
A similar term coverage was certainly cheaper, but the premiums got pretty high after 20 years. So it would be cheaper for the term but then a lot more later, which of course makes sense.
I figured that this would be a good base to cover our debts and funeral costs etc if one of us dies. We don't have any kids but when we do we will likely get a term policy for a higher amount for when the kids are under 18. We each work so neither of us dying would result in the other having much financial hardship. The base 100k policy would just be nice for the remaining spouse to pay off debts/funeral costs/leave work for a little bit of time. Our debt would be more than wiped out by the $100K.
I guess what my question is, is this such a bad thing? Everyone is always saying that term is a lot better but running the numbers we are paying a total of about $26000 over 20 years for $200000 of rewards (even if it is in death). Is there something I'm missing?
-Dave
We each have $100K of coverage ($200K total/combined). It costs us $107 per month for 20 years and then we are covered until our death. I don't have the paperwork in front of me but the one 'perk' I can remember is that 50% of the policy can be taken out to cover nursing home bills. Granted 50K doesn't go that far. . .
A similar term coverage was certainly cheaper, but the premiums got pretty high after 20 years. So it would be cheaper for the term but then a lot more later, which of course makes sense.
I figured that this would be a good base to cover our debts and funeral costs etc if one of us dies. We don't have any kids but when we do we will likely get a term policy for a higher amount for when the kids are under 18. We each work so neither of us dying would result in the other having much financial hardship. The base 100k policy would just be nice for the remaining spouse to pay off debts/funeral costs/leave work for a little bit of time. Our debt would be more than wiped out by the $100K.
I guess what my question is, is this such a bad thing? Everyone is always saying that term is a lot better but running the numbers we are paying a total of about $26000 over 20 years for $200000 of rewards (even if it is in death). Is there something I'm missing?
-Dave