Level Term Vs Adujstable Premium Term

Discussion in 'Life Insurance Forum' started by one321, Feb 3, 2009.

  1. one321
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    one321 New Member

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    I'm comparing the pros and cons of a NWM level term policy with a NWM adjustable premium term policy.

    Everyone knows how a traditional level term policy works. For me, a 20 year term would end when I'm 45 and a 30 year term when I am 55. I think I would be comfortable with the 30 year term.

    The adjustable premium term policy lasts until the holder is 80. With the adjustable premium term policy, premiums are payable for the entire coverage period. Scheduled premiums start out low, increase annually, and are guaranteed for the first five years of the policy. After five years, they may increase above the scheduled rates, but not beyond the guaranteed rates specified in your contract.


    www<period>nmfn<period>com/tn/insprods--life_term80_pg

    I'm wondering what you all think about the adjustable premium term policy. I'm looking to purchase a term policy; I don't want permanent or whole life coverage.
     
  2. HealthGuy
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    HealthGuy Guru

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    NWML sucks and so does their increasing premium term. Don't be a fool and buy their crap. Find the cheapest term you can and lock it in for a stable 20 years. What if you become uninsurable but NWML will continue to strangle you with the increasing rates every year if you want to keep their increasing premium life insurance. So what if its cheap for 5 years, that is their bone to get you to buy their crap.
     
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  3. LGilmore
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    LGilmore Guru

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    "adjustable premium term policy"

    Do you mean annual increasing premium term? Adjustable implies it can go up or down.

    How long do you expect to hold the policy? If you're going to hold for 30, probably the 30 year level will be the best choice planning wise as you will have a 30 year contract that only YOU can break.

    Annual increasing premium is only a five year guarantee, after that it becomes an option of pricing for the insurance carrier, up to their contractual maximums. Which if you look, will be huge in comparision to the guaranteed rate. Companies leave themselves alot of wiggle room.

    So, if the financial world still is topsy turvey for a while and companies need to improve thier bottom lines, how will they do it? Can they adjust a 30 year guaranteed contract? NOPE.

    Don't outsmart yourself here. This isn't new thought process wise.

    Do you want a guarantee for 30 years or one for 5? Why don't you look at a 20 as a compromise?

    "I don't want permanent or whole life coverage."

    Well, if that is really true, you've picked a quality WL company. Are you unknowingly hedging your bet? ;)
    That is their strength wl.

    At least if you're wrong down the road, you'll be able to wingwalk pretty well. ALWAYS MAKE THAT IDEA OF BEING "wrong" PART OF YOUR PLANNING. There's a lot of financial gurus out there right now that look pretty stupid because of their "absolutes" in planning.. Well planning isn't an absolute certainty. Have a safety net. The only thing ya can't do over is time.
     
  4. know patience
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    know patience New Member

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    I commend you for making the wise decision of protecting yourself and your loved ones by purchasing life insurance, especially while you are still young and a relatively low risk. Why would you not want a WL/permanent policy? According to your post, you're pretty young so anything permanent would be relatively inexpensive. For most young people I usually suggest a UL or VUL over term unless they really need a larger face amount.

    I have not looked at the NWM but does it come with a ROP?
     
  5. HealthGuy
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    NWML is too eliteist to offer ROP. Its below the principles of their "mutual" company. "Mutual" meaning they charge you too much for life insurance and give you pennies back in a marketing trick called a "whole life dividend". And wow, you "own" a piece of the mutual company NWML...Whoa! You can take their whole life and chuck it. It SUCKS.
     
  6. SportsNut
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    SportsNut Guru

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    You tell em... cause I stutter...
    Sounds like we will never get that post from you Health Guy, entitled: "Interviewing with NWML; should I go fo it"

    Dimebag... your avatar needs a haircut.
     
  7. LGilmore
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    LGilmore Guru

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    "You can take their whole life and chuck it."

    Mine is just fine thanks. Has worked well for a couple decades now.


    Is it that you've lost cases to mutual companies or are you actually unaware of the different organizational types of companies and how each works?
     
  8. HealthGuy
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    LGilmore: Respectfully I know intimately the differences between a 'mutual' company and publically traded life companies. If you want to overpay for insurance and it makes you sleep better at night because you are buying a 'mutual' product then sure, go with NWML...And if you feel better with your little kickback they give back to you in the form of a 'dividend' then sure stay with it. I don't buy it for a minute. I haven't lost business to NWML agents - but many of them are unethical so they can get their volume production bonuses. They will layer increasing premium term policies on top of their expensive whole life product and insure couples that way, in essence - selling them 4 policies instead of two and justifying this with all types of reasons as to why its a great way to insure your family with the foundation being a WL policy and you pretty it up with a cheap IPT that will keep increasing in cost till you can't pay for it anymore and you are forced to convert it to more whole life down the road....The goal of NWML is to have all their clients overpaying for big fat WL policies that do nothing but rape their clients pocketbooks and underinsure them.
     
  9. Norwayguy
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    Norwayguy Guru

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    Adjustable Premium Term sounds like another name for 5 year Level Term. Would you buy 5 year Level term? maybe if I had a 5or 6 year need but for most people that slightly more expensive 20 year level term would meet there need and budgets after 6 or more years down the road.

    In regard to NWML it is like any other life insurance company in that the agent you deal with kinda determines your experience there are many good and many scumbag agents at any company like NYL, PRU, NWML, State Farm, Allstate and probably just as many good and scumbag independent agents. Not Defending NWML just saying you can have an ethical agent steer you in the right direction if the client is first and not commission dollars or production requirements.
     
  10. sman
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    One alternative is what is now being deemed "Term to age 100". It's really just a Universal Life policy with a guarantee to stay in force to age 100 (and beyond).

    For example, a 25 year old male could get $250k of coverage for as little as $72.95 per month (in Georgia). The premium never changes and the coverage stays in force to age 120. You stop paying at age 100. If you only wanted coverage to age 80, you could potentially lower the premium after the first year.

    As for NWML, their term is horrible. They have a decent WL, but there are mutual companies that have a lower cost for coverage. Such as Ohio National.

    Just some food for thought.


     
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