Hello-- I'm 30 years old and currently single, but I have a strong hope of eventually starting a family and I've started to become extremely worried about how I'll ever be able to get affordable life insurance.
When it comes to me and insurance, there's good news and bad news-- the bad news is that I have some pretty nasty skeletons in my closet when it comes to health history, so if I were to apply for insurance I expect it would either be declined, or approved but with a substandard rating. The good news, though, is that I've worked hard and have a pretty successful career, so I think I'll probably be able to afford it.
Through my jobs I've had Group Life policies, upon leaving the companies I've found that the Group policies have usually been portable/convertible to Individual ones without having to prove insurability, so I've figured I should probably stock up on this coverage as much as possible. I just left a job this week, I have 30 days to decide whether to convert the Group policy to Individual, and with the new job that I'm about to start I've found out that the Group plan will also be convertible. The problem is that not all of it is portable to a Term plan; some of it is only convertible to Whole Life. Since the amount of insurance that I can convert from jobs will probably not be enough, I'll probably still have to apply for insurance at some point and prove insurability, and the decisions that I have to make now have begun to get me very confused about the details of Term vs. Whole.
My understanding is that Whole Life can be about 10x more expensive than Term, but that the premiums go into a "Cash Value" account that pays tax-free dividends. If as a result of being substandard the premiums for Term would go from about $1k/year normally to about $3k for me for the amount of face value that I'll probably want, would this imply that for Whole Life, the premiums would be $30k/year instead of $10k for the same face value, or does the 10x relationship change at all when one gets into the territory of substandard policies? Also for Term, if I don't prematurely die, my understanding is that the premiums paid are essentially just lost. For Whole Life, if I'm paying substantially higher premiums because of the bad health rating but it goes into cash value, would Whole Life therefore make more financial sense for me with a substandard rating since even though I'm paying much higher premiums, I get to (at least in some form) keep the extra money I'm paying since it's going into cash value? Or does the formula for the cash value calculation change so that if someone is substandard, they still get hit just as hard financially as they would if they had Term?
Thanks for your help
When it comes to me and insurance, there's good news and bad news-- the bad news is that I have some pretty nasty skeletons in my closet when it comes to health history, so if I were to apply for insurance I expect it would either be declined, or approved but with a substandard rating. The good news, though, is that I've worked hard and have a pretty successful career, so I think I'll probably be able to afford it.
Through my jobs I've had Group Life policies, upon leaving the companies I've found that the Group policies have usually been portable/convertible to Individual ones without having to prove insurability, so I've figured I should probably stock up on this coverage as much as possible. I just left a job this week, I have 30 days to decide whether to convert the Group policy to Individual, and with the new job that I'm about to start I've found out that the Group plan will also be convertible. The problem is that not all of it is portable to a Term plan; some of it is only convertible to Whole Life. Since the amount of insurance that I can convert from jobs will probably not be enough, I'll probably still have to apply for insurance at some point and prove insurability, and the decisions that I have to make now have begun to get me very confused about the details of Term vs. Whole.
My understanding is that Whole Life can be about 10x more expensive than Term, but that the premiums go into a "Cash Value" account that pays tax-free dividends. If as a result of being substandard the premiums for Term would go from about $1k/year normally to about $3k for me for the amount of face value that I'll probably want, would this imply that for Whole Life, the premiums would be $30k/year instead of $10k for the same face value, or does the 10x relationship change at all when one gets into the territory of substandard policies? Also for Term, if I don't prematurely die, my understanding is that the premiums paid are essentially just lost. For Whole Life, if I'm paying substantially higher premiums because of the bad health rating but it goes into cash value, would Whole Life therefore make more financial sense for me with a substandard rating since even though I'm paying much higher premiums, I get to (at least in some form) keep the extra money I'm paying since it's going into cash value? Or does the formula for the cash value calculation change so that if someone is substandard, they still get hit just as hard financially as they would if they had Term?
Thanks for your help
