Substandard Rating, Term vs Whole Life

[AndrewRoche]

Keep it simple.
1-Decide how much you can comfortably afford per month. Emphasize comfortably!
Everything depends on that number. It doesn't matter if you're healthy or unhealthy. The amount and type of insurance you purchase should be based on what you can afford.
2-Decide how long you think you want coverage.10, 15, 20 or 30 years or until age 100.
Remember, you're buying a death benefit. If you need permanent coverage go with a product that guarantees the premium and death benefit until age 100 or beyond but also gives you the ability to cancel the policy and get all your premiums back. Maybe tough to get this if you're table rated but it would be nice to have that choice in the twentieth or twenty-fifth year of the policy.
Once you decide on your budget and how long you need coverage, get examined to find out if your insurable and then compare the products of A Rated companies.
Don't over think it! It's a death benefit.
You're getting it because you want to know your loved ones will be okay. It's not an investment or a savings vehicle and no matter what people say, you don't need an insurance calculator to determine how much you should buy. You only need to decide how much you can comfortably afford.
In other words, you want to get it and forget it!
Good Luck!

 

[Robert Barney]

If how much you can afford is going to limit the total amount of death benefit, then permanent should NOT be an option.

The initial post talked about a single person who was planning to marry and have a family. In his/her current state, there is VERY LITTLE need for insurance. If there are insufficient assets to pay final expenses, like a funeral, then a very small policy is all that is needed.

But I would recommend pretending you already had that family, and consider what it would cost to replace your income to that family if you died, an income that they will need at least until the youngest child is out of mom's hair. That income replacement number will give you a ballpark estimate of how much total insurance you need.

Play with this to get an idea:

TERM4SALE | Life Insurance Needs Calculator

Once again, the need for insurance is NOT there currently, so buying a family sized face amount is ALL ABOUT insurability, and protecting your right to be able to keep buying insurance.

The current health problems are a complication, but they could get worse and make it even harder to get insurance. I would get as much coverage, in a 30 year term plan as possible. If you can't afford that coverage buying 30 year term, back it off to a 20 year term plan. Don't compromise total coverage.

 

[LGilmore]

so here is what you do. Contact a broker and do a pre-underwriting screen or prescreen. That is a nonbinding look at your health history and where you would shape up class wise. That way you'll get an idea on cost and classification. Doesn't cost you anything, takes a little longer to get info back but will give you a solid idea of what your potential costs would be.

Then you don't have to wonder about ten times or what. You'll know or at least have a good idea.

 

[Robert Barney]

I agree with the pre-screen but you still need to talk to more than one broker, to determine which companies would be most favorable to your health issues.

 

[LGilmore]

Wouldn't the word "broker" over "agent" already imply using a representative who works with a variety of companies?

 

[Robert Barney]

Wouldn't the word "broker" over "agent" already imply using a representative who works with a variety of companies?

That is correct. But the skill levels, experience and subjectivity of each broker varies and it is always good to get more than one opinion about the best strategy. If you get two, and they are different, you need a third.

 

[pfg1]

What if all 3 are different? Or 4 or 5? Most will likely have a slightly different opinion based on experience, market, etc.

 

[LGilmore]

But the wonderful thing about using a prescreen is it takes the estimation of class out of the broker or agent's hands. It no longer becomes an agent's best guess or opinion. As far as skill level, the concept of using a pre screen with a person with health issues usually indicates a pretty decent agent or broker.

The other aspect with this type of situation is it takes time to do. A good agent or broker will take the time as they are not pressured by immediate production issues.

You mention strategy and honestly strategy is "Bumpkiss" until you find out if the person is insurable or not. AFTER you find out if the person is insurable, then you form a strategy.

Several here have taken the strategy approach and really until you find out if and what the person's rating class wise is, you're wasting your time and theirs. Find out first, plan later after you know what class the person will be.

 

[Robert Barney]

What if all 3 are different? Or 4 or 5? Most will likely have a slightly different opinion based on experience, market, etc.

If you visit a Ford, Chevy, Toyota, Chrysler and Mitsubishi dealer (agent), looking for opinions on the best car to buy, then you can expect 5 different opinions. If you go to a used car dealer (broker), and ask which cars are best, you will likely get a different opinion and I suspect that if you asked two different used car dealers if Toyota is a good brand, you will be much more likely to hear common advice.

So asking 5 brokers for advice, will likely yield for common advice than 5 agents.

But if there are different opinions, it underlines the need for MORE consumer research, not less.

 

[LGilmore]

Bob? Not a good example. Unless you're using agents as your argument. Might want to review the concepts of a broker and for an agent. You're basically using the definition of a career agent for an independent broker. I've been both Bob, they are different.

and again asking for too much advice before finding out insurability, remember this guy is coming in with health conditions that he thinks will influence classification, is putting the cart before the horse.