I need to buy life insurance because of my frequent travel and young
family. I am looking at a 30 year $1M policy, for around $850 year.
Does this sound competitive? Does it matter what company I buy from?
Any helpful hints or websites to guide this purchase? I am very
uninformed. Thanks.

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Request for Question Clarification by pinkfreud-ga on 24 Apr 2003 13:11 PDT

Dear nervousdad,

I applaud you for thinking of your new family's financial security. In
view of the very important nature of your question, you may want to
raise your price, however.

I suggest that you review Google Answer's pricing guidelines:

http://answers.google.com/answers/pricing.html

You are seeking detailed advice from a professional, yet your current
price of $2.00 will put only one dollar and fifty cents into the
Researcher's pocket. Although it is possible that you may get a
cursory response at the current price, I am certain that, if you value
this information highly, you will get a much better answer by pricing
the question accordingly.

Howdy nervousdad!

Keep in mind the "Important Disclaimer: Answers and comments
provided on Google Answers are general information, and are
not intended to substitute for informed professional medical,
psychiatric, psychological, tax, legal, investment, accounting,
or other professional advice."

The $850 rate sounds competitive; here are a few of the
rates for a 22 year old, good health, nonsmoking male,
etc., $1M term policy from the eHealthInsurance website.
http://www.ehi-life.com/Life/LifeLanding.html

BANNER LIFE OPTerm 30 Preferred Plus Non-Tobacco $800.00 30 A++
FIRST PENN-PACIFIC 30 Preferred Best Non-Tobacco $800.00 30 A+
ZURICH KEMPER LIFE 30 Premier Non-Tobacco $810.00 30 A
ZURICH KEMPER LIFE 30 Premier Non-Tobacco $850.00 30 A
JOHN HANCOCK 30 Super Preferred Non Tobacco $870.00 30 A++

To get rates from the above site, enter in your age, etc.
and click the Go! button on the page.

The rate might be the least important consideration, as
you have to take into account the specific policy, the
insurance company, etc.

The Insure.com web site explains ratings (those A, etc.
entries at the end of each of the above lines) and why it
does "matter what company" from which you buy insurance.
http://info.insure.com/ratings/

"Selecting the right insurance company is an important
financial decision. One important consideration is the
financial strength of the insurer. If the company cannot
pay future claims or benefits, other considerations become
unimportant."

"Financial strength ratings represent an analysis of a wide
variety of risks that could affect an insurer's long-term
survival. Insurance companies can fail or cease to operate
due to inadequate financial capabilities, competitive forces,
or changing fundamentals in their marketplaces."

Three of the rating companies are:
- A.M. Best
- Standard & Poor's
- Fitch Ratings

Most sites will give you rating from at least one of the
above companies.  Insure.com has a quote system as well.
http://www.insure.com/quotesmith/controller?reqid=qstermindex

A.M. Best's website explains their rating system.
http://www.ambest.com/ratings/explanation.html

"Best's Ratings are our traditional letter ratings and range
from our highest, A++(Superior), to our lowest, F ..."

The Insure.com website has a good informational page on
buying life insurance.
http://info.insure.com/life/basics.html

The FAQ Farm has a Frequently Asked Questions (FAQ) on life
insurance, with some good tips, and humorous illustrations.
http://faqfarm.com/life-insurance/questions.html

- How much life insurance do you need?
- What is term life insurance?
- What is decreasing term life insurance?
- What is permanent life insurance?
- What is whole life insurance?
- What is universal life?
- What is adjustable life insurance?
- What is variable life insurance?
- What is variable universal life insurance?

On the "term vs. whole life" issue, this SmartMoney page
keeps it simple.
http://www.smartmoney.com/insurance/life/index.cfm?story=lifeterm

"FOR MOST PEOPLE, the right type of life insurance can be
summed up in a single word: term."

Note the qualifying "FOR MOST PEOPLE" above, and you'll
want to read the whole SmartMoney article so as to get a
full feel on why they make that recommendation.

Even though you can shop around for rates, etc. on the
internet, you will get the same rates from a licensed
insurance agent, and they should be able to guide you to
the right policy.  Talk to friends and associates and
see who they use.  Get an "multiagency" broker as well,
so they can compare different policies, but don't be
afraid to do some of the legwork yourself so you go in
as educated as possible.  Make a checklist of things
you want from the insurance (coverage on your frequent
travel, especially in other countries, if that is
involved, etc.) and do not be afraid to ask questions.

Hope this makes you a little less nervous!


Search Strategy:

Searched in Google with the keywords: "life insurance" FAQ
://www.google.com/search?&q=%22life+insurance%22+FAQ

Searched in Google with the keywords: "term versus whole"
://www.google.com/search?&q=%22term+versus+whole%22

I recently checked into life insurance for myself, so I knew
about the eHealthInsurance.com and Insure.com websites.

If you need any clarification, feel free to ask.

Looking Forward, denco-ga

As having just become a father, this has been on my mind too. What
does the researcher recommend as to type of life insurance policy -
term, whole, etc?

I'm sure some companies are better than others. You should probably
talk to several independent agents, before you choose a policy. Some
companies have lowest prices. Some have fewer excuses for not paying.
Others rarely question a claim. Most exclude acts of war, perhaps even
terorism.  Most won't pay is you disappear even if presumed dead. Most
insist on a death certificate. You need to understand the fine print.
The 100th policy you read will be much more understandable than the
first few. Generally whole life is not a good idea, as it is
combination of savings and life insurance. Likely Consumer Reports
Magazine has done a helpful report or two. Your Librarian will help
you find these and may have some other sugestions.   Neil

Dave Ramsey, a self-made millionaire who went bankrupt and then
rebuilt his financial life, recommends only term life insurance.  See
http://curezone.org/forums/m.asp?f=158&i=21 where a lady named
Paulette wrote of Ramsey "He sells nothing---just gives you great
information.  (For instance, he taught me why you should NEVER buy
whole life insurance--only term life.  I cancelled my universal whole
life insurance policies.) He teaches money the old fashioned way.  You
save for what you want and then you pay cash."

You may want to visit Ramsey's site at http://daveramsey.com/ for
general financial education and to learn more about the stations on
which his nationally syndicated radio show may be heard.  I've been
listening to his advice for years and it has revolutionized the way I
used to handle my money.

I suggest you check ameritasdirect.com for term life quotes; they sell
thru
the Internet, but have live phone reps who can answer any question. I
replaced
my existing group life last Fall with 10 year term, and it worked out
way
cheaper. The rep was extremely helpful (they are non-commissioned) and
quite
knowledgeable.

Also to consider- why 30 year term ? Are you trying to guarantee thru
your
later years, or just want a fixed stable price. There is an
interesting
article on the Web I found that argues that 30 year term is kind of
"bogus" or
overkill.
Finally, consider Universal Life - this is like whole life, except you
control
the annual premiums. Ameritas is a very low cost source- they do not
take
commissions out of your payments, and the insurance component is
cheap.
The result is you can have insurance into your 90's if you wish- or
use the cash value for college, etc. There are many advantages -- and
I must say it
looked attractive enough for me to buy some to support a survivor
annuity
on my retirement, even tho I was always a big fan of "buy term and
invest the difference".

Last, tho its NOMB, why $1M ? sounds like a _lot_ of need. you may not
need as much as you think ... so maybe consult with a life insurance
guy (I was going to say "professional"). Again, this is a fair
question to bring up witht the Ameritas Rep.

'nuf said, for now.
Email me back and I will look for more info.