wjm@lcuxc.UUCP (04/09/85)
Despite what insurance agents tell you, if you want (or need) life insurance,
you should buy life insurance and not life insurance with many additional
extras thrown in. Term insurance is pure life insurance - anything else adds
things that you'll pay through the nose for.
Don't get me wrong, you should set up a savings plan, but whole life (or
adjustable life) is not the way to do it. You can do much better by going
to a bank or broker or mutual fund and investing the money you'll save by
getting a term policy.
As always, the best advice on life insurance is - Buy term and invest the
difference.
The second thing that insurance agents won't tell you is WHERE to buy the
insurance. The best options are:
1) your employer's group plan - if you have one.
2) professional societies - for example, the IEEE has an excellent plan for
its members
3) a savings bank, if you live or work in Mass. or NY.
The aabsolute worst option is one of the major insurance companies, since their
salesmen get astronomical commissions that come out of the early premiums
paid on a new policy.
You can also look at the Consumer Reports life insurance report which came
out in early '84.
Regards,
Bill Mitchell ({ihnp4!}lcuxc!wjm)mlh@houxl.UUCP (M.HARRISON) (04/10/85)
Well, my wife works for TIAA (Teachers Insurance and Annuity Assoc.) so I looked fairly closely at their life insurance. What I found was that in many cases IEEE offered a better deal and that's what I bought. The clincher was the 50% premium dividend (i.e. refund!) that the IEEE plan has been paying for a while. These dividends are not quoted in the rate tables for any policy I've seen so you need to ask before making a decision. Marc Harrison AT&T Bell Labs - Holmdel
davec@dciem.UUCP (Dave Cote) (04/23/85)
> > Well, my wife works for TIAA (Teachers Insurance and Annuity Assoc.) > so I looked fairly closely at their life insurance. > What I found was that in many cases IEEE offered a better deal > and that's what I bought. > > The clincher was the 50% premium dividend (i.e. refund!) that the > IEEE plan has been paying for a while. These dividends are not > quoted in the rate tables for any policy I've seen so you need > to ask before making a decision. > > Marc Harrison > AT&T Bell Labs - Holmdel The source of term life insurance is as important as the decision to go term vs whole life. If you buy through an organization such as IEEE or TIAA, you have to remember that you are dealing with three parties: 1) the organization with which the insurance is affiliated, 2) the administrator of the insurance program (essentially the middle man who gets the good rates for the organization members), and 3) the insurance company. You have three links in the chain, any one of which may break at any time. The organization may decide not to deal with their present administrator if a new one comes to them with a better offer (result: you finish up the present term of insurance with the current administrator's contract company and then switch to a new administrator and possibly a new company). The administrator may decide to stop administrating (I suggest that most administrators are small operations) (result: a new administrator who may contract with a different company replaces him). The organization may decide to stop being associated with life insurance or the organization may dissolve (result: the insurance company may permit you to switch to one of their own policies). You may think that switching companies is no problem, but what happens if your health changed and no one will insure you? You are up the creek without a paddle. Thus, I prefer to deal directly with an insurance company when buying term insurance that I will be counting on for several years. The rates may be a little higher (around $250/yr for $100,000 of decreasing term from age 27 to age 60), but they are still lower than whole life and I sleep a little better at night. For term that I am counting on for a short time (5 yrs or less), I am an advocate of the term insurance offered through various professional organizations.