A lot to unpack here! Thank you all for taking the time to provide considerable insight!
Follow-ups:
1. Assuming continuous payment, is there any point where the policy stops accruing cash value? (and/or starts to burn principal)
2. I believe my father was under the impression that, after a certain point, this policy would remain "paid up" for life, (in other words, the accrued cash value would cover the cost of premium payments until age 120 or whatever). Is this a realistic possibility?
First, we chewed on the amount of insurance coverage needed. Realistically (and very conservatively), they need about $200k to pay off all debts (mortgage and cars), $100k for educational expenses, and maybe $100-$200k for final expenses and financial runway.
Time-wise, within the next five years, my sibling should be out of school and all household debts should be paid off. God forbid, if something were to happen, the widowed parent would probably be better off selling the house (which is a sizable property in a VHCOL area), buying a smaller one, and living off the remaining balance (likely $1m or so).
As a result, we were thinking that a ballpark $500k policy over a 5-10 year term would likely be best? This is not factoring in my mother's group life policy, which should provide about $200k in coverage.
Can you please describe some realistic situations where one might benefit from lifetime insurance versus term?
Also, please let me know if you see any gaps or errors in my logic regarding planning.
Follow-ups:
1. Assuming continuous payment, is there any point where the policy stops accruing cash value? (and/or starts to burn principal)
2. I believe my father was under the impression that, after a certain point, this policy would remain "paid up" for life, (in other words, the accrued cash value would cover the cost of premium payments until age 120 or whatever). Is this a realistic possibility?
This is a question we've been discussing.
Or1on, I posed the real question for you in a prior post - that is, for how much longer does Mom need life insurance protection? If it's short-term, a level term policy for 10 or more years makes sense. But if it's for her whole life, this GUL product is a good match for her insurance needs.
First, we chewed on the amount of insurance coverage needed. Realistically (and very conservatively), they need about $200k to pay off all debts (mortgage and cars), $100k for educational expenses, and maybe $100-$200k for final expenses and financial runway.
Time-wise, within the next five years, my sibling should be out of school and all household debts should be paid off. God forbid, if something were to happen, the widowed parent would probably be better off selling the house (which is a sizable property in a VHCOL area), buying a smaller one, and living off the remaining balance (likely $1m or so).
As a result, we were thinking that a ballpark $500k policy over a 5-10 year term would likely be best? This is not factoring in my mother's group life policy, which should provide about $200k in coverage.
Can you please describe some realistic situations where one might benefit from lifetime insurance versus term?
Also, please let me know if you see any gaps or errors in my logic regarding planning.
Statistics: Posted by or1on — Thu Jul 11, 2024 10:11 am — Replies 59 — Views 4433