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I have never seen a policy with a suicide exclusion other than the 2 yr look back period....life insurance is based on actuaries that are ridiculously accurate so they know exactly what the odds are of death, policy lapse, profits etc.
True story: late 80's guy dies at age 42. 125k mtg, 4 kids from 6-18. 350k in insurance, wife worked and made 35k a year. 350k seemed like a decent amount but in reality it only replaced his salary for about 10 years. Social Security paid out about $1200 a month for the minor children but in reality it simply funded the college prepaid programs.
No one lived lavishly but the 4 kids graduated from college. Quality of life was significantly better before death than after but not a food stamp/welfare case afterwards either.
LI should cover the persons lost income at a minimum just to preserve some level of stability in the family. LI has never been so cheap (due to people living longer, actuaries adjusted for this).
It's what happends in every neck of the woods when someone dies with no money or insurance. Or you just leave your relitives body at the morgue and forget about it? I don't think so.
I'm not anti insurance, I worked for an insurance company for years and know the importance of it. I also know that when a 30 year term policy (which is often all people can afford when starting out) goes up in cost to the point where it's no longer affordable, and you no longer have kids or income to protect, it's not a priority for most people anymore. Especially if they have a few $$ in the bank to cover their funeral needs or have even made arrangements already.
We have term insurance. When the kids are grown the term ends. Ours will pay off the home and provide a cushion to help in the raising of kids. we also have a policy from work that pays 3 years income. As we get older and find many of our relatives passing on we have come to the conclusion that it makes sence to pay for a burial plot and funeral exspence. One of our relatives did this years ago and the value of the package has increased from $1,400 to well over $10,000. You are going to go someday, may as well pay for it now. LOL
Hubby and I are in our mid 30s and have only had life insurance for the last couple of years, through his work. It also has some sort of long term disability insurance built in as well. However, we have no kids, and other than the small mortgage, no debt. Either of us could afford to get by alone if we had to. So life insurance is less important to us than it is to many.
I actually posted though to comment that when my grandmother died last year (who did have life insurance, by the way, even though her kids were long since grown and the house was paid off 50 years ago, and she was already leaving substantial assets to her children), the funeral home director personally wrote a thank you card to my mother for the fact that she not only paid the funeral bill, she paid it in full and promptly. Apparantly that is a huge problem in that business. People apparantly expect the funeral home to just wait around until the insurance check comes in to get paid, and by then, the heirs conveniently "forget" about the debt and take the money and run with it.
I understand completely where you're coming from, but isn't there a point where self-insurance does make sense? My parents are in the their 60s and worth many millions. 70-100K is easily what they spend in vacations every year. I just don't think they should have LTC, it doesn't seem to make sense. Or is the argument that no matter what your wealth the cost is worth it because its so likely?
I'm not trying to be difficult, I'm just wondering where the line is if there is one?
I noticed this part of the thread is from about a year ago, but wanted to comment on this anyway.
My grandma, who I mentioned in my above post, was in a care center for about the last 8 years of her life. It cost about $40k a year (she didn't need the highest levels of care, so cost less than some facilities). She did not have long term care insurance. She owned (and thus paid to maintain) houses in 3 states, as well as assorted other pieces of ground and multiple rental properties. Her annual expenses were substantial. Despite that, because she owned the rental properties outright, and had retirement income and investments earning dividends, etc, and because my mom took really good care of all the finances for her, she ended up with more in assets at the end of the 8 years than she did at the beginning.
Let me say that another way. While paying for her own long term care, she still managed to profit about 12% on her assets over the course of 8 years (during a period of time ending in a substantially down market).
So absolutely there are cases where self insuring makes more sense.
After watching 3 relatives die and none of them having insurance to even cover their burial/cremation cost we now have a policy. We are poor and it is not much but it is enough to cover our cremations and leave several thousand dollars.If a person can afford bare coverage they should do it instead of putting that extra burden on your grieving family.
Has anyone seen or heard of any instances when a person with children or a spouse died without life insurance or not enough to at least leave a cushion to live on? Feel free to tell the story of you know any..
Life insurance is mainly to cover the premature death of the family breadwinner, not to make someone rich when the holder of the policy dies of old age.
I noticed this part of the thread is from about a year ago, but wanted to comment on this anyway.
My grandma, who I mentioned in my above post, was in a care center for about the last 8 years of her life. It cost about $40k a year (she didn't need the highest levels of care, so cost less than some facilities). She did not have long term care insurance. She owned (and thus paid to maintain) houses in 3 states, as well as assorted other pieces of ground and multiple rental properties. Her annual expenses were substantial. Despite that, because she owned the rental properties outright, and had retirement income and investments earning dividends, etc, and because my mom took really good care of all the finances for her, she ended up with more in assets at the end of the 8 years than she did at the beginning.
Let me say that another way. While paying for her own long term care, she still managed to profit about 12% on her assets over the course of 8 years (during a period of time ending in a substantially down market).
So absolutely there are cases where self insuring makes more sense.
i think i am with you on the LTC. I try to talk myself into it every now and then but the dollars don't work for my situation. I only have a small life insurance policy to take care of final expenses.
Just don't see too much in the way of insurance for me.
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