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Thoughts on insurance

April 23rd, 2024 at 04:40 am

I realized being so busy I haven't really written about stuff but I might as well put down some thoughts here.  I've posted a lot since December 2006.  18 years older and 2 kids later.  Financially?  Probably better than I ever dreamed.   In some ways I'm still very liberal and others i find myself becoming more conservative.

But there are still things that pop up at us.  So where we live in WA state they started this long term care insurance tax for working people.  0.58% unless you got your own coverage and it's a load of crock.  Basically the racket is a money grab because you have to live in WA when you retire to get the $37k in LT coverage reimbursement. You had to have worked for 10 years minimum.  So if you leave or stop working early that's it.  I think if you made people buy coverage and waive the tax it would be more fair.

That being said when it went into effect in 2022, we had to buy our policies in 2021.  So we bought a cheap normal LT care policy for $37k as a tax avoidance.  Well the premium was $200/year for DH.  It's now $500/year for what?  Getting older.  It sucks and covers nothing so I decided to look into getting a whole life policy with LT care rider as an alternative. In case the state starts checking.

What did I learn?  I learned my DH is uninsurable.  He had the physical, his medical records and at 46 years old they were like "no".  So we couldn't buy the stupid expensive coverage.  We do have term life insurance from when the kids were young.  But like our $37k LT Care plan back then he didn't need a medical exam for a 31 year old guy.  Nope we bought $4m in term for $1500/year and they were lik rubber stamp yes.

Turns out I had no idea this would happen.  But it did.  For anyone waiting or thinking they don't need it, I would highly suggest getting it while you are young and before they really look at your health.  He's in excellent top physical shape.  Had his accident 1 year ago, but been cleared from the concussion and other physical problems.  He's thin, low blood pressure, cholestoral perfect, but because of a pre-existing condition he's uninsurable now.

That's the breaks.  For any young people PSA buy the insurance you want or need before 35 I would say.

3 Responses to “Thoughts on insurance”

  1. Lots of ideas Says:

    I agree that you should get insurance when young.

    I recommend a whole life policy for $20,000 at birth.
    If, good forbid, you have to bury a child, you’ll at least be able to
    The premium will diminish to nothing in the last years of the policy, and dividends can continue to compound for life as inflation protection.

    As soon as a young adult purchases a home with a partner or has a child, they need to look at the mortgage debt and the income needed after Social Security Survivors benefits and buy 20 to 30 year term insurance for the amount ended to,pay off the mortgage and support a family. Some policies allow you to buy the right to purchase additional coverage at life events like birth of child, marriage, or death of a spouse. If there is a non working spouse,you need insurance on their life that would pay someone to do what they do for the family.

    Once your children are educated and the mortgage is paid off (or close), as long as you have retirement assets, you can let term insurance lapse because you presumably have assets to support a surviving spouse and bury you both.

    I think long term insurance is a scam, but that’s a post for another day…

  2. rob62521 Says:

    Amen on getting insurance when you are young and it is far cheaper. Sorry your DH is uninsurable. That stinks!

  3. Dido Says:

    Age 35 means paying insurance premiums for possibly 50 years before you might possibly need it. Typically purchasers are age 50 to 60.

    Different companies use different underwriting standards, so rejection by one does not mean rejection by another.

    Traditional LTCI has become tougher to get and premiums can be adjusted, though not on an individual basis. I got my policy at age 52 for about 3k a year and last year they raised the rate by 1K so now it's 4k a year going forward.

    Hybrid life/LTC has become much more common; I know we have clients who have Lincoln MoneyGuard. But it's more expensive up front.

    I am forever grateful that my mother had her LTC policy in place; her last 18 months would have wiped out most of what my sister and I inherited otherwise. It's why I bought my policy.

    I don't think it's a scam but it's a young industry and the assumptions they made when pricing it originally turned out to be misguided.

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