Life Insurance

Discussion in 'Flight Following' started by denverpilot, May 1, 2017.

  1. denverpilot

    denverpilot Tied Down PoA Supporter

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    We've been messing around with our life insurance for both of us lately, to better match it up with reality.

    My wife's stuff, no brainer. Found a better company at a lower price just by shopping it better than ever before. That part is easy.

    Me:

    I have an ancient policy that's not very big and also not that cost effective per dollar of coverage, but it's there... covers about 1/6 of what we want in total coverage.

    I have another policy taken when I was a Private pilot and held for a long enough period of time it's set in stone also and covers about 2/6 of the desired coverage.

    There's also a third policy that's just going away. It's not even close on pricing and covers a fairly good chunk of what we want today also. That's what we are trying to kill off. Easy on her, not so easy on me.

    Went shopping this around mainly to simplify this by a LOT. (One total policy would be great...) I realized that with the CFI ticket I now have to make sure the underwriter knows I'm involved in "commercial aviation". And whooo boy. Did that pop the rates sky high and remove a number of companies from even being willing to underwrite.

    Attempted to contact and do quotes from a broker who says they specialize in aviation stuff. They can't seem to get their act together enough to even get the quote out. Not impressed.

    Anyone have an aviation broker they like for life insurance stuff? Perhaps willing to share a number for what you're paying per 100,000 annually for coverage?

    Frankly it looks like my cheapest route is to keep two of my old policies, argument it with a policy that excludes aviation, and tack on EAA's AD&D policy that doesn't exclude aviation.

    The change by adding the CFI is MASSIVE on anything quoted thats brand new. We're talking a big multiplier vs Karen's rates.

    I probably should have realized this earlier but it's honestly not a huge problem for us. Just interesting enough to ask. Also annoying that I can't get it all done with one reasonably priced policy now.

    More stuff for Karen to mess with if I were to croak. It also means they're kinda scattered on end-dates, which is fine, but the old ones will run a little longer than we'll probably need them to. Cancellations of all of them will happen before they mature, most likely. All depends on the retirement numbers invested.

    These are just partial income replacement on us if one of us keels over before retirement. Not huge policies (No I'm not worth more dead than alive! Haha! Well not yet anyway..!) but not tiny. Mainly designed as a stop gap to allow someone to move into smaller digs, pay cash for the move if desired, maybe build a giant dog fence if needed, and then deal with selling the house on the prairie... all with Denver's
    housing in a bubble, making that stupidly expensive to do... without raiding retirement funds.

    Term only, of course.
     
  2. Clip4

    Clip4 Final Approach

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    I sent you a PM
     
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  3. denverpilot

    denverpilot Tied Down PoA Supporter

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    Thanks.
     
  4. Clip4

    Clip4 Final Approach

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  5. mwagg737

    mwagg737 Pre-takeoff checklist

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    Francis Medler at Travers and Associates.

    Sent from my XT1585 using Tapatalk
     
  6. hockeyrcks9901

    hockeyrcks9901 Pre-takeoff checklist

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    Try Haven life

    They would not underwrite me as a student pilot but said that they would with a small additional premium after completing my license.

    For reference: I'm 29 and healthy. The quoted premium for a $1,000,000 term policy for 20 years was about $35 a month. They have no exclusions for any kind of death which is nice not having to worry about.

    They are underwritten, and I think owned, by Mass Mutual so there's some good financial backing.



    I don't know if they would have underwriting issues with commercial pilots.
     
    Last edited: May 1, 2017
  7. Stewartb

    Stewartb Final Approach

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    Life insurance protects your survivors from your debts. There's no reason to over insure unless you like giving away your money. With personal assets and no debt there's no need for insurance.
     
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  8. paflyer

    paflyer Final Approach

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    If your assets can cover the lost income for many years. Otherwise insurance is needed to replace your income. Not necessarily to make your survivors rich.
     
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  9. Cykoguy

    Cykoguy Pre-takeoff checklist

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    Bingo. It does both. I know some don't like him but Dave Ramsey explains it as replacing someone's value. Even my stay at home wife has a big value because if she were gone I would have to pay someone to watch the kids and clean the house. That alone is nearly $40k a year.
     
  10. TCABM

    TCABM Pattern Altitude

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    I was successful with PIC Life. As for life insurance in general, my agent has delivered several 'payouts' to surviving spouses. He said the toughest thing he's ever had to deal with is when a surviving spouse said to him "is that all there is?".

    Not second guessing anyone's choices or beliefs here; I just encourage everyone to have a frank, two way conversation on the needs of the survivors taking into consideration the entire estate and develop a sound plan to ensure your goals of the plan are successful.
     
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  11. denverpilot

    denverpilot Tied Down PoA Supporter

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    Lots of reasons for life insurance. Like I said before, in our case, it's a hedge against a housing market gone a bit nuts here locally, so the survivor could afford to move back into town or not, at their leisure, and as income replacement so the survivor doesn't have to make major decisions about lifestyle immediately.

    It's NOT meant to make the survivor rich, or even replace all of their income.

    (It's not uncommon these days for someone to make multiple millions of dollars, gross, in a typical adult working lifespan. Replacing that, which certain fiscal advisors recommend, and I disagree with, would be hideously expensive.)

    Technically a survivor could significantly harm the joint retirement savings left to them, and then put it back when the prairie house sold, but that has some ugly tax implications. So the insurance avoids that at a relatively low opportunity cost lost. (Always calculate the total cost of insurance, from beginning to end of policy, to see if it's worth it.)

    Folks saying not to over-insure are correct. Have to know exactly what you're buying and why, before buying.

    (Depending on the size of the business venture, it's not uncommon to see business partners with crossed over life insurance policies, as in the business or the partner is the named beneficiary, in case one of fen principals of a business drops dead. Those policies are usually incredibly cheap, and cover the business somewhat for the loss of a key person for some agreed-upon sum.)

    Thanks for the ideas.
     
  12. denverpilot

    denverpilot Tied Down PoA Supporter

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    Just as a follow up to this, we realized our strategy for changing this was flawed. We have a couple of VULs that at one time we were overfunding and have some cash value.

    Light bulb went on today. Just let them eat themselves and then quote it all later. No penalty, and they'll run for quite a while like that. Not the absolute best rate on their term portion but not awful either, since they were purchased before various real life changes.

    Anyway, no need therefore to mess too much with it for at least a couple of years.

    And no offense to any insurance folk, but my personal analysis and how we're structuring things, VULs are terrible products unless you have a very specific fiscal need for them. We don't.

    We bought them when we were being stupid. If there's one absolute in life it's that we cause ourselves a "stupid tax" from time to time! LOL

    Do appreciate all the PMs and info shared here. It's all going in my insurance folder in the filing cabinet for a couple of years from now!

    (Yeah. I'm old. I have a filing cabinet. And paper documents. Leave me alone and get off my lawn! Haha!)
     
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  13. TRocket

    TRocket Line Up and Wait

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    I have an IUL, life/retirement in one kind of deal, I won't go into specifics, but the aviation stuff is kind of a pain. At the moment it just doesn't cover me if I buy the farm while flying, have to meet certain requirements and get a waiver for that.
     
  14. NoHeat

    NoHeat En-Route

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    Two aviation-specific brokers I've used for term insurance, which doesn't exclude flying small planes. They seemed equally good:

    Pilot Insurance Center 800.380.8376
    Travers Aviation 800.888.9859

    I ended up with a 10-year term policy from Minnesota Life that was perfect for me. I had never even heard of that insurer before we started.
     
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  15. flyingron

    flyingron Touchdown! Greaser! PoA Supporter

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    I had a policy with Lincoln General through PIC life for a long time. At the same time I was getting that I pulled a SelectQuote bid and found the rates for the pilot-included policy wasn't really out of line with the rest of the policies.
     
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  16. Art VanDelay

    Art VanDelay Pattern Altitude

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    Life insurance - don't believe in it - except for young couples. Better to take that money and build up an estate.
     
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  17. flyingron

    flyingron Touchdown! Greaser! PoA Supporter

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    I guess it matters how you define young. Term life is handy when you need to provide for survivors for your lost income. When I was youngER, and had a wife, two kids, and a house she wouldn't support on her own (then) teaching income, I got enough insurance to pay off the house and cover the college of the kids. I got a policy on her at the same time to guarantee the kids college (they're step kids and their father is a bit of a flake and I wanted to just be able to unconditionally write a check to the college of their choice rather than negotiating with him).

    Once the kids were adults and our respective financial situation improved, we just dropped the term life. That's the beauty of it, it's got on an ongoing obligation.

    Most life insurance other than for unexpected death is a pretty bad investment. Whole life is a joke.
    There are a few insurance-based annuities (wouldn't call them policies) that may be a good substitute for bonds when the bond rates are low (as they are), but you'd be well advised to speak to a financial advisor who is not in the business of selling insurance products.
     
  18. Rykymus

    Rykymus Line Up and Wait

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    I used Liz Yaegaer at PIC Life. 20yr term, 1m coverage, at $400/mo. Expensive, but I'm still a bit overweight and on BP meds. (Still losing, thought.) I got the coverage so that our mortgage and any debts would be paid in full and my wife would be left with a few hundred thousand. Her part-time job doesn't pay much, but she likes it, and with a paid mortgage and some cash in reserves, she'd be comfortable until it's her turn to take a dirt nap. I got the 20yr term because that's when I expect to be done writing all my books, at which point the life insurance becomes unnecessary.
     
  19. denverpilot

    denverpilot Tied Down PoA Supporter

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    Many don't, and that's fine. It's all about what you want planned to happen vs happening without a plan. Like I said, ours has a specific purpose very unique to us:

    Moving the other person back to the city if they so-desire, in a horrendous housing market, price-wise... without touching the "estate", plus a small amount of income replacement (a couple of years worth) to allow the problems to settle down and a new fiscal plan to be written up, with no dire need to go to work right away.

    If she decides she wants to go to work every day, fine... her retirement nest egg is literally completed for a reasonable lifestyle once that money is added to the existing investments.

    She also doesn't have to hurry the co-owner through selling the airplane off or anything like that, either. That's also a plus. Allows her to be a lot more gracious about it.

    Basically for 1/10th the cost of saving up that much cash, she gets it if I croak. It's actually cheaper than 1/10th but just rounding off here toward the bad direction by quite a chunk.

    She likes the coverages to be equal, but I'd probably still go to work, so I'd probably buy an airplane or something utterly stupid with it. LOL. It still isn't Cirrus SR22 money. (As bad as our housing market is, it still isn't touching that!)

    TCO on these policies isn't that high. Even assuming something high like 8% interest on the total cost lost before they're cancelled, it wouldn't even buy a new car over 20 years. And that's my awful "pilot" policy. Hers the TCO wouldn't buy a ten year old used Ford truck. She all fancy with her "Platinum" status and all. Hahahaha. But if something does happen, the payoff would buy a new small house.

    There's absolutely no way any savings for an "estate" can keep up with these things. Well unless you know of a way I can save six-figures for many years.

    Opportunity cost including investment interest equates to very low five figures over the life of the policy. Very low.

    By the numbers, it looks like the actuaries think there's about a 1/10 shot they'll have to pay her. There's about a 1/30 shot they'll have to pay me. They don't play to lose money, I know that for sure, but they do cover their losses.