40f and 39m looking for term life. We’re in CA. We have a 3 year old, and may try for another next year. We’d like to retire by 60 at the latest. We don’t smoke or do drugs of any kind. My husband doesn’t drink at all, I have an occasional glass of wine. We are very overweight (morbidly obese, by definition); I have high cholesterol and my husband has diabetes (type 2). We are working on our health, but don’t want to wait to obtain life insurance, since we’ve put this off long enough. We bought a condo a few years ago, 30 yr mortgage, still owe about $460k. We owe 17k in student loans and and 9k credit cards. I only have 20k in basic life through my work, my husband has 115k basic life through his work plus 685k accidental death. We both contribute to retirement (I’ll have a pension and my husband has his 401k), but we want to make sure our daughter is covered in the event of an early demise.
I started the process to get a quote through AAA, since we have homeowner and auto policies with them, but are they good with life insurance? What other companies should we check out? Should we aim for 20 yr term or longer due to our mortgage? Anything else we should be thinking about?
I think AAA might only offer their own insurance, so they may have limited options. Your agent should still be able to check if you qualify and estimate your premiums with a few questions.
Term4sale is great for comparing rates if you’re looking for the cheapest option based on the best qualifying criteria (perfect health, balanced height and weight, etc.). I used it before I created my own comparison site.
You might want to talk to an independent broker who can review all your information and compare it with a few carriers. You don’t pay for our services since we’re compensated by the insurance companies for taking applications and doing “field underwriting.”
Regarding how much life insurance to get, we usually don’t count anything work-related unless you’re paying for it and can take it with you. There are two methods I use with my clients to decide on coverage:
Human Life Value (HLV), which usually leads to a higher coverage amount.
Debt, Income, Mortgage, and Education (DIME), which is more of a minimum recommendation.
A 20-year term policy could be a good choice, but you might also consider something that can convert or upgrade to whole life, which could help with a pension maximization strategy (that’s a separate discussion).
It sounds like you’re on the right track to financial security. A few adjustments, like getting life insurance, can help.
Think about your child’s age and how many years are left on your mortgage when applying for life insurance, so your family isn’t left with a burden. He’s right to use the DIME method. Just keep in mind that you might get a higher rate due to the health issues mentioned.
Given your health condition, apply to multiple companies at once. Some companies with living benefits, like Corebridge or National Life, are good but may be harder to get and more expensive. You could also try Guardian term, which lets you convert to whole life later.
See if you can get more coverage through work without underwriting—it could be cheaper given your health situation. Since you’re in California, I also recommend getting long-term care insurance. It’s affordable for your age and could exempt you from state tax if the law passes.
Don’t compare prices right away, as they’re just based on estimates. The final price depends on underwriting, which varies by company. You should contact a broker and go through underwriting first. Then, once you know your rating, comparing makes more sense.