Personal Finance

Aaron · Guest

I work for a large company and they offer group universal life
insurance. I have heard that term life is the better deal, but I am
not sure since I can get the group rate through my company.

I have roughly $450,000 of univesal group life at the moment for $300 a
year. Is this a good deal? or could I beat this by going outside my
company benefits and get term life insurance?

Thanks,
Aaron

Cal Lester · Guest

Aaron, you ask a good question, but unfortunately do NOT provide sufficient
information to be able to advise you as to what YOU should buy.

a) Universal Life is a product that can provide a life insurance policy for
AS LONG AS YOU LIVE, provided premiums are paid.

b) Term Life Insurance is a product that will provide life insurance for a
specific period of time, 10 - 15 - 20 years, after which the policy will NOT
be in effect. If you LIVE longer than the TERM of the policy, then all of
the premiums that you have paid will be GONE, and so will the policy.

c) You say that you already have 450k of GROUP U/L, but you do not
mention whether or not you OWN that coverage. Generally speaking, a
GROUP contract is issued to the "EMPLOYER", and the employee will
receive a "certificate of coverage". In many instances, IF you should leave
the company (or it leaves you), you would be unable to take that coverage
with you. You would then have NO LIFE INSURANCE.

I would suggest that you confer with the person in the company who is
responsible for the handling of that contract, to learn what you have, what you own,
and it's portability....
Cal Lester CLU

Aaron · Guest

Thanks for your reply.

The actual amount I will receive is 516,000 for $300 a year.

It is portable, but I would guess the company owns it.

The main thing I want from the life insurance is that my family will be
taken care of if something were to happen to me. I don't really care
about it as an investment. I would rather find the least expensive
cost life insurance and invest my money in something else. I have
heard that term life insurance is the least expensive, but I am not
sure since I have this group universal available to me through my
employer.

Thanks,
Aaron

Cal Lester · Guest

once again, based soley on what you have written, it would appear to me,
since I do NOT know your current age, that a cost of $.58 per thousand
(516,000/300=$.58) is EXTREMELY low. I would doubt that you could
purchase Term Life (on the outside) for that prmium.

You state that it IS portable, then you counter with"the company owns it".

That is contradictory. IF the company owns it, it is NOT portable, the
company must pay the premiums, and that would normally cease if
and when you leave (or they leave you).
IF it were truly portable, then you would have a "CONTRACT" (not a certificate)
in your name, listing YOU or YOUR designate as OWNER.........................

Cal Lester CLU

herlihyboy · Guest

Another consideration is that it was recommended to me to
carry/purchase life insurance that is not attached or connected to your
employer. Because, if you have a heart attack while working there,
let's say, and then the company goes bust or you choose to seek
different employment, it will be difficult for you to find comparably
priced life insurance because of your health issues.

If, on the other hand, you purchase your primary life insurance outside
of work, it is not dependent on your place of employment. That said, I
think it would be very difficult, from my research, to find $500,000
worth of UL for $300/year. Do some research and find some life
insurance calculators to find out for sure.

Term can be very cheap depending on your age, health factors, smoking
status, etc. I purchased a 20-year, level term policy one year ago
when I was 30. I am healthy and do not smoke. I got a $400,000 policy
for about $250/year.

Ryan

Aaron · Guest

I am 31.

I guess I do own the policy since I do pay the premiums by payroll
deductions. Thanks for the information. I am trying to learn personal
finance. A few years ago I signed up for a bunch of benefits through
my employer and really did not even know what they were. Now I am
trying to figure out what I have and if it is a good deal. From what I
know now I think I will keep this policy. It is through Prudential,
but I have only talked with my own companies benefits office.

Thanks Again,
Aaron

Cal Lester · Guest

Unfortunately Aaron, that is NOT the barometer of Ownership. Group
Insurance is NOT always paid for by the employer. Mostly by the employee.

I strongly suggest that you EXAMINE the paper (contract / Certificate).
That and only that will define OWNERSHIP.........................

Cal

Aaron · Guest

Thanks for your help. I will dig up the papers and amke sure I take a
look at them.

carl · Joined: 30 Aug 2005 Posts: 4 Location: Dallas

What is a better investment for me, VUL or mutual funds. I am 22 years old, single, and still in school. I have a VUL my dad bought me but I don't think I need it and should cash out and invest somewhere else, where should I invest

buzlighty1 · Joined: 12 Feb 2006 Posts: 1 Location: Canada

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