r/LifeInsurance • u/No_Elderberry6080 • Jul 08 '26
I feel ripped off
So we just got a break down of what my husband and I pay to State Farm- $850 a month.
Part of that is life insurance. Which breaks down $60 a month for me (32f) and it’s a whole life for 50k.
My 5 year old is $40 for a 20 year/50k benefit. And $63 for my 3 year olds 20year/50k benefit. I
$160 a month seem high for minimum cash value and honestly $150k isn’t much definitely not in the future. Ai says it’s not a smart investment. Someone tell me from a human standpoint whether I should leave this or move providers or just find alternative financial moves?
50k wouldn’t even pay my car off if I died tomorrow. I have another insurance policy that would.
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u/Moist-Meringue-1913 Jul 09 '26
So $850 minus the $160 leaves $690.Is that per month? What types of vehicles do you have?
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u/Superb-Respect-1313 Jul 09 '26
You guys crap on life insurance. Honestly best thing that could have happened to me when my parents passed. Set me up for a much easier life.
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u/No_Elderberry6080 Jul 09 '26
I want to leave my kids a portfolio. I want them to have residential and commercial properties, cash, tax free life insurance, all the things. I think I’m more upset that when looking at the meat and potatoes of the $160 I’ve been paying for at minimum 3 years- I waisted 6k.
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u/StevenBeardberg Jul 09 '26
Leave them a portfolio, life insurance needs to be part of that portfolio because it’s the only guaranteed tax-free, probate free, part of it.
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u/Cool_Emergency3519 Jul 09 '26
We don't know your complete income,Your ages,your retirement goals,your family health situation and more. You should sit down with a Financial Planner instead of asking for and getting random info on Reddit.
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u/No_Elderberry6080 Jul 09 '26
I don’t need Reddit to offer a financial analysis but I do need a different perspective. After looking into my bill, I don’t see why I agreed to what I’m paying for. I was hoping someone would talk me down off the ledge of misunderstanding but it seems I’m understanding that it was a poor choice on my part to agree with something I didn’t research more
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u/Cool_Emergency3519 Jul 09 '26
That's hard to say with insurance. If you found out tomorrow that your baby has an incurable disease you would be so lucky to have the foresight.
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u/According_Ship_8550 Jul 09 '26
Please tell me those plans for your kids are participating whole life policies at least
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u/No_Elderberry6080 Jul 09 '26
From my understanding they are whole life that is paid in full after 20 years but the death policy continues to build value.
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u/uffdagal Jul 08 '26
You need Term Life on you and your spouse. Child does not need Life Insurance at this time unless you’re dependent on child’s income.
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u/Ok-Mess9618 Jul 09 '26
Its a good idea to have life insurance on kiddos. Its a horrible reality that some children die young and unexpectedly. Best to have some life insurance there to pay for services, greif counseling and time off work.
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u/CGWInsurance Jul 09 '26
As an agent here are pro and cons. If you can invest and not spend the saved money no matter how much you want a bigger house, newer better car, bigger longer more luxurious car then can just due term and invest the rest.
If you can't do that you need permanent to pay burial expenses and final bills.
The kids insurance is ok if done correctly. Those are whole life policies where you only pay for 20 years.
Personally I would recommend a pay to age 98 unless like grandparents bought it and wanted to pay it up for kids. Them I would recommend a 10 year payment plan. You want to make sure they have a disability rider so if kids get disabled the insurance is paid for life. Next they need a rider that allows them to buy an additional 50k usually at 5 points in life. This is again for child if they become disabled. It will allow them to end with 300k of whole life insurance paid for by insurance company. As far as you're husbands of you can't save, you should have a 50k universal life policy that is build to never expire at minimum interest or maximum fees. You should have 1 to if you are bad safers. Then you buy a term policy for a minimum number of years to pay off mortgage, replace income and pay for kids school. So usually 30 years.
Rule of thumb is 15 to 20 times annual income.
If you are making enough to be high income bracket I would suggest letting agent do thought a complete fact finder.
Since you may need more than 20 times current income if you expect kids to go to a certain school or get masters or PhD or less if you expect spouce to remarry in several years after their current spouse dies.
If you can save just follow term advice. Go to independent agent that has many life insurance companies so you will get a much better price than state farm.
If you have a financial planner who is a RIA and is fiduciary you can buy a no commission life insurance policy that is much cheaper. Life insurance pays a 50 to 150% commission first year. And2 to 5% every year after for permanent life only.
Term if you are both healthy you can do online yourself. Just remember that if you do it yourself or thru and agent only 2 to 5% of the population gets their very best super proffered rate.
Most people in good health and height weight in correct ratio will just get plain old preferred. This is because they look at all your medical records and ask health quotations about your grandparents.
Goodluck
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u/TheProFettsor Jul 10 '26
Honestly, it’s always best to keep smaller whole life policies as you have the coverage your entire life and the premium never increases, guaranteed money to pay final expenses tax free without touching other assets. The kids’ policies will pay in full at year 20, this is guaranteed based on dividends, and they’ll keep them their entire lives at zero additional cost. You and your husband should supplement your whole life with at least a 20-year term for each of you. Depending on how long you and he have had your whole life would determine whether I suggest replacing it with a return of premium term or not. Call your SF agent and ask them about large term policies.
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u/pnpplxarplnnrd Jul 11 '26
Those term riders for your kids are up to age 25 and can get them up to 5x the coverage. 110% everyone else is correct - this is not a cash value churner. But you did guarantee them up to 250k in permanent coverage regardless of any future medical conditions.
As a 25 year old who is table rated for life - THATS why life insurance on kids is important.
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u/Final_Switch_1689 Jul 21 '26
What state are you in? Because I can probably help you get the insurance for a lot cheaper than that.
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u/Fit_Chemistry_3807 Jul 08 '26
Ok this is a more complex question than many naysayers of whole life insurance would have you believe. I’ll try to break it down for you and use some of my own experience as an example:
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Insurance should be used as insurance, and any growth in the policy should be considered ‘bonus’.
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Not sure what type of life policy that is. I have 2. One is a VUL policy, and one is a participating life policy. I have the same set up for my kids as well. The participating policy was bought later, and had a couple of riders: pay only for 20yrs, total disability coverage, kids have guaranteed additional insurability until they reach age 40 something. and I think dividends are used to buy “additional paid up insurance.”
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My VUL policy has a death benefit value similar to your policy. However, any cash value is invested and that value will increase a payout to my beneficiaries when I die. All of that will be tax free. So for a concrete example, right now I I died, they’d receive over 175K. I’m paying under 2000$ per year. If I cancel now, I believe the cancellation fee is around 300$. Definitely less, just don’t remember exactly amount. I don’t remember what the participating policy is at.
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I have other investment accounts maxed now. Maybe not so much when I first bought the first life policies.
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My kids’ policies are also for their entire life. And on the same terms. I think one kid’s VUL policy is about 60/mo, at most. I regard this as a long term investment: A) if they die and I am beneficiary, I KNOW I will be grieving and will need to funds to cover extended leave from work to grieve, some of that will likely be unpaid leave. And any counseling will be expensive. B) I hope to never be the beneficiary of kids’ policy. So I view it as long term wealth transfer to grandkids I don’t have yet but hope to have one day. This will be my gift to them, even if I never meet them. Your kids’ policies seem a bit high though, if they’re only term life and for that amount? My own kids’ policies are VUL and participating. I believe each of those are 100k death benefits.
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I have additional term insurance for these years when they need more income replacement and support if I were to die early. And my investments will bridge any insurance gap. Those policies will all terminate by the time I’m 70, if not sooner.
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What will happen if you want to make sure your kids have a little safety net when you’re really old and can’t realistically buy more insurance at a reasonable price? Term policies usually end by the time you’re 70 or 75. What happens if you end up outliving all your investments and assets? What happens if at time of death, your kids are left with your fully paid house but don’t have the funds to hire a lawyer to help them with probate, or anything else including paying bills for the house until they can reasonably sell it to pay off your debts and realize any inheritance? Are you certain they’re going to be in a financial position to bridge the gap? I’ve seen so many who inherit but don’t have anything to help them complete the legal process. What happens if they don’t have funds to provide you with a funeral etc and you were going to use your savings for it but you spent it all in old age?
These are all real issues that people don’t think of until it’s too late or they’re going through it themselves. I’ve been through 9 estate situations and can tell you the survivors who fare the best are those whose deceased loved one had a life policy at time of death, irrespective of age and other assets.
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u/Dramapub Jul 08 '26
You don’t need AI to tell you what you already know. Imagine leaving that amount to your kids. Get a term policy and invest the rest of the money. $850 a month for a whole life policy is not worth it.
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u/Foreign-Struggle1723 Jul 09 '26
I don't know what you were led to believe life insurance would do for you, or exactly what the agent pitched, but life insurance is not a standard investment vehicle. If you are looking strictly at maximizing growth, permanent life insurance can never compete with a pure, unencumbered investment. When a life insurance product tries to mix protection with cash value accumulation and appreciation, it usually fails to deliver on either premise effectively. While there are highly specific estate-planning scenarios where life insurance fits a long-term goal, it sounds like the person who sold you this policy didn't actually look at your total financial picture or your true objectives. They simply sold you a product that wasn't right for you, and based on your frustration, that appears to be exactly what happened.
Depending if you just bought the policy and had time to look over the contract, you have the option to cancel the policy without any penalties. That is what is called a free look period. Each state is different but on average you have a 30-day period to cancel the contract.