life insurance advice

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Full Moon's picture
Full Moon
Status: Diamond Member (Offline)
Joined: Oct 14 2008
Posts: 1258
life insurance advice

 Life insurance  question here .  How do we find out if our life insurance  will be a solid company  when TSHTF ?   

 FM

  and what are you doing ??

Travlin's picture
Travlin
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Joined: Apr 15 2010
Posts: 1322
Full Moon You used to go to

Full Moon

You used to go to the library and get the reference book by A M Best company.  Now you can access them online along with many other insurance rating agencies.  A M Best says they offer info for free if you register.

http://www.google.com/#sclient=psy&hl=en&q=life+insurance+ratings&aq=1c&...

I don't think these ratings mean much anymore though. Financial statements and ratings are no longer trustworthy. Remember the mortgage bonds that were actually junk were rated AAA by the best rating agencies.  Maybe they can give you a relative strength of one company compared to another, but if the SHTF any of them can fail.  Life insurance companies are based on investing money safely long term.  As Chris has often said there are no investors now, we are all just speculators.

If you have a term life policy it might be worthwhile to keep it.  If you have a whole life policy or annuity I'd take a hard look at your options to get out or stop making payments. A financial adviser could help you understand the terms, and that is important, but expect them to argue strongly that it is "prudent" to keep it.  Only you can decide so make sure you know your options and the costs.

Good luck and let us know how it goes.

Travlin 

 

Full Moon's picture
Full Moon
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Posts: 1258
 Thank  You so  much

 Thank  You so  much .   It is term  and we are getting old enough changing to a  better or more safe company may be difficult .  I was just thinking the $1000 bucks a year might be better spent somewhere else if it is going to go down a rat hole .  I suppose since we have  kids still at home we had better take the gamble and keep paying in .

  FM

Travlin's picture
Travlin
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Posts: 1322
Full Moon Term life is an

Full Moon

Term life is an easier decision.  It is a pay as you go plan and the cost is low compared to the other types.  You do not have any "investment" that you expect to become more valuable later.  As long as you pay them money they promise to pay a death benefit.  Your payments are already gone forever. As you said, changing companies could be hard, and also expensive.  Even a professional would be hard pressed to know if an altenate company was really more sound, unless there are already warnings on your current company.

Your contract may state that the policy ends at a certain age, meaning they would no longer pay a death benefit, so this is something you should know.  As you have kids at home it is probably best to continue this poicy.  The consequences of not having it when needed are high enough to gamble on the rather small possibility that they won't be able to pay.  I probably wouldn't feel the same about whole life and annuities.  In any case get multiple opinions before you make a decision.

Hope this helps.

Travlin 

Full Moon's picture
Full Moon
Status: Diamond Member (Offline)
Joined: Oct 14 2008
Posts: 1258
 Thank you travlin

 Thank you travlin ,      We are just looking at how "insurance poor we are "    Paying into things out of fear ??       Health insurance for example  We  have military  Tri care  , we have have Railroad Uninted Healthcare and a suppliment ..  But  .. BIG But  we do not go to the Dr. except for emergancies that we can not handle at home ..  Overkill in my book .      Already  cut back to liability on the cars and minimum on the House . We have Job insurance , accidental death and dismemberment  ...   on and on  it is driving me nut  thinking of the money going down the rat hole .

  I talked to a gal last night that pays $1000 a month on insurance !!!   

   I will  come to some answers soon .

 FM

Full Moon's picture
Full Moon
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Posts: 1258
Travlin , One more question

Travlin , One more question .

  We have an very small independant bank .  One you can not even find out who the share holders are . Anyway  The Railroad is now  nudging us to have the check automatic deposited  because of Postal cut backs . Is this a safe thing to do ?    I had always liked it in my little hand because I could  go to either town and get the thing cashed .  So my question is  ..  Is the direct deposit  thing a non-issue ?

  FM

Travlin's picture
Travlin
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Posts: 1322
Full Moon Direct Deposit is

Full Moon

Direct Deposit is actually safer than a paper check or mail.  Any glitch can be quickly traced by the electronic "audit trail" and promptly corrected.  Problems are very rare.  You can count on it being there on time without having to brave a blizzard.  The only drawback for you is that you only have one place where it is "cashed".  You could keep some spare money in a bank in the other town for quick cash withdrawals while you are there.  You bank probably offers ATM service too.

The safety of our bank deposits is one of the few things I still have confidence in.  When a bank fails the FDIC closes them late on Friday and by Monday morning they are reopened under federal control and all your insured money is available as before.  In a worst case all deposits would be transferred to a nearby bank but your money would still be available.

In a major emergency the feds could restrict how much cash could be withdrawn from all banks, but I can't see them stopping checks and electronic transfers because the whole economy would immediately crash to a halt that would be extremely hard to restart.  Having some cash in a safe place out of a bank is a way to deal with this, but I wouldn't go around talking about it.

Although the FDIC insurance fund was exhausted last year, they have a line of credit with the US Gov and are backed by the "full faith and credit" of the same.  Now that doesn't mean what it used to, but Congress knows that if they don't honor deposit insurance they can expect a mob of citizens to descend on the Capitol with tar and pitchforks.  Each account holder is insured for up to $250,000* and coverage "stacks", so you could have on account in your name, one in your husband's name, and a joint account, and have $750,000 insured at the same bank.  Each IRA at a bank is also separately insured for $250,000.  If you have more money than that send me a PM and I'll advise you further. Smile I could take some off your hands to help you get back under the insured limits. Cool

You are a big hearted lady and you have been generous with advice to many others on these forums.  I’m happy to have a chance to be helpful to you.  If you have any other questions just fire away.

Travlin 

 

* The $250,000 limit is now permanent.

Wendy S. Delmater's picture
Wendy S. Delmater
Status: Diamond Member (Offline)
Joined: Dec 13 2009
Posts: 1982
life insurance in an uncertain age

Hi Full Moon,

We have life insurance through my husband's company, and the carpentry skills to make a pine box for the nearby family plot on the homested if that is not available.

Fancy funerals are kinda overrated if you ask me. My mother had $3K in death beneffits and hers cost $10K, back in NY (2006). What really annoyed me was that  the legal death notice in the paper was INCREDIBLY expensive, and struck me as kicking a family while they were down.

The biggest gift you can leave your family is a carefully thought-out will and all the sustainable things you can get started before you go. Or at least, that is one woman's opinion.

Full Moon's picture
Full Moon
Status: Diamond Member (Offline)
Joined: Oct 14 2008
Posts: 1258
 Thank You Safewrite

 Thank You Safewrite ,    I  have  wrestled with the  dilema of  doing cheap funeral  and had to decide on cremation for an uncle that had little left .     This is a hard choice for Christians to make !  Finally I thought of all the Christians that ended up burned  at the stake  and as Lion poop  it made the choice a litle easier . Still hope and pray it is not situation ethics !!     Walmart .com  has the cheapest urns and caskets .     You have to get and pay for a permit to bury on your own land !!       My mom wants cremation  I told her I was strapping her ashes to bottle rockets and sending her out with a bang !

   @  Travlin  , living paycheck to paycheck  not leaving anything in the bank , that is why every dime counts . Tightwad  is becoming an art form !!   Sorry buddy  you know I would share !

 

 FM

DeniseM's picture
DeniseM
Status: Member (Offline)
Joined: May 3 2011
Posts: 1
Full Moon, I’d suggest

Full Moon, I’d suggest doing some groundwork before giving your business to any life insurance provider. The first thing you need to check is its financial solidity. Since life insurance is a long term contract between the insurer and the insured, the former should be financially solid to settle claims even after years.

 

Usually, ratings by independent rating agencies like AM Best or Standard & Poor are a good indicator of a life insurance carrier’s financial solidity.

Denise

SteveW's picture
SteveW
Status: Gold Member (Offline)
Joined: Jan 21 2010
Posts: 490
Don't count on it

When TSHTF and there is raging hyperinflation the money will be worthless so don't count on insurance. Sorry to be such a downer.

fandango's picture
fandango
Status: Bronze Member (Offline)
Joined: Jun 13 2010
Posts: 53
life insurance payout

Full Moon,

We received a small life insurance payout last year upon the passing of my father-on-law.  The paperwork indicated that instead of cutting a check they would set up a checking account in our name.  I called and told them to cut the check.  I was informed that since it was under 5K they would cancel the checking account; however, I got the impression that we would have had to pitch a fit to avoid the checking account option if the payout was over 5K. 

I suggest you contact the estate processing department and find out the payout procedure.  Now, having said that, the procedure could change year to year.  

I realize your original question was about life insurance but you brought up funerals.  My husband and I are currently dealing with that for an elderly relative who wished for no elaborate send off but elected cremation. Same situation as your uncle...limited funds.

For other members, this is an excellent site:  http://www.funerals.org/your-legal-rights/funeral-decision-rights 

We live in Texas and the cremation is under $1000  http://fcant.org/index.php?option=com_content&view=article&id=255:what-are-the-cremation-rates-in-the-us&catid=41:Check%20here%20for%20answers%20first&Itemid=57

I agree with Safewrite on a having a will.  However, in our case, with my father-in-law,  I just made sure the beneficaries were current so we didn't need to process the will. The house stayed with the current wife.  To avoid future problems, we made sure the property taxes and the house/car insurance only listed the wife's name.  Also, durable powers for health care, and HIPPA forms came in handy.   

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