Back in February, I mentioned that I was shopping around for life insurance. I didn’t have any at all, and my husband has a $25,000 whole life policy. I wanted to get at least $100,000 term life insurance for the both of us and cancel my husband’s policy and cash it out.
How did I come up with $100,000?
The main thing I want taken care of is all of our debt. I want the surviving spouse to be able to live debt-free. I looked at our total debt and that comes to $85,776 (note: that amount includes the student loans for my husband and I although some of it will be forgiven because we each have our own loan).
Next I searched for the average cost of a funeral. I couldn’t seem to find any current information, but I did find the average cost for 2004: $6,500. I don’t believe that our costs would be that high, because my husband and I favor cremation and we don’t need a viewing or a fancy funeral.
Given that information, and the goodies that I learned from this MSN article, How to Plan an $800 Funeral, I am allocating a bit on the high side and using $2,500 for burial, etc.
The other cost will be any medical bills for the deceased spouse. Our health insurance policy has a maximum out-of-pocket yearly cost of $2,500. So, I want to make sure that is covered.
So far we have
Health Insurance: $2,500
That brings us to almost $91,000. That will leave around $9,000 for other things. It really does go fast! I know it isn’t enough and I do want to get more in the near future. But I decided on that amount for the next year or so.
Now that I knew how much I wanted to purchase, it was time to find an insurance company. It was easy to find some companies to work with after cruising the personal finance blog-o-sphere and I also received a very nice email from a reader with some suggestions.
Here are the sites I checked out and went through the process to get a quote:
The first company I received a call from (be prepared for the telephone calls!) was the one behind Insure.com. They were nice and pleasant and they took more information to schedule a time for someone to come out and do the health portion of obtaining life insurance. The next to call was Matrix Direct from Intelliquote.com. The woman there was very nice and very helpful so I decided to go ahead with the application for that one as well.
According to Matrix Direct, they can take the results of the health information for the other company for their underwriting. The fewer needle picks, the better.
All was well and it was going to be about three weeks until a portamedic could come to our house to draw blood, etc. During that time, I received quite a few calls from Matrix Direct. I heard from the one woman, who again was very nice. She even told me that if I could lose some weight before my exam, my rate would go down drastically.
Right there, I started rethinking buying term life insurance with a health exam. Maybe we should wait a little bit and work on our health to get lower rates.
Then, the calls started getting confusing. Matrix Direct would call (it was a different woman) and tell me what I needed to do with my application. Because Matrix Direct was the second company I applied with, I would have to mail my application in separately. But wait, now the woman is saying I had to give it to the portamedic.
The one thing about me is that if I start feeling a bad vibe from something, I tend to stop what I’m doing. In this case, I stopped EVERYTHING. I called the two companies and cancelled the applications. I was getting too confused and in the back of my mind I was thinking about how high the rates were for me.
Not too long after that, I miscarried and I found out how poor my health really was. I weighed more than I thought and my blood pressure is pretty high. I don’t even know if they would have insured me, and I’m not sure if a rejection by one company will hurt me in the long run. After all, there is that question about if you have been denied coverage by another life insurance company.
What was next? Trying out the no exam companies for some coverage.
I tried quite a few companies and each one said, “Sorry…we do not have a plan for you.” Since I have in my medical history that I was diagnosed with asthma and that I smoke, no one wanted to touch me. Until I came across a very familiar company that sells baby food and life insurance.
I’ve known about Gerber offering insurance on children, but after checking out their site I found out that they offer term life insurance for adults. I entered in the information, and instead of the automatic, “Sorry…” I was told that I would receive some information in the mail.
Sure enough, I received a questionaire about asthma. I filled it out and returned it and waited. They accepted my application and provided a quote. $35/month or you could receive discounts for paying every three months, six months or a year. If I paid yearly, it would only be $29/month. The same price would apply if I chose to have automatic monthly payments from my checking account or credit card.
My quote from the other companies were both over $30/month for the same amount of coverage. But how well does Gerber Life Insurance stack up according to Ambest.com (the ones who rate life insurance companies). It turns out that they rate them excellent (A).
Well, that seals it. I sent out my check and now I am covered by Gerber Life Insurance Company. Sounds sort of weird, but for a filler life insurance company it will do just fine. Next step is to get my husband covered but we will be waiting a little bit for that so we can stagger our payments a little (I’m paying in three month intervals at the moment and that comes out to a little over $32/month).
My method is a little unconventional, but given my poor health at the moment and my desire to change that around drastically within the next year, I didn’t want to take the chance of getting denied for life insurance that was exam dependant. I ended up finding the same coverage for almost the same price. Once my health improves, we will go ahead and get more coverage (the limit for Gerber is $100,000) through a different company.
I feel very good about my decision although I did not enjoy shopping for life insurance and dealing my own mortality. But you really do have to think about it and at least do something to help those that you would leave behind if the unthinkable does happen. I kept thinking that to myself the whole time to help motivate me to get through this.
We are one more step closer to getting our financial house in order. Yay!