Posted on Aug 19, 2016
I am looking to replace my SGLI since I retired. I know I'm covered for 180 days, but I need new coverage. Can I get some references?
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SGLI
Retirement
Advice
Posted >1 y ago
Responses: 11
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I used to be licensed to sell life insurance. I would advise you to get the longest term life insurance you can get for the target amount you need.
A few tips:
1) You are never locked in permanently. A new provider can replace your current policy and you are protected by law that the new policy must be better than the current. So shop once a year to see if someone will provide a better benefit. One caveat: ensure that there will be no lapse in coverage before replacing a policy. Some times there can be a lapse of up to half a year! Also don't get involved with anything that has an early termination policy of any kind that costs you. They shouldn't care as you are just paying for risk management. The money they already received from you is theirs to keep at the expense of a few pieces of paper and ink from a pen.
2) Have a plan for your survivor. If you make 100k a year and the policy is for 1 million, have a plan for investment of the 1 million so that the annual payout should be about 100k. An example is a moderate to low risk mutual fund. This will ensure that the money will most likely never run out. Alternatively, the insurance money could pay off all family debt and military retirement would cover month to month expenses.
3) Whole life is an outdated type of 'insurance'. You are better off with a savings account. Term is especially good for those in good health and who plan on staying that way (no smoking, exercises daily, not obese) as the rates can be very low for a long time. If you have high risk factors, get with a financial advisor before getting insurance to make sure you have a solid long term plan. In fact, a financial advisor may be prudent in any case.
4) Check with many, many insurance providers. Don't play one against the other but out of 8 providers there should be about 4 that are overpriced and 4 that are really close to target. Don't disclose the provider/company names but give them the quotes and ask if they can do any better. Successful agents bargain but they also have limits.
A few tips:
1) You are never locked in permanently. A new provider can replace your current policy and you are protected by law that the new policy must be better than the current. So shop once a year to see if someone will provide a better benefit. One caveat: ensure that there will be no lapse in coverage before replacing a policy. Some times there can be a lapse of up to half a year! Also don't get involved with anything that has an early termination policy of any kind that costs you. They shouldn't care as you are just paying for risk management. The money they already received from you is theirs to keep at the expense of a few pieces of paper and ink from a pen.
2) Have a plan for your survivor. If you make 100k a year and the policy is for 1 million, have a plan for investment of the 1 million so that the annual payout should be about 100k. An example is a moderate to low risk mutual fund. This will ensure that the money will most likely never run out. Alternatively, the insurance money could pay off all family debt and military retirement would cover month to month expenses.
3) Whole life is an outdated type of 'insurance'. You are better off with a savings account. Term is especially good for those in good health and who plan on staying that way (no smoking, exercises daily, not obese) as the rates can be very low for a long time. If you have high risk factors, get with a financial advisor before getting insurance to make sure you have a solid long term plan. In fact, a financial advisor may be prudent in any case.
4) Check with many, many insurance providers. Don't play one against the other but out of 8 providers there should be about 4 that are overpriced and 4 that are really close to target. Don't disclose the provider/company names but give them the quotes and ask if they can do any better. Successful agents bargain but they also have limits.
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LTC Stephen C.
CW5 (Join to see), I must take exception to a few of your observations, if you don't mind.
1. Although an insured is "never locked in permanently" to a life insurance policy and the insured is protected by replacement laws, there are factors that could preclude an individual from replacing their policy. For example, one's insurability may change. A person has a $1,000,000, 20 year term policy and then contracts some debilitating disease or is in an accident. They may no longer be insurable. Or, they may be insurable, but only on a more expensive, rated basis. In that case, conversion of the term policy may be the only option available. At the very least, a person is still going to be underwritten based on age, sex and current health conditions, so it will cost more, perhaps even rated where it was not previously.
2. Having a plan for your survivor is a good idea, but you're going to be gone. The survivor will do what they wish. Your suggestion to contact a reputable financial is indeed the best advice. The individual and their spouse could then visit with the advisor together and hopefully work something out.
Good luck with getting a $100,000 annual income from death proceeds of $1,000,000. That would assume a guaranteed interest rate of 10% so that the principal is not disturbed. I don't know where anyone could find such a product or have a prudent investment strategy to produce such a return on an ongoing basis. The principal would have to be drawn upon and depleted in your example to receive a $100,000 per year. In your example, the money would run out.
Suggesting a single mutual fund flies in the face of current investment strategy. Current wisdom suggests that investments be made across a wide variety of investment classes, based upon the individual's risk tolerance. Mutual funds may not even be the best selection. Again, a visit with a good financial advisor is the route to follow.
3. Whole life insurance is a form of permanent insurance. Although I can't say that I would suggest whole life insurance, there are many places where other forms of permanent insurance fill the need of the insured both in terms of death protection and establishment of cash values.
4. In most instances, financial advisors have access to virtually every insurance company. There's really no need to pit one insurance company against another. The financial advisor can very likely shop the market and find the best policy for the individual in terms of cost and coverage without the individual getting involved in the process.
All in all, CSM David Heidke, the best advice is to find a financial advisor you can trust, and let him/her guide you. Granted, there are some that are driven solely by the fact that they're compensated on a commission basis in many instances, but those that have securities registrations through FINRA (Series 6, 7, 63, 65, 66, etc.) are compelled to do what's in the best interest of the client. CDR Terry Boles
1. Although an insured is "never locked in permanently" to a life insurance policy and the insured is protected by replacement laws, there are factors that could preclude an individual from replacing their policy. For example, one's insurability may change. A person has a $1,000,000, 20 year term policy and then contracts some debilitating disease or is in an accident. They may no longer be insurable. Or, they may be insurable, but only on a more expensive, rated basis. In that case, conversion of the term policy may be the only option available. At the very least, a person is still going to be underwritten based on age, sex and current health conditions, so it will cost more, perhaps even rated where it was not previously.
2. Having a plan for your survivor is a good idea, but you're going to be gone. The survivor will do what they wish. Your suggestion to contact a reputable financial is indeed the best advice. The individual and their spouse could then visit with the advisor together and hopefully work something out.
Good luck with getting a $100,000 annual income from death proceeds of $1,000,000. That would assume a guaranteed interest rate of 10% so that the principal is not disturbed. I don't know where anyone could find such a product or have a prudent investment strategy to produce such a return on an ongoing basis. The principal would have to be drawn upon and depleted in your example to receive a $100,000 per year. In your example, the money would run out.
Suggesting a single mutual fund flies in the face of current investment strategy. Current wisdom suggests that investments be made across a wide variety of investment classes, based upon the individual's risk tolerance. Mutual funds may not even be the best selection. Again, a visit with a good financial advisor is the route to follow.
3. Whole life insurance is a form of permanent insurance. Although I can't say that I would suggest whole life insurance, there are many places where other forms of permanent insurance fill the need of the insured both in terms of death protection and establishment of cash values.
4. In most instances, financial advisors have access to virtually every insurance company. There's really no need to pit one insurance company against another. The financial advisor can very likely shop the market and find the best policy for the individual in terms of cost and coverage without the individual getting involved in the process.
All in all, CSM David Heidke, the best advice is to find a financial advisor you can trust, and let him/her guide you. Granted, there are some that are driven solely by the fact that they're compensated on a commission basis in many instances, but those that have securities registrations through FINRA (Series 6, 7, 63, 65, 66, etc.) are compelled to do what's in the best interest of the client. CDR Terry Boles
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CW5 (Join to see)
Thank you for the comments, Sir. My license was from over 20 years ago so of course things can change.
I can say that my personal, anecdotal experience in investing shows that I (over the last 20 years) have been getting 15-20% return (annual average) from all my mutual funds which are moderate risk. I recommend T Rowe Price and Vanguard. My funds have never fallen below 11% return (monthly average) even during 2008. (Your experience may vary). Of course diversification is a must in any investment plan and my return percentages may just reflect that I got into the funds early and started aggressively.
Risk management in investing is always a planning factor and that is why a planner will take goals and milestones into consideration.
I can say that my personal, anecdotal experience in investing shows that I (over the last 20 years) have been getting 15-20% return (annual average) from all my mutual funds which are moderate risk. I recommend T Rowe Price and Vanguard. My funds have never fallen below 11% return (monthly average) even during 2008. (Your experience may vary). Of course diversification is a must in any investment plan and my return percentages may just reflect that I got into the funds early and started aggressively.
Risk management in investing is always a planning factor and that is why a planner will take goals and milestones into consideration.
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LTC Stephen C.
CW5 (Join to see), your investment performance certainly exceeds what most expect, so my congratulations!
As far as the bus driver cap goes, I retired in '98 and ASUs were still dress blues and that photo was taken in '96. Personally, I think a beret (black, green, maroon or tan) looks silly on the ASU uniform (especially with bloused boots), and I'm glad I didn't have to wear that combination. There are so many colors involved, it looks like a clown suit. Personally, I would never have eliminated the dress green uniform, but that's just me!
As far as the bus driver cap goes, I retired in '98 and ASUs were still dress blues and that photo was taken in '96. Personally, I think a beret (black, green, maroon or tan) looks silly on the ASU uniform (especially with bloused boots), and I'm glad I didn't have to wear that combination. There are so many colors involved, it looks like a clown suit. Personally, I would never have eliminated the dress green uniform, but that's just me!
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We are related. My dads last name is Heidke. Grandpa says all heidkes here in america are related. Can't answer your life insurance question though.
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