7 Killer Insurance Mistakes You're Probably Making

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Another one is to avoid VUL policies. If you go to Ameriprise, they will make sure to sell you one. Dont fall into their trap.

Amol of WA 8:17PM April 17, 2009

One thing people often overlook with life insurance is that dependent children under 18 will get social security until they graudate high school. You never see that mentioned in an article about life insurance but it actually can be a big factor. Not sure why it is never mentioned but I know from experience that it pays a pretty generous benefit that goes a long ways towards covering the cost to raise children on one income.

Ronald of KY 2:34PM April 17, 2009

Yes, this article is a little puffy and obviously not meant to be a survey about all who have an opinion on life insurance. However, I know very few people who DO have enough - risk is by far on the down-side. So for that large audience, it's probably good to spend a few seconds reconsidering coverage.
My take-away was that there are several methods for calculating needs, all "rules of thumb" - not meant to be accurate to the dime - to get you to the right ballpark. Run the numbers and make an intelligent decision. There will clearly be puts and takes -- i.e., I never factored in my current special needs insurance coverage vs. continuing therapy for my oldest son. A cost above estimate. However, I likely didn't take out all my personal expenses like auto insurance (however, when my 3 boys hit 16, I can guarantee insurance for them will be more than me, or that I would likely estimate). So, if you can get to the dime on projecting the next 20 years, perhaps you're in good enough shape you shouldn't bother with these articles.

LM of GA 2:32PM April 17, 2009

Kimberly Palmer, do you call yourself a journalist? If so, why write an article about life insurance where your "experts" work directly for the insurance industry. How about some non-biased public advocacy groups? What does the government have to say about insurance?
This is anything but journalism, it is marketing and PR for the insurance industry.
Secondly, in your ninth paragraph: "...so it would cost more," he says. WHO says? Yes, you mention Michael Bonevento in the previous paragraph, but that is just sloppy.
You are a sham.

M. B. of ME 2:16PM April 17, 2009

Just heard on the radio the other day a woman that was charged in conjunction regarding her hustband who was killed with an ax. She and her new lover were motivated by the insurance the police reported. Being worth more dead than alive is NEVER a good thing. What up with that. About as stupid as though "grow-up Gerber" insurance plans on tv. The idea is to have insurance on your kid so that if they die you get $$, with the consolation being an horrific savings vehicle you can cash in later. Whaaaa? Enough to pay off the mortgage and some burial fees and a leg up are all that is healthy in my opinion.

Reality Check Charley 10:40AM April 17, 2009

So, if you die, you should fund everything you "wish" you could have funded had you lived. Nice way to pump up the profits for the industry.
First off, there is social security, there may be workman's comp (depending on how you die), and hopefully a spouse is continuing to work or can reenter the workforce. Also they never, in these estimates, take into account those things you no longer need to pay for (e.g. will you need two cars (gas, maintenance, insurance, car payment) if there's only one parent, how about food costs, etc.). These potential income streams and adjustments can be figured in. Also, do you have to fund an ivy league education for your kid, or just give them the opportunity to hit the basics with two years community college and 2 years at a state school? Guess which one the insurance companies use for their estimate.
I don't feel my death should punish my family, nor do I feel that I should make myself worth more dead than alive. I'd cover the mortgage, a reasonable percentage of income given when the kids will be leaving the house, some support for college, and a chunk for possible medical bills. The advice to look at your life and adjust it is spot on, just keep in mind to do what's right for you and your goals. You may want your kids going to private school and ivy league or your spouse to not have to work again, so plan that if you want, just don't let it be dictated to you without giving it some thought.

Martin of MD 9:36AM April 17, 2009

What commission is Kimberly going to get for each life insurance policy she sells because of this alarmist article?

Eric of MA 8:30AM April 17, 2009

What commission is Kimberly going to get for each life insurance policy she sells because of this alarmist article?

Eric of MA 8:30AM April 17, 2009

After 9/11/2001, the Government used a Human Life estimator and I believe, each person was valued a over 1 million dollars,even illegal immigrants who worked in the kitchen.
I remember reading , in People magazine,of a financial executive's wife and kids(the survivors).He made $800,000 a year and had $100,000 of life insurance.She was bemoaning the fact that she may not be able to keep their Connecticut Estate style home,Red Cross gave her another $100,000( why I don't donate to Red Cross anymore) and neighbors we're "chipping in" bringing them dinner.
As a life insurance professional of 25 years...I KNOW the poor deceased man( approx 40 yrs old) was asked many ,many ,many times to buy life insurance.He apparently didn't feel it was necesaary.Perhaps even the wife was present during a life sales presentation and may have even chimed in that it was a "waste of money"
I've talked with many people like him in my career.I was appalled that our government paid out such sums, and supposedly they subtracted out what you owned ,so they actually penalized and paid less to families who's breadwiiner was decent enough to try and protect their family,on their own dime.

BR CLU,ChFC,CRPC of FL 2:38PM April 07, 2009

The government thinks life insurance is so important that they do offer it. When you die, social security calculates your life value at $255.00. That pays for the notice in the newspaper, maybe.

Michael Hill of CA 9:26AM April 07, 2009