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anyone wearing nosepin while going office ?
Conversation Starter
Enthusiast
That was a fun little tremor last night...
7pm flight- just me myself and I @ TSA
Additional Posts in FIRE Financial Independence Retire Early
Mentor
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Regular term. Invest that 4-5x difference and you'll be better off anyway.
Anything beyond the cheapest vanilla term policies you can find is somebody looking for a fat commission.
Regular term - and shop around for providers. I have Amica and really like them.
Coach
Look at how much your dependents would need to survive, and project your wealth out until retirement.
Once you're in retirement, ideally you no longer need life insurance because your dependents would inherit the sum of money that was able to retire you.
So what you'd want to look for is overlapping term life policies along the lines of:
30 year policy @ 3x income
20 year policy @ 7x income
10 year policy @ 10x income
That way if you die while your young and your dependents need more money because you have less saved you are covered by 20x your income.
Then when you have more saved, your policy ladder begins to drop off and you are covered for less and less as it's no longer needed (20x -> 10x -> 3x) and you aren't overpaying to have coverage that isn't needed.
And it can be reducing ladder as explained above by @SC1
Makes sense, thanks all!
Subject Expert
I have two suggestions and a prediction.
Suggestions:
1) Figure out if this is a good deal, relative to the hypothetical counterfactual, which is treasury zeroes. Basically if you do not get the death benefit, you will get a certain nominal sum on a certain date. A treasury zero will do the same. You can calculate how much it would cost to buy those zeroes over a 30 year period at current rates and compare it to the incremental cost of the ROP rider on the insurance policy.
2) Figure out whether you want that. Would you ever consider spending 30 years buying treasury zeroes for a specific date 30 years out as part of your investment plan?
Prediction:
Once you have done these two things, you will conclude that you don't want the ROP rider, because it is a bad deal and/or you don't even want that kind of investment to begin with. You will decide to invest the difference in the investments you want.
Will you let us know how your thinking goes and what you decide? :)
@GSK1 What is a Treasury Zero?
Subject Expert
A zero coupon treasury bond, wherein there are no coupons, just a principal redemption at the maturity date, and the buyer obtains a yield by paying a discount relative to the face value. They trade just like regular treasury bonds.
The reason I mention it is that like this proposed insurance investment they pay out on a specific date in nominal terms with very little risk, so they are a good comparator.