Term life in AGI - R2Ied.should i continue or not

[srini234]

Hello

I have been paying close to 100$ per month for last 10 years sitting in india for 750k insurance. at times i was thinking of cancelling it as i dont have any income coming from US. with the kids growing up and not having similar option in india i continued for a while. should i be better of canelling the AGI insurance. what kind of data i should have to make a decision on this. I do not look back at and hind sight all decisions has its plus or minus. Looking forward to next step.

[Desi]

Hello

I have been paying close to 100$ per month for last 10 years sitting in india for 750k insurance. at times i was thinking of cancelling it as i dont have any income coming from US. with the kids growing up and not having similar option in india i continued for a while. should i be better of canelling the AGI insurance. what kind of data i should have to make a decision on this. I do not look back at and hind sight all decisions has its plus or minus. Looking forward to next step.

The purpose of insurance is risk management. If you are earning some money and your kids depend on that income and your savings from your current income may pay for their college etc then if you pass away, they will lose that income. Since they were dependent on your income, and if you are no longer their that is where the insurance acts as a financial substitute.

If your children are not dependent on your income, then there is no risk an no risk management needed i.e. no insurance needed.

If your assets exceed 11 million, then insurance in those cases can be properly planned to cover some estate taxes but once again, I do not advice that.

So, it all boils down to who is dependent on your work income? If someone is then insurance may be necessary, if no one is, then insurance is most likely a waste of money.

[srini234]

I remember bogle's or diehards article on insurance planning and talks about Term life value to be some what equivalent to mortage(house value)+kids educaiton etc.


This 100$ per month for 750K is biting me at the age of 50. with 1 kid in college first year and 2nd kid in middle school looking at options. Do not wanted to cut corners as well. Not sure how to realistically come up with reduced coverage at this time. Would be helpful to get idea on the planning part. I believe there are equal coverage in india. I have also asked aig to see if premium/coverage can be reduced. they had sent a quote.

God bless all.

[Desi]

I remember bogle's or diehards article on insurance planning and talks about Term life value to be some what equivalent to mortage(house value)+kids educaiton etc.


This 100$ per month for 750K is biting me at the age of 50. with 1 kid in college first year and 2nd kid in middle school looking at options. Do not wanted to cut corners as well. Not sure how to realistically come up with reduced coverage at this time. Would be helpful to get idea on the planning part. I believe there are equal coverage in india. I have also asked aig to see if premium/coverage can be reduced. they had sent a quote.

God bless all.

Are you dependent upon savings from your monthly income to pay for mortgage and education of kids or you already have assets to pay for their education? In other words, is running of your household and children's education dependent on your monthly income? If the answer is yes, then you need insurance. If the answer is no, then you don't.

[layman]

As Desi says if your assets and other income can pay off for the expenses in worst case scenario of your absence, insurance is a waste. Insurance is typically useful at 30s', 40s when you have young kids and your asset base is small. At 50s, you would have already accumulated reasonable assets. Your house also will have some equity and your son can become productive in 3 yrs. In such case, spending $1200 per yr for a worst case can be bit paranoid ( but again depends on your asset vs risk calculation).

Does your company provide group insurance? If so, you can take that.

[ra999]

I am surprised that for 750K Term they are charging 100$ per month. I feel its excessive. As your kids grow you insurance needs go down. All insurance money should do is cover the education expenses in case if you pass away. You only need insurance till your kids graduate or get married. After that you don't need it. Also if you have a mortgage then you just need to cover the balance. For me I planned the term life to cover till my youngest kid is around 27. I am assuming they won't depend on me after 27. By the time they are 27 I would retire and my SS kicks in.
You will get the cheapest if you term ends before 60 and if you starting age is before 40. The next set if your term ends after 60 or if you are older than 41

[srini234]

Thanks Ra and Layman. I am okay as long as i am in india. My company group coverage maximum i guess 25 lac or so - not sure on details. If my kids move to US for PG+UG then i am talking about close to 100 k + 300 K which is close to 400 K, that would be the requirement in the next 4-6 years time frame. I know i can take loan and such for them. I guess numbers are not adding and unfavourable continuing with AIG term life.

thanks to all for great input

[ra999]

Probably you should cancel and take a term just for 5 years which will cost you around 30 to 35 bucks. The only thing is for the first 2 years, it will be under probation

[VS007]

By AGI, do you mean an American insurance company? If you took insurance from America,also check if they have a clause of living abroad.

[srini234]

i have made the address change and they are okay with me living in india.. talked to them couple of times on policy being active on india. thanks ra. good point