Anyone Been Denied Life Insurance for Pre Existing Condition

SweetAndLow

Know1:

To answer your questions, yeah, your spouse can get access to your retirement accounts, but at a steep cost (taxes and penalties) depending on the type of account and the terms set for it.

It would behoove you to call a retirement/financial advisor and/or an insurance agent, and Google/look up on the Internet about insurance. Zanderins.com, which Dave Ramsey strongly supports, provides some great information for free. He's a trustworthy financial guru. At that site, click on 'term life' at the top, and at the left are a FAQ, insurance calculator and other helpful insurance info.

I used that site to direct me to the policies I wound up buying, but by pitching it to you I am in no way suggesting it is the best one to use. There's tons of them out there. I just mention this one because Zander is reputable.

Hope this helps. Ain't trying to be an ass. I know I come off as such with my writing style from time to time. ...

gimmesometruth27

yes. avoid whole life insurance with a cash value policy at all costs. any financial advisor worth anything will tell you that term is the way to go. "buy term and invest the rest". that whole life stuff is garbage. with the whole life/cash value policy there is a bank account attached to it so you can generate some cash value over time that is supposed to save for retirement. there are so many ways to screw the policy holder in these policies.

for example: a man buys a 100,000 whole life policy (100 k is face value of policy) with a 25,000 cash value attached to it. the cash value is what is supposed to accumulate over the course of the policy holders life. one would assume that when the policyholder dies he will get the full 100k plus the 25k cash value on top of that. this is NEVER the case because of there are four strange rules that apply to the cash value accounts in these policies. these rules are how whole life cash value screws you.

rule #1: for the first 2-5 years your cash account accumulates $0 of cash value...no money in the account for the first 2-5 years. you will be paying premiums but that money that is to go into that account is paid in commissions to brokers or agents, or fees to the bank or insurer. the policy will have a breakdown from year to year with a projection of how much cash value will accumulate.

rule #2: cash value accumulates at 2%-4% interest. this will be stated right there in black and white inside the policy. why invest in this when you can invest in a cd or an ira that can net you 8-10% interest every year?

rule #3: if you need access to this cash value you BORROW your OWN money from the bank with an interest rate of 6-8%. this is stated right in the policy. say you need to get 10,000 for a new roof for your house and you try to access the $20k you have saved in this policy. instead of YOU giving the bank a withdrawl slip, the BANK gives you a loan application and you will have to pay it back at potentially twice the interest that it would be accumulating inside that account. whould anyone ever pay to borrow their own money?

rule #4: if you die your beneficiary loses your cash value. in these policies there is usually 2 options, option a and option b. typically option a says when you die the beneficiary will get the face value and the cash value. option b says your beneficiary will get "the greater of the face value or the cash value" so if you have 100k face value and 50k in cash value you will get the face value and lose the cash value....the bank will keep that. option b is the most common option. it is chosen by the agent without the policy holder's knowledge. the agent gets bigger commission because they are saving the insurance company money in the long run by preventing you to get your cash value. if you don't believe me read your policy. i have only seen a handfull of policies where the agent chose option a. must have been a real stand up guy, or a new guy that has not become greedy.

i have seen hundreds of policies exactly like this. what is worse, is in some whole life policies you will pay the same premium for your whole life, but as you age your cost of insurability increases to the point where your cost of insurance exceeds your premium you are paying. so eventually what makes up that difference? your cash value account pays for it. the insurance company takes it right out of your savings, so if you live long enough that cash value account will eat itself. pretty shitty, eh?

i would buy term and invest the rest. term is dirt cheep and hopefully by the time the term is up you can renew it if need be and it will still be cheeper than that whole life garbage.

well that is my rant. sorry if i offended anybody, but i feel really strongly opposed to whole life insurance.

BhagavadGita

People on disability do not invest money into anything but pharmy companies and doctors bills. :evil:

SweetAndLow

BhagavadGita,

So we should let someone on disability go homeless, then?

What is our moral obligation?

Know what pharma's No. 1 obligation is, by law?
Make a profit.

TriumphantAngel

know1 wrote:

I'm in the process of getting some term life insurance now, but to be honest the more I look into it and think about it, the more I think it's a scam to some degree.

As your illustration points out, it's relatively easy to self-insure yourself. Just put the amount of money you can afford into a good, longterm, growth mutual fund or retirement plan. If you die, the beneficiary gets it and it could basically serve as your life insurance.

that sounds good in theory, and i hear what you are saying, but it wouldn't be much good if you died after only contributing for a short time.

i also think it's just as important to take out term life cover for your partner (even if they are not the main income earner), if there are children involved. it would be impossible to maintain the lifestyle you are used to without it. how would you ever meet the extra costs involved with child care, housekeeping etc without it eating into your income. you wouldn't.

catefrances

insurance is a form of gambling. you pay out all this money in hopes that when it comes time to collect you dont get shafted. no thanks.

TriumphantAngel

catefrances wrote:

insurance is a form of gambling. you pay out all this money in hopes that when it comes time to collect you dont get shafted. no thanks.

for whole of life cover i agree.

term cover is a little different because it pays you the amount you are insured for, so you know what you are getting when you take it out. if you die you collect. if you don't die you can't cash it in, so i guess the attraction there would be that premiums would be a hell of a lot cheaper and more affordable.

anyways, death is a natural part of life. rejoice for those around you who transform into the force!

catefrances

TriumphantAngel wrote:

catefrances wrote:

insurance is a form of gambling. you pay out all this money in hopes that when it comes time to collect you dont get shafted. no thanks.

for whole of life cover i agree.

term cover is a little different because it pays you the amount you are insured for, so you know what you are getting when you take it out. if you die you collect. if you don't die you can't cash it in, so i guess the attraction there would be that premiums would be a hell of a lot cheaper and more affordable.

anyways, death is a natural part of life. rejoice for those around you who transform into the force!

and in the mean while the insurance companies get fat. once again i say no thanks. i wont be playing that game.

TriumphantAngel

catefrances wrote:

TriumphantAngel wrote:

catefrances wrote:

insurance is a form of gambling. you pay out all this money in hopes that when it comes time to collect you dont get shafted. no thanks.

for whole of life cover i agree.

term cover is a little different because it pays you the amount you are insured for, so you know what you are getting when you take it out. if you die you collect. if you don't die you can't cash it in, so i guess the attraction there would be that premiums would be a hell of a lot cheaper and more affordable.

anyways, death is a natural part of life. rejoice for those around you who transform into the force!

and in the mean while the insurance companies get fat. once again i say no thanks. i wont be playing that game.

even if i could find you one that will cover you for the loss of an arm...to a snake...

catefrances

TriumphantAngel wrote:

catefrances wrote:

TriumphantAngel wrote:

for whole of life cover i agree.

term cover is a little different because it pays you the amount you are insured for, so you know what you are getting when you take it out. if you die you collect. if you don't die you can't cash it in, so i guess the attraction there would be that premiums would be a hell of a lot cheaper and more affordable.

anyways, death is a natural part of life. rejoice for those around you who transform into the force!

and in the mean while the insurance companies get fat. once again i say no thanks. i wont be playing that game.

even if i could find you one that will cover you for the loss of an arm...to a snake...

i can live with just one arm. thanks anyway...

SweetAndLow

If you have kids/spouse/income, not buying insurance is itself quite a gamble.

But if you're not in that boat ... it's easy to say "insurance is a form of gambling"

Just hope you don't own a house with no insurance on it.

catefrances

SweetAndLow wrote:

If you have kids/spouse/income, not buying insurance is itself quite a gamble.

But if you're not in that boat ... it's easy to say "insurance is a form of gambling"

Just hope you don't own a house with no insurance on it.

im a marxist... there will be no home ownership in my future.

know1

BhagavadGita wrote:

People on disability do not invest money into anything but pharmy companies and doctors bills. :evil:

Surely you spend SOME money elsewhere such as groceries, clothes, utilities, rent/housing, entertainment, etc.

This thread has been hi-jacked to some degree, but in looking at your original post if that's the best deal you are being offered, then you should probably just self-insure yourself by putting as much money as you can away to earn interest.

soulsinging

know1 wrote:

BhagavadGita wrote:

People on disability do not invest money into anything but pharmy companies and doctors bills. :evil:

Surely you spend SOME money elsewhere such as groceries, clothes, utilities, rent/housing, entertainment, etc.

This thread has been hi-jacked to some degree, but in looking at your original post if that's the best deal you are being offered, then you should probably just self-insure yourself by putting as much money as you can away to earn interest.

Even if she does, what difference does it make? Do you truly believe everyone has the disposable income to easily invest in stocks and insurance plans?

know1

soulsinging wrote:

know1 wrote:

BhagavadGita wrote:

People on disability do not invest money into anything but pharmy companies and doctors bills. :evil:

Surely you spend SOME money elsewhere such as groceries, clothes, utilities, rent/housing, entertainment, etc.

This thread has been hi-jacked to some degree, but in looking at your original post if that's the best deal you are being offered, then you should probably just self-insure yourself by putting as much money as you can away to earn interest.

Even if she does, what difference does it make? Do you truly believe everyone has the disposable income to easily invest in stocks and insurance plans?

No I don't believe that. Did I say that? I'm saying if they are denying her coverage, then her best bet is to take the money she WAS GOING TO SPEND on insurance premiums and self-insure herself by investing it or at least putting it into savings.

It's pretty hard to argue against that advice.

cincybearcat

know1 wrote:

No I don't believe that. Did I say that? I'm saying if they are denying her coverage, then her best bet is to take the money she WAS GOING TO SPEND on insurance premiums and self-insure herself by investing it or at least putting it into savings.

It's pretty hard to argue against that advice.

Or, another alternative if you can't find affordable term life insurance...take the money you were going to spend on it and pay down the debts. At least that way, if something happens, the burden on your dependents is reduced.

know1

cincybearcat wrote:

know1 wrote:

No I don't believe that. Did I say that? I'm saying if they are denying her coverage, then her best bet is to take the money she WAS GOING TO SPEND on insurance premiums and self-insure herself by investing it or at least putting it into savings.

It's pretty hard to argue against that advice.

Or, another alternative if you can't find affordable term life insurance...take the money you were going to spend on it and pay down the debts. At least that way, if something happens, the burden on your dependents is reduced.

That's probably even better advice as the interest paid on debts is likely to be much greater than the interest earned on investments. After the debts are gone though, then continue to self-insure by taking the premium money and investing it.