frankieParticipantStatus: PhysicianPosts: 2Joined: 04/21/2019
I am a relatively young physician (mid 30s) a few years out of training, who like many is pretty ignorant about insurance. My previous job had many fully paid benefits included, and I didn’t elect any extra coverage. I recently joined a new large institution which is not as great benefits wise and am in the process of enrolling in different insurance options and the one I don’t fully understand is the life insurance offerings which are as follows:
1. A 50K life insurance payout, no need to enroll, no premiums
2. Optional Variable group universal life insurance policy.
I know in general that permanent/whole life/VGUL policies don’t make sense for most but the premiums they quote are actually significantly less than the 30 yr term quotes I’ve gotten and am in the process of signing up for via insuredincome. I’m assuming that this is because it is partially subsidized by the employer. If I were going to with my employer provided plan, I would plan on just paying for the life insurance premium portion and not investing any extra. Despite everything I’ve read telling me to avoid VGUL, is this a reasonable approach or am I totally missing something here? Do these monthly premiums increase significantly with time/age? By only paying for the insurance portion of the plan, I would think there is no cash accumulation or investment aspect, so is this not different than a term life sort of plan?
Thanks for the help. I can provide more details if needed but want to see if I’m just fundamentally not understanding how this works. I plan on talking with an agent about it but obviously I am wary when talking to someone with vested interests.September 6, 2019 at 12:37 pm MST #244281FIREshrinkParticipantStatus: PhysicianPosts: 1004Joined: 01/11/2017
Yes they increase steadily with age. So you can’t compare directly to your level premium thirty year term policy.
Also as you mentioned your employer is paying part of the cost.
When you separate from your employer you’ll have to pay the full premium which will be age based and eventually substantially higher than the level premium term option.
Term is the way to go.September 6, 2019 at 1:16 pm MST #244299PedsModeratorStatus: PhysicianPosts: 4405Joined: 01/08/2016
Would not proceed.September 6, 2019 at 2:50 pm MST #244325