Am I Paying Too Much For My Life Insurance Premium?
Posted February 25, 2010 – 4:18 pm in: structured settlements FAQI am 23 years old and I have a MetLife whole life insurance policy with an accidental death policy as well. I’m paying $72 per month for it and I was wondering if this is too much. The face value is $100k.
Thanks.
4 Comments
It depends on the exact type of policy you have, I ran an illustration:
Male
non-Tobacco
Standard Health
100K
100k accidental
UL
Non-Guaranteed interest rate 5.15%
Guaranteed interest rate 3.00%
$44.25 monthly
Your policy is more, but it may be a different type of policy and may be a good rate for the type of policy it is, I’d have to know the exact kind to know if it was truly competitive or not.
*** After your additional details***
You’re premium sounds about right for a 5% guaranteed interest rate. How long do you pay on the policy? i.e. 20 years, 10 years, to age 100, 85….etc. My guess would be a 20 year pay.
If you shop around you may find some less and you’ll find some more.
MetLife’s products are very good and competitively priced. I see two potential problems though.
1) In my opinion, Accidental Death Benefit is a tremendous ripoff. Here’s why: It costs between $7 and $10 per month for a 23-year-old to buy $100,000 of Accidental Death coverage, which only pays if the insured dies in a particular way. That same 23-year-old can buy $100,000 of 20-Year Term, which pays regardless of how you die, for $11 to $12 per month.
2) MetLife will not give their best health class to an insured unless the death benefit is $250,000 or more. I have no idea what your health and family history are but you may have qualified for a better health class (and cheaper rate) with a carrier that has a lower minimum face amount.
I have one that is 50K, at about the same age 12 years ago. I pay 55 a month. So I think you got a good deal, but mine has an increasing cash in value that I can take advantage of when I retire. I’m sure you got that too?
You’re paying the right amount. Assuming that you are in good health, the healthier you are the better rate you will get.