OP should buy a moderate amount of company group life insurance (group life ins may not have underwriting and is not portable), Short and longterm disability. Save for an emergency fund. Purchase some life insurance on his Mom and some longterm care insurance on her. If his mom is dependent on his earnings now, she will be really dependent on him later. A health ins policy on her. HE should only do minimal IRA or 401k.
-- Edited by longprime on Thursday 3rd of January 2013 09:02:07 PM
Ok IBN, I'm not sure about the life insurance. If you want it, you really have to shop for it.
Normally, I would say forget it. But the diabetes complicates things. And your mother complicates things.
Save money. You are young. You should invest in stocks. You are off to a great start. That's a nice salary.
DStark, thinks that one should save money instead of buying the call option on one's future earnings (life insurance). When I was younger, we were presented with the problem of IRA (living into retirement)and LI (dying prematurely-before retirement). The illustrated solution proved to me that one could virtually never able to save/invest enough for an unexpected/early death. The 1/1500 of dying, prematurely is a bad statistic when it affects, my HS classmate, friend, BIL (sister's husband's, brother), adventurer, and Rhodes Scholar.
-- Edited by longprime on Thursday 3rd of January 2013 09:06:17 PM
For someone who has extensive experience in derivatives (calls, puts, futures) he can not fathom the value of life insurance.
#43. Life insurance is a crummy bet. I own stock in AIG too. If you have kids, buy term insurance. If you have somebody financially depending on you and you don't have the assets you can buy term insurance
Of course, LI, is a crummy bet. That is why it's cheap, if you qualify at rates that you can afford. In order for LI to be a good bet, is when you/heirs really need it but you can no longer can afford it. No LI underwriter, is going to take your death call option when you have a good chance of dying, unless they can be assured a profit.
For illustration,
DS @27, excellent health pays ~75% of 1% (.0075) of the benefit amount; ~40% of 1% (.0040) of his gross salary. His auto insurance (liability, uninsured drivers) and health insurance (medical, dental, vision) premiums are much higher and he has a very good health plan.
We pay ~1.35% asset protection, on death, on our annuities; Which is far cheaper than if we bought life insurance on our retirement assets. I can no longer qualify for LI, at any price.
I am one of those fools that bought term insurance.
Would do it again. If something happens to us, at least kids have a way to pay off house, bills, debts. Life insurance isn't for the living, but those left behind.
We never bought whole life.
When my mom passed away, there was no safety net. No insurance to help pay her massive medical bills or lost wages. Didn't qualify for SS survivor benefits, either. My dad told me that it was the biggest mistake they ever made - not having life insurance on my mom. Back then, it was common to only insure the breadwinner.
-- Edited by SamuraiLandshark on Thursday 3rd of January 2013 04:11:49 PM
