Term Life Insurance for my Wife – failed attempt #1

Term Life Insurance for my Wife – failed attempt #1

I recently went ahead and finally got the ball rolling as far as getting a life insurance policy for my wife. Seeing as how we already have one kid and another on the way it is pretty important for us to make sure that our family would be taken care of if anything bad happened to either of us.

EDIT: This is now outdated…there was a typo in the underwriting process and we were able to get the top rate…see more in the comments.

I already have three term life insurance policies out on myself, totaling just a little over $1 million in term life insurance, but for whatever reason I never got a policy for my wife. So I finally talked to a local insurance agent and started the process on getting a $250k – 20 year term policy on my wife. He quoted us at $14.66 for the top health rate, which probably isn’t the absolute cheapest price, but it came in at pretty competitively when I did a quick search online and well we know this guy personally and the insurance company it is through does a ton of charity work in our area so we were ok with an extra $1 or so a month.

Well we just got the results back from the underwriter and despite me asking up front if her being a few months pregnant would affect their underwriting decision and them saying “early pregnancy should have no effect on her risk classification or the testing process. The only time a pregnancy may become an issue is when complications exist.“, well it turns out that it did in fact affect their rating of her and she was rated the 2nd highest health class instead of the first class with the following statement “Reason for underwriting decision: build (pregnancy was taken into consideration)” and thus our monthly premium would be $17.50 instead of $14.66 per month, which to me was unacceptable so I am thinking we will pass.

I guess I could take this policy now for the next 7 months or so until our child is born just to be safe and then shop around at that time and cancel the previous policy, but I was hoping to have this all taken care of right now so that I could start working on our will/living trust and get that all in order and while I could/should still continue on down that road, it means that in 7-8 months I’ll have to revisit and change a bunch of stuff just because of this little term life insurance policy, which not knowing anything about keeping a will/trust up to date I’m assuming will cost me more money with the lawyer. Darn kids I told you they were expensive 😉

  • I don’t know much about life insurance, but an extra $36 a year doesn’t sound like much to me for protection of your wife’s financial contribution to the household.

  • OwtoBahn

    Are you sure pregnancy was the reason? Sounds like it was ‘build’ i.e height/weight even after accounting for pregnancy.

    You mentioned you considered to take the policy and shop again later — Why not do that? It is always possible some other condition might manifest in the future and cause a change in health or insurability.

    Finally ask your agent – Even with a term policy you might be able to ask the company to re-rate your wife. I have a term policy that was issued in ‘standard’ class not preferred due to my weight but my agent said I should try to get it re-rated if I lose weight (not 100% sure it is possible, have to try someday!)

    Also keep in mind you did comparisons of premiums at the best rate class – If you tried to buy elsewhere they may rate the same.

  • My Financial Journey

    Actually after talking to insurance agent again he said it was indeed height/weight instead of pregnancy. Thing I don’t understand is my wife on the physical is listed as 5ft 4.5 in and 131lbs. I am not sure how that makes her more of a risk as I would think that would be a pretty ideal weight for her height?

  • My Financial Journey

    Actually just heard back from insurance agent and they mistyped her weight when entering it into the underwriting system and when they fixed the mistake she was classified at the top health class.

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