Life Insurance

Meat67

My wife has told me I have until the end of July to get life insurance (something about having a family now) and I really know nothing about it.

Can anybody recommend a good site that explains what I should be looking for and also what I should look out for?

Also, can anyone recommend a good broker in the Tokyo or Chiba area who preferably speaks English. I don't think my Japanese is good enough to understand the all the nuances that I think this will have.

Skoal Cat

Does your job out there offer this benefit? Maybe their HR department can provide some help.
Your wife has the right idea, and even if she isn't a bread-winner she should get one too.

Gabriel_Pitt

When it comes to getting life insurance in Japan, you're probably going to get a quicker, better informed response by asking friends and coworkers. It's something useful to have, for worst case scenarios. My dad got a policy for me just after I was born, and as it currently stands, if when on my way to the grocery store, I'm run down by a rogue blimp, the insurance payment will be something to the tune of a quarter million dollars. Still sucks for me though. :P

MagicToaster

I agree with Skoal Cat, if your employer, or your wifes employer offers this benefit, I would check there first.


On the subject of Life Insurance:
There are several types of life insurance coverages, such as Whole Life, Universal Life and Variable Life or Cash Value. However, the one you should focus on is Term Life Insurance.

Remember, the purpose of life insurance is to protect your family and children in the event of your death... but if you pass away when your kids are 40 and your wife is retired, the economical impact in their lives is gonna be considerably less than than if it happened when your kids are 12 and your wife is left to provide for them.

With this in mind, you can calculate how long your family will be dependent on you and you can find an excellent rate for Term Life Insurance for 20 - 30 years, as opposed to the abundant (but unnecessary coverage) offered by other plans.

According to Suze Orman, your death benefit should be twenty times what your family needs to live in a year. So if your salary is $35,000... your Term Life Policy should be $700,000. This should be around $40 a month.


On the subject of Life Insurance in Japan:
My wife worked at a Chartis in Japan until this past October, she tells me that the issue is not so much that you wont find a broker that speaks English (they exist!), but its more of an issue of if they will be available when the need for them arises. Not only this, but all the documents will be in Japanese, the call centers are in Japanese, in the event of your death your wife will be facing all these already challenging tasks, with the added difficulty of a language barrier.

I would suggest calling a company from your country, if your HR department doesnt offer this benefit, and asking them about terms and conditions for someone in your situation.

If you have any specific questions about Life Insurance in Japan, let me know, and Ill ask my wife. However, she says that Aflac has great rates and is really popular.

jkylefulton

On the other hand, if you select a whole life or universal life policy, the policy will build cash value that you can borrow against, and will have level / variable premiums. The pricing on Term Life Insurance becomes prohibitive as you grow older, and it does not build cash value (though you can get a 'return of premium' term life).

MagicToaster

I would rather put the difference in a Roth IRA and gain 8% interest for 30 years over the cash value I would gain in a Universal policy. I can take the money and it wont count as extra income which wont put me in a higher tax bracket. Also, I dont have to pay it back. Im not sure this is the case with taking a loan against a Universal Policy.

AngelHedgie

jkylefulton wrote:

On the other hand, if you select a whole life or universal life policy, the policy will build cash value that you can borrow against, and will have level / variable premiums. The pricing on Term Life Insurance becomes prohibitive as you grow older, and it does not build cash value (though you can get a 'return of premium' term life).

The thing is that life insurance isn't an investment, it's risk mitigation. I'm not looking for my life insurance to build cash value, as I have other tools for that which are much better at doing the job (as MagicToster pointed out.) All I want for life insurance is to cover the costs my passing will leave behind. For myself, being single and childless, this entails paying my debts off and paying for my funeral. If someone has dependents and in the workforce, then they need a larger policy as they need to think about lost wages.

grendle

jkyle has it right. This is NOT an investment. You need to look at, for each breadwinner in the family, what your plan would be if they died or were unable to work. You need to carry insurance that will allow the survivors to carry on without undue hardship. Don't over-insure in this area - you are hedging against a small but catastrophic risk. Only insure breadwinners, and only if they have dependents.

MagicToaster

Meat, how old are you and your wife?

Meat67

MagicToaster wrote:

Meat, how old are you and your wife?

I just turned 44. She's a bit younger than me. We are planing on having children.

AngelHedgie

Meat67 wrote:

MagicToaster wrote:

Meat, how old are you and your wife?

I just turned 44. She's a bit younger than me. We are planing on having children.

So basically, you need to insure that your children will have access to your income while they grow up.

grendle

Right now you just need to ensure that your wife can survive if your income goes. If she has her own career you really don't need life insurance at this point. Wait till you have kids, and insure your and or your wife's income until they are no longer dependent on you.

Meat67

Magic Toaster, I seem to have missed your first reply somehow. Thanks for your reply. My wife is Japanese so having everything in Japanese will be easier for her in the unfortunate event that I pass away. I will ask her what she knows about Aflac.

I spoke a little with my wife and she told me that I also need insurance in case I get sick and I'm unemployed. What's that called?

bowen

Whole life generally only makes sense for people under the age of 30 who have a good 20 years of needing life insurance. It'll work out cheaper in the end.

While it is absolutely right that term is better in the short term, you're basically gambling. You need to compare it like renting versus buying. Renting is an absolutely fuck awesome idea if you know you're going to move soon. Same goes with term life insurance. As explained to me by people smarter than I, if your terrible at saving, whole is the better approach. If you're better at saving and investing, a term insurance will be better, have higher returns, and lower cost.

And you're old (no offense meant), so, your premiums will be better off with term anyways.