My husband was recently denied term life insurance because he has a criminal record from a long time ago. The good news is that, in a year, heíll be far enough removed from the incident that heíll be eligible for a policy. He has a whole life policy for $75,000 from before, which he doesnít plan to cancel. We have two small children, so is there another kind of policy he could get in the interim?
If you canít get term life insurance, you canít get whole life. Itís the same underwriting process. I only recommend term policies, but under these circumstances Iíd keep the whole life in place because heís basically uninsurable.
There are a couple of things you can do in this kind of situation. One thing is to get a mortgage life insurance policy. These are usually available without any kind of major inspection, and they pay off your mortgage, in full, in the event of death. Itís about 10 times more expensive than regular term insurance, but at least it will pay off the house.
Another thing to look into is an automatic issue-type policy. Lots of banks offer these when you open an account. Usually, theyíll send you an offer for a $10,000 life insurance policy. But if you pick up four or five of these, then heís got another $50,000 on top of the $75,000 already in place. Itís still not enough, but itís better than nothing.
But I wouldnít spend a lot when heís only got a year left until he can get some good, proper coverage. I recommend people have eight to 10 times their annual income in life insurance coverage. So if he makes $50,000 a year, he needs to have $400,000 to $500,000 in a good, level term policy. Thatís what you guys need to shoot for a year from now!
Finding good tenants
I have a townhouse Iím preparing to rent. Do you have any advice for evaluating potential tenants?
The first thing Iíd do is pull a credit bureau report. Iím not really worried about their credit score; I just want to see if they have a history of late or missed payments. Talk to some local property management firms and see who they use to pull these reports. Iíd also recommend doing a background check on the potential renters. Talk to the owner of the last place they rented as well as the one before. I advise this because there are some dishonest landlords out there who will tell you that a bad tenant is wonderful just to get them out of their property.
Page 2 of 2 - A lot of things, though, are simply common-sense measures. Have them fill out an application, which includes their income and a list of their debts. If they make $2,000 a month and have $2,500 a month in debt payments, you donít want them as tenants. In this scenario, a smile and ďI promise I can pay itĒ wonít work.
Spend some time just talking with them, too. Really listen to what they say and how they say it. Get a feel for what kind of people they are, and, if they have children, pay special attention to the kids. Are they well-behaved, or do they run around and act like a bunch of wild animals? If itís the latter, then theyíre going to tear up your house. And guess what? If the parents canít discipline their kids, thereís a good chance they canít discipline themselves either. You donít want to get mixed up with that. People who let kids run the household donít make good tenants.
Finally, remember to trust your gut instincts. If you get a weird vibe from someone, or if things just feel strange, donít rent to them. Chances are, thereís a reason you have those feelings.
Dave Ramsey is Americaís most trusted voice on money and business. Heís authored four New York Times best-selling books: ďFinancial Peace,Ē ďMore Than Enough,Ē ďThe Total Money MakeoverĒ and ďEntreLeadership.Ē The ďDave Ramsey ShowĒ is heard by more than 5 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the Web at daveramsey.com.