At your age… id recommend 20 year term… and in 10 years, reevaluate… that way you get through your childs critical years… 20 year term is WAYYY cheaper than 30…
If you can find 30 for a similar price then do it. But from an actuarial standpoint… its tough for insurance companies to predict 30 years out, therefore… it costs the client a buttload.
If you want a permanent option… I’d look at Univeral life rated to age 100 or so. (cash value will be low typically, unless you over fund it, but you’ll have perm insurance with no term on it (unless you live to be 100 lol)
I just have the one on the mortgage where if either us dies then the house gets paid off in full. Then one years salary through my work and she has the same through hers. Basically, I’m sure she won’t be upset for too long if I die lol
Thats good if you’re both working, no large uncovered debts, and no children. I couldnt imagine losing a wife and being told, oh yea, get back to work after my period of bereavement was over.
Again… Mortgage insurance is still more than most people seem to have.
Life insurance is so inexpensive that it makes sense if you want to protect … a 25 year old male whos healthy can get a $1,000,000 coverage (guaranteed for 20 years) for under 430 a year. (in ny, i did a quote the other day)
Thats insanely inexpensive. Not to mention Death benefits pass tax free when structured properly.
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EDIT… 1,000,000 on a female for 20 years is only 355 if shes healthy…
Universal Life has cash value, which you can access the cash value… if you’re looking for growth and not likely going to “OVERFUND” a policy, whole life can be a more costly alternative.
I’d shy away from variable life… especially with the volatility… (I’m kind of ignorant to variable life, i’ve seen to many people get burned by it)
UL means you can guarantee premium to a specified age… or to eternity… It can build cash value (but typically UL is made to keep CV low and premiums low) That policy for a female above for 1 million for a 25 year old at 355 dollars, would cost 2100 a year if it were a UL case guaranteed to age 100. (then the premiums and cv’s arent guaranteed anymore)
You can do UL and term blends too. (they can bring the premium down, i’ve done them before)
Term is typically very cheap, as you can see from the premiums above. But its only temporary and after year 20, the cost is normally unaffordable for most.
Side note… the reason I say get a 20 year term is you can get term with conversion privileges.
EXAMPLE… above girl is rated preferred best (top rating available) shes healthy until age 44 when she develops cancer. (if her policy allows conversion, she can convert to whole life or UL and pay a 44 year olds rate at a PREFERRED BEST rating (some companies even allow you to convert to an original age (25 at the whole life rates) but typically that must be done in the first 10 years.
I’d def. recommend reviewing the conversion options of all policies that you look into
I didn’t have life insurance until my son was just born, makes you think alot more what would happen “if”.
Coverage through my work (written through Liberty Mutual) was super cheap, offered up to 10X yearly salary, its costs me ~$15 every bi-weekly check for $1M in coverage. That also covers up to $250k for the wife and child.
I would have at least enough coverage to pay the mortgage, put your kid(s) through school and at least 5 years of normal expenses.
This guy is right on about Term versus whole life.
I carry a large 40 year term policy for 9 dollars per month, I also carry a policy from my work that is free, and I increased the value of that policy for 4 dollars per month. I’m insured for 500k until age 69 for 13 dollars per month. After age 69 I won’t need life insurance to take care of my family, my investments will.
