Life Insurance - For Dummies

[TXUSMC]

I am the dummy here. Like many things, I search and ask questions before making a decision. I also believe this crowd to be a bit more mature in age and wisdom. I am looking to protect my family in case anything happens to me or my wife. Whole life? Term life? Companies to stay away from? Policy details that are necessary to pay attention to? Any help is appreciated.

[preaux40]

Get a quote for whole life and term life . . Buy the term life and put the difference in an annuity . .

[TheZenTex]

I'm and just now going through buying life insurance. I have some already through my job just want more. I'm using USAA and doing term life. Just don't get caught up in overbuying.

[RWB]

You will get a lot of opinions on this subject. To me life insurance is to replace your income should something happen to you. That way your spouse or children's lifestyle doesn't have to change if something happens to you. Insurance should amount to a lump sum amount that when invested reasonably will replace your income with its return. If you make 100K a year, $2M @ 5% = 100K to replace your income while the $2M remains untouched. Pay term insurance with your plan to have enough personal investment to not need the insurance when the term is over.

[TXUSMC]

I'm and just now going through buying life insurance. I have some already through my job just want more. I'm using USAA and doing term life. Just don't get caught up in overbuying.

Did USAA give you the best options? What do we consider “overbuying”? My goal would be to leave the survivors completely debt free (which is just a mortgage) if one of us passed.

[eastover53]

I have enough term life insurance to make sure that my son gets through college(he can make his own money after that) and that my wife will be able to pay off the house and have a nice little nest egg. I bought a twenty year/$1 million policy for $70 per month. Got about 4 years left on it. At that time, I may buy a smaller policy just for a little extra security. I'm not buying insurance to make anybody rich though.

[outlook8]

You will get a lot of opinions on this subject. To me life insurance is to replace your income should something happen to you. That way your spouse or children's lifestyle doesn't have to change if something happens to you. Insurance should amount to a lump sum amount that when invested reasonably will replace your income with its return. If you make 100K a year, $2M @ 5% = 100K to replace your income while the $2M remains untouched. Pay term insurance with your plan to have enough personal investment to not need the insurance when the term is over.

This. The survivors would live off the investment proceeds of the lump sump payment.

[Ishi&Elvis]

RWB wins. Replace your income, period. Death benefit from insurance is tax free, invest it safely.

[TeamAmerica]

I would also make sure you have long term disability insurance (depending on if your employer offers any it could be a supplement to what you already have). Probably more likely that you will be hurt than killed and it could prevent you from working. You don't want to life of the govt disability pymts i assure you!

[Swampa]

I’ve got a whole life policy that will bury me and a $1mill 30 yr term that will take care of my family.


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[MountainMan]

Another thing to look at too with your agent is the ability to convert some or all of your term insurance to permanent insurance. Makes it cheaper in the long run so that you aren't just playing a gambling game with the grim reaper using term insurance.

[Capt.Brown]

Whole life or universal is a scam IMO. Way to expensive, for what you pay you can get a term life policy for 1/3 or the price and invest the rest and come way ahead. Anyone pushing those policies run the other way.

[TXUSMC]

I appreciate all of the input. The basic plan I have researched covers all my debt or two years income, whichever is higher. I can select either five or eight years income replacement along with full debt coverage at double and 1.5 times the basic premium respectively. I am retired military so my wife will receive a portion of my retirement after my death which will help quite a bit. I am also not trying to get anyone rich, just don't want my family on the street if I pass early. I agree that in that term I need to invest my way out of needing life insurance.

[7sdad]

Her new man can take care of her.