What kind of life insurance and how much?
 

I'm 31 on Friday and decided its time to be a big boy and buy some life insurance... plus the way I party its probably recommended :1orglaugh

My insurance agent (Nationwide) called and asked what I wanted by recommended term policy for 30 years, however that versus whole life I can not borrow against nor does it get any cash value.

When she asked how much I said probably $500,000 but she said that was a bit high. If I get hit by a train tomorrow, I want to make sure my house, cars and debts are paid, as well my gf is taken care of for a bit.

What do you have and/or suggest?

Recently I've heard rich people and financial advisors to the rich say that one should get a good life insurance policy because many you can use as a bank of sorts later on if needed. I don't know the details of that, just thought it was interesting.

And what qualifies as "good," I have no clue.

Take the difference in cost between the Term and Whole Life policy premiums and put it in a tax differed retirement account.

There are two options to consider when choosing life insurance. Term and Perm. Term is obviously for a set amount of time. Once that term has expired you have to re-negotiate into a new contract at a higher rate since you are older. The rates will be the lowest under term. This method can not be used as an investment vehicle. (I think)

Perm/whole life insurance cost more, but your rate is locked. You also are allowed to invest money into this policy. The money you put in can be invested in stocks/bonds/mutual funds etc. This money can be taken out tax free. (This money might be borrowed can't remember)

Choosing the perm situation isn't for everyone. You should consult a financial advisory before making a decision.

I'm 27, with a kid on the way. I went with perm for various reasons that I'd prefer not to disclose on a public forum. But for me it was the right situation. It's a massive policy, but I want to make sure my wife and kids are taken care of.

If anyone wants to consult a professional for free, a good friend of mine is in the business. He can be contacted at [email protected].

Term is the way to go, take the difference from whole and invest in just about anything and you'll be better off.

The insurance the bank offers on my mortgage and line of credit seemed like a good start. At least you will know your debts are taken care of right off the bat. Then you can worry about adding additional coverage once you shop around a bit.