What kind of life insurance do I need??

Question

I am a single mother of a 6 month old. The father and I are not married, but are living together. We both realize that we need to get life insurance, but have no idea where to start. We are 30 and 35 respectively, both smokers and otherwise in good health.

Answer 1

I think a term life insurance policy is your best bet. And believe it or not, I suggest that you get it for 10 years. Here is a trick... The rate for 10 years will probably be about 2/3 of that for 20 years. As time goes by the life expectancy generally goes up as well. So, unless you have major health issues 10 years from now, you will probably get another 10 years term for less than 20 years costs now. Perhaps you quit smoking by that time so it will be even cheaper. Don't bother with any "Whole Life" insurance policies or other junk similar to that -- this is all scam, and it's just the way the so called financial planners make money.
Now the coverage, you need to replace yourself for the child until the child is 18, that's true. Now don't forget that the child may be eligible for Social Security benefit if you die, so that lowers your insurance need. Also, insurance proceeds are tax free, so if you make 50K, than 300K insurance payout invested into a CD or good saving account will replace you for about 8-10 years.
Plus, you will not be driving to work, eating lunches, buying yourself clothing etc., which means that if you earn 50K per year, it is probably enough to have 30K per year to fully replace your income. Anyway, in my opinion if you're both healthy and the child is only 6 months old, I say if each of you gets 6-10 times your annual salary that should be plenty enough.
The idea is that you don't need to over insure yourself. Get just enough, since most people do not collect on insurance, but do pay premiums.

Answer 2

I can't give you a black/white, yes/no answer. There is a lot of grey area, but I have noticed that most working families would do best taking out 20 or 30 year term.

If the purpose is to protect you child, then you should take out a policy that covers your life until your child is on her own. You may want to go longer than 20 years because after a child turns 18, they often still are dependent on their parents in one way or another. Do not look at any permanent policies if this is your primary concern.

If you also want to have protection for your estate when you die, or if you are looking for a place to have money grow tax free, then you would want to get a permanant life policy (whole life, universal, variable). The premiums on this are also much higher (4-8 times higher), but they never go up.

If you are not looking for that, then you should stick with 20-30 year term.

Answer 3

I suggest that you try this site where onel can get quotes from different companies: http://insurancetocompare.info/index.html?src=2YAshyjdGJ26

RE :What kind of life insurance do I need??
I am a single mother of a 6 month old. The father and I are not married, but are living together. We both realize that we need to get life insurance, but have no idea where to start. We are 30 and 35 respectively, both smokers and otherwise in good health.
Follow 7 answers

Answer 4

Good financial planners that market life insurance will do a needs ananlysis. For example, if he dies and had been earning $50k year, you need $830k of life insurance (if the $830k, earns 6% year = $50k) to replace the income the family lost. Term might seem cheaper, but if you still need life insurance when the 20 year term policy ends when your are 60 and at a new health risk, the premiums could be aweful. Smoker premiums are about 3x's that of non-smokers.

Wininbiz.com is a good starting point for general life insurance info, they even let you submit a referral request to legitamite financial planner/insurance agents.

Answer 5

Your get the most coverage for the least amount of money buying term life insurance.

You can buy 10 or twenty year fixed term policies, which means your premiums remain the same for the term period, but you have to reapply for a new policy when the term expires.

You will get much better rates if you quite smoking, especially in later years.

Answer 6

Fortunately that's an easy one. Term life is your best bet. You need to figure out how much coverge you will need. Think about paying off the house, bills and college. That will give you a good place to start. Go to the following site and you can get a free quote to see what it will cost based on how much you want. Good luck.

Answer 7

Oh just because you smoke and are 30+ I would suggest you get term life it's still gonna be cheaper than whole but just because you smoke I'm guessing over 100+ a mo or even more each I think.

Answer 8

It's recommended to have a policy that will cover replacing you until the child is 18. (consider child care, household contributions, money you earn outside the home, etc.)

Some people feel that obtaining coverage that will replace you until the child is 12 is more than enough. You will know what's best.