I'm 29, and my wife and I just had a baby. I need life insurance. What's the best way to shop around?

Question

I'm sure I could meet with dozens of slick salesmen, but I don't have time for that and I want to compare cold hard facts. Anyone been there, done that?

Answer 1

I seen many families that either had no life insurance or own the wrong type of life insurance. That's great that you are taking a step to protect your family.

The first thing you need to do is understand the different types of life insurance out there. There are two basic types of life insurance.

The first type is called "cash value life insurance." They go under the name as whole life, universal life, variable life, or a mixture of those words together. Cash value life insurance is a term insurance plus a savings attached to it.

Whole life insurance is a level term to age 100, Universal life insurance is an increasing term insurance (that means the insurance goes up internally every year) to age 100, and Variable life is also a level term to age 100, but the death benefit may increase if there is growth in the cash value. If you see the word "Variable" it means that a portion of your premiums is invested and when you are investing, you must know that there is no guarantee that there will be growth.

All cash value life policies provides protection to age 100. But the bad news is that they are generally expensive to the average consumer and most people who buy these types of life insurance are under-insured (meaning they don't have enough coverage).

Majority of cash value life policies have a low rate of return. They usually average around 3%. The highest I ever seen was 6%. The lowest I ever seen was 1%. If you ever wanted to take money out of the cash value, you will have to borrow it and pay a loan interest on it (usually around 8%). If you die someday, all the cash value is kept by the insurance company. In some life policies, the cash value is included in the death benefit, but you have to pay more premiums to get this feature.

The second type of life insurance is known as "term insurance." Term insurance does not build cash value, therefore premiums are very low. You can buy lots of coverage for a low amount of premiums. There are level term policies that are as short as 1 year (you want to avoid these) and as long as 35 years. Longer term is always better since it will give you enough time to build wealth for your future.

Right now, you probably have a mortgage to pay, you got a child to take care of, and you probably have some other personal debt such as credit cards. You probably don't have much saved right now, so the need for life insurance is very high.

If you die tomorrow, not only would it be emotionally devastating, it will also be financially devastating. Which will have a longer impact on the family, their emotional loss or financial devastation? The financial devastation because without life insurance, your child may not be able to afford college, the family will have to move out to a cheaper place, and your personal debt may go toward your spouse.

In the later years, your kids grow up and maybe move out of the home, your mortgage gets paid off, and hopefully you don't have much personal debt. So the need for life insurance is very low. You are nearing retirement, so you better have lots of money saved.

Buying term now will provide the right amount of protection needed to protect your family's income. At the same time, you want to start investing toward your future. Of all the cash value life policies I seen, none of them can compete against the S&P 500 index, which represents the top 500 largest companies (mostly all US companies). Most of the products you own in your home is listed in the S&P 500. In the past 20 years, the S&P has an average rate of return of 12%. Even though it done 12%, investor's performance will vary because people tend to make mistakes. If market crash, people will tend to pull their investments out. But if you are smart, you will continue to invest.

So lets say you invest $200/month for the next 20 years and it gets an average rate of return of 12%. Keep in mind, it's not going to do 12% every year. One year it may be 4%, then one year it may be 18%, but if you invest for the long term, it may average out to 12%. So in 20 years, investing $200/month, you can potentially have about $200k. In 30 years, you can potentially have about $706k, and in 35 years, you can potentially have about $1.3 million. If these investments were in a Roth IRA, you can withdraw all this money out after age 59 1/2 and you won't pay any taxes on them! Just remember, this 12% is not guaranteed. But saving money outside of life insurance is always better because life insurance charges lots of fees that you don't know about.

If you were to accumulate this amount of money in 20-35 years, would you still need life insurance? Your answer should be "I don't know" because you won't know your financial situation in the future. Maybe your kids are still dependent on your income, maybe you have a horrible mortgage where the principal balance never goes down (these type of mortgages do exist because I seen them), or maybe you abused your credit cards and maxed them out (hopefully you don't, but people have done it). Whatever happens in the future, you just need to take care of your needs right now.

Now you know everything about life insurance and a little bit about how money works, you are set to find the right life insurance for you. Remember that life insurance's only purpose is to replace your income if you die, not as a way to build savings for financial goals.

Answer 2

Sure, lots of people.

FIRST, before you make that telephone call, sit down, and write the GOAL(s) of the life insurance. What do you want it to DO for you?

Now, call the guy that writes your car/house insurance. Talk to him - odds are, he can do life insurance too. If not, ask for a referral.

An independent agent can get you a variety of quotes, and explain the different policies.

PURE insurance is term insurance - it's a straight bet on whether or not you'll die in the next XYZ (usually 20) years. It's BY FAR the cheapest way to buy. Everything else has "bells & whistles", like a flat premium forever, or built in savings or investments (which, btw, are the MOST expensive way to save or invest).

DO NOT buy over the internet. DO check the insurance company rating, it should be AM Best rated "A" or better. And whatever you do, keep that goal in mind.

Answer 3

Do it online, it's great. Make a list of a dozen well-known insurance companies, and be sure to check with any associations you may be a member of (AAA, alumni groups, etc). Visit their websites for information on their life insurance policies, and request quotes online. Even if the sales rep contact you, you can limit the contact to email, so you have some time to consider their sales pitches.

Start an Excel spreadsheet and enter the information as you get it so you can compare information side-by-side (one company or policy in each column; use the rows for features - one row for monthly premium, one row for benefit amount, etc).

I just cut by renter's insurance in HALF by doing this!

Answer 4

Figure out how much you need first and then check out some websites. Your family won't care what type of life insurance you had when they get the check in their hands. That's the reality of our business. Make sure you can get the numbers before you submit personal information.

What Scotty Doesn't Know is that you cannot solve a permanent need with term insurance, but in your case, term is most likely the best fit. I just don't believe in regurgitating advice that is overly simplified and impersonal.

Answer 5

It's never too late or too early to
think about protecting your family's financial future.


Life insurance is protection against financial loss resulting from death. It is an insurance company's promise to pay your beneficiary a specific amount of money when you die in exchange for timely payment of premiums.



Why do I need life insurance?
Although you may not think about it, your ability to earn income is a significant asset and life insurance helps replace lost income in the event of your premature death. Here are some reasons people buy life insurance.

The death benefit may be used:

To replace income the family would need to maintain their standard of living after the death of a wage earner.
To pay off a mortgage loan and other personal and business debts or to create a rent fund.
To create a fund for children's education.
To pay final expenses, such as funeral costs and taxes.
To create a family emergency fund or a fund for a family member with special needs.


How much life insurance do I need?
The State Farm Life Insurance Needs Calculator provides a quick way to get an estimate of the cash needs you may have at death. Cash needs that exceed your available assets can be covered by life insurance.

Answer 6

I would have to say you have got yourself a selfish woman that expects you too pay for everything Asian woman are known to be very money-hungry especially the Filipinos. Sounds like she will allow you too pay her way make herself a big nest-egg then leave you. I think after reading this and you guys do not have a joint account?. Tell her in marriage you do not have your own money that all money is used to better the marriage and also to look towards the future like a retirement plan. Tell her that you guys need to go to a bank get a joint account where both of you have your pay placed into and then after the bills are paid and money is pulled for groceries etc. Transfer a good amount into a joint multiple signature savings account where you both need to sign to remove funds. Tell her unless she is willing to make some sacrifices and compromises and pay for some stuff in this marriage; then the marriage is done! Sound like you need to grow some balls and stand up to her stop putting up with this **** why did you even date her for so long she sounds like a nightmare?.

Answer 7

Yep. Look for a level term insurance policy, especially one that has a spouse rider (you will pay much less in fees with your wife attached to your main policy), and one that has a single child rider that covers your child, now, and ANY future children you may have. Look for a policy term up to 35 years.

Be certain that the agent you speak with asks you if you want your debt paid off, including mortgage, that if everything was paid off, how much would survivor need to live on and for how long, and do you want your child's education paid for?

Answer 8

Western Southern life insurance

Answer 9

The Independent Order of Foresters can be found at http://www.foresters.biz/

This is one of the companies I represent and they have a simplified issue term product for you and your family. Simplified issue means there is no medical exam for the coverage and is easy to get. That web site listed above can get you going. Send me an email if you want more information about this company.

Answer 10

Maybe you can try below website to get the information you need. It's about choosing the best life insurance option for you articles for your second opinion.

Answer 11

insure.com is a good place to start.

Be sure you purchase TERM LIFE INSURANCE only. Anything else is a ripoff. The only people who will disagree with me are those who sell the other products...and even some of them agree.