Term Life Insurance

[MelCald]

Dh and I are changing our life insurance. We aren't sure if we should do a 10, 20 or 30 year term. What is the benefit of any of them over the other? We are 38 and 40, if that makes a difference.

Thanks!

 

[Christine]

You should have term for the length of time that you plan to be working. I'd probably go with the 30 years since you could have at least 20-25 years until retirement.

 

[Acklander]

It really depends on your needs and plans. The important thing to remember when buying insurance is that it's supposed to support your current life style if someone dies early. It's not supposed to be like winning the lottery. At what point would you not miss your partner's income? How long will you have children in the home if they go to college? How long until your mortgage is paid off? When can you start collecting on your retirement plans/pensions/ or SS? These are the questions you need to ask, and that should help you find your answer.

 

[mickeyboat]

I guess it depends on why you are buying it. DH and I are 37, and we just bought a 20 year term policy. I figured by then the kids would be out of clollege, the house would be paid off, we would have saved up enough money for funeral expenses, we would have some retirement savings and we would both be able to fend for ourselves should the other pass away.

Denae

 

[crjack]

I just got new term life insurance a few months ago and went with a 20 yr. policy. (I'm 42). The rate was really the only difference that I found but for me 20 yrs. seemed like the best choice.

In 10 yrs. the mortgage will just be paid but we will have 2 kids in college. (Plus the hassle of going through the application and blood work again) 20 years seemed like the better option. 30 years really didn't seem necessary based on our situation.

Now I only work part-time and DH's income is significantly larger so we carry a lot more insurance on him.

 

[momto2girls]

I think it really depends on your personal situation. We have a lot of life insurance on my husband because we have young children. I don't work and don't plan to work again in the future, so we need a lot more to support us if DH would pass away unexpectedly. So, we opted for longer time periods too. We do also have longer term life insurance on me as well, but obviously for a much smaller amount. I don't believe in funerals so those costs would be very minimal.

 

[freckles and boo]

I think it really depends on your personal situation. We have a lot of life insurance on my husband because we have young children. I don't work and don't plan to work again in the future, so we need a lot more to support us if DH would pass away unexpectedly. So, we opted for longer time periods too. We do also have longer term life insurance on me as well, but obviously for a much smaller amount. I don't believe in funerals so those costs would be very minimal.

Do NOT underestimate your financial contribution to your family, especially if you are at home with the children. We did a $1,000,000 death benefit for my husband and half that for me with 20 year terms. If something happened to me my husband would either have to stop working or find someone he trusts unquestionably to care for our children. One has special needs and she can't just be plopped down in a day care center. The stay-at-home parent also tends to do most of the cleaning. Someone could be hired for that but it can get pricey. The same with other chores like gardening. I figure I contribute as much as he does, although he brings in much more cash (I still freelance). Funerals are small potatoes compared to raising children for the next fifteen to twenty years.

 

[DMickey28]

Do NOT underestimate your financial contribution to your family, especially if you are at home with the children. We did a $1,000,000 death benefit for my husband and half that for me with 20 year terms. If something happened to me my husband would either have to stop working or find someone he trusts unquestionably to care for our children. One has special needs and she can't just be plopped down in a day care center. The stay-at-home parent also tends to do most of the cleaning. Someone could be hired for that but it can get pricey. The same with other chores like gardening. I figure I contribute as much as he does, although he brings in much more cash (I still freelance). Funerals are small potatoes compared to raising children for the next fifteen to twenty years.

That's what I was thinking.

We really need to buy some.

 

[momto2girls]

Do NOT underestimate your financial contribution to your family, especially if you are at home with the children. We did a $1,000,000 death benefit for my husband and half that for me with 20 year terms. If something happened to me my husband would either have to stop working or find someone he trusts unquestionably to care for our children. One has special needs and she can't just be plopped down in a day care center. The stay-at-home parent also tends to do most of the cleaning. Someone could be hired for that but it can get pricey. The same with other chores like gardening. I figure I contribute as much as he does, although he brings in much more cash (I still freelance). Funerals are small potatoes compared to raising children for the next fifteen to twenty years.

Oh, ITA! When I said that we have a much smaller amount on me, I did not mean that it was negligible. I think we have $500K on me. We already have someone clean for us, so we're used to that expense already. Also, DH works from home, so our child care needs would be a bit different as well. Each family's situation is unique, but I think we have our bases covered.

 

[freckles and boo]

Oh, ITA! When I said that we have a much smaller amount on me, I did not mean that it was negligible. I think we have $500K on me. We already have someone clean for us, so we're used to that expense already. Also, DH works from home, so our child care needs would be a bit different as well. Each family's situation is unique, but I think we have our bases covered.

I just worry when people minimize what the SAH parent does because it is critical to the financial success of most families.

I wish I had someone cleaning for me.

 

[auntie]

I'd go with at least a twenty or thirty year term given your ages. Whether or not it's possibly you'll still have a mortgage, and the age of your youngest child by that time. Also..better to get it now, while you are younger and in good health. In just a few years time, the rates will be significantly higher, and if any health issues arise,(which with natural aging process, there are bound to be) it will be more difficult and the rates will be higher. I'd go with as long a term as you can afford, so as to avoid having to add it later.

 

[becka]

We got 30 year term insurance for us after we had our first child. We both also have group term life policies were we work as well.

We figured that by the time our 30 year term insurance runs out our kids will be 25 and 30. Hopefully by then they will be mostly self-supporting unless something changes. We also should have our house paid off (or mostly paid off) and should have a pretty substantial retirement savings built up so we would not be leaving the other without any money. The key thing we wanted with the extra term insurance was to make sure we provided for our kids financially if for some reason one of both of us were not around anymore. Once the kids are grown that need is just not the same.

 

[golfgal]

Also keep in mind that your actual final expenses, MEDICAL BILLS, could be astronomical so that could wipe out your retirement plan pretty quickly. Funerals can be expensive and WILL you have $15,000 to pay for that? Also consider that if you get a 20 year or 30 year term policy and it runs out at age 65 or older, you won't really be able to get anything else--well you can but you are talking HUGE premium costs then. It is a good idea to have some permanent insurance just in case. Also, if you take a 20 year term, runs out at 50, you can't really tap into your retirement plan yet so that does you no good either.

 

[mjkacmom]

Do NOT underestimate your financial contribution to your family, especially if you are at home with the children. We did a $1,000,000 death benefit for my husband and half that for me with 20 year terms. If something happened to me my husband would either have to stop working or find someone he trusts unquestionably to care for our children. One has special needs and she can't just be plopped down in a day care center. The stay-at-home parent also tends to do most of the cleaning. Someone could be hired for that but it can get pricey. The same with other chores like gardening. I figure I contribute as much as he does, although he brings in much more cash (I still freelance). Funerals are small potatoes compared to raising children for the next fifteen to twenty years.

Same here - young children, I'm a SAHM, so $1,000,000 on DH, $500,000 on me. I can't remember how long - probably 10 or 15 years, because our needs will change once they're in school fulltime.

 

[golfgal]

Same here - young children, I'm a SAHM, so $1,000,000 on DH, $500,000 on me. I can't remember how long - probably 10 or 15 years, because our needs will change once they're in school fulltime.

They might not need full time day care once they are in school full-time but the TAXI service costs more then daycare once they start participating in activities in school, etc.

 

[Chicago526]

One of the 1st things I did when we got married was to drag DH down to my insurance agent and signed us up for 20 year term policies (that will take us to our early/mid 50's, after that what we have thru our jobs should be enough). We got 250k on each of us, but we also both have policies through our employers so we'll get more than that.

Health makes a huge difference in what you pay. I'm 100% healthy and I pay $25 a month for mine, DH is type 2 diabetic and has high cholestoral and we pay $75 a month for his! But we're locked in, so if he gets sicker they can't cancel it or raise our rates. It's why I wanted to do it right away, if he gets worse, then they might not have given him a policy at all.

 

[Golter]

I'm not a big believer in Term insurance for young people (unless you cannot afford anything else). You are throwing your money away. Less than 1% of all term life insurance policies ever pay out a benefit. They only way it pays is if you get "lucky" and die early.

The best policy on the market is a VUL...great tax benefits. Talk to your financial advisor about them.