Life Insurance Questions.

I sell life insurance so let me explain the best way I know how.

There are 2 basic types of life insurance.
Term - This is like "renting" insurance. You buy a policy for a certain period of time, say 20 yrs and the premium stays the same. Does not build cash value or earn interest. If you don't die within that 20 yrs than you get nothing and you have to buy more insurance at a higher rate.
Whole Life - This is more like "buying" insurance. You buy a policy and it is meant to last you your whole life. This type earns interest and you can borrow against it or take money out of it once you've paid enough in.

Term is much cheaper in the beginning. Good for parents of small children or new home buuyers. You can get a lot of insurance fairly cheaply. Once the term is up you may have to requalify and it is significatnly more expensive.
Whole life is more expensive initially but over the long tem it doesn't go up when you get older and it has the benefits of getting some of your money out later. It's very cheap for infants, so good to get the kids a whole life policy early.
If you have more detailed questions feel free to message me.

I can't go into too much detail because there are so many policies out there. What I can tell you is to get something. With some policies you can take money out before the term finishes but they have to be policies that build cash value and some policies don't. I have a $50,000 policy that costs about $15 a month, and I have some that build cash value that are $100 a month, so it really depends on how much you are looking for. What you should think about for you and your husband is: can you live off of just your salary? If not, you should get enough insurance to cover the spouse's salary for awhile anyway. Also, when it comes to your 3 year old, it is a good idea to get insurance on him/her because once he/she has some kind of insurance, as long as you keep it up, he/she can't lose it if they become ill. However, if your child becomes seriously ill, he/she becomes uninsurable in the future and it will make it difficult for them to provide for your family. My husband works for State Farm and could go on and on about the benefits of life insurance. Please talk to an insurance representative who can really give you all the ins and outs and provide you will necessary quotes. Also, if you multiline your insurance, car, home, life, etc. you can get discounts.

Don't use life insurance as a savings plan!

Dave Ramsay recommends 10x your salary in level term life insurance. Look for the company he recommends (Zander Insurance) & get quotes on the Dave Ramsay website....www.daveramsey.com/

The younger you are when you buy it, the cheaper it will be!

Hi J.,
I also recently started looking into Life insurance (for me and my husband - we have a 19 month old daughter) and we met with an agent yesterday. Other posters explained the difference between "term" and "whole" (basically permanent) so I won't mention that again. But one important thing that I just realized is that if you do die, Social Security gives your child and husband some amount of money on a monthly basis. I think each person is different, but if you get those Social Security updates in the mail (I seem to get one about once a year and I just happened to get one the other day), it will tell you what that amount is (at this time)... Or I would imagine you could get in touch with a Social Securuity office to ask them. Just something to keep in mind. I still want to get some life insurance, but some of those whole life plans were very expensive and I'm not sure if it's worth it (at least for us). But based on the meeting I had with the agent yesterday, there are so many options and it really is complicated. I also plan to meet with agents from other companies to do some rate comparisons. Good luck! I will be interested to read other responses to this as well!

Hi J.,

MANY a moon ago I was in insurance sales so from a "buyer's perspective" I probably know a little more than the average client. I do have an agent that I love to work with because even though I sold it years ago (over 15 yrs ago), I cannot recall much. Greg explains it in layman terms, will repeat information, give real life examples, is not pushy at all, and offers options that truly meet your needs. I've referred him to several people & all have loved working w/ him. I'll note his contact info below if you decide to use him.

In the meantime, you'll want to decide what the goal is for your life insurance needs - is it to cover you and/or your husband's income for a period of time should he or you pass (i.e. so either of you can continue to pay the mortgage, household expenses, etc.). Is it to protect your child's future should both pass?

There are term policies - in other words, they'll cover you for the period of time you have the policy (10, 20, 30 yrs) but if you don't die during that time, no death benefit/no payout. Some offer a refund after 20 or 30 yrs - either full premiums paid or a portion - while others are simply pay for it but get nothing back after the term runs out. There are whole life, variable life, adaptable life, etc. - many variations of a more permanet policy. These offer the option to pay until a certain age (usually age 65) and then you no longer have to pay but still have the death benefit.

I would suggest you Google some of these terms & familiarize yourself w/ the various options. Or do an "estate planning" Google search for some general information. Once you decide you're ready for more detailed information specific to your needs, then contact an agent. Below is my guy's information. Like I said, I really like dealing w/ Greg. He'll give it you straight, not push some expensive plan you don't really need.

Greg Koeberl
____@____.com
###-###-#### ext. 222

He's helped me w/ all sorts of financial planning needs overall - not just the life insurance, but college savings, retirement accounts, etc. And not all Prudential products (since he's w/ Prudential now).

Good luck!

G.