How to choose a Life Insurance?

Question

All the insurance companies sound like they're trying to sell us on the product.

We're married in our thirties with two babies.

Thanks!

Answer 1

Go to the link below.  I don't know if you ever heard of Clark Howard before but he's wonderful.  He's so tight with money that he squeaks,

Clark says:

Consider your own situation to see if life insurance makes sense for you, how much you need, and which type of life insurance would be best. If your family would be unable to make the mortgage payments without your income, you need life insurance.

Life insurance is meant to replace your income. My rule of thumb is to buy an amount equal to six times your annual salary.

If both spouses work, both should have life insurance to replace their own income. Don't buy insurance on your children.

There are two primary types of life insurance. Term life coverage provides a payment only if you die. other policies, such as whole life or universal life, include investment components.

If you decide to get term life insurance, the best way to buy is by checking one of several Web sites for a financially strong company that offers low premiums.

Don't cancel a whole life policy. Once you've purchased it, it's best to keep it.

Avoid buying more than one policy for any person. Every insurance policy you buy has fees hidden in it. So two $50,000 policies would cost more than one $100,000 policy

go to his site for more info.

pst..  check into disability insurance.

Answer 2

honestly, i do not believe in Life Insurances although i work in an insurance company. I think that the total payments you make in an insurance will almost equal to the amount if you save the money on your own (even without placing it in a bank).

Probably if you're gonna get a life insurance, just get a plan where you can pay for it religiously, and has just an average face value (face amount) just enough to cover the expected expenses in the future, this may be referring to estate taxes, burial or a little fund to help your beneficiaries start up their life without your help for a moment.. Do not get a plan where the face value is very high cause you may not realize it but the value really would depreciate, the value your paying for right now may be not be worth it in the future because of inflation and everything. Hope this helps..

Answer 3

It's simple, all you need to do is take the time for you and your spouse to sit down and write out exactly what it is that you want and how you want it, then choose a line of insurance companies no more than 5 that you would like to deal with, compare them and see who gives you what you want. Stick to what you want don't let them change your mind.

Answer 4

I'm a financial representative and providing life insurance is one of the things I do for clients. God forbids if the breadwinner dies, where would the family be without life insurance? Life insurance can't protect you against harm or death, but it can replace your income. The problem is that many families that own life insurance don't have adequate coverage, but they pay lots of premiums for it. That's because they own the wrong type of life insurance. Take a look at the facts and you decide which product is the best:

Whole life insurance

1) Its level term to around age 100 that builds cash value.

2) Since it builds cash value, premiums are higher than term insurance that doesn't build cash value.

3) There is no cash value growth in the first 2 years because premiums are used to pay for the insurance and commissions to the agent.

4) After first 2 years, you are guarantee a rate of anywhere between 1-4% (varies between companies)

5) If you wish to take money out from the cash value, you have to borrow it and pay loan interest of 6% to 8%.

6) If you die someday, the insurance company keeps your cash value, but pays the death benefit. Death benefit will be reduced by any loans you taken from the cash value.

Universal life insurance

1) Annual renewable term until around the age of 100 that builds cash value.

2) Flexible premiums as long as there's enough cash value to pay for the insurance.

3) While premiums may remain level in the beginning, the internal cost of the insurance goes up every year. That means less and less of your premiums goes into the cash value. Eventually, the premiums you pay will be insufficient in the future to pay for the cost. What would happen is that you would either have to pay more premiums or a portion of your cash value will be used to pay for it.

4) Same cash value features as whole life.

Term insurance

1) Various of level term products to choose from (from 1 year to 35 years).

2) It does not build cash value, so premiums are initially lower than whole life and universal life.

3) Most term insurance are guaranteed renewable without providing a proof of insurability. If your health was to decline because of old age, you can renew your policy without any hassle.

4) When you renew, premiums will be based on your current age. So premiums will go up after the initial level term.

Those are the facts.

Personally, I have sold term insurance 100% of the time. Why? Its because my clients can get lots of coverage for low amount of premiums. Since premiums are low, I help setup investment accounts for my clients so that they can build wealth. If you had lots of money saved right now, would you still need life insurance? Probably not. But you probably don't have lots of money saved right now and if something were to happen to you, would your family be financially ok? As you get older and continue to invest, you may or may not need life insurance when it is time to renew the term insurance. If you were to invest $200/month for the next 30 years and the average rate of return in your portfolio was 12%, you would have about $650k saved for retirement. That's probably not enough to live on, but at least its better than having money sitting in a life insurance policy.

Which brings me to the next point. It pays to start saving early. The later you wait, the more you would have to put away to reach your retirement goal.

Answer 5

OK Life insurance is a good thing. It is split between the kind that you pay in and when something bad happens it pays you and the kind where you build a cash reserve which they say you can use as it builds up. Mostly you want this kind to build up where it pays for itself. This kind is more expensive and could be used as a retirement hedge.

#1 rule do not sign up for more than you can afford if times get tough, you can always add to it later, but go real lean now.