I'm 24 yrs old. should I get whole life or term insurance?

Question

Currently I have no children yet, what's best for me?

Answer 1

Since you are 24, you will run into some financial surprises later on. So your goal should be to remain as liquid as possible.  Therefore, Term is your best option.  Term is cheaper.  With the savings between the Term and the Whole life, you could invest the difference.  The benefit here is that you will have access to the money you invested, where the whole life policy would not allow access until much later.

Answer 2

If you are 24 and have no dependants, I would suggest setting up some type of whole or universal life product.

Most term products will: 1) expire before you will die...most expire at age 80 and with medical advancements increasing life spans there may be a good chance will live longer than that and 2)  Term insurance rates increase everytime you renew it and it will be ridiculously expensive when you get to age 50 and older (as in literally hundreds of dollars a month).

Depends on your situation and where you live, but buying $100,000 of whole or universal life would be appropriate if you are looking for a general blanket answer without knowing much abou tyour personal situation.  The cost of final expenses (funeral, taxes, admin. fees) right now will generally run between $15,000 to $25,000 depending on how fancy you want your funeral to be.  These costs will never go away and will increase as you get older (it's called inflation), so by the time you are old and grey, there is a good chance your final expenses will be around $100,000.

Also, being as young as you are the rates should be fairly cheap.....the older you get the more expensive it will be.  There is an old saying that says the best time to buy life insurance is TODAY, because as you get older it increases in price.

If cost is a huge factor, but convertable term insurance where you can convert it to whole life later in life

Answer 3

I prefer term. Just fully understand both and then make the decision that's best for U. A sales agent would make more for WHOLE LIFE. base the decision on educating yourself. If you are younger, than whole life might be better. (cheaper). Maybe get both if you can financially do it to cover the bases. Some plans allow you to borrow from it down the road. I did this during financial difficulties. This was a term policy.

Answer 4

TERM!! Like others have said....get term and invest the difference.

I'll tell you the route I'm going. I've just turned 26. I started my life insurance when I was 25. The term rates with my company are the same from ages 23-29. I've gotten an ART(annual renewable term) policy for now. It's about $12 cheaper per month than the 30 year term policy I'm going to get at age 29. I'll stay with the ART until right before the rates would increase, then I'm going to lock it in on a 30 year term policy that will give me coverage until age 59. Hopefully, by age 59 I will be debt free with about a mil in investments and therefore won't need life insurance anymore. So......if you plan on being deeply in debt late in life, you might need a whole life policy. BUT, if you plan on winning financially, I would stick with term.

Answer 5

You should ALWAYS buy term life, no matter your age.  "Whole life" is just another term for a mixed program of term life combined with a savings account which pays VERY poorly.

Do not mix the two.

Answer 6

each has its own benefits ..in term life you have to pay lesser premium but still you can insure your life and save  the balance money in any form of savings say mutual  funds ,  fixed  deposits in whole life premium is more but your life is covered till 100 years so you have that advantage for your  family  if you are in india i would suggest  icici life insurance to you it is  good  choose which  product fits you best

Answer 7

Risk aversion, how likely do you believe you will be dead at a certain time?

Answer 8

Take a look at both articles below.

Also,check out the new money book by Ric Edelman. Go to the index at the back, look up universal life or variable life. What he explains here, is also good for whole life.

Anyone like KTL who says only 10% of the people with term die with term are fooling themselves if they think the same doesn't also follow for the whole life stuff. Go with the longest Level term premium that you can. Make sure that anything you invest is automatic- comes right fgrom your bank account each month so you don't think about it. For the company you go with for the level term, ask the agent if the policy can be renewed WITHOUT re-qualifying medically. So, at the minimum, you are guaranteed the same face amount that you had from the beginning. That company should also offer you a 10% benefit rider- for 1st 10 years face amount increases by 10%, then so does your premium. BUT, at the end of each year you get a letter asking you if you want to increase the next year. If you decline, the premium will not increase until the end of the original term, if accept premium increases and you get letter the following year. Be sure that ONE policy can take care of your household, to include child policy that covers ALL the children you will have for the price of one child policy.

Answer 9

Term is obviously for a set time then it would cost more to re-insure after the term because you would be older, whole of life you have to pass away before your surviving relatives get paid out.

D.W.

Answer 10

Hi Imb,

This is a very important decision because life insurance is based on age and every day you approach death it gets more expensive.  

I recommed a guaranteed death benefit Universal Life.  It is kind of in the middle of term and whole life.  It isn't much more expensive than term and provides a stable premium.  It builds interest as well, which is later used to pay on the policy so your premium isn't rasied.  I recommed this because although the "invest the diffence " method is a great "idea", noone knows what the future might bring. To give you an example of why that is not guaranteed to work.

Example one:  Purchase cheap term at age 24.  Invests so many dollars every month (if you are discipline.. which most of us are not ).  You have a baby and get married at age 30. You and your husband want to buy a house and you need to pay off bills to put yourself in a better position, you cash in your investments to use towards this.  Your intentions are to continue to invest but somehow the new responsiblities of a family prohibit you from being consistant.  Now you are 38 years old and have diabeties.  Your term premium guarantee will run out in 6 more years, so you decide to upgrade your policy.  The cost will now be based on a 38 year old with diabeties versus a healthy 24 year old.  

In other words noone knows what life will bring so it is better to be proactive than reactive.  My clients pay about $25.00 a month for a guar. Universal life policy which the premiums will stay the same.  Talk to insurance agents who tell you that term is better cuz it's cheap, ask them what percentage of people die with term.  The answer will be less than 10%.  Which is why many die without life insurance.  They had it at some point and the term expired and couldn't afford the insurance at that age.  Besides companies stop writing term at the age of 80 years old, so when you die after that then what?  If you have a nice nest egg great!!  But in this economy that is getting harder to do so don't depend on that.  Not to mention where,. who and how you invest the money is another can of worms..to make sure it grows.  Those decisions must be wise!  It is better try to make the right one the first time.

Good luck you can go to this site and it will give you some more insite on the type of insurance pros, and cons.

Answer 11

Generally you insure to help the ones that will suffer from your income loss, a wife-then you would figure how much she would need to survive without you, maybe enough to pay off mortgage if she has a decent job.

If you did have kids and they were one year old  getting a term policy for say twenty years-the amount that they would depend on you financially.

You pick a term that would cover that person until they can take care of them self. The amount is figured by your income loss over that time.

Whole life only benefits the insurance co. and the agent otherwise a terrible product for consumers.

Answer 12

def whole life... term ins is no good..... if you have prudential where you live... they are good....

Answer 13

Sure, they say that about whole life, but ask yourself this: Will you really take the money you save with term life and save it? Will you invest it to earn a greater return than the insurance company would guarantee? If so, go for it.

If you decide to go with term life but have no dependents, there is really no reason to insurance now. The idea behind life insurance is to help your dependents cope with the sudden loss of income if you die prematurely. If you have no dependents, there is really no reason to have life insurance. It’s true that you can lock in a lower rate the younger you are, but tem life insurance costs do not go up substantially until a person is turns 40 or even 50 (see article below). For example, according to the most recent survey by Insure.com, at age 30, you can get a 30-year term life insurance policy with a death benefit of $250,000 for $228 a year. At age 35, the cost of the same policy is just $250 a year. By locking in at age 30, you save $22 a year—but of course you would be paying $228 a year for five years of coverage you don’t really need.

Answer 14

If you have no dependents I don't understand why you want to buy any life insurance. Better to take what you would be paying in life insurance premium and investing it in stocks or mutual funds. Or in a high yielding bank account if you're conservative.