What type of Life Insurance would be best for me?

Question

I am a 27 year old single male. I own a house that has a mortgage, and I have some outstanding debt, car, student loans, etc. I plan to be married within the next 3-4 years. I want to make sure that if something should happen to me my family, future wife and parents, are not stuck with my bills and able to continue on without a huge finacial hardship. I know there are different types of life insurance, but not sure how the different ones work. Any help would be greatly appreciated.

Answer 1

Go to Yahoo Finance and click on "Personal Finance."  There is a section within that explains life insurance.

Answer 2

northwesternmutual.com is the best!

Answer 3

If I were you I would buy just enough coverage to cover the loans you presently have plus burial expenses.  AND I would look for a rider on the policy for guaranteed insurability.  This will allow you to buy more coverage when you need it - regardless of your health but at the age you have attained.

Many people that I meet who are in their 60's look back and wish they had bought some permanent insurance (whole life, universal life).  So I would suggest that if it fits your budget you buy some permanent coverage now.  Then you will have guaranteed rates at that level for the rest of your life.  Many people will disagree saying that term is always best.  But my experience tells me that there is a place for some permanent coverage.  I rarely see a situation where someone needs all permanent coverage so be wary of an agent or broker that recommends all permanent coverage.  

At age 27 paying debt like car loans, credit cards and student loans are important.  As is accumulating savings to buy a home.  So make sure that the coverage you buy fits your budget (in other words, don't buy more permanent insurance than you can comfortably afford) .

All that said, investigate 10, 20 and 30 year term insurance.  If you find that you can afford more coverage now - do buy more than I suggested above so that you lock in rates now for the next decade (or two or three).  It sounds like your needs are going to increase.

When you are married and have children make sure you increase your coverage substantially so that you provide enough to eliminate your debts and leave a safety net of extra money to replace your lost income.  Even when the debt is gone there are many other bills that remain.  Replace your income for at least 5 years.  Much more if you have young children (ie 20 years)

One final thought.  Do you have disability and medical insurance?  Injury or Illness could wipe out all of your financial plans.  that might be a bigger need at the moment than life insurance.

I hope this all helps.

<edit> looks like "insurancemadeeasy" and I were posting at the same time.  And our advice is very similar!

Answer 4

At this point it does not sound like you have a high need for life insurance, if your net worth is in the positive your home equity and investments could pay off your debts.

If you still need life insurance you could purchase term insurance, It is very inexpensive and you could get a level premium and death benefit for 30 years. By then your kids would probably be out of college and your need for insurance would most likely decrease.

You could also purchase a small cash value policy, it would remain in force your entire life up to age 100 or 120. If any tries to sell you on the investment benefit of cash value life insurance run, life insurance is insurance and should not be purchased as an investment, because it is a bad investment.

I suggest you look for a local broker that can help you sort through the different companies available. You can use yellowpages.com to search for life insurance brokers in your area.

A Broker represents multiple carriers and can help you sort through all the different insurance companies and plan options in your state.

You can call your auto and home agent they specialize in property and causality insurance and usually have a good knowledge of life insurance.

But you may have better luck with a broker that specializes in life insurance they will have a wider selection of companies to offer.

Answer 5

Given that you are currently single and marriage and family are still several years away I'm not sure you need life insurance.  Unless your parents co-signed on your mortgage or other loans then they won't be held responsible for the debt if you die.  Some of your creditors might bug them, but all they would have to do is send them your death certificate and there isn't anything else they can do.  If you don't have any assets then a small policy to cover your funeral expenses might be a nice gesture.  

If your parents did co-sign on any of your debt and you don't want them to be burdened for the debts if you die then a simple term life insurance policy equal to your debts would be a good thing to do.  

Assuming that nobody else is responsible for your debts but you, I would recommend using all your income to pay those debts down starting with credit cards and car and working up to your student loans and mortgage.  The best thing you can do for your future family is to not bring a lot of debt into it.  

Once you have a family look at getting some life insurance to replace your income and pay off any debts that you might still have.  

Good luck.