When should i be concerned about life insurance?

Question

my hubby and i are 20 and college students. whats the appropriate age to start a life insurance policy?

Answer 1

The earlier the better.  Go to Yahoo Finance, click on "Personal Finance."  There is a section there on insurance.

Answer 2

You're thinking about it all wrong.  It's not something you have for the sake of having - it's a FINANCIAL TOOL.  It's point is to accomplish a goal.  What's the GOAL?

For most people the GOAL is about paying to get your kids raised, if you kick off.  If that's YOUR goal, and you have no kids, you have no need.

Don't buy the tool just because it's there.  Don't buy it because you're young, and someone's trying to sell you whole life.  But if they are, DO plug the monthly premiums into this calculator:  http://www.msfinancialsavvy.com/calculat...  at 12% - what the stock market has averaged since inception - and see how much money you could have for yourself, if you invest it in mutual funds rather than give it to an insurance company.  Odds are, if you start now, you could retire with $1,000,000 in the bank, for the same amount per month.   And trust me, if you've got that kind of money in the bank, you don't NEED life insurance.  (except for estate planning).

Answer 3

You don't need life insurance unless you have family that depends on your income to maintain a certain standard of living.  Since you and your husband are in college I would guess neither of you are making substantial sums of money and although it would be a tragedy if you passed away, you would probably not leave the other person any uncessary financial hardships.  It may be different in the future when you both have careers and I would say you will definately need it when/if you have children.

A couple of thoughts on some of the other answers:

I would never buy life insurance that is specifically designed to pay off your mortgage.  You are paying a fixed rate for a declining amount of coverage (as you pay your principal down the benefit goes down).  I would buy term life insurance that would be enough to cover the mortgage instead, as the payout will be the same no matter how much you owe on the house.

I would be careful about whole or universal life policies as they are very expensive.  It's true you will get some kind of benefit no matter when you die and it works like an investment, but I think the costs outweigh the benefits.  I would buy a term policy and then invest the difference betwen the cost of the whole life and term life polices on my own in a 401K, IRA, or some other investment vehicle.

There are lots of different opinions about insurance out there.  Hopefully you are getting enough information to make up your mind for yourself.

Answer 4

My broker said that if you have children or are planning children then you should both have a separate life insurance policy that covers the mortgage on the house and living expenses.  If one or the other spouse passes on, then the surviving spouse will be taken care of.   Life insurance ensures that surviving family member's have the means to bury you and to live a decent life style.  

Now is also an excellent time to start putting money into a ROTH IRA for retirement.  If you take the change left over from a $5 bill each time and deposit it into the IRA you would be surprised at the amount that accumulates in 10-20 years time.  I wish someone had told me the benefits of this when I was in my 20's!

Best idea is to sit down and figure what your goals are for 5, 10, 15, 20 years down the road.  Get with a good broker who has your interests at heart and not someone who is trying to make a buck off commission.  It isn't too early to start planning intelligently as you are young now, but you will be glad you did in the long run.

Answer 5

Yesterday.

You cannot obtain a policy when you must have it (e.g., imminent death).

The insurance must be procured prior to it's fundamental need.

Another advantage of getting it early is that the rates are lower.  Still another reason is that it gives more time for the cash values of the policy to grow.  

At your age, you can obtain a policy to protect the children you may have, pay off a mortgage, keep food in the refrigerator, and every year, have enough left over to by the child a Christmas present.

The fact is, you could make more money investing in a particular investment-grade policy than you could (perhaps) have, if you tried to keep money in a bank.

Answer 6

Do you have a 401k or retirement plan? If you do then I would also consider a life insurance plan. It is never too late to start one if your company offers it or open a IRA until you are eligible or the company offers one.

Life insurance is a great way to protect those you love and your investments. Here is a wonderful writing that a fellow agent had written to explain life insurance. My clients read it and understand more about having life insurance and what it can do for you and your family.

I am a piece of Paper…..But Even More

I am an idea

I am a promise

I help men and women see visions, dream dreams,

and achieve economic immortality.

I am an education for children

I am savings

I am also property that increases in value from year to year

I lend money when you need it most-

with no questions asked.

I pay off mortgages so that the family can

remain together in their own home

I create, manage, and distribute property.

I am the great emancipator from want

I guarantee the continuity of business…I protect the jobs of

employees…I conserve the employer’s investment.

I am tangible evidence that a man or woman

is a good provider

I am a declaration of financial independence

a charter of economic freedom

I am a certificate of character, an evidence of good

citizenship and unimpeachable title to

the right of self-government.

I am protected by laws that prevent creditors from assessing

the money I give to your loved ones.

I bring dignity, peace of mind, and security to the latter years

of life.

I am a “great social compact that merges the individual into

the mass and places behind the frailty of mankind, standing

alone, the immeasurable strength of men and woman, standing

together”.

I guarantee that there “will always be

a happy fireside and the laughter of children-

even though their parent may not be there”.

I am the guardian angel of a home.

I AM YOUR LIFE INUSRANCE POLICY.

I hope you do decide to get one. My husband and I got one a year after we were married and we have never regretted it and have been married 11yrs.

Definately check out what the first answerer said. There is a lot of good helpful info there. Also, ask your family and friends who they deal with for insurance.

Answer 7

Life insurance is designed to protect a family against the financial burdens that accompany the premature death of a breadwinner. Right now you probably do not need such a safety net, since you are not married, do not have children, and most likely do not own a home together. When you read a point where the other person’s financial well-being, and the well-being if your children, would be adversely affected by your or your boyfriend’s sudden demise, then you should have life insurance. Don’t worry, putting it off for a few years will not cost you. Your rates will not go up substantially until after you turn 30, and even then the increases will be gradual until you reach 40.  According to the latest survey by Insure.com, at age 30, you can get a 10-year term life insurance policy with a death benefit of $250,000 for $108 a year, or just $9 a month. A 20-year term life policy worth $250,000 would cost $153 a year ($12.75 per month), and a 30-year policy would cost $228 a year ($19 a month). The lowest prices for a policy with a $500,000 death benefit are $155 for a 10-year policy, $245 for a 20-year policy, and  $325 for a 30-year policy. To qualify for the lowest rates, you have to be in excellent health yourself, have an excellent family history of health, and not participate in any dangerous sports or hobbies. Of course, with rates that low, you might as well get the longest term possible and lock in the rates, just in case. You also might want to discuss whole life and universal life with your insurance agent. Both are permanent forms of insurance that last until death, regardless of health or age. They cost more, though. You need a full analysis. Good luck!