June 6th, 2006 | 
Author: 
mrs333luv asked:
If we are a young family of 3, with one child (1 years old) and we both are 29 years old, which is the best option for Life Insurance to purchase for myself (mom) as my employer doesn’t offer this benefit to its employees – Term, or Permanent? Don’t know if this makes a difference, but we make a decent income, but we are on a strict budget, have been trying to get things paid off over last few years and I think in another year or two we should be in much better financial situation…
Thomas Clayburn
If we are a young family of 3, with one child (1 years old) and we both are 29 years old, which is the best option for Life Insurance to purchase for myself (mom) as my employer doesn’t offer this benefit to its employees – Term, or Permanent? Don’t know if this makes a difference, but we make a decent income, but we are on a strict budget, have been trying to get things paid off over last few years and I think in another year or two we should be in much better financial situation…
Thomas Clayburn
Posted in Insurance | 
Tags: Benefit, Decent Income, Financial Situation, Insurance, Life Insurance, Mom, Strict Budget
What’s the GOAL of the life insurance?? Set the goal first, THEN select the product.
You may need insurance cover for protecting your child if some thing unfortunate happens to either or both of the parents. So calculate how much amount is needed for his/her future needs. that will be the sum assured or the goal to be set. then get quotes for pure term assurance plans from various companies and took the ideal one. there are policies that covers both or either of you in a single policy. this will not cost you much as it is a risk only policy. you can invest the balance fund in ideal alternatives. I could suggest different alternatives if you are in India.
Term gives you the most protection per $1 of premium. Go to Yahoo Finance, click on “Personal Finance” and read the section on life insurance.
I know a source of your answer.
I would suggest a permanent policy with a low death benefit and a term policy with a high dollar amount. The term should be long enough to cover the big things like a mortgage, your child’s care, college, etc… The whole life policy would supplement those and would serve mainly for burial costs.
Completely depends on what you are looking to insure against/provide for:
You should buy term if it’s a temporary need that will eventually go away. Examples of temporary needs would be making sure the kids get through college (after 20 years, you 1 year old will be in/through college so that’s no longer an issue), paying off debts (IF you have a 15 year mortgage, after 15 years, the debt will be gone), etc.
You should buy whole life (perminent) if the need is perminent and will not go away whether you die tomorrow or 60 years from now. Examples of this would be making sure your family has enough to cover the cost of burial, lawyers fees, taxes, etc. when you die, or if you want to start a legacy fund in your memory to a charity, or if you want to make sure that your kids don’t have to pay taxes on your estate when you build assets later on, etc.
It’s not uncommon for a person to have a small whole life policy ($50,000-100,000) to cover funeral costs and such as well as having a larger term policy ($500,000 or whatever) to cover all the debts, kids costs, etc. Don’t feel that you have to have only one or the other.
Anyone that says “only buy XXXXX type of insurance” without knowing why you’re buying it in the first place is giving lousy and uneducated advice in my opinion. Different insurance products are designed and on the market to cover different situations and needs.
Your best bet either way is to contact a liscensed insurance broker in your area that can discuss all the options with you. A broker will do what’s best for you, since they have access to multiple companies. They will shop around for the best rate rather than just offering you one brand of product that they have to sell.
As one word of slightly off topic advice, if you do not have group benefits, having thigns like Disibility insurance, medical insurance, critical illness insurance and long term care insurance would be likely more important than life insurance at your age. The odds of getting seriously hurt or ill are far greater for a 29 year old than dying is.