We DO NOT sell life insurance! So read this “unpuckered” because I’m not trying to sell you anything.
A common question we get from new families is what kind of life insurance do we need and how much?
The simple answer is:
There are two kinds of life insurance – 1) Term and 2) Whole Life.
Term insurance lasts for a certain period like 10, 20 or 30 years. You pay the premiums and if you die during that term, then your family gets the death benefit. If you don’t die, then you get nothing – it’s “use it or lose it”.
Whole life insurance lasts your whole life. You pay the premiums and when you die, someone will get the death benefit.
Whole life is much, MUCH more expensive. (Which makes sense since it will definitely pay out and term probably won’t.)
As a young family, you need life insurance to replace the paychecks that would disappear if you’re gone. Once the kids are out of the house, the surviving spouse presumably will continue working and support themselves.
So you only need a life insurance policy that lasts until the kids are “off the payroll” – likely a 20 or 25-year policy.
Buyer Beware: Insurance salespeople masquerading as “financial advisors” often sell unwitting young families whole life policies. They get fat commissions selling whole life and jack squat selling term insurance. Don’t fall for it. No one under 60 should own a whole life policy.
Stay tuned next week to calculate “how much”.
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