When buying life insurance what is the best affordable option?
insurance
I am 37 with 2 kids I currently have term life on me for 250,000.00 and 100,000.00 on each of the kids.
Now there are tons of different life insurances out here is one really better than the other?
I currently have it thru met life does it really matter?
You really need term life, not whole life at this stage. The $100k for your children is excessive, all they need is less than $5k each if any to cover burial costs since they are not supporting anyone.
You should up your coverage even if you aren’t working unless you have insurance through your husband. Met Life is fine but you can certainly compare rates with other providers. A.M.Best is the insurance rating company.
First of all I’m sad to say that you broke the first rule of buying life insurance and was suckered by the broker into buying too much. You aren’t supposed to buy life insurance on your children. Some people may buy $10,000 to pay for a funeral in case of an accident but $100,000 is crazy! Why would you need that? Aside from that, your policy sounds correct. Term life at your age would have the most inexpensive premiums and metlife is a very reputable company.
Term life is the best because it is pure insurance, and doesn’t get you involved with “investing your money” like a whole life policy. Don’t ever buy whole life, or policies that tell you they are investing your money. Insurance companies just make money on you and your agent gets big commissions, so they push these policies.
May I ask why you have life insurance on your children? Was this suggested by an insurance agent? If one of your children dies, you would have to pay for a funeral, that’s all. Either increase the amount of your $250,000 policy or put more money towards your family’s health plan. I believe that insurance on children is a waste of money.
Met Life is a good company. If you’ve had the policy for awhile you’re probably better off staying with them because your premium will be higher based on age if you switch. You need to make sure that the term goes long enough to see the kids through college.
You probably don’t need the term policy for the kids. Depending upon their ages and health a smaller permanent policy may be better for them, if any at all. Many people don’t agree with a life policy on kids but I like to see a permanent policy because that way if something goes wrong with their health and they become uninsurable they’ve at least got the permanent policy.
Term life is the best bargain.
In your situation I would drop the children’s policies. They are an unnecessary expense. If anything, cut them to $5k or $10k at most to provide for funeral expenses should the unthinkable happen. Use the savings to purchase additional insurance for yourself.
You may well be under insured. Most financial advisers recommend that you carry at least 8 to 10 times your annual salary to provide an income stream for your family to survive on if anything should happen to you. A $250k policy would only provide about $12k in annual interest if you should die. This would probably not provide enough for your children’s support in the event of your death.
You should carry enough that the annual interest on the proceeds will replace your current income without touching the principal. The principal would then be used to cover their educational expenses when they go to college. By the time they finish college most of the principal will be used up but they will have a paid education under their belts and would no longer need any additional support from your insurance.
First off, no one here can tell you what is best for you unless you want to post a LOT more personal information – your debts, savings, income, goals for yourself and for your children AND your health.
$100,000 of insurance on your kids sounds excessive but if one child has an illness that may prevent him/her from getting insurance as an adult (juvenile diabetes or adult diabetes), $100,000 may not be enough to cover his/her needs later in life.
Second, no one here is liable for giving you a wrong answer either intentionally or unintentionally.
Why not meet with one or more local agents or financial planners and discuss your overall goals and how life insurance (and disability and other insurances) fit into your overall financial game plan.
Be prepared to make numerous changes in your insurance as your life changes.
Good Luck
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Do the three of you have a policy each? If you do, each of you are paying a policy fee of something like $50-75 per year. That $150-225/ year could be ging into a ROTH IRA for you or a 529 for one of the kids.
All of you could be one one policy, children would be a rider. One rider covering both, one premium covering both. How old are they? Insurance should be used to cover the bread winner with children having enough to pay funeral expenses. That is my usual recommendation.
Why do you have the insurance and what do you want it to do for you? These are questions that must be answered in order to provide you with the correct amount and length of term.
Check out whole life…not sure of the best company.. I have Hartford. I locked in a fixed premium for the remainder of my life and either my wife or my kids get the money. If they pre-decease me I can get the cash value (which increases each year) for my personal use.
I decided to use this method in lieu of decreasing my retirement benefit (the company was going to deduct $5,000 a year to provide my wife with 100% of my retirement benefit, however when she died my kids got nothing) so I purchased a policy that had a guaranteed premium of $5,000 instead for $500,000.
BTW whole life is not for everyone as the agent who sells it makes a bunch of money but for me it works.
I would also check with a FARM BUREAU agent as they seem really reliable. Personally I don’t like MET life.. love Snoopy but…
Good luck.
250,000 for your self is ok, as long as it is able to cover debts, mortgages, minimum 5 years of basic living expenses for your family members in the event of death or disabilty.
but 100k for kids are too much.
please try this help!
all the options there
Term insurance rates are pretty competitive. You want to make sure you are insuring with a financially solid company. AM Best rates insurance companies – you can check on line or at the library. I have included some comments below that I hope you find helpful.
The purpose of life insurance is to provide the beneficiaries money they need to live, pay for college, even for some estate/tax reasons.
It seems as if you have too much insurance on your children. God forbid they die what would be your financial (not emotional) loss? Actually, it might be some medical expenses and funeral expenses. Sometimes agents convince parents to have children covered because it is cheaper when they are young or because they might not be insurable when they get older. It is cheaper because so few children die and most children are healthy enough to get coverage as young adults.I would seriously consider reducing or eliminating their coverage.
You didn’t give the ages of your children but you should have coverage to pay for their expenses until they reach adulthood – including college? Your coverage may be low. Term is very cheap and since life expectancies are getting longer term is getting cheaper. If you are in good health for a few hundred dollars you could have $500,000. In fact some rates have dropped so much if you bought your insurance 4 or 5 years ago you might be able to get a better deal.
Good Luck
The easiest and most cost effective for you is to buy term insurance and invest the difference.
Term is the cheapest, best bang for your buck.
Any policy through an A rated carrier, like Met, should meet your needs.
If you are looking for a simple quick answer as to the most affordable insurance, I have to agree with the majority of the other postings and say Term is the way to go. However, there is truly more here to consider that simply cost.
What you first must identify is what you want the policy’s to do for you. While this question may seem obvious, it truly is not. Everyone has different needs and goals and that is why there are different types of policies available. As a mother of two I am going to assume that you have the policy on yourself to protect the children in case something were to happen to you. The policies on the children are most likely taken to cover funeral expenses if something should happen to them.
If my assumption is correct as to the policies on the children, you should look into adding a child rider to your existing policy. This can be done with MetLife on the policy anniversary date and the cost for a policy that will cover all of your current, as well as potential future children is very inexpensive.
As to your policy, you need to determine what you want to cover.
1. Do you want the policy to provide an income replacement for your children? If so, how much of your income do you want to replace and for how long?
2. Do you plan on helping your children to pay for a portion of the cost of college when the time arrives? If so, what portion do you want to cover and is this something you want your policy to provide for?
3. Is there someone who you want to appoint as the children’s guardian?
4. Do you want the children to remain in the home?
As you can see, there are a lot of questions to consider. My goal is not to give you a headache, but to instead help you to determine how much coverage is enough based on your needs and goals and how long you want the coverage to last. Once that is determined, it is easy to recommend a particular type of policy.
While there are very strong opinions as to permanent verses term insurance policies, you need to decide for yourself what is important to you, and based on that, which policy will best meet those needs.
I hope you find this helpful.
Dawn