Am looking to get life insurance. I am only 25 years old but have a 1 yr old daughter. What type of coverage s

should I get and which companies should I look into? I am looking for something fairly reasonable but with good coverage. Any other advice/help would be appreciated as I know nothing about this!

I'm a financial representative and providing life insurance is one of the things I do for clients. God forbids if the breadwinner dies, where would the family be without life insurance? Life insurance can't protect you against harm or death, but it can replace your income. The problem is that many families that own life insurance don't have adequate coverage, but they pay lots of premiums for it. That's because they own the wrong type of life insurance. Take a look at the facts and you decide which product is the best:

Whole life insurance
1) Its level term to around age 100 that builds cash value.
2) Since it builds cash value, premiums are higher than term insurance that doesn't build cash value.
3) There is no cash value growth in the first 2 years because premiums are used to pay for the insurance and commissions to the agent.
4) After first 2 years, you are guarantee a rate of anywhere between 1-4% (varies between companies)
5) If you wish to take money out from the cash value, you have to borrow it and pay loan interest of 6% to 8%.
6) If you die someday, the insurance company keeps your cash value, but pays the death benefit. Death benefit will be reduced by any loans you taken from the cash value.

Universal life insurance
1) Annual renewable term until around the age of 100 that builds cash value.
2) Flexible premiums as long as there's enough cash value to pay for the insurance.
3) While premiums may remain level in the beginning, the internal cost of the insurance goes up every year. That means less and less of your premiums goes into the cash value. Eventually, the premiums you pay will be insufficient in the future to pay for the cost. What would happen is that you would either have to pay more premiums or a portion of your cash value will be used to pay for it.
4) Same cash value features as whole life.

Term insurance
1) Various of level term products to choose from (from 1 year to 35 years).
2) It does not build cash value, so premiums are initially lower than whole life and universal life.
3) Most term insurance are guaranteed renewable without providing a proof of insurability. If your health was to decline because of old age, you can renew your policy without any hassle.
4) When you renew, premiums will be based on your current age. So premiums will go up after the initial level term.

Those are the facts.

Personally, I have sold term insurance 100% of the time. Why? Its because my clients can get lots of coverage for low amount of premiums. Since premiums are low, I help setup investment accounts for my clients so that they can build wealth. If you had lots of money saved right now, would you still need life insurance? Probably not. But you probably don't have lots of money saved right now and if something were to happen to you, would your family be financially ok? As you get older and continue to invest, you may or may not need life insurance when it is time to renew the term insurance. If you were to invest $200/month for the next 30 years and the average rate of return in your portfolio was 12%, you would have about $650k saved for retirement. That's probably not enough to live on, but at least its better than having money sitting in a life insurance policy.

Which brings me to the next point. It pays to start saving early. The later you wait, the more you would have to put away to reach your retirement goal.

You need to talk to a local, independent agent. You ALSO need to SET THE GOAL before talking to him. What do you want the insurance to DO? Is there a time when you foresee not needing it any more? That kinda stuff.

At 25, it's going to be cheap. Relatively speaking.

Find a local agent and talk with them. Can't give too many recommendations because of no information, but as a general rule, a Level Term for as long as you can get is good.

Get just one policy to cover the both of you. Child rider's are cheep and will cover as many children as you have/plan to have.

Don't look at the price as a deciding factor. Cheeper is not always better, and more expensive is not either.

Find an agent that will explain all the terms to you and one you can feel comfortable with. Learn about the riders that are offered and ask several companies for which they offer. If you really want to through them a curve ball, ask about guaranteed renewability to another term product. It helps cover the permanent side of things for less cost of a permanent policy.

At 25 years of age, there isn't much that you are looking to pay off if something were to happen to you.

In most cases you want enough for any outstanding debts that you personally have. Otherwise, if something happens to you, all the money goes to those companies that you owe two.

Now at your age and "assuming, your in good health", I would consider a WHOLE LIFE insurance policy. These insurance policies have different options (aka riders), that can be added in case of disability or what not. Disability rider is nice, because if you are disabled then the insurance company pays the premium for you.

There is an internal rate of return, roughly about 5-6% at your age. So this is why it is critical to take advantage now. Then once your retired, you can use that cash value to supplement any short falls in income, and the cash is NON TAXABLE.

Most people have a buy-term invest the rest type strategy, but if you do it correctly and not just look at this investment as a life insurance policy. You'll receive the tax benefits years down the road.

What state are u in? Are you looking for "term" life or "universal" life?

Term is for a term of years ie: 10 yrs, 20 yrs, or up until a certain age say the age of 50.

Term life is much more affordable. I wrote a 20 yr term policy for one of my clients who is 53 yrs old for $100,000. She is paying $35 a month.

Universal is a little bit more expensive because it's considered a policy that lasts the persons whole life, but the premiums generally stay the same.

I hope this helps you make a decision

mbrcatz1 is right, find a local independent agent with experience. Maybe talk to a few agents and go with who you feel the most comfortable with. The independent agent should know what company to go to, for what kind of policy that is best for you.

Buy two policies, one term and the other a whole life policy.
You are young and will be glad you did. I love to get young people and educate them on the value of life insurance. Mutual of Omaha, Americo, Unity, Forethought, and Monumental are all good companies with good rates.

Go to Yahoo Finance, click on "Personal Finance" and read the section that explains the major types of life insurance.

I would recommend a 20 or 30 year level term policy that is about 7 to 10 times your annual income as a general rule of thumb without knowing the specifics of your situation. This should replace your income if something were to happen to you and the 20 to 30 year period should get her to adulthood where she could provide for herself.

See the resources below for more information.

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