Which is Better for Me: Term or whole life Insurance?

1'm 40 years old, have a 7 month old baby, my family annual in come is $80,000. thank you!

BOTH

Actually there is no way to tell which type or types of insurance will work best for you ... not to tell what amount of insurance is right for you and your family unless you give a lot more information on this PUBLIC FORUM like health, assets (house, car, savings & investments) as well as your debts (current and future).

Go meet with a financial planning professional and discuss all of your goals as well as your current financial situation.

It is great if you are able to save enough money to pay off all of your debts and leave money for your loved ones that they may need (for college etc). It is very rare that people actually do save enough - especially with the awful stock market and low interest rates.

You may face future expenses like a larger mortgage when you move into a bigger and better home or medical expenses in your senior years that will be a real drain on your savings.

There are just too many issues to tell you which insurance is best for you.

Good Luck

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If you need it for a 'term' then get term, if you need it for you 'whole' life get whole life. It IS in fact that simple. Most people can get by on term, but a GOOD plan would have a combination of both.

If you have a productive life the goal would be to need LOTS of insurance to pay your estate tax bill when you get to retirement.

Hi Judy,

You really need to meet with an insurance agent face to face and have a much more detailed discusssion about your needs and goals with the life insurance before you can get a real answer. You should never listen to an agent who just easily recommends term or easily recommends permanent. Everybody's situation is unique and requires a unique solution.

Do you currently invest for retirement? If so, how and how much? After 20 years will the balance in your retirement accounts (if you have any) be sufficient to pass along to your beneficiaries and will it be transferrable? If you're being told to "buy term and invest the difference", where are you investing that money and how will it be taxed when it's passed on to your heirs. Are you maximizing your investments in IRA's and/or employer sponsored retirement plans? If you are, do you feel like you still need to supplement your retirement.

Your family income of $80,000, how much of that is your income and how much is your spouse or other family members? Easily multiplying family income by 10 does not give you an accurate death benefit. Are you the bread winner or a stay at home mom? If you're the bread winner, I'm guessing you'd be working for at least the next 20 years, so maybe you want 20 times your income. If you're a stay at home mom, you need enough coverage to pay the annual salaries of people who would replace your duties (ie, nanny, maid, etc). Do you want to also have some death benefit availaible to pay for your child's schooling costs if you passed away. If so, you have a child that won't be attending college for another 17+ years, so you may want to allocate an additional $150,000 to $250,000 for that (how much will a college education cost almost 20 years from now).

It's not a simple process, and there's no easy answer. You are an individual with individual needs which require an individual solution. Never trust anybody who blindly tells you that term or permanent (whole) life insurance is the answer. Some people would be best with term, some would be best with permanent, some would be best with a combination of both (I find most people fall into the combination category). Try to find a reputable insurance agent who also provides financial services (ie, retirement planning) and has their Variable licenses. When you meet with him/her, have all of your budget and current retirement planning data available. He or she should have a nice long discussion with you about your current situation and should help you figure out what products would suit your individual needs. Please don't turn a blind eye to either term or permanent insurance because limiting your options only hurts yourself.

What's the GOAL of the insurance???

If the goal is to raise the child to adulthood if you kick off, you only NEED 20 year level term coverage.

Without a set goal, we have NO IDEA which tool you need.

Kinda like going to Home Depot, and asking them which tool you need to buy. Without the PROJECT information, it's impossible to tell.

Term with level payments for 30 years.

Also, invest some money in something else for savings and tax savings. Life insurance is not an investment.

Find an honest agent that will tell you that.

You need a term policy for about 800,000 always 10x your income.

I would suggest a 20 or 30 year level term policy on both you and your spouse if you have one. At 40 years of age the 30 year product may substantially more expensive so you may find the 20 year gives you the most bang for your buck and will protect your family until your child is an adult.

When you retire - your goal is to NOT need insurance.
You do not need whole. /

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