Another life insurance question, what should I get?
Another life insurance question, what should I get?
I'm a single 44 year old female with a 20 year old daughter who lives at home and attends college. I'm employed full time and have the life insurance offered at work. The insurance at work goes up every year. I want to get insurance on me and my daughter, what should I get?
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7 Responses
1.31.2010
Best Answer – Chosen by Voters You should get a 20 year or a 30 year term. You should get at least 5-7 times of your annual gross income for your coverage. For example, if you make $30,000/year, you should get $150,000 to $210,000 coverage.For your daughter, she should get her own life policy if she works. If she don't work, you can be the policy owner and pay for her premiums. Then when she do get a job, you can transfer ownership to her. You want her to be the policy owner so that she can change the beneficiary (such as her future spouse and kids) and any other changes in the policy in the future. For a $250,000 30-year term policy for a 20 year old, it may only cost her about $20/month. As she gets older and get married one day, she can increase her coverage if she wants.Also, both of you should highly consider opening an IRA account and invest whatever you can into mutual funds. The maximum contribution limit to IRAs for tax year 2006 and 2007 is $4000. For 2008, it will go up to $5000.Lets say you put $4000/year into your IRA. Lets say the average rate of return on your investments is 10%. When you retire at age 65, you can potentially have $335,200 in your IRA. If you have retirement plan at work such as a 401(k), you can roll that over into your IRA when you leave that job.Lets say your daughter invest $100/month into her IRA. If her portfolio has an average rate of 10%, in 40 years, when she is 60 years old, she can potentially have $637,680! Source(s): See my research here: http://finance1o1.blogspot.com
1.31.2010
Lynne, it sounds reasonable that you want to get life insurance for your daughter's sake, if something happens to you. Also, I understand the fact that your premiums go up each year at work.However, does your daughter really need life insurance on her own life? Who depends on her for financial support?Also, you may want to compare term life insurance quotes online and decide how those rates compare to the coverage you have in place at work.It's quick and easy to compare online quotes for term insurance. Also, level term life insurance may provide you with rates and coverage that remains the same for up to 30 years.I hope that helps. Best of luck to you and your daughter! I hope she does well in college. Source(s): http://www.term-life-online.com
1.31.2010
k.. get it Source(s): http://www.insurance-assurances.110mb.com/
1.31.2010
The reason you need insurance of any kind is to cover the loss of an asset. In this case your life is an asset because your daughter depends on you for financial support. If your daughter were to die you might be devastated emotionally, but financially you would be okay. I think it costs about $15K to bury someone in most states. One question you need to ask yourself is how much money would you want your dependents to have in the event that you die? If your daughter will only depend on your for a couple of years while she is in college, $50K of coverage might be enough. Maybe $100K. It depends on your standards of living. Next, determine how much you'd be able to give her without getting any extra insurance. Typically, your employer provides you with some sort of death benefit (mine gives my dependents $50K). Also, add to this any other assets for which she is the sole beneficiary. For example, if you have a 401K plan worth $20K and $45K in equity in your home you might not need any insurance at all. Generally speaking, as you get older and your net worth improves (hopefully) you have less of a need for life insurance. $100K term life insurance benefit should cost you somewhere in the neighborhood of $20/month (but don't quote me on that because it depends greatly on your health). But then you don't get any benefit once you stop paying. Whole life insurance is much more expensive with a much lower death benefit, but you get to keep all the money you paid into it, plus some interest. Really, it's just like having a mutual fund except it has an additional pay out to your beneficiary if you die. For this benefit, they take a precentage of the return on your investment. Essentially, whole life insurance = mutual fund + term life insurance. Typically, I don't recommend whole term life insurance because you can generally do better by separating these two financial products. But if you really feel uneasy about investing and whole term life insurance makes you feel better about it, then I say go for it. Best of luck to you.
1.31.2010
Get 10 or 20 year term policies. My husband & I have $250,000 each & it only costs about $20 per month. You may want to try a website that compares multiple companies at once to get you the best price. I am paying less than ? after I did. The policies start at around $2 per month.Go to: http://www.insureme.com/landing.aspx?Ref…Take care,Casey
1.31.2010
Term, Buy level term, this will secure that you can buy more insurance in the future of the same type. This will benefit your daughter by locking her in at an age where she will not be declined. Find out how much more the same amount of whole life would cost you and put the difference in your IRA or 401k, if you want to do something for your daughter with the money left over open a Roth IRA for her, there are may advantages to it for some one so young, and yes she can tap it to buy her first home if and when the time comes
1.31.2010
At first you have to see is your life cover in the insurance offered by your company is enough for you or not? I mean as you are single your daughter must be totally depended only on you. So, in any unfortunate conditions she should get a proper benefit!! And as per your description I think that your life cover should be reaching this target. Now, the thing is the equity market and other financial markets are growing tremendously that there is no predection of a major setback in future years. This requires you to be more attentive towards making money as the conditions are very comfortable. So, you should better invest in unit-linked policies on the name of your daughter – this would generate more money and also allows you a necessary life cover.You can go for any policies investing diversified in equity. You should for eg think of growth plans and retirement plans as you have the added responsibility of your daughter's marriage.