Do I need life insurance?

[StormRider]

Okay, it's open enrollment time where I work. My employer gives $5000 coverage for free. Previously I bought extra group term life insurance that covers 3 times my salary. But I don't really understand what life insurance is about. Is it really for people with children to support after they've died?

Basically I only have my parents and brothers to think about. One of my brothers has not saved much money. My parents seem to be okay financially.

Is it wise for my to get that extra life insurance?

 

[vi edit]

Got a home mortgage?
Got a big ass car payments?
Got a kid?
Got a wife who can have the financial burden of all the above dumped on her in the event you died?

If you answer yes to those then you probably want to pick up life insurance. Otherwise, it's probably not worth it.

My $.02. Others may disagree though.

 

[Jzero]

Life insurance is just money in general--it doesn't have to go to your kids. When you die, your family will need to pay for funeral and interment expenses and if you have any debts, they could be saddled with those as well. If you leave an inheritance, the insurance money could also go to offset inhertiance taxes. If your employer is handing out $5k extra at no cost to you, you might as well sign up.

 

[RossMAN]

I'm not a life insurance expert but I'd say go for it. You can designate anyone you want (usually a spouse, children or family members) as beneficiary (the person who receives the funds should you die).

Since I'm relatively young (almost 27) and a non-smoker, I pay like $1.50 per month for 7 times my annual salary in life insurance. Should I die I don't want my family to be burdened with my funeral expenses and outstanding credit debt.

Assuming the life insurance premiums don't cost a lot, sign up for 3 times your salary and make your brothers the beneficiary.

 

[Parrotheader]

I'm no insurance guru either, but if you can afford to, then get it while you're young and healty (term policies anyway.) However, since you're not married, don't have any kids and I assume you don't own a house then you really don't need all that much. If you plan on getting any or all of the above at some point in the future however it might not be a bad idea. I've been meaning to get some more too. I currently get 4X my salary coverage for next to nothing at work. But I'd really like to beef that up into the $600,000-$1,000,000 range for my wife and future kids. That way if anything happens to me the house would be taken care of and she wouldn't have to worry about extra income since she only makes a teacher's salary. I've done a little shopping around and a good 15-20 yr term policy in that range is surprisingly inexpensive for a 25yr old like myself.

 

[StormRider]

Okay, I've decided to continue with getting 3x my salary coverage. For me, it costs about $4.50 per month ($2.21 every two week paycheck).

 

[Lvis]

If you're a young guy, you may do better on your own, rather than through your employer. You may find that for the same price, you can get more coverage.

 

[StormRider]

I'm not that young anymore -- I'm 38 years old.

 

[milehigh]

The younger you can get into a permanent life insurance product the better. Reasons:

1. You will not always be with the same employer or you may choose to be self-employed someday.
2. You are the OWNER of a permanent life policy which means that it builds cash value that you can borrow against, you can assign the policy to your wife or kids or other family, or you can cash it out any time you choose (minus outstanding loans).
3. Universal life products allow you to make additional contributions to build cash value or allow you to skip premiums.
4. While 50k or 100k policies at work will help cover funeral expenses, outstanding debts and such, they will not replace your income. A good life insurance plan will allow your family to continue the same standard of living even after your income is gone (they won't have to sell the house and card, kids can still go to college etc...). You'd be surprised how fast 50K can go once you subtract your income from the picture.
5. God forbid you are diagnosed with something, you will be uninsurable outside of group plans.

A lot of this assumes you will someday have a wife and kids though.

My $0.02

 

[cipher00]

My, I'd like to respond to this.

 

[jjm]

Unless you have people financially dependent upon you, or there are people who would suffer a financial burden at your death, you do not need life insurance. Period.

When you eventually do need it (usually after marriage and first child), most people will find that it's better to buy term. Why? At a young age, with a growing family, you will need to buy the maximum amount of protection for your dependents with what will probably be the limited dollars you have available. Permanent insurance is not a good solution in that situation. Forget about lifetime costs, tax deferrals, savings components, and such. At that point in your life you'll need the maximum protection possible.

 

[Mister T]

I am 22.
No wife, no kids, no car.

Insurance:

Life insurance: 600K --- (costs $10/month)
Accidental Death and Dismemberment: 550K -- (costs $6/moth)
Long Term Disability --- 70% of Salary (cost $18 bucks a month)

The most important insurance to have is Disability if no one else is dependent on your income.
The reason I have Life and ADD is because my parents have invested over 100K into raising
and educating me, so if I die, I want to leave them a nice chunk of money.

 

[heartsurgeon]

get disability insurance no matter what - it's a cold cruel world and everyone eventually gets sick, you are getting old enough that you could become uninsurable (either life or disability insurance) should you develop an illness. best off to get both now if you don't have em. trust me, i know from personal experince about this.....enough said.