Kids as beneficiaries for life insurance

[Anonymous]

Whole life is usually pretty expensive in most cases. Talk to insurance brokers and get quotes and discuss your options. You’ll likely need to submit to a medical exam.

[Anonymous]

Anonymous wrote:This is OP. Thank you for all tips.

To summarize, it seems like that I & DH should get term life till my kid turns 21 (finish college). Policy amount depends on how much we need to cover for mortgage, school, college something like that, & mostly people do $500k, $1 million or more. And, I should make my spouse as primary beneficiary, trust is 2nd (with my brother as trustee) something like that. Do not let my kids get the $ until they are more mature, like 25-30 years old.

One big question, for term life, if I or spouse are still living by the end of term life insurance, let's say 20 years after, there's no value that we can get, right? Because it is an insurance policy, not an investment, right? And, I should never buy whole life insurance till we are like retirement age, right?

Term life has zero cash value. Whether you get a whole life or universal policy later in life is up to you.

[Anonymous]

Never get whole life at any point of time - always a bad investment.

For term life get (at least) two policies each one for say $750k for 25 years and one for $500k for 10 years (or for 15 years). This will be significantly cheaper. Ten years from now your mortgage will be less (as you will have paid it down) and you will have significant college savings so will not need as much.

Insurance for a 30 year old for years 30 through 40 is very cheap. Insurance for a 30 year old to year 60 is very expensive. Your needs at age 30 if one spouse dies will be much greater than if one spouse dies at age 50.

We did three policies: one for 750k for 10 years; one for 500k for 15 years; one for 500k for 20 years. Our youngest was 5 when we did this and we had 600k left on mortgage. By the time he is 15 (when the first policy expires) our mortgage will be about 300k and we will have 100k saved for college so our needs are less.
The cost for this combination of coverage was only a little more than a single policy for 750k for 20 years and we have much more coverage when the kids are younger when we need it most and much less coverage when we are older (and riskier for the insurance company) and need less coverage.

[Anonymous]

Talk to a financial advisor, not DCUM. But yes, get the insurance.