Reply to Getting real life insurance now that we're expecting our first child - advice from people who know life insurance?

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[quote=Anonymous]By means of background, I'm an expert in the insurance space.

the amount.  $1M is probably not enough.  You need to assume what you would do if your spouse died.  Do you depend on his income.  If yes, you need to replace it.  If he makes $100K/ year, you need to replace it at least until your child goes to college.  So if that is 20 years, you need $2M minimum on him.  Some people chose to also provide enough to pay off an existing mortgage.  That would be on top.  I don't know your income, but for many DCUMers, $1M is nowhere near enough.  For some $5M is not enough.

Second, the type.  Term.  Do not buy anything else.  Convertible is meaningless.  It doesn't make sense to convert unless you should have a terminal illness with expected death in the year after it would otherwise lapse.

Third, term.  20 years.  Assuming that you plan to save for college and retirement, you DC will be in college by that point and you won't have a need for insurance any longer.  I don't disagree with some of the commentary that you might not need 20 years on the full amount.  But, you might.  I would really have to know the income and income trajectory for each of you, as well as how much you save annually.

Health.  Buy what you need, not what you can afford.  If you DH has inferior health, buy it anyway.  But have him work on it.  You can reapply next year and literally every year thereafter as his health improves and replace the existing policy with a better priced one.

From whom. Whomever has the best credit ratings and is cheapest.  There are dozens of companies with the top credit rating.  After that, go with the cheapest, even if you've never heard of them.[/quote]

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