Personally, I believe you only need term. I think you need to look at your financial obligation: do you have a house, do you have kids (college), will your spouse need to stay home with the kids or provide daycare?
Generally, speaking, I believe 8 to 10 times your income is a good place to start.
The second piece is whole versus term. I believe in term for 2 reasons. The first is that it is so cheap compared to whole life. You could also take the premium savings and invest that. The second issue is that I plan to be self insured after 20 years. What does that mean?
In 20 years, I will have a paid off house and my kids will be through undergraduate school. So, all of my big expenses will be paid for. I should also have a nice size retirement and investment portfolio, especially if I am putting 10%-15% away for the next 20 years.
Or if you look at the difference between whole and term and were to invest that difference for 20 years, how much extra would you have investments? Probably enough to bury you and leave an inheritance?
Those are just me thoughts but good luck.
|