That’s the million dollar question. No matter who you are, let’s start at a million bucks. Life is expensive. Especially if mom & dad aren’t around. In addition to how much coverage, it’s important to ask: for how long?
Term life insurance gives you the most bang for the buck or face value for the premium. The younger you are and the better health you’re in, the less expensive the policy.
If I were a strapping, healthy 25 year old about to start a family, I’d purchase a $5M face value/ 30 year term with a locked-in rate. It will never be more affordable.
Here’s a little story:
Before my first child was born I purchased a Twenty year term, $1M face value policy. The premium was something like $480 per year.
At the time, a 30 year term was $620 annually.
I went with the twenty year term.
Fast forward twenty years and two more children later, my youngest is only 14 and I still have to get all 3 through college.
My original term life policy as expired.
I recently purchased a ten year term, $2M face value and now that I’m an old man, the annual premium is: $2,680.
How does Cher’s song go:
If I could turn back time
If I could find a way
I’d take back those words that’ve hurt you and you’d stay
Not really relevant, it would be more like:
If I could turn back time
If I could find a way
I’d have picked a 30 year term and a two million dollar face value
I digress.