All Life Insurance Tips

what kind of life insurance is best for a single male 40's to ensure estate is cared for?

I don't understand the differences in all the different types (whole, term, universal, variable and variable universal). I want to make sure my family is able to pay funeral expenses, bills, etc. Thanks!

Public Comments

1. Yahoo Personal Finance has a good section on life insurance. The primary factor in determining how much coverage you need is to figure how dependent your survivors are on your income.
2. Probably a savings account. If you have no kids, and no wife, just open a savings account or buy a prepaid funeral. Your debts are not inheritable, so you're REALLY only looking at funeral costs. Insurance is going to cost you WAY more than a funeral - so it's not the proper tool to get the job done.
3. Here's a quick rundown of the differences between the different types of insurance. Term: good for any type of need that will go away in 30 year period or less (IE: eventually your mortgage will be paid off, that's a temporary need. Eventually your kids will be able to fend for themselves, that's a temporary need). Think of it like renting a house. Starts out cheaper than buying a house, but the price will go up when the landlord wants to raise it (term insurance rates go up at the end of each term). Eventually they can kick you out if they want (term cancels typically at age 85) and when you're done with it you get nothing in return (There is no cash value with term so when you cancel it you get no cash back). Whole Life: Good for any type of long term need that won't go away, the cost may just change (IE: Charitable giving, funeral expenses, final taxes and estate fees). Think of whole life like buying a house. It's a little more expensive in the short term than renting, but the monthly won't ever go up. It's yours as long as you keep paying the taxes on it (as long as you pay the premiums the insurance company can never 'kick you out') and if you do decide to move on from it, you get some equity out of it eventually, or you can borrow out the equity and use it for whatever you want (with whole life there is cash value that you get when you cancel the policy, or you can borrow it out) Universal Life: Good for people that have long term needs AND who have a substantial networth and would be looking for a tax sheltering plan. There are basically 2 parts, the insurance part and an investment part where the money grows tax sheltered, and if you withdraw it properly it comes out tax free as well.