10,000 bucks through the Army (National Guard).
I’m 20 and expendable, but at least my parents won’t have to pay for my college debt!
From work, aroung $360,000.
My wife has from work around $60,000, and another separate policy for $130,000.
A question for you former insurance salesmen. We choose to go with a whole life for my wife. As she’s diabetic, after a term policy was up, it would be very very difficult to get her insured again. Hell, it was a pain getting her insured at 28. I can’t imagine at 48 trying to get it done. Was our logic faulty in that situation? Why is whole life a bad thing?
Also, we didn’t look at is enough for the other partner to not have to work, but rather enough to pay off all our debts, and have some left over. But whomever is still around will still have to work.
Whole Life = Evil
And here’s why:
Term (CHEAP) is good for a certain period of time and is useful for protecting a temporary need. Parental duties, business purchases over time, mortgage protection all come with a foreseeable end. After that time, no one is depending on you to be alive for either income or services. Got new kids? Get a huge 20-year term policy and sleep well.
Oh, you expet longer term needs, estate planning or are looking for another tax shelter to put investment income? Go Universal Life. Pay extra into the policy to hedge against future times when you can’t don’t want to pay; get a better rate of interest on that extra money than the rigid pay structure you have to follow in a whole life policy; enjoy the flexibility allowed by other features of a U.L. that you just can’t do with the Whole Life Dinosaur.
Talk to a licensed (mine lapsed last January) insurance sales professional for more information and BEFORE you take action based on anything I said. 
I am an investment professional and I would mostly agree withMatchka. Atrael, your situation sounds like the best reason one might use whole life. Universal life would have taken care of the need just as well, but getting term should you need it later would prove very difficult.
A caution should go out to those who feel that purchasing term life insurance is throwing money away. It is, and you must get over it. The types of insurance that build cash value are very expensive and laden with fees. These fees are cleverly hidden and an insurance salesman can easily make them sound inconsequential. They are not.
There is a clear incentive for the insurance company to sell Universal or Whole Life instead of Term. If a 35 year old wanted 500k in coverage, the insurance salesperson would make about $100 commision for term and a $1500 commision for cash value life insurance.
Be especially careful if the insurance is being sold as a savings program rather than life insurance. It can be effective for a small minority of people, but most of us should buy term and invest the rest. In my experience insurance companies don’t invest money very astutely, just as you wouldn’t go to Fidelity to get your insurance.
fruitbat
[Matchka pulls black stocking cap over his face, draws his fountain pen, makes sure it has ink]
:Hijack:
ASSUMING BOTH ARE PURCHASED AT THE SAME TIME:
(asked with curious politeness) Given that a Universal Life, hell let’s go all the way, Variable Universal Life is, in essence, a term policy attached to an investment (buy term invest the difference) what redeeming qualities does a Whole Life policy have?
Especially in light of the possibility of attaching an aggressive diversified investment fund that grows at, say 13+% in a stew of untaxed bucks? Consider further that when one has finished their need for the life insurance part of the policy the cash value can be “borrowed” and never repaid—hey! Tax free money (practically speaking)! Sure the same maneuver could be applied to a whole life policy, but at like 3% growth.
(the above is a strategy only, your figures may vary, yadda yadda yadda)
Well Matchka I have a feeling only you and I will be following this hijack, but here goes. You are correct in a purely financial sense. Universal life has supplanted the usefulness of whole life. Whole life is on its deathbed as an insurance product. I think, however you overestimate the power of VUL.
The possibility of a 13% return on the separate accounts is very slim indeed. Most of those accounts carry expenses of at least 2% and hefty surrender charges before you can access the money. Furthermore, most of the investment options in VUL policies are poorly managed and underperform their indices before expenses.
VUL carries risks that the client would often refuse to take on if they were told the whole story. Too often illustrations are given assuming a perpetually rising stock market. If life doesn’t go that way, the policy risks lapsing unless the client can increase what is already likely to be a stiff premium. VUL works for the rare client who has maxed out all other tax preferred investments and has the investment background to fully understand the product.
That client is rare. Most start on their VUL policies with optimism, only to see the cash values fail to rise as quickly as projected. They then often fall into neglect and the insurance costs eat away at the cash value that has accumulated. This is why I prefer a level term policy covering the period of time the person needs insurance with a separate investment portfolio to cover retirement and other needs.
I am a single mother with a home. I have an annuity worth about $56,000 and the equity on my house is about $120k. The insurance I get for free from work is about $80k. My sister, who will take my 2 kids until they are 18 will get about $2500 a month total in child support from my ex (who gladly pays it so he doesn’t have to go to court or see them) and social security benefits from my death. My kids will split up the estate with the exception of $50,000 which goes to my last husband. When my kids are old enought to go to college, they can spend as much money as it costs to go to the best school they can afford on this and whatever is left will collect interest and be given to them when they graduate or turn 30 (if they don’t go to college), for the sole purpose of buying a house. Now if they do not qualify for a mortgage, this is enough to buy a mobile home for cash or an inexpensive condo, given the rise in the value over time.
Do you think this is a good plan? I have often asked this of people and seldom get any educated opinions. Even if I lost my job, they would still have enough for a college education or a downpayment on a home.
Sorry for the delay, but I will give it a shot. Just realize that this is not professional insurance advice, because I would need a lot more information than what you would be willing to give on a public message board.
It seems to me that your current arrangements should be adequate. The amount of insurance you need depends heavily on your current standard of living however, and the salary that would need to be replaced if you were to die. The key factor is the fairly hefty child support that would go a long way towards taking care of your children if something were to happen to you.
If you firmly believe that those support payments are likely going to be going to your children no matter what, I wouldn’t worry too much. If you think there is a good chance that the amount of payments could decrease, or stop altogether, I would start to worry.
The fact that you have clearly spent some time thinking about this puts you well ahead of most people. I would follow your instincts and don’t be afraid to talk about these issues with your sister and the children’s father.
Good Luck!