Level Term Life Insurance - 20yr or 30yr

[ActiveDuty]

I'm 32yo and currently under-insured as the sole provider for a family of 5. (I imagine that's how an Insurance Anonymous meeting would open.)

I'm looking to add level term $1M policy to my current $400K SGLI.

Question:  20yr or 30yr level term policy?

I'm leaning to the 30yr policy which will last to a point in my life were I should be self-insured.  Good decision or go with standard 20yr and reassess?

 

Thanks in advance.

 

 

[Scott at MD Financial Services]

How old are your kids?

[jfoxcpacfp]

ActiveDuty wrote:

I’m 32yo and currently under-insured as the sole provider for a family of 5. (I imagine that’s how an Insurance Anonymous meeting would open.)

I’m looking to add level term $1M policy to my current $400K SGLI.

Question:  20yr or 30yr level term policy?

I’m leaning to the 30yr policy which will last to a point in my life were I should be self-insured.  Good decision or go with standard 20yr and reassess?

Thanks in advance.

Click to expand...

Have you considered the "laddered term" structure that WCI discusses here?

[ActiveDuty]

Scott @ MD Financial Services wrote:

How old are your kids?

Click to expand...

Oldest is 8yo, youngest is 15months.

[ActiveDuty]

jfoxcpacfp wrote:

ActiveDuty wrote:

I’m 32yo and currently under-insured as the sole provider for a family of 5. (I imagine that’s how an Insurance Anonymous meeting would open.)

I’m looking to add level term $1M policy to my current $400K SGLI.

Question:  20yr or 30yr level term policy?

I’m leaning to the 30yr policy which will last to a point in my life were I should be self-insured.  Good decision or go with standard 20yr and reassess?

Thanks in advance.

Click to expand…

Have you considered the “laddered term” structure that WCI discusses here?

Click to expand...

Thank you.

Navy Mutual largest policy is $1M.  So if I laddered I would just add another (or 2) 1M policy for a shorter terms, but a 30yr policy would still be my long term protection, and get me to a point in life I would be self-insured.

Navy Mutual rates are the lowest I've found as well.  $696 annual premium.

[Scott at MD Financial Services]

You are not talking much money so if the 30 takes you to the end of your need just lock it in.  You probably could get by with a 20 year since that would mean your coverage would expire when your youngest is 21 but for a difference of $250 per year if that extra 10 years of coverage lock makes you feel good then do that.  Just make sure you buy their policy that has a fixed premium for the full 30 years, one of theirs has a cap of $250k and another one has level premiums to 50 then adjusts.

[AlexxT]

If I were you I would have at least 3 or 4 million in term insurance.  It's really cheap to get, and worthwhile for the peace of mind.   I agree with a 30 year policy.

The argument against laddering is that inflation will cut the value of your policies by more than half by the time you get 25 years into the policy.  So if you ladder your policies, expecting to have 1 million in coverage at the end, you will effectively have only $300,000 or so in buying power.