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I've always heard that Term life is the way to go. Personally I believe the idea of life insurance is to hedge your bet against dying young and leaving your family in a bind without your income. If you're worried about money when you're old you're better off putting it in an IRA.

Haha, I just wrote about this for another website.

Universal really only makes sense in two scenarios: You're rich as hell and need to invest in some tax-sheltered places after maxing out your retirement accounts/need to avoid estate taxes when you die, OR you absolutely have no fiscal discipline and want the forced savings aspect of it.

Assuming those scenarios don't apply, you are probably safe to pick term.

We have term, we figured after the age of 85 or whatever it is, we should be pretty set regarding our needs financially.

@FliegepilzHut: I'm going to go against the grain and say universal. Hopefully I live longer than 30 more years, and I can lock in a rate right now. It is important to me to make sure my family is covered for all of my student loan debt and the mortgage since I'm the primary breadwinner.

@FliegepilzHut: I think talking about finances is tough no matter who you talk about it. Even though DH and I are on the same page about a lot of things we still have some different views about how to spend the money we have.

Is it possible to talk to a financial adviser? I would also recommend talking to more than one because sometimes an adviser has an agenda or their personality doesn't mesh with you guys but if you find one that is good and can figure out compromises and fill in the gaps of knowledge that would help a lot.

We have both. DH inherited some money when his mom died and we kinda "inherited" his parents financial advisor who advised us to get both. To be honest, I didn't really understand all that went into it, but supposedly it was the thing we were supposed to do.

This reminds me that the premiums are due in a couple months. Ugh. Not looking forward to that.

@Espion: I just thought I would mention that, assuming you don't have private student loan debt, your student loans are forgiven at your death.

@FliegepilzHut: It's definitely a bummer conversation - as PP have mentioned, I would recommend seeking the advice of a financial advisor. I am a Certified Financial Planner, but since you aren't a client and I don't know your full situation, I don't feel comfortable advising you. In general, I almost always recommend term insurance over universal life, but insurance ins't always that simple. With that said, my best advice would be to seek out a Certified Financial Planner (CFP). They should offer a free consultation and many even do free financial plans. I would recommend a fee-only practice, but that's just my opinion.

ETA: Please feel free to wall me with any questions!

@Espion: Boo! Stupid Texas. Thought I could maybe save you some insurance premiums by letting you lower your coverage.

I didn't read all the comments so forgive me if this is repetitive...but no no no no to universal life. It is better to buy term on your own outside of your employer, for exactly the reason you stated. If you get sick and have to leave your job, you may not be eligible to apply for a new policy, so you lose your insurance. Even if you lack the discipline to save on your own, you can set up an automatic draft and draft it into a mutual fund, which is just as hands off. You are a million times better off that way, since you have the ability to control your investment when you decide you want to. When you die, universal life companies keep the cash value you have "invested" and only pay out the death benefit. Plus, the cost for universal is astronomical compared to the same term insurance.

It is absolutely insane to me that these companies even exist. But the people who sell them get commission based off the premium you pay, so their commission checks are a lot bigger if they sell you universal vs term, since the premiums for term are a lot less (like literally 20x less).

@FliegepilzHut: honestly I think most people buy it and don't really know what they are buying. They assume that it's a good thing to have life insurance forever (where my view is you only need life insurance until you have enough other investments that your family is fine if something happens to you and your home is paid for. When we are 60 and have a solid retirement account, a paid for home, and kids who are grown, we no longer need life insurance). I think people also figure they can use their insurance to leave an inheritance, but in reality if you just take the difference between the cost of term and universal invest it yourself you have a much more stable investment that you control, and that your family gets to keep. With universal, my understanding is that your family gets the death benefit for as long as you keep the policy, but any cash value is kept by the company.

I finally got around to asking my husband if his universal life insurance paid out just the policy or the policy and cash value. He says his happens to be policy + cash value but there universal life policies that only pay out the policy which he thinks is dumb but believes they are "cheaper" than policies that pay out the policy + cash. The way you can know which one you have (if you have a universal life policy) is to look at your yearly statement and they will have list the death benefits which tells you the pay out if the person were to die soon.

So if you go with universal just make sure to watch out for this.