• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Best insurance for single mom, 2 young kids

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

K

kboyd2005

Junior Member
What is the name of your state? NY

Hi, Currently have a whole life policy worth 500k which i pay $300 per month. If something happened to me, this would be enough to pay off the mortgage, but would leave very little to care for my 2 children, ages 7 and 9.

I'm thinking of converting to term life for 20 years @ $1.5mil. is this adviseable? Would I even want to pay off the mortgage, since that would be assuming that their guardian would want to live there?
Thanks.
 


B

Betty

Senior Member
kboyd2005 said:
What is the name of your state? NY

Hi, Currently have a whole life policy worth 500k which i pay $300 per month. If something happened to me, this would be enough to pay off the mortgage, but would leave very little to care for my 2 children, ages 7 and 9.

I'm thinking of converting to term life for 20 years @ $1.5mil. is this adviseable? Would I even want to pay off the mortgage, since that would be assuming that their guardian would want to live there?
Thanks.
Click to expand...
You can get more ins. for your money with the 20 yr. term ins. as you know - 1.5 mil. as opposed to 500k permanent (WL). At the end of the 20 yrs. the kids would be grown.

However; if you want ins. to continue on after the 20 yrs. even though the kids are grown, you would need a term pol. that you can convert to WL at the end of the term or one where the term is renewable at the end of the original term period. You can also buy a new pol. at that time (for a lower amt. if you desire) but you would have to prove evidence of insurability.

You might talk to an ins. agt. - they can help you decide what is best for your income & needs & also help you decide if paying off the mortgage would be a good idea. It kind of depends on how old the children are & the guardian situation at that time if something did happen to you. (that is info you cannot know ahead of time though)

I do think term is a good idea for you with young children as opposed to WL since you can get so much more ins. for your money. However, it has no cash value which some people like to use to pay for college for their kids, etc. It depends on what you want to accomplish.
 
Last edited:
K

kboyd2005

Junior Member
Thanks for responding.
I have 529s for both kids. I guess it boils down to which would accumulate college funds quicker. Another aspect is that I want to free up extra cash, and my thinking was that the term could save me more than $100 / month, and have a higher value. Or I can stop the 529s, and increase the value of the cash value life insurance policy. In general, do you know of the growth is similar for 529 and cash value life ins?
 
M

moburkes

Senior Member
The term would only be worth more if you died within the next 20 years. After that it isn't worth anything.

In any case, the life insurance won't need to pay off the mortgage. Your family could move into a less expensive home. Your family could make monthly mortgage payments, instead of paying the note entirely.

Does the other parent have the same amount of insurance?
 
K

kboyd2005

Junior Member
My ex spouse doesn't have insurance as far as I know. I will try to get a projected analysis of costs for each option to compare.
 
M

moburkes

Senior Member
kboyd2005 said:
My ex spouse doesn't have insurance as far as I know. I will try to get a projected analysis of costs for each option to compare.
Click to expand...
Whoa. This money is not for the kids' parent. Okay. Well, if the kids will go to your ex should you die before they are adults, then your current spouse most certainly should move into a smaller home. Even if the current spouse has children with you, there will STILL be 2 less children in the household.

You need to speak to a financial advisor face to face. This person would have WAY more facts that you can/should provide over a forum.
 
You must log in or register to reply here.

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top