As long as you each are
able to support yourselves and you have no kids (and no mortgage) you don't
need life insurance. Very few young adults become uninsurable. Note that one
company might deny coverage while another company will sell the same person a
policy. See:
http://wealthpilgrim.com/who-should-buy-guaranteed-issue-life-insurance-a-surprising-answer/
(note the author is a certified financial planner which lends credibility).
How do I guarantee future
insurability with a term policy?
http://www.fool.com/insurancecenter/life/life08.htm
What factors might
supplement replacement income? http://www.fool.com/insurancecenter/life/life03.htm
Note the important role
Social Security plays in replacing income. Early in my career I had a student
who was a widow with 4 kids under the age of 6. Her husband was killed in a
vehicle accident when they had 2 toddlers and she was pregnant with twins! They
had no life insurance. Luckily he had worked long enough to be covered by SS so
she and the kids received SS survivors’ benefits. Very few insurance sales
people will even mention SS Survivors' benefits as part of the process of
deciding if you need insurance and, if so, how much.
SS Survivors Benefits http://www.socialsecurity.gov/pubs/EN-05-10084.pdf "The younger you are, the fewer years
you need to work. But no one needs more than 10 years of work to be eligible
for any Social Security benefit. Under a special rule, if you have worked for
only one and one-half years in the three years just before your death, benefits
can be paid to your children and your spouse who is caring for the
children." Each of you should set up an online Social Security account:
http://ssa.gov/myaccount/
If you decide to buy life
insurance read:
Life Insurance Buyer's
Guide (but note the publisher is the industry) http://www.naic.org/documents/consumer_guide_life.pdf
Consumer Reports article:
http://www.consumerreports.org/cro/money/insurance/life/life-insurance-safety/how-to-protect-yourself/life-insurance-safety-how-to-protect-yourself.htm
New York State Life insurance
consumer info: http://www.dfs.ny.gov/consumer/clife.htm
Do either of you have
life insurance as an employee benefit? Sometimes you may have 1x your annual
salary in insurance as a free benefit. Can you buy cheap life insurance as an
employee benefit? By buying through your employer you are part of a group plan
which does not require a health check (or only if you want to buy a really high
amount of coverage).
Also consider that the
surviving spouse would be the beneficiary of retirement accounts and other
assets.
If you had a mortgage
that you need both incomes to pay and want to be sure the surviving spouse
could afford the mortgage if one of you died, then you might want to buy term
life insurance policies.
Life insurance salespeople use scare tactics to try to sell guaranteed
renewable whole life insurance because they earn much higher commissions on
whole life policies than on term policies, not only when they first sell you
the policy but for years afterwards if you keep paying premiums. So the sales
person will really push whole life. You might be better off funding Roth IRAs.
