Life Insurance - What is the "right" amount / type?

I have 750k for term till I'm 80. I hope to be completely self insured by 40 and cancel the policy.

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I have been term...incremental savings vs. whole, etc. can be invested for greater return than value of whole... well, that is how I was taught anyways. Thoughts...?

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The younger the person, the more likely a whole life option might make sense - you get the immediate death protection, don't have quite the gross income to protect (although tons of time). However, it is not a terribly good value over time - particularly the older you are when you get into the policy - you're betting against yourself, essentially.

I would say something like the mid-30s is the cut off and you should buy level term, death protection insurance. I don't see anything wrong with your 4-5x annual earnings, except, you get to 40 and top six figures of income, your widow and children will have to deal with that multiple for a long time. I'm pretty sure 10x to 12x is going to be the number that everyone will start to suggest is prudent - at that point.

Group can be inexpensive if you have access to it - but, unlike level term, those rates start to increase precipitously when you hit higher age brackets. I have only group myself, but I know there will come a day in the next 4 years I will have to switch some or all of that to level term for the final run.

What meaxjeaux said was a good way to calculate amount.

You can use the rule of thumb calculations, but honestly that is just taking an easy way out of doing some real calculations for your family.

As far as the type. Nobody here is going to be able to tell you the best type without digging deeper into your situation. Term insurance is the simple answer as everyone at some point has a need for term insurance, however there are situations where WL makes sense. Finances aren't a one size fits all answer.

If you want to really know if your family is covered, go talk to an agent (a good one). They will help. Sure take what they say with a grain of salt, as they are salesmen, however they do know what they are talking about (usually).

Just get 1M 20 year term, I did this at 35, it's like $750/yr through Hartford.

You will have a difficult time convincing the majority of financial planners that WL is the best path

Neither do I think most estate attorneys will back up your perspective

An ILIT is not the best practice for most estates unless you happen to be in the small minority that is worth tens of millions of dollars-

You are just trying to bypass probate processing

So I will give that in 1-2% of estates you may be correct

GoCrazyAuburn-

You will NEVER EVER NEVER win this argument with some on this board, they just don't want to admit that financial planning should include good insurance planning. I always love this question because all of the termites come out. Thankfully the estate planning attorney that I use must be dumb because she sends a lot of referrals my way for permanent insurance planning. Furthermore I guess I'm fortunate that the business owners that I deal with must be dumb as well cause they overwhelming choose owning something versus renting it from me.
Hell just last month a guy that could buy and sell me bought another permanent life policy from me after the first one he bought for buy/sell coverage became paid up with a little over 1.2 million in cash value and 5 million in DB after 10 years of payments. But I guess term is the only solution and he was just sold a bill of goods by me and the estate planning attorney and his CPA.

Never buy WL.

According to the SmartMoney website, commissions typically eat up 100 percent of the premium for the first year. On average life insurance agents make about a 30-70% commission on term life insurance, and around 90-105% commission on whole life products. You do the math.

Its better to buy term, and start your own investments. Roll over those 1st year dividends, that dont exist in WL policies

If they are getting paid 30-70% they are absolutely getting hosed or they are not good at all. My lowest term payout is 95%.

And again please quit using absolutes when giving advice. The best advice to anyone is for them to sit down with a good financial planner who is in for the long term with their clients and develop a person or family specific plan based on that persons life.

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You will NEVER EVER NEVER win this argument with some on this board

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I think he just did.

Another question for Auburn. You have mentioned that Guaranteed UL is not so guranteed. Can you please explain that to me?

BOLI is also another instance where permanent insurance is better than term.