Each situation is different when it comes to how much life insurance you may need.  At the very least, an easy way to calculate a number is to multiply your income by ten.  If you want to go even more in depth, add up all your debt, and then add extra for college and burial expenses.  Just don’t forget to take out your assets when doing the calculations.

Universal life insurance is a permanent life insurance policy that accumulates cash value. Unlike whole life insurance, you can adjust the premiums you pay should you need to.  This will, of course, affect the cash value accumulations.  It can be a great investment option.

Technically, the best age to begin a life insurance policy is the day you are born.  A Whole Life Policy can be purchased for a child and then be transferred to them when they turn 18.  The cash value grows the longer the policy is in place and can end up being used as a down payment on a house or even held longer to supplement retirement income.   

There are three types of life insurance: Term, Universal, and Whole.  Term life insurance provides coverage for a specific number of years. Universal and Whole provide permanent life insurance that accrues a cash value.  As you pay your premium, part of it goes toward cash value and is invested for you by your policy holder (usually a 3.5% to 5% yearly return). This cash value can be dispersed to you while you are still living (taxes apply upon withdrawal of funds).  

 

A 401k is an employer-sponsored account that helps people save for retirement.  This type of account cannot be withdrawn from until retirement. You may make contributions to this account above the minimum withheld by your employer (usually around 3%) and you may get free money with a contributions match offered by some employers.  You also do not pay taxes on the amount you pay into your 401k. That happens when the money is disbursed to you upon your retirement.