Term life insurance is the low-cost best bet for most people

Q I'm a married homeowner in my late 20s, contemplating life insurance. We want to make sure that if something happens to one of us the other would have some time to figure things out instead of selling the house and moving back in with parents. What do you recommend -- the more expensive comprehensive lifeinsurance that we can take money out of later or term insurance?

MELISSA

A There's really only one reason to buy life insurance: To financially protect loved ones from an untimely death. Some insurance agents will try to sell you a policy as a way to save for retirement or for children's college education. Forget it. The financial world offers far better and cheaper ways to salt away long-term savings, such as a 401(k), a Roth IRA or a 529 college savings plan.

I'm a big fan of term life insurance for most people, especially in circumstances such as yours. Term is a pure death benefit. Premiums are cheap if you're in good health, although the cost of the policy increases as you get older. It's a simple product and it allows for comparison shopping. You'll want a low-cost, plain-vanilla policy from a blue chip, financially stronginsurance company.

Permanent or "cash value" insurance comes with a tax-sheltered savings component, as well as life insurance. The investment returns are difficult to analyze. Types of policies include whole life, universal life, variable life and variable-universal. In general, these policies are expensive, with steep fees and commissions. Cash value insurance makes sense for some people, but for most of us, term is the way to go.

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