First of all, investing and life insurance are two different things and you do them for different reasons. You purchase life insurance to protect your loved ones from the loss of your income and to pay off your debts at your death. You invest to have money to buy the things you want, when you want them and to have a comfortable retirement. I never recommend you invest through life insurance. How it works is simple. You decide how much you want to purchase, you buy the insurance and when you die they pay your beneficiary. The amount you need varies by individual and I would suggest you contact a local insurance agent who can talk with you about what is right for you.

1. as a single person with no one that relies on them for income, your insurance needs would be minimal. Until that changes, you should pretty much just keep what you have at work. A very small personal policy would be ok, but probably not needed. Life insurance is to replace income from someone that has others relying on them (kids, spouse, parent, etc…)

2. Dont invest through a life policy. I am assuming you are speaking of Variable life. I personally am not a big fan of these. I think investments & insurance should be kept apart from each other. If you want to invest, then do so. If you need insurance, get it. But it should not be a 2 birds with 1 stone kind of thing.

Well, you DON’T invest through life insurance. If you did, it would sound like this:

Hiya! If you pay me $1,000 a year, I’ll invest it, keep 95% of what I make, and give you 5% back!

Doesn’t that sound great? NO. Because life insurance is NOT a good investment tool.

Do you want LIFE insurance, to pay someone if you kick off, or an INVESTMENT? There are MUCH MUCH MUCH better ways to save money than life insurance (like, a mayo jar under the bed). If you’re looking for an INVESTMENT, check with your employer for a 401K plan. Or set up an IRA plan at. Or just start putting money in the BANK every month.

But don’t EVER buy life insurance as an “investment”. That’s just like buying a pair of Prada heels to bang the nail in the wall with. It’s not the proper tool for the job, and you’re wasting your money using the wrong tools.

You generally cannot “invest in life insurance” because most contracts are not securities. The only life insurance policies that would qualify as securities are variable life policies. Furthermore, most broker-dealers (that’s the entity in charge of overseeing folks who can sell securities) disallow that colorful turn of phrase.

I’m sure the spiel included something about income tax-free retirement etc, and you feel comfortable with the investment options. Ask this agent about the volatility of the life contract itself (not the underlying investment). To help that agent demonstrate this to you, ask him or her for an illustration at the SAME interest rate on the guaranteed and current side. The difference between these columns reflects the swing that the adjustable mortality and administration costs have on your account. This is out of your control and company strength etc has nothing to do with whether and how much these charges may increase.

Oh, then talk to a real financial planner and get a game plan together.

Life insurance is designed to protect a family against the financial burdens that accompany the sudden, unexpected loss of a breadwinner. You have two options: term life and whole life. You pay a monthly premium with each. A term life policy will pay a death benefit in the event that you die during the specific time, or term, covered by the policy. A term life policy has a start date and an end date. If you die the day after the policy ends, the insurance company does not pay a death benefit. The premiums that you pay for a term life policy will be gone when the term is up. You will never see that money again.

A whole life policy covers your for your entire life. If you die the day after you take out the policy, you are covered. If you die in 20 years, you’re covered. And if you die when you’re 80, you’re covered. In the mean time, the insurance company invests the money you pay in premiums, and some of the earnings are put into your policy in the form of cash value. The cash value builds over the years. At some point—when you are on a fixed income, for example—you can use your cash value to pay the premiums, keeping your policy in force. A whole life policy costs more than a term life policy, of course, because of these investment features.

Some people say that you could invest the money you save by getting term life in something that earns more money than a whole life policy. That may be true, but be realistic about your investing skills: Would you really invest the premium savings? Do you know enough about investing to guarantee a profit? Whole life is guaranteed to build cash value. Good luck!