Insurance for Young Couples

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Dear Dave,

My wife and I are both in our early 20s, we’re debt-free, and we’re just a couple of months away from having a fully loaded emergency fund of six months of expenses. We both also have 401(k) plans at work, and we’re looking forward to starting additional investments later this year. Right now, we’re trying to decide on which life insurance policies to buy. I know you always recommend term insurance, but how long should the coverage last? Would you suggest 15-, 20- or 30-year policies? — Anonymous

 

Dear Anonymous,

Wow, it sounds like you two are starting your lives together on the right foot. Congratulations on being super smart with your money!

I recommend 15- or 20-year level term policies, unless you have children. I’m assuming kids are not in the picture, since you didn’t mention any. Then, if you decide to grow your family at some point down the road, I’d advise converting those to 30-year term policies. The idea behind this is you want the insurance to be there to protect everyone in the family until the kids are out on their own and established.

In the meantime and in the years after, your continued saving and wealth building will lead you to a place where you and your wife are self-insured.

Way to go, guys. I’m proud of you! — Dave

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About Author

Dave Ramsey

America's trusted voice on money and business, Dave Ramsey is a personal money-management expert and extremely popular national radio personality. His four New York Times best-selling books—Financial Peace, More Than Enough, The Total Money Makeover, and EntreLeadership—have sold more than 7 million copies combined. His latest book, EntreLeadership: 20 Years of Practical Business Wisdom from the Trenches, debuted at number one on the New York Times best-selling list.

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