Life insurance: to die or not to die.

Right around three years ago, I was contacted by a "life insurance guy," to whom some "friends" from church had given my name and phone number. (Thanks, Jeff and Brandy.) Anyway, I ended up meeting with him in my office, and we went over some of my financial info. Ultimately, he gave me some quotes on life insurance policies, etc., but I was able to put him off for a while. He would occasionally follow up with me, thanks to some complicated process of "reminders" on his office computer, I'm sure. He contacted me at some point while I was with my next firm, but we never met, and we never got into premiums or anything. However, he tracked me down yet again at my current firm (number 3, for those of you keeping track), and we met last week to go over the current financial situation and to redo the whole premium thing.

Also last week, we finished up our birth prep classes (thank goodness we're done with those), and one of the guys in that class just so happened to be a "life insurance guy," too. I talked to him yesterday and got even more premium numbers, etc. Here are our options:

"Life insurance guy" number one: get an annually renewable term policy. For about $28 a month (for the first year), we can get a $500K policy. For about $53 a month (again, just for the first year), we can get a $1 million policy. Because it's annually renewable, the premiums go up each year...the term is for one year, so we're locked into a fixed premium just for that one year. By the next year, we're in a new term, so the rates will change (i.e., they'll go up).

"Life insurance guy" number two: don't do the annually renewable policy; instead, get three separate policies, each with different terms and for varying amounts. In a nutshell, get a 10-year policy for $500K, a 20-year policy for $250K, and a 30-year policy for $250K. Total premium for all three policies is $48/month. For the first ten years, we'll have a total of $1 million in coverage; for the next ten years, we'll have a total of $500K in coverage, and for the final ten years, we'll have a total of $250K in coverage. I guess it makes sense to have your coverage decrease as time goes by; at first, that seemed counterintuitive, but I see the logic behind it now. Biggest advantage to this approach: the premiums don't increase every year like they would with an annually renewable policy (see "life insurance guy" number one).

So, life insurance experts, what say ye?