I think I was around 13 or 14 the first time someone asked me about life insurance. My mother described a policy where I could pay some ridiculously low amount, I think around $6 a month for whatever the coverage was. The big question she had for me was whether I’d continue to pay it for the rest of my life to keep it active.
I like to think I was a responsible early teen, but I didn’t think it was wise to make such a commitment. I only had a very, very high-level understanding of what life insurance was. Looking back at it now, I’m happy I didn’t make a decision to buy back then. Even if I would have ended up saving money over the long haul (and I’m not sure I would), I am more confident in my ability to make financial decisions now than I was as a 14-year-old with limited life experience.
The next time I thought about life insurance was after I closed on my first condo when I was 28. At around the same time one of my good friends became an insurance salesman. He put together an in-depth analysis for me to review. The analysis made the point that if I were to die my estate would still be on the hook to make payments on the condo. However, since I was living there by myself with no dependents, I didn’t really care what happened to the condo.
Finally, at the age of 36, I found myself buying life insurance. What changed? My wife and I were expecting our first child. We both earn an income, but if one of us were to die life would be very, very difficult. In fact, raising a child by yourself and working seems impossible to me. I don’t know how some people pull it off. In an upcoming article, I’ll dig into what kind and how much life insurance we bought and why.
The financial support that life insurance would provide can make a world of difference. Money can be used to buy time, buy day care, camps/after school programs. It simply changes everything.
What’s disappointing to me is that I’ve read that too few people have life insurance. It makes sense to me as it isn’t the kind of thing they teach in school.
If you are looking for a place to get started with life insurance, you might want to consider Midland National’s awards or contact them through their LinkedIn account.
While the above article is sponsored by Midland National, these are my own words and thoughts.
Emilie Burke says
I’ve been thinking about this a lot lately. In terms of debts, I have 8K left on a student loan and 14K left on my car. I don’t have life insurance, but I have enough in retirement accounts to bury me. If anything were to happen to my Casey, there’s SGLI, but I don’t know if I need anything right now or if it’d be worthwhile to just wait the two years til we’re debt-free.
Lazy Man says
From a very high-level of what you’ve told me in the past, we were in a similar place and did the same thing. My wife’s SGLI might be not be enough, but that’s topic for a future article.
Terri Pastorelli says
Back in the olden days my employers always provided a life insurance plan for me. Over the past decade, however, that hasn’t been the case. I now have a life insurance policy through AARP (yes, I’m that old) so at least I know there will be enough money for cremation.
Christie Lea Thompson says
I slightly disagree with you, Lazy Man. At any age, if you don’t have adequate assets, then without life insurance, your loved ones will be left paying for your funeral and other final expenses. That’s not the legacy that most people want to leave.
[Editor’s Note and Response: Ms. Thompson was kind enough to leave her email and phone number in this comment presumably in an attempt to drum up business. My sources say that cremation can be $600-$1000 and a funeral can be done in your loved one’s home. So this would presumably be for people who have less than $1500 in net worth at their death. I understand that some people may be in debt, but in that case, I think your loved ones would understand. I think you have bigger problems if you don’t have $1500 to cover the burden on your loved ones.
In any case, I don’t know if I’ve heard of anyone buying $1500 of life insurance, so I think the answer is just to save up $1500 and make it clear to your loved ones how they should spend it. Want to be buried or have a big funeral? You can cross that bridge as you make more money.]
Nathan Lindeman says
Besides doing the bare minimum (paying down debt and funeral expenses) people should consider the loss of income for one’s lifetime and how that impacts those left behind. You touched on it in your article but this is a concept many consumers struggle with. What a consumer wants their policy to accomplish is ultimately their decision, but most loved ones who receive a life insurance benefit are left wondering if it is going to be enough to pay bills and support the household for any extended period of time.
It’s amazing that so many people don’t have any life insurance. They should at least have enough to take care of funeral expenses. The GoFundMe craze for those irresponsible enough to not have life insurance is annoying. I am 50 and have had enough life insurance to cover funeral expenses since I was 10. I have paid for those policies since I turned 18.