Many people I know don’t have life insurance. I was one of them until a few months ago. When you’re young, or single you don’t see life insurance as a necessity. If you have a family or people who depend on your income, it may seem like something you can get later in life when you’re more likely to need it. Or it could be that you don’t think paying monthly for life insurance will fit into your budget.
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Getting life insurance was something that I had been thinking about for years. I’d heard it was better and easier to get it when you’re young, but I didn’t think I could fit it into my budget. Recently I started working with a financial planner who recommended getting life insurance as part of my long-term financial plan. She then showed me how I could fit it into my monthly budget.
I was surprised at how affordable it was and how much more beneficial it was for me to get it now than to wait and get it when I thought I’d need it.
(This information is not meant to be financial advice and is just for educational purposes. This post may include affiliate links. Should you click an affiliate link and make a purchase I may receive a small commission at no extra cost to you.)
What is life insurance?
Simply put life insurance is a policy that pays out after you die. You make monthly payments and the insurance company provides a previously agreed upon payout to your beneficiaries.The cost of life insurance is based on a variety of factors such as the type of insurance you get
- The amount of the death benefit
- Your age,
- Your medical history
- Your overall health
- Your lifestyle (e.g. you have risky hobbies or do a lot of travel to places considered dangerous)
As you get older the price of life insurance increases. So it’s better to get it when you’re young and healthy so you can lock in a good rate.
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The benefits of life insurance
Having life insurance is very important, especially if you have a family or people who depend on you and your income. Life insurance can help pay for funeral costs, make sure the mortgage is paid, debts are paid off, the kids have money for college, and the regular household bills are paid.
Even if you don’t have a spouse or kids having life insurance can help your surviving family members pay for the expenses you leave behind should you pass away. Especially if you will be leaving behind debt like student loans, credit cards, or a mortgage.
Even if you don’t have a spouse or kids having life insurance can help your surviving family members pay for the expenses you leave behind should you pass away. Especially if you will be leaving behind debt like student loans, credit cards, or a mortgage.
The thing to remember is that life insurance isn't for you. It's for the people you leave behind. And if you're the main breadwinner, have a spouse and kids if you don't have life insurance you are being very selfish. And believe me, if you don't have ample life insurance people will talk about how selfish you were after your gone. I know because I've attended funerals of husbands who left no life insurance and everyone was talking about it.
Where to get life insurance
In this modern age of technology, there are now many ways you can get your life insurance- Through your auto or home insurance provider
- Online from places like policygenius.com or Intelliquote
- From your bank or financial institution
- Your financial planner which is the route I took
How much life insurance to get
How much life insurance you need can be based on several different factors. Such as- The number of dependents you have
- What the money may be used for
- Your current income
- The amount of your current debts
- If you plan to change your marital status in the near future
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And that’s not an exhaustive list. As you can see there are multiple factors that can be used to determine the amount of life insurance you need. This may not make it easy for you to figure out what you need on your own.
The options you have are to talk to an insurance agent or your financial planner for some advice. There are also online tools like this one from State Farm that can give you an idea of how much life insurance you may need.
Do you have a life insurance policy? If not, what's been holding you back from getting one?
For my wife and me it's not about kids since we don't have any, but more so about protecting each other in case of tragedy. You never know how you will react to an unexpected death of a loved one and it may have a dramatic impact on your ability to work and, in turn, your short- and long-term income.
ReplyDeleteSo true. You don't know how you will react. Thanks for sharing!
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