Ah yes… September. The air is cooling, the leaves are coloring, NFL Football is back (way to start the season off right, ‘Skins! #NOT), and most importantly – It’s LIFE INSURANCE AWARENESS MONTH!!! OMG! CGW! (Crowd goes wild) OTM! (over the moon) TGIS! (thank goodness it’s September)
I know I know, you waited all year for this month to come and now that it’s here you don’t know how to control yourself. Join the club. The club of BEING INSURED, baby – yeah! (okay okay, I’ll stop)
In all seriousness though, life insurance is pretty important. (Important if you’re BORING! Okay for real this time – no more yokes. I mean Jokes.)
It really is important :) Especially if you’re married, have kids, buying/own a home or assets, or pretty much just don’t want to get screwed in the off change that you die one day. Which, surprise! Will happen. Hopefully not until all debts are paid off though and you’re living the good life down at the beach with 16 of your grand kids burying you into the sand. (Another reason to retire early, right?)
But here’s the thing. You already KNOW all this. Some of you smarties have already sucked it up and covered yourself and your family, but a good majority of you have not. According to this minfo-graphic (“mini info graphic” – coined first here!) by goodneighbors.com via State Farm Insurance, only one in four of us are picking up life insurance by one of these main events:
All four of those check marks are mine because they’re exactly the reason we picked up life insurance for each other ourselves. We had just bought a house in the summer of 2007 (real estate could never go down, right?) prompting us right out the gate, and then by the next Spring we’d be getting married (prompt #2) and shortly thereafter working on our new beautiful family (prompt #3). So we each picked up enough coverage to wipe out our entire mortgage and keep the future of the Money household safe and secure – at least financially.
It’s funny to think about how much money we spend on something that we hope will never come, but it’s one of the best ways to protect your wealth and make sure you’re not leaving behind a trail of mess for your loved ones to clean up. The last thing they want to be doing is figuring out how to pay off all those large debts you’ve left behind while they’re grieving for your loss. I like to think of it as one last gift to bestow upon them as you make your way up to Candy Land ;) And what a great financial lesson to leave with them too! (Do you think there’s blogging in the after-life?)
Now, I’m not gonna be your mother and tell you to stop what you’re doing and go buy yourself some coverage, but I am going to channel your dad and hand you an eBeer while sternly telling you “it would be wise” to look into this today, son/daughter. Don’t rush out and buy something you’re confused about or not even sure you need (contrary to popular belief not everyone technically does need life insurance, though it is always beneficial!), but do spend a few moments today – 15 minutes? – reviewing your current situation and whether it’s worth looking into more or not.
What’s changed over the past few years? What’s changed since the last time you GOT insurance? What would happen if you vanished into thin air like that fateful day on The Leftovers?
This goes very much for myself, too. Since picking up coverage those 7 years ago we’ve tied the knott, started an online business, grew our net worth by hundreds of thousands, and of course welcomed 2.3 new kids into our world (cats count, right?). What we picked up then might not match what we need today, so I’ll be chatting with the wife about this as well :)
In fact, here’s what we have now to give you a better idea:
- J. Money: $350,000 of Term Life Insurance (30 years @ $30.99/mo, via USAA)
- Mrs. J. Money: $350,000 of Term Life Insurance (30 years @ $24.57/mo, via USAA)
(Why do women always pay less for insurance? Those beautiful creatures…)
It’s literally been two years since I last paid attention to this – ever since my last riveting post on Life Insurance Month, where I changed it to M.M.L.P. Insurance: Mo’ Money, Less Problems! Haha… – so the timing couldn’t be better. Even us money bloggers need to suck it up…
Here’s a refresher from that post on why life insurance is so important:
- When you die, it’s going to cost money. Who, will depend on you.
- The money can be used to pay off mortgages, debts, full rides to college!
- It’s good to give your family complete peace of mind.
- It’s good to give YOU complete peace of mind! While you’re still alive!
- And more importantly, you can forever ward off all questions from your nosey financial blogger/parents going forward. Possibly the best reason :)
So. What are you going to do as soon as you finish reading this most exciting article I’ve served up for you today? Drink some coffee? Okay, sure. Leave a comment about how brilliant and funny I am? Fine, I’ll allow that. Oh oh! How about taking 15 minutes to review my wonderful life and whether or not I’m happy with my insurance coverage? Ding Ding Ding! We have a winner!
You don’t have to make a big deal of it, but I do urge you to put down The Facebook for a few and mull it over. You kids have it easy these days… Back in my day I had to walk uphill – both ways – to the life insurance company to talk about my options. All while barefoot, and in the snow!
PS: If you have no idea what amounts of coverage you’d need, check out this handy calculater from State Farm: Life Needs Calculator. It’ll help put things in perspective more.
UPDATE: Got a great message on Facebook about *Disability* insurance too: “Also worth mentioning, it’s super important to have disability insurance. I’ve read that it’s actually more common for people to need that but yet far less people have it. If you can’t work for an extended period of time (like a year or more), disability insurance is a lifesaver… Years ago, I knew someone who was in a terrible car crash & couldn’t work for 6 or 7 months. He didn’t have long term disability insurance, & it really messed him up financially. The small premium is worth the peace of mind, if you ask me!” ANOTHER GOOD THING TO CONSIDER!
Disclosure: This blog post was written as part of a sponsored program for State Farm to raise awareness about the importance of life insurance. All views expressed are entirely my own (do you think State Farm is that funny? ;)), and were not influenced (at all) or directed by State Farm (fo sho). You can learn more about this blogger program and life insurance at GoodNeighbors.com, PlantingMoneySeeds.com, and by following #StartLiving on Twitter.
[Photo by meddygarnet]
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I think women get cheaper insurance because, statistically speaking, they’re more likely to be healthy and live longer than men.
While I don’t have life insurance right now, I also don’t have any dependents. Maybe when I get married / have ze babies.
Statistically speaking, you’re less likely to do stupid things than we men are haha! I’ve done some VERY dumb things in my life. I should be charged double for life insurance…
No woman has ever had the last words, “here, hold my beer” before trying something stupid.
Haha… y’all are too much.
It’s a worthwhile thought exercise to have every year! Especially if you have debt that will still require servicing after you die.
Another thing that has come up when I’ve discussed life insurance with friends and family is that it always seems someone has an uncle “Bernard” who sells Whole Life Insurance and swears it’s the best thing ever. Hopefully most folks reading this blog already know… but stay away from whole life insurance unless you _really_ know what you are doing. For most people it’s financially detrimental bordering on scammy.
Agreed. That’s a whole ball of wax…
I was surprised to see that only 4 out of 10 buy it because of a life event. I thought it would be higher. It’s sad that some people view it as a luxury. I’m sure it’s hard for people with low income but a conversation has to take place so people can find a way to purchase it.
@Taylor – if you died now, your parents would bear the brunt of burying you. A small term-life to take care of such expenses is helpful. Think of life insurance as part of a “fish-truck” mentality – ‘If I got hit by a fish-truck today, what would happen?”
Another life insurance calculator: (J Money – you MIGHT recognize the URL)
and between the two of them, they were about ~20% different in the needs calculation, but.. they asked questions differently. Doing both gave me a better idea of such.
Thanks, J. (baby pics!!!)
Haha yeah USAA calc!
And, why “fish” truck? Why not, say, beer truck or coca-cola truck? :)
I can understand life insurance makes sense for a lot of people. That being said, that’s one expense our household doesn’t need. We are self insured because there is no need for life insurance when you have
1. no debt, nadda
2. no kids (a dog hardly counts as a dependent)
3. decent savings you can live on for decades (which one could argue doubles for the surviving spouse)
I’d rather invest the $50/mth.
That being said, my dad had life insurance for my parents’ mortgage and, when he died suddenly at 47, I was able to go to graduate school and my mom was able to keep the family home. That made a HUGE difference in our quality of life as we adjusted to our new life without him.
Very very sad stuff :( My wife’s father died super early too (while she was in high school) and she reaped the benefits of insurance for handfuls of years later. Definitely helpful in that regard!
Well look at that! After playing with the coverage calculator, MY coverage is SPOT on!! hmmm, I owe it to those wonderful CFP’s over at USAA that have pretty much planned my financial life (disclosure: I’m a USAA emp..). While I’m good to go, my husband is most def not… and 11 years older than me. Which kinda adds to my financial stress… if he goes first (which common sense will tell us that will happen), I know we aren’t properly covered. Catch-22: because of his age (and weight), bumping up his coverage to where we should be is going to break the bank. sigh.
I thought you were gonna say he’s just lazy and doesn’t want to deal with it. And my answer to that would be “get naked and hand him a beer!” We tend to perk up and pay attention when that happens :) (*fist bump* Herb)
We are both insured through work, but need more. I struggle with the “right” amount because I keep reading different things. Off to check out the calculator…
Thanks for making us aware its Life Insurance Awareness month. Its important to have life insurance but even more important to have the proper amount. Its not a buy it once and forget about it. I believe you need to review your coverage every couple of years to make sure you have the proper amount of coverage. Things change over time. More kids, bigger house, and more assets.
I used to poo poo the idea of life insurance until I became a financial planner and realized how important it was to your overall financial goals. I freaked out for the two months that I had between leaving my job (with lots of group life insurance) until I signed up for my own policy (with USAA, btw). I just had this feeling something bad would happen to me in those two months. Thankfully it didn’t, and not to sound like a commercial, but I literally sleep better at night knowing I have life insurance.
The things we do as “adults” :)
My fraternal order provides life insurance and that’s where all of our policies are housed except for the mid-sized one that my firm provides me as a benefit. I meet with my life insurance agent no less than once a year just to make sure we’re properly covered. I have a mortgage, 3 kids and my wife doesn’t work so my needs are constantly changing as account balances go up and loan balances go down.
For the people who claim they don’t have a need for life insurance because they have no dependents or debt, I say please remember that someone has to bury you when the time comes (and it will).
I know the conventional wisdom says don’t buy a policy on your children but I have met more than one family who has had to bury a child and we were passing the hat to buy a simple coffin and grave plot. I have also met more than one family who’s child had a serious childhood disease (leukemia and cancer) that they survived but that child would never again be insurable. If their parents had bought them a policy @ least they could bring that into their adult lives. I’m not advocating it as financially savvy but if its something you could swing I’d look into it.
For those that self insure @ least look @ the possibility of what you can get for a reasonable amount. Maybe you’d like to leave a large sum to your university or your Church. A life insurance policy is one of the more efficient means to leave large sums to a beneficiary. Not saying you couldn’t do better in the market, but please @ least look @ it.
That’s a GREAT point actually. I went back and forth on getting insurance for our first kid and ended up passing on it, but you’re right it would be a huge benefit if God forbid something happened. Esp getting sick later in life too as you mention… The sucky part is that we never know what’ll happen to us, and when!
I am looking into actually going with group insurance through my employer, much cheaper per coverage. Hopefully in a few years we will be self insured enough so the other doesn’t need to worry.
I’m not married yet and don’t have kids, but I do have life insurance through my employer. It is really not enough, but since I don’t have dependents at the moment, it is good enough for now. I plan on getting an umbrella policy once I get married to help me cover the rest just in case I don’t make it.
Both my old lady and myself have coverage via work. Other than that we don’t have insurance.
I think insurance is great for lots of people, but we are just going to self insure because we are in a situation where we can do such things.
I don’t understand why, for example, S L responded to Taylor Lee (who does not have life ins b/c she is not raising kids) and said that if S L passed away tomorrow, S L’s parents would be paying for her (I assume she’s a female) funeral/cremation expenses. Why wouldn’t that $$$($) come out of S L’s own estate?
I am married (second marriage) but not raising kids. I had term life but when the term was up I did not re-up. I don’t want to have life insurance. My spouse makes amazing bank and he pays for his own kids so I figure I don’t need an outside term policy. Similar to Aldo, I have I think 1xsalary through the employer. I figure that is enough.
I think S L just meant it’s something good to consider. Especially as most people these days die broke and/or in debt. Not readers of this blog, of course, but others ;)
Thanks Dad, but my coverage is spot on! :)
It’s good to see that I’m not the only one who went for a longer term. When our son was born I got a 20 year term, to be on the safe side, even though the 10 year was quite a bit cheaper and I could probably 10 years from that date get a 2nd 10 year that was also cheaper. Life insurance is one of those things that once you do it, its done, no hassling with it, just pay the $15 – $30 bucks a month and forget it…Well don’t forget it, make sure your beneficiaries know you have it! Mrs. C sometimes jokes when she’s mad at me that she’s about to become $500K richer ;)
I hope that your readers who don’t have insurance who have children take your advice and get some. My sister in law passed away earlier this year leaving behind two young kids. If she had even a $250K 10 year policy which would have cost her like $10 a month it would have made a major difference with taking care of her children. We always think this stuff happens to “someone else”, but we are someone else to someone else.
Oh no!!! So sad about your sister-in-law, dang… So much worse when little kids are left behind too – that’s my BIGGEST fear. I can’t even go a weekend without seeing my kids, ugh… But you’re right on the longer time stuff. I love having it set for so many years like that. The only annoying part is that if we want more we have to get an *additional* plan set up but I guess that’s the way it goes… life’s always changing anyways, right?
Dh and I both have term life insurance mainly because of our little guy. If either of us gives up the ghost before little J (yep his name starts with a J) can fend for himself financially, he will be amply provided for, and that is essential.
That’s so sweet you named him after me, awww.. I had no idea ;)
Every situation is different. I had significant life insurance when we had children. Now they are 8 and 9 years old. We dropped it recently. Why? Our net worth has now become such that we can self-insure. Also, should I die they will have inheiritance from my wife’s family and Social Security to 18. That should all be factored in. I also have some through work,though I dont factor that into my plans.
If you do need LI, don’t count on getting through work. Jobs change, and you might be sick a long time before you die and lose it. Get it independently, that way you can carry it with you through different circumstances. Its probably just as important to have a good will and trust, so I hope you will cover that next!
Agreed – and work changes so much MORE these days than it used to. It’s a nice perk while you’re there (it’s usually free, right?) but getting some on the side is much safer.
Now, can I borrow a few G’s? ;)
I’m afraid I’m in the opposite camp – it’s not necessary for me to have life insurance, and I’m frankly sick of mortgage advisors trying to sell me it – even by making things up, such as your family inheriting your debts.
I’ve had to complain several times about dodgy sales practises in this area. Its scares me how many people they have influenced to buy, when they don’t need to.
I think life insurance is a must for most with kids. I have an physical occupation where I work with my hands, and it’s also important to consider some disability insurance. I read that approximately 30 percent of us will be disabled at some point on our career, way higher than our chances of death. Most employers offer affordable disability insurance, something to consider as well. My wife’s policy even covered her income the last few weeks of her maternity leave.
Scary!!! 30% is super high! I just saw a comment on my facebook page about disability so I updated the post with it… I suck at thinking about that so it’s on my list to look into. So many things to be prepared for, ugh…
I would say life insurance is one of the main areas we are lacking, I have employee sponsored life insurance, but that is it. It’s a conversation Mrs. Even Steven and I need to have this month, thank you.
Two of those have happened to me recently! I have to admit I know I need it and should just do get it but I haven’t yet! And coincidentally I most likely will get it through State Farm too. Okay okay…I will get life insurance…dad.
Thank you daughter. Now clean up your room!
My husband has worked in the mortuary industry for ten years and I spent seven years workin alongside with him. I have seen firsthand how devastating it can be when someone chooses to go uninsured then dies unexpectedly. I have seen people charge $10,000 funerals on credit cards, for example, or sell their spouse’s car to come up with the money. Trust me, that is the LAST THING people want to do when they are also grieving over the loss of a loved one. Being properly insured shields your family from having to make those tough decisions.
Ouch! But I guarantee your husband has seen worse. (get it? cuz he works with DEAD PEOPLE???? Haha… ;))
Huge proponent of life insurance, especially after working with people who lost a spouse without coverage. It’s not easy and incredibly hard on a grieving family when you not only lose a parent but half an income or more. And as much as you want to grieve, that loss of income is immediately and often harshly felt. People also say that don’t have the money but when we look closer, we see that they fritter away the cost of term life insurance on lots of wants. :) And yes, my husband and I have adequate coverage, which we bumped up significantly after we had children.
Hey, those burritos and lottery tickets are much more important than insurance! You leave them alone! :)
My husband is far and away our primary earner, so we have life insurance for him. We got it when we had just bought our first house and I was pregnant with our daughter. It’s pretty cheap, and the piece of mind is invaluable.
Haha hubs has some but I don’t – crazy need to get on that!
I’m gonna tell all your blog readers on you ;)
Single, no kids, house paid for. Plenty of assets for my brother, or designee to put me somewhere for all eternity. A chunk leftover for the new cat caretaker. No need for life insurance that I can see.
Disability insurance is a whole different story…
(Can i be your new cat caretaker? :))
Well, first there will be an intensive interview process, wherein Miss Fluffy Pants, aka Lucia the Cat, checks you out, rubs your legs, waits for significant petting and chin scratching to happen. Then, and only then, will said cat be transferred to the Household of J$, with her said caretaking fund. Hah! Actually, she goes to a friend. We should have a Pet Photo Day here, for all of us to do show & tell. She really is lovely, a long-haired Siamese, with beautiful blue eyes. And, a rescue. She’s a looker.
Now, about that topic of disability insurance… still think that’s worth researching.
I’d like to see those pictures, please :)
My employer provides me 2x base salary for “free” (I have to pay income taxes on the premium). I would decline it if I could since I have no dependents and my parents could afford to pay for my funeral. But if not, they’ll get a nice bonus if something happens to me since my current will leaves everything to them. Once they’re happily retired and I’m 30, I’ll probably re-visit my will since I wrote it in my early twenties.
My parents have life insurance. I ask why they had to. They said that it’s for us and for some reasons. I was touched hearing from them. They are really great, detailed oriented, and very prepared.
That calculator actually made me feel much better. I can only get a small amount of insurance through work because of a chronic health condition, but that’s enough to do what I want (help my spouse cover daycare costs as long as they last).
That calculator told me I need over $1.8M
I quit taking it at $900,000 :) Mainly cuz I clicked “want to pay for my kids college” haha… it probably WILL be $900k by then! Ugh.
It helps that I work for a nonprofit and make a pittance. My income largely covers daycare, food, and my medical costs for my chronic illness. The rest goes into savings. So, in theory food costs go down and my medical costs are gone when I die, so my husband would just need help with daycare costs until our son is old enough to stay on his own for a few hours.
Definitely something to look into, I don’t currently have a family to support or a house but I do have some debts, I wouldn’t mind knowing were taken care of. That being said, even though I still like to consider myself young, in college because of where my dorm was I had to go up hill, then down hill, then up hill again to get to the cafeteria. So I actually did have to walk UP HILL BOTH WAYs in the SNOW to get to food. Though I never did have to do it barefoot…
Hahahahaahhah… you just became my new favorite person of the day :) Hilarious.