Over the past couple of years, I’ve mentioned the fact that Dave and I each have a life insurance policy… and every time I mention it, I always get lots of questions about why, when, how much, etc. etc.
While I’m certainly not an expert, I do know that Dave and I felt very strongly about each having a life insurance policy; not necessarily because we love thinking about those “what if” situations, but because we know it’s important to be prepared just in case. And you all know how much I love planning ahead and being prepared!
Dave and I each have a $250,000 30-year term life insurance policy. This essentially means that we pay a fixed amount (around $150) per year for 30 years (or until we cancel our policy). After 30 years, the policy expires. However, by that time, our children will be fully grown and living on their own, so hopefully, we won’t need the security of life insurance any longer.
If you’ve been thinking about buying life insurance but aren’t sure if you really need it or not, here are 10 things to consider. They are, in my opinion, 10 very good reasons you SHOULD get life insurance.
1. You’re the breadwinner.
Whether you’re making part or all of the income for your family, you most definitely need some sort of life insurance to protect your family from financial disaster in the event that you are no longer around.
Life insurance will not only provide a much-needed income for your family, it will also provide necessary funds to afford benefits for you and your children.
Also, even if you already have a life insurance policy from your employer, you might still want to purchase an additional policy on your own — just in case you ever lose or quit your job.
2. You’re a stay-at-home parent.
Yes, you read that right. Even if you aren’t contributing to the financial well-being of your family as a stay-at-home parent, you are saving thousands of dollars by staying home with your children.
Not only are you dodging a huge daycare expense, you’re also able to do the cooking, cleaning, errands, laundry, and all the bazillion other tasks you do each day when you are home.
If you were no longer around to do those things, your spouse would need the money to pay someone else to do it all… and that could be expensive!
3. You have debt.
As I’m sure you can imagine, most people have some sort of debt — whether it’s a mortgage, car payments, medical bills, or credit card debt.
That debt will fall on the hands of your family members if you pass away.. however, if you have life insurance, the burden of your debt won’t be nearly as stressful as you’ll have a large amount of money to put towards that debt.
4. You’re young and healthy.
Yes, I realize this might sound completely crazy, but if you’re young and healthy, your yearly premiums will be MUCH lower than if you’re older or if you are not in the greatest health.
I only pay $120 per year for $250,000 of life insurance because I locked in this low rate when I was in my mid-twenties. If I were 10 or 20 years older, my yearly premiums would most like be quite a bit higher.
5. You have young children.
Honestly, I feel very strongly that anyone with young children living at home MUST have a life insurance policy… no questions asked.
If you and/or your spouse pass away and are no longer able to care for your children, you certainly don’t want to leave your relatives with a huge financial “burden” on top of the stress of planning your funeral and caring for your children.
In my opinion, it’s the least I can do to be a responsible parent and plan for those “just in case” moments.
6. You want to have a funeral.
In case you haven’t noticed, funerals can be VERY expensive. Even if you have an emergency fund, a funeral could easily drain your savings, leaving your surviving family members with nothing to live on.
7. You don’t have a lot in savings.
Speaking of savings accounts… if you don’t have much in your savings account, or if you don’t have an emergency fund to fall back on, you most definitely need a life insurance policy as a “safety net” in case you’re no long around to financially support your family.
8. You have a family business or family wealth.
I don’t know all the details on this one (so you’ll want to talk with an expert) but I do know that there are some life insurance policies that can protect your family business and allow you to leave more money to your family members as part of your estate.
9. You are involved with a special charity.
Even if you don’t have family members to benefit from your life insurance policy, you can use that insurance to leave a lasting gift to your favorite cause or charity when you pass away.
10. You want peace of mind.
For Dave and me, life insurance was a very simple and relatively inexpensive way to give us peace of mind that no matter what, our spouse and children would be taken care of even if we weren’t around to take care of them.
Death is not something we can plan for… but we can be prepared “just in case” something tragic happens.
I realize that life insurance is a very personal topic, and one you’ll need to make based on your own family and financial situation. For Dave and for me, this was one of those decisions we made early on in our marriage and have been very happy with our decision ever since.
What are some of the reasons you have (or don’t have) life insurance?
This post was written as part of the Allstate Influencer Program and sponsored by Allstate. All opinions are mine. As the nation’s largest publicly held personal lines insurer, Allstate is dedicated not only to protecting what matters most–but to guiding people to live the Good Life, every day.
Jane says
OH! Thanks for the reminder. This is something that keeps getting pushed to the back burner. I appreciate your sponsored posts that aren’t pushy. I’m more apt to contact your sponsor because they allow you to blog in the same manner you always do with honesty, integrity and helpful information. I’ve read sponsored posts on other blogs where I feel like it is just a long commercial. I’m happy you are back to blogging full time 🙂
Andrea says
Thanks Jane! I really do feel strongly about having life insurance, so this post was completely my own opinions and simply sponsored by Allstate. It’s nice to have a few sponsored posts every now and then as an additional source of income so I can keep everything on the blog free to readers 🙂
Natalia says
I completely agree with this post. But there is one point that sounded strange to me… Regarding the stay at home parents. You write “If you were no longer around to do those things, your spouse would need the money to pay someone else to do it all… and that could be expensive!” If I was a stay at home mom And something happened to me, I hope my husband would use the insurance money not to pay someone to take care of the kids and the house, but to stop working for a while or to work less for a while and take care of his kids himself. If the Kids just lost their mam they will sure be having a hard time and will need their dad and his presence more than ever.
Jenn S. says
Natalia,
While that would certainly be ideal, it is important to be realistic – he will have to go back to work eventually, and childcare and other household help can get expensive.
Andrea says
yup, that’s basically what I was thinking too. The living parent certainly can’t stop working indefinitely 🙂
Erica says
Great post! These are all great reasons to have life insurance – I as an interviewer for a company that processes applications for life and health insurance products, so I know how much peace of mind having life insurance can provide..
Sabrina says
My brother in law passed away a year ago from a brain tumor at 32 years old, leaving 5 children ages 3 months to 8 years old. The month before he was diagnosed he and his wife discussed life insurance but decided to wait 6 months until he graduated to know better how much he’d need. Then it was too late to get life insurance. His wife and kids are supported by her parents and welfare now. It’s an awful situation. He was so strong, grew up on a farm, the picture if health and strength. Even if you’re young and healthy there can be accidents or sudden bad health. I’m amazed at how many Go Fund Me accounts there are of people who don’t have life insurance and suddenly die and it leaves the family completely desolate.
Andrea says
so sorry to hear that… how awful. You’re right though, accidents can happen to anyone at anytime (even if you’re young and healthy).
Melissa says
We did exactly what you did, when I was pregnant with kid#1 in my mid-20s we each got 30yr term life insurance. Ours also has the option to renew at a certain point (when we’re 50? 55?) at the same low rate if we choose, which we will likely do just to be sure that when it is our time to go, there’s money around to help those that have to sort out our affairs.
So, I’m with you, for around $40/month we each have $250k to help cover whatever expenses come up in the event we’re not around to take care of things. I feel better knowing it’s there, and it helps me not dwell on any what ifs.
Andrea says
wow — that’s awesome that you can renew your policy at the same low rate. We do not have that option with our policy, but it definitely seems like a good deal!
Heather says
We carry life insurance on my husband and I both. Enjoy the low premiums! My husband is 52 and we pay $166 per month (!) for $350,000.
Andrea says
yeah, we only pay $100 – $120 a YEAR for ours! however, I’m sure it’s worth it even for your higher premiums 🙂
Melissa says
It’s just my husband and I right now, but we both have life insurance through our employers. Definitely for the peace of mind factor and we both agree that we’ll revisit the amounts once we have children.
Curious why you said you hopefully won’t need the security of life insurance after your kids are grown and living on their own? Wouldn’t you want the security of having the life insurance for each other in case something happened even if the kids are older? Funeral costs, health insurance, income replacement, etc?
Carlen says
I’ve heard it explained that (hopefully) by the time your kids are grown you will have paid off your house, have no other debt, have enough in investments AND be able to either earn your own income or live off of your retirement.
But, I know my parents are empty-nesters but still have life insurance. Both of them have at least 10 years until retirement.
Andrea says
yup, that’s the idea! However, I think that with the way things are currently going financially, so many people will carry life insurance even after all their kids are out of the house because they have lots of debt, a huge mortgage, or no retirement savings to fall back on. Kind of sad, but I think many people in “my generation” will have to do it that way.
Andrea says
by the time our kids are out of the house, we shouldn’t need the financial security of life insurance. We should have our mortgage paid off in the next couple of years, and after that, we’ll be able to save significantly more each year. Plus, we’ve been fully funding our retirement accounts for the last 10 years and will continue to do that until we retire.
That’s usually why people buy a 30-year policy in their 20’s… because by their 50’s they should be financially secure enough not to need the extra insurance. Plus, with the kids out of the house, that cuts down on financial expenses significantly!