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.