Most of us know that life insurance is an important piece of the puzzle when it comes to financial planning.
The problem is that there is often a disconnect between what we know, and what we actually do.
According to recent information from State Farm, it looks as though many families aren't approaching life insurance the right way. At least, they aren't budgeting for it like they should.
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Are You Budgeting For Life Insurance?
Here are some of the key statistics from State Farm:
- Becoming a parent is the life event that is most likely to prompt thoughts about life insurance, with 37 percent of people citing it as a reason to start thinking about life insurance.
- Getting married is the next most common life event inspiring thoughts of life insurance, with 30 percent of respondents citing this reason.
This makes it clear that starting a family is one of the main drivers behind thinking about life insurance. This is due, in large part, to the fact that many of us know that life insurance is for your loved ones, and not for you.
It's designed to protect your loved ones financially if you die and can no longer provide for them. Those who are the primary breadwinners for their households should especially consider getting life insurance.
Budgeting For Cable TV, But Not Life Insurance?
And this is where things start to get a little disappointing. According to State Farm, 78 percent of parents talk about how important life insurance is. However, they aren't so willing to adjust their budgets in order to afford adequate life insurance. Here is what many respondents are interested in adjusting their budgets for, however:
- Cable TV: 76 percent
- Family Vacation: 69 percent
- Cell Phones: 62 percent
So, while many parents know that it's important to have life insurance to protect their children, it can be a daunting task to actually follow through and purchase the life insurance policy. However, purchasing life insurance is probably more important to your family's long-term financial well-being than cable TV, or even a family vacation.
Life Insurance Doesn't Have to be Expensive
The good news is that life insurance doesn't have to be expensive. If you make it a priority, you can find life insurance for a good price, especially if you choose term life insurance.
Term insurance policies come with expirations, but it's usually possible to get them for a long enough period to cover the time your children are minors. Term insurance usually allows you to get a greater amount of coverage for your premium dollar than you would see with whole life or universal life insurance.
Consider your family's income needs over the next couple of decades. If you can afford it, try to get enough life insurance coverage to provide for your family's income until your kids are grown up. You will lose your premiums if you outlive your coverage, but the amount is usually relatively small when compared with peace of mind.
Remember that life insurance really is for your loved ones, and that you can make it a priority — and it probably won't cost you as much as your monthly cell phone bill.