Back in the days when I was a single guy living in a house with several other guys, I had no real responsibilities beyond providing for my own food, shelter, clothing and transportation.
Thinking ahead to the future was probably the furthest thing from mind, and having life insurance was something I really didn't spend any time on.
Fast forward through the years and I'm now married, have a home and a 6 year old son. I am the main breadwinner for my family, and they're depending on me for everything.
But what if I were no longer here? What would they do if I were suddenly gone tomorrow?
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We Aren't Promised Tomorrow
Recently I was reminded just how fragile our existence can be at times.
A close friend of the family passed away last week. A couple of years ago he was a healthy, vibrant 35 year old, running triathlons and raising two sons with his wife. Then found out he had a brain tumor. He fought the good fight for a couple years, but the growth in his brain had advanced too far, and he passed away in hospice care last week.
I don't know if he had life insurance before he got sick, but for his family's sake I hope that he did.
It is for just such a situation like this that I first bought term life insurance a few years ago. I wanted to make sure that my family would be taken care of in the event of my passing, and I knew my responsibility for them wouldn't end if I was gone. I wanted to be able to provide for them once I was gone.
Buy Insurance Before You Need It
One thing that I am constantly reminded of is the importance of buying life insurance, before you need it.
If you wait too long, either you'll already be too sick and won't be able to find an affordable policy, or you won't be able to get coverage at all.
Buying life insurance while you're still young and healthy will mean much lower premiums, and more coverage for less!
Life Insurance Isn't As Expensive As You Might Think
One reason that people wait too long to get insurance, is that they believe it is too expensive. The thing is, it isn't as expensive as you might think.
One study found that those with no life insurance think it is 3 times more expensive than it actually is. The same study found that 80% of consumers misjudge the price for term life insurance!
Take my situation as an example. When I purchased life a $500,000 term life insurance policy a few years back when my son was born, it cost me right around $30/month. Honestly, I don't even notice that automatic payment coming out of my account every month! To me, it's well worth the peace of mind knowing that my family would be taken care of when I was gone.
What Kind Of Insurance Should You Buy?
There are several kinds of life insurance that you can buy, but I recommend that for most folks the best bet is to buy term life insurance.
Term life insurance will cover you with a guaranteed death benefit for a given time period – like 10, 15, 20 or 30 years. Since there is no cash value for the policy if you don't die, the cost is much lower than a whole life policy.
Someone I trust once said that investing your money via a life insurance policy isn't a good idea, and for most people, I believe that's the case. Instead of investing with your life insurance premiums, buy term life insurance (at a much lower premium) and invest the difference!
When buying a policy, the longer the term and the higher the benefit, the higher the cost typically.
The typical advice is to recommend that people buy 8-10 times their annual salary in life insurance. So, for example, if you make $50,000/year, buy a $500,000 policy. Others recommend buying even more, but it all comes down to your risk tolerance, and just how much you want to be provided for in the event of your death.
Use A Service Like SelectQuote To Find The Best Rate
Shopping around for term life insurance quotes is easier than it's ever been. One service that I would recommend checking out for help (and one that I've used in the past myself) is SelectQuote.
SelectQuote has been around for over 3 decades, and they have a lot of expertise when it comes to helping you find term life insurance. They specialize in life insurance, but they can also help you get quotes on auto, home and senior care insurance as well.
They will get you quotes for life insurance from multiple companies, and find you the best one for your situation.
You get a personal agent who can guide you through the process, and you can return your policy within 30 days for a full refund of premiums paid if you change your mind.
You also don't have to ever go to a physical office to meet with an agent, it can all be done online. The only human contact you'll need is for a mini medical exam at your home or office. When I did mine it only took 10-15 minutes.
Plan Ahead For The Worst, And Get On With Your Life
None of us likes to think about what would happen if we were no longer here – it's an unpleasant thing to think about. While it's a bit morbid, our unplanned passing is something we should be planning ahead for, our families are counting on us.
Thankfully it doesn't have to be something that you think about constantly. Just go online, get a quote, find the best possible policy for your situation. Then, get on with living your life. Revisit your insurance every 5-10 years and update your policies as your situation changes.