Why spend money on something I hate?
Life insurance is for those you love
Life Insurance… Personally, I hate it. I hate paying for something I will never use. Bottom line… The company takes my money, builds investor portfolios and fancy buildings with it, and gambles on when I will die.
Admittedly, I don’t have much personal experience with life insurance companies … after all, this article was not “ghost written“.
In my experience, insurance companies LOVE to take premiums, but HATE to pay claims. Many spend money to prevent paying a legitimate claim. Clients often get the run-around. “Oh, sorry… that’s not covered… Page 782, Paragraph 374, Subparagraph 42b… ‘Policy void if incident happens during any phase of the lunar cycle’.”
Maybe I’m exaggerating… a little.
I have no problem if they don’t want to pay a fraudulent claim. However, the few times I have tried to collect on a legitimate claim, I have gotten the run-around, customer no-service, and excuses. I hope that does not happen if my survivors need to claim my life insurance policy.
Maybe I just have a bad taste in my mouth for life insurance because of the other types of insurance. Regardless, I hate life insurance.
However, I love my wife and children more than I hate life insurance.
If you are like most people, life insurance is probably not a priority in your mind. I rarely think about life insurance, except when the life insurance bill arrives. If you are young, healthy, and single, you may think you don’t need any coverage. Perhaps, you think, “I’ll worry about life insurance when I’m really old and decrepit … like when I’m 40 or whatever.” 🙂
However, if others depend on your income, TODAY is the day to think about life insurance.
Are you married? Do you have children? Would your family have a hard time continuing to live at the same quality of life without your income? If the answer to any of these questions is “yes”, you are a prime life insurance candidate.
Please, do not put this off.
Are you are single, but engaged? Are you married with no children, but you plan to have children? If so, meet with a life insurance professional first, before others need your income.
Chances are, you will live a long life. However, accidents happen, and people get sick. There are many stories of people dying without life insurance. There are many horror stories of families left behind, without life insurance. In addition to dealing with the grief of your loss, they often struggle to eat, pay the mortgage, attend college, or simply survive.
I am the primary breadwinner for our family. My wife makes a little extra money. She keeps a baby three days each week. However, if I died, she could not afford our modest lifestyle on that small income. On the other hand, if she died, I would need to hire assistance, since I work full-time, plus have a small business. I would also need to pay for occasional childcare.
If something happened to both of us at the same time (car accident, for example), we want to provide for the children’s needs until they are 18. We would also each have final expenses.
Therefore, both of us have an individual life insurance policy.
There are many factors to consider, such as,
- If you need life insurance
- What type of life insurance
- How much life insurance
- How long do you need life insurance coverage
Even if you are single, with no children, you may need at least a small policy. If you die, your family has to pay your final expenses. These may include your funeral, burial, or cremation expenses, or any final medical bills. Here are three reasons why TODAY is the best time to get term life insurance.
The policy from your employer may not be enough
My employer provides a year’s salary at no cost to the employees. For a single person, this may be enough. Likely, all you would have is your final expenses. However, I’m married, and have two children. I suspect my children would like to continue eating after that year is up. In addition, we have rent, utilities, dog food, sports, extracurricular activities… everything my family has come to expect and enjoy about my income.
You probably need more than one year’s income replacement… Unless you only plan to be dead for one year. 🙂
You will never be as young as you are today
This may sound morbid, but each day, you are one day closer to death. You are closer to the day the life insurance company will have to pay out your policy. The younger you are, the better chance they have to recoup the risk they take by insuring you, so the cheaper your life insurance policy will be. When you are younger, you are a relatively lower risk for the insurance company. Premiums might not rise exponentially year over year, but when you are in your 40′s, you will pay much more than if you were in your 20′s.
Your health condition could change tomorrow
When people are young, generally speaking, they are healthiest. Body parts generally still work like they should, young people rebound from illness and injury much more quickly, and they are usually sick less often.
Comparatively speaking, from today until the day you die, today, you are in your prime. Each day, everything goes downhill from here. Cheerful thought, eh? 🙂
If your healthcare professional finds a single indicator of a serious illness, such as cancer, diabetes, or heart disease, it may raise a red flag. This will likely increase your cost for life insurance. Once you have been diagnosed, from then on, you are marked.
By law, you must report your diagnosis on any future life insurance application. If you hide it, you commit insurance fraud. If your fraud is discovered, the insurance company probably will not pay your policy when you die. After all, you obtained the policy fraudulently.
So, stop putting it off. Research your needs, then call a life insurance company!
There are many resources to help determine your life insurance needs. Following are a few I found helpful:
- Top Ten Review
- Money Review
- Consumer Reports – article for parents
- Wall Street Journal looks at Term Life
In a future post, we will talk more about life insurance. We will also talk about other insurance needs.
If you have life insurance, how did you decide the coverage amount? What was the reason you purchased the policy? What type of insurance did you purchase? Why did you choose that type of policy?