Why do you need life insurance? Well, I actually have 8 reasons personally…and chances are that you have at least one… But the main question then is, “Do you HAVE life insurance?”
I am a proud affiliate for Bestow life insurance. If you click through the link and sign up for life insurance with them, they’ll give me a small referral payment for my troubles.
But is that really why I write these posts?
Of course not!
I could certainly manage without the nominal amount that they pay me. I write posts like this because I’ve seen people go through a tragic death in the family…and they unfortunately never got around to getting life insurance… Families are left struggling, the spouse suddenly needs to go back to work, and life becomes a constant uphill climb – for years…maybe even decades.
It’s just totally unnecessary.
The not-so-surprise ending to this post is to GET LIFE INSURANCE. Stop waiting for the perfect moment to get signed up. The time is now. Protect your family and give the gift of a secure future – no matter if it’s with or without you.
8 Reasons Why I Have a Large Insurance Policy
My wife and I are completely debt free – even our house is paid for. We have savings for the kids’ private schooling and have a bunch of money socked away for their college years. We’re doing pretty good right? So….why do we need life insurance?
The answer is pretty simple actually.
Even though times are good now, we certainly couldn’t retire today. So if one of us passed away, life would become extremely challenging!
I have 8 solid reasons for getting a $1 million life insurance policy. Do you relate to any of them?
Whole life insurance sucks.
- It’s expensive (like, hundreds of dollars a month expensive)
- There’s a savings option that earns very little interest
- And, if you receive the death benefit, the savings that you’ve built up often never gets paid out!
It’s an archaic product that probably shouldn’t even exist today.
What is Term Insurance? How Is It Different?
Term insurance (in my opinion) is so much better!
Instead of trying to buy insurance for your entire life via whole life insurance (which obviously gets incredibly expensive when you get old!), term insurance allows you to buy insurance for a shorter period of time. The most popular time-frames are 10 years or 20 years.
Instead of paying hundreds of dollars per month, the cost is often around $30 or $40, even for the larger policies! Then, the idea is to grow wealthy during that period of time so when it ends, you’re already a millionaire and really don’t need life insurance anymore!
It’s a beautiful product that I honestly try to push all of my friends into. It’s cheap and it’s the responsible thing to do for their families. Life is fragile! And unfortunately, you never know what’s going to happen!
For me, I took out the million dollar policy.
My cost of having this semi-large policy?
Just $30 a month! Boom!
2) I have 2 kids that are going to be costly
Experts often claim that it costs $250k to raise a kid. That amount is total crap by the way (that’s another article for another day). BUT, it is costly none-the-less. And, things always pop up that you didn’t anticipate…
- School costs
- Extra-curricular costs
- Hospital bills…
If I passed away today, I’m sure that over the next 20 years, the kids will ring up some pretty decent bills that we never thought to consider. The extra money from life insurance would certainly come in handy for all those incidentals if I wasn’t around.
3) My wife is a stay-at-home mom
My wife and I decided early on that when we had kids, she would stay home and take care of them. (Sidebar: At the time, I was jealous of this. Today, I’m thankful for her sacrifice each and every day! She by FAR has the tougher job. AND, she runs a photography business too! She’s simply amazing.)
If something happened to me, she’d likely have to put the kids in daycare and find a menial job that I’m sure she wouldn’t love.
By getting life insurance, I’m ensuring that she can STAY being a stay-at-home mom, which is what I would want for her and the kids.
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4) Life insurance gives us peace of mind
My wife is a constant worrier.
- We go to the park – she worries that the kids will fall off the jungle gym and break their face
- We drive to Nana’s house – she gets worried if I drive too fast (and, oddly enough, she often mentions that I’m driving too slow…I have roughly a 2-3 mph window for passenger-seat silence)
- I go for a swim in the lake and she’s almost certain that my heart will stop and I’ll sink to the bottom, never to take another breath on this earth
Without life insurance, I’m sure she would constantly wonder what would happen if I died. What would happen to her and the kids if I wasn’t around?
Now that we’ve got life insurance, she can at least have peace of mind on this one topic. She’d have plenty of money and their lives would mostly continue as normal (aside from missing out on my sarcasm, teasing, and my never ending air golf practice swings :)).
5) We bought it earlier for cheaper rates – and before I become uninsurable
You know when the best time for life insurance is? When you need it the least…ie. when you’re young and healthy. That’s when it’s cheap.
If you wait till later in life, chances are you’ll get some kind of medical condition that either causes your insurance to go up or make you completely uninsurable!
- sleep apnea
- high blood pressure
As you get older, you typically DON’T get healthier and start looking younger! On the contrary, your body is going to start falling apart! Get life insurance now before you can’t!
6) If I pass away unexpectedly, I still want my wife to have the extras in life
My wife and I plan to build a master suite above the garage this summer. She also wants a horse and a barn in the next 3-5 years!
She’s been such an amazing partner, I want her to have all those things no matter if I’m alive or dead! Life insurance will help keep those dreams alive.
7) I still want my wife to retire early and enjoy life!
Right now, my wife and I are 36 years old. I can’t imagine I’d work my corporate jobs beyond age 55.
- Our kids will be out of school,
- We’ll have millions of dollars in the bank,
- And, we’ll certainly have no debt!
…so why not retire?!
That’s the plan.
If I die without life insurance, my wife would have to get a full-time job and she’d likely have to work until at least 65 years old!
Sooo…not only would she have to morn my death, but I’m going to make her work like a dog because of it?? Sounds terrible. I’d rather give her a million bucks at my funeral and have her retire whenever she wants to.
8) I’m not afraid of being murdered in my sleep 😉
Lol. When I tell my friends that I have a million dollar policy on myself, their response is typically, “Dang! I would be worried that I’d get snuffed out in my sleep!”
They’re mostly joking of course, but I have absolutely no concerns of being willed off from this earth by my wife. She and I both think mutually of each other’s awesomeness. We’re going to be together for a long time.
Oh, and she really doesn’t care that much about money – just safety and security. That million dollars…she thinks it’s great and all, but if you’d ask her what she’d do with it, she’d probably tell you that she’d put it into savings.
(Honey, if you read this and you’ve recently killed me in my sleep, I was wrong. To my police officer friends, please use this article as some form of evidence to avenge my death! :))
How Much Life Insurance Do You Need? Why Did I Get $1 Million?
I listen to Dave Ramsey a lot. And I’ve heard him answer this question about 500 bazillion times. He recommends that you get 10 times your income for a 10 year term. This way your spouse can live normally for 10 years while figuring out what needs to be done to get through all the later years.
My wife and I make approximately $100,000 a year, so multiply that by 10 and that’s our $1,000,000 policy! Pretty simple. If we were too high, oh well. For less than $400 a year, the additional insurance is well worth that minimal cost.
What Happens If You Don’t Have Life Insurance?
Let’s continue with the $100,000 example. Let’s say I earn $90,000 and my wife earns $10,000 a year. If I die and have no life insurance, then her income goes down to just $10,000 a year. That’s not good. Heck, our home insurance and property tax alone are $6,000! She just couldn’t survive on $10k/year!
Her life would be (as the Fresh Prince of Bel-Air would say) flipped, turned upside down!
Put simply, without life insurance, there will be no payout of any kind. You’ll lose the income of your spouse and you’ll just have to figure out life and struggle through for many years to come.
To me, the $30 a month is well-worth the peace that you’ll have by knowing the life insurance is there. You’re financially set if something awful would ever happen.
Reasons NOT to Buy Life Insurance
Many people should have life insurance, but it’s honestly not needed for everyone. If you’re single and no one depends on your income, then you don’t need life insurance.
Perhaps you think you need life insurance for a funeral?
Just have your family use your savings for that!
If you’re older and an insurance salesperson is pressuring you into life insurance, just ask yourself, “Do I really NEED life insurance?” If you’re hesitant, then you probably don’t. Keep your money.
Is Life Insurance Worth Getting? For Most, Absolutely!
Do you have life insurance? I sure hope so!
Like I said earlier, life is fragile and people die every day. As morbid as it sounds, I could die tomorrow, you could die tomorrow, your spouse could die tomorrow! Nobody knows! Prepare for the unknowns. You’ll never regret having a life insurance policy in place!
Test out the free Bestow quoting tool! It takes roughly 5 minutes!
How much does it cost you for a $250,000, 10-year policy? Tell us in the comments below!
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.