How you can be Happy about Life Insurance
I’m sure you’ve heard all kinds of opinions about Life Insurance. Anywhere from people saying to stay away from all life insurance products to other people that advocate to solving all your life’s problems with Life Insurance solutions.
Let’s start here: Do you even need Life Insurance? If you answer yes to the following two questions, then you need life insurance:
#1 Are you mortal? Is it possible that you could die?
#2 Do you have a partner and/or kids who depend on your income for their survival?
You may be chuckling here a bit but we can’t tell you how many times we have sat down with a couple and heard one of them say: “I don’t believe in life insurance.”
Put it another way, if you had a cash machine in your house that cashed out $100,000 per year would you insure it in case it stopped working? Of course, you would! Who wouldn’t?
The reality here is that YOU are that cash machine that your family lives on. If you pass away, so does your income. All of it. Not just one year’s income, not just two, but all your life’s income.
That’s the purpose of Term Insurance: it’s there to replace your income should you pass away.
How much should you get? Again, I like to keep that very straightforward:
- The cost of Life Insurance shouldn’t break the bank, it has to fit within your budget. There is no sense going insurance poor here.
- I follow Dave Ramsey’s rule (click here) to simply get Level Term coverage amount that is 10x your annual salary (adjusted downward to fit your budget if needed).
Do you have life insurance through work? Great, how much 1x or 1.5x your annual salary? Your family could blow through that pretty quickly so it should be supplemented. Even if you can buy more insurance through work, you would be better off buying your own independently for 2 reasons:
#1 You could be laid off and left without protection at any time, and maybe you won’t be insurable then
#2 Although insurance might be cheaper at work at first, the costs go up year after year through work, whereas with regular Level Term Insurance the cost is flat for your term period (e.g. 20 years)
Don’t like needles, pee tests, or medicals? The good news is there is a wide array of Term Life Insurance solutions that don’t require medicals or blood tests, just answer a series of questions to see if you qualify!
Now all that being said, there is only a small chance of you passing away during these years. Are you frustrated with the notion that you buy Term Life Insurance, but if you outlive the policy, you walk away from the policy with thousands of dollars spent over the years that is gone forever.
The good news here is that there is a way that you can protect your family AND get your money back if you outlive your policy. Learn more here.