Life after death

Life insurance. It’s one of those things I never really thought about until I got married and wondered ‘What would happen to my spouse/family if I were gone suddenly?’ It’s a question anyone with dependents should ask, and I’m going to add younger siblings to the list of potential ‘dependents,’ even if they themselves are adults.

I’m talking term life insurance, NOT ‘whole life,’ ‘universal life’ or any of those other products that they’ll come up with in order to charge you an arm and a leg while you think you’re getting some kind of ‘cash value.’ We cashed out my husband’s cash value last year on a policy he’d had since childhood, and got less than $2K. Buy term and invest the difference to be self-insured by the time the term ends.

You’ll read and hear lots of advice on the amount of coverage you should have. Dave Ramsey says 8 to 10 times your income in term insurance is the rule of thumb. For most healthy people just starting off, locking into a 20 or 30 year term of life insurance will be ridiculously cheap, like pennies on the dollar for the amount of coverage.

We’re going to be looking 50 in the face when our term is up, and with our plan to be able to retire at 55, we can let our term lapse or renew it for another 20 years, which would then bring us to age 70–by which time we had better NOT need the pittance of life insurance we’re getting compared to the millions we should have saved by then!

Since we originally got $150,000 of coverage on each of us when we got married and our incomes have changed significantly since that time (only 2 years ago!), we went into our insurance guy yesterday to increase our coverage–love him, same guy my parents have used since they got married, and I highly recommend working with someone you trust for these things. [Little story about our guy: when we went to buy our new car, we didn’t have our insurance cards with us since my parents drove us to the car lot. The dealer actually knew our insurance guy and I had his business card in my wallet so the dealer called up our insurance guy, who immediately faxed over the needed info. to the dealer and added our new vehicle to our policy right then. It was awesome.]

We still have to get our blood tests and answer that slew of questions which includes, ‘Have you ever gone skydiving/bungee jumping/used a hair dryer near a full bathtub/gone outside with wet hair?’ but the paperwork is done.

It will still suck thinking about one of us leaving this earth before the other, but that is an inevitability, and I’d rather know that if we needed to, either of us wouldn’t have to worry about bills for many, many years with the coverage we’ll have. The way our beneficiaries are set up, my 6-years-younger-than-me sister would be taken care of instead.

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One thought on “Life after death

  1. I remember the first time I bought car insurance and thought the numbers seemed kind of astronomical. A cheapo policy covered something like $50,000 in medical fees if I were to injure someone in a wreck, and I though that was a pretty huge amount of money. The more I learned about the medical industry, though, the more I realized $50,000 is kind of a drop in the bucket when it comes to medical fees. Getting life insurance kind of seems like that too: the numbers might seem high now (i.e. $150,000 seems like a lot of coverage) but really, it’s not going to go all that far. It’s cool that you are thinking about all this and planning for it now!

    ps. I dig your plan to retire at 55, btw. 🙂

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