You Don’t Need Life Insurance (Or Do You?)
You Don’t Need Life Insurance
Life insurance is one of the few things you buy and hope you don’t use.
You may be thinking, “If I’m not going to use it, then I don’t need life insurance”.
Why Should You Spend Money On Something You’ll Never Enjoy?
The life insurance conversation typically begins with these questions:
- Are you married?
- Do you have kids?
- Is your income helping to support someone else?
If so, you’ve probably been told to get life insurance.
Here’s why you don’t need life insurance:
Why spend money on life insurance when you’ll never see a penny of it?
After all, you feel fine and you probably won’t die this year, so why shell out a few hundred bucks on the off-chance that you die this year? Actually, the odds are against it – especially if you’re younger.
This may be what you’re thinking if you’re under 40.
Insurance seems like a big waste of money. Who spends money on something that you hope you’ll never use?
Longevity Statistics-Just for Fun
In 2013 (the year of the most recent statistics), according to the CDC, about 2.6 million folks died in the U.S. That’s about 731.9 deaths per every 100,000 people. Those born today can expect to live until 78.8 years.
This seems like a long time for most of us. The thought, “I’m in my 30’s or 40’s, I don’t need life insurance” is crossing your mind.
These statistics give more data to support the idea that you probably won’t die this year, if you’re younger, and careful.
So if you’re a gambler or just don’t care about your family and want them to fend for themselves if you die, you might skip insurance – or not.
Of course, this intro was sarcastic. Actually, I’ve had life and a variety of other types of insurance for years and still have life insurance for my spouse today-even though I could live fine without my husband’s income.
I don’t believe that you don’t need life insurance.
I’ve Had Term Life Insurance for Decades and Never Used It
In spite of the odds, my husband and I’ve owned term life insurance policies for decades. Here’s why, financial security and peace of mind. We’re committed to minimizing stress in our lives and maximizing our wealth. Life insurance fits in with these goals. And that’s why we’re content to pay for insurance this year, as we have done for decades.
What is the Point of Life Insurance?
It’s simple, if you die and someone is depending on your income, they will receive a payout and have financial security. Imagine this scenario, you’re in a terrible auto accident and your family is left to fend for themselves. They lost you, and your income. The stress of losing you will be catastrophic. Add to that, the loss of your income and the results are unthinkable. This loss can’t be imagined.
And that’s why you need life insurance!
Now, you’re probably convinced that “You Don’t Need Life Insurance” is a myth. If you want to care for your family, then you do need term life insurance. Fortunately, term life insurance is relatively inexpensive.
The Only Life Insurance We’ve Bought is Term Life Insurance
I’m an expert investor, and have no interest in an insurance product that includes an investing product. Plain vanilla term insurance is very affordable and does what it promises-provides financial security for your loved ones. That’s why term insurance is the only life insurance we’ve bought.
Now, this doesn’t mean that no one should by other types of life insurance. But, if you’re younger and on a budget, then buying level term life insurance is a smart financial decision.
Here’s How Term Life Insurance Works:
You select the term of length of time you want the insurance to cover. With level term life insurance, you lock in the annual charge for your preferred time period. I usually go with ten or 15-year term, so that I know what my annual charges will be for the next decade or so.
Next, you choose the amount of insurance you think you’ll need.
Think about how much money you earn per year, and then consider how much insurance you’ll need to make up the financial loss. Consider your financial responsibilities – debts, mortgage, rent, college expenses, medical bills, day-to-day expenses etc. The insurance professionals at SelectQuote suggest using a multiplier for your annual income to figure out how much insurance to purchase. In general, they suggest buying a policy worth five to ten times your annual salary. So if you earn $50,000 per year, you’ll want to buy a term life insurance policy valued at $250,000 to $500,000.
If both you and your partner contribute to the family expenses, then you each need your own term life insurance policy.
What Happens After You Decide to Get Term Life Insurance?
Talk with an insurance professional first. Personally, we’ve used SelectQuote for our term life insurance because their prices are competitive and they have access to a variety of companies from which to choose. They’ll send you several quotes and you choose the one you prefer.
Next, the friendly medical technician comes to your home for a to do a quick mini-physical. They take your height, weight, blood pressure along with blood and urine samples. It’s fast and painless.
Within a short while you get the results of the exam. Then, you sign on the dotted line, pay the premium and you’re covered. It’s that easy.
Other Insurance You Might Consider
So, I mentioned we have term life insurance. We also have a lot of other types of insurance. The reason is because, stuff happens. If you have a lot of assets, you may want to consider umbrella insurance. If you’re getting on in years, you may want long term care insurance. Disability insurance is also helpful to protect you and your family should you become disabled. Finally, more complex types of insurance may be useful for estate planning and other financial reasons.
In the end, only those individuals without someone else depending upon their income can say, “I don’t need life insurance”. For the rest of us, this is one purchase you hope you never use.
This article was sponsored by SelectQuote, but all thoughts and opinions are my own.