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24.08.2012 in Everything Else by Lena Gott 6

How Our Life Insurance Needs Have Changed Over the Years

Today I want to talk about a serious subject: life insurance. Jeff Rose over at GoodFinancialCents has challenged personal finance bloggers, or anyone else with a passion about life insurance, for that matter, to write about the topic. The official LifeAware movement occurred on August 22nd, but I’m late writing this because I’ve been caught up in life with three kids.  Go figure.  ;=)

Life Insurance Needs Over the Years

Life insurance is what I would consider a necessary evil. Nobody wants to pay for it, but nobody wants to leave this world knowing their affairs won’t be taken care of once they’re gone.

My husband and I have gone through many types of insurance over the years.  When we were first married, we purchased life insurance through work plans.

We chose random dollar amounts – we didn’t have any obligations like kids or a house and we were used to being poor college kids, so we didn’t think it would be a big deal if we suddenly lost one of our incomes.

Life Insurance for Married Homeowners Without Children

Within a few years, though, we moved into a house and reconsidered the scenario where one of us might die.  Considering the fact that we purchased our home based on two incomes and we were still young, we matched our insurance amounts with the value of our home and remarrying prospects.

We figured if one of us were to die, then the other person would need help making mortgage payments until he or she got remarried.  According to my husband, that would be approximately 6 months for him and 5 years for me.  LOL

Life Insurance Needs for Thirty-Something Parents with Three Kids

Fast forward a few more years, and we found ourselves having kids. This is when we really started getting serious about life insurance.

We had to consider how much money one of us would need if the other one were to die.  We also had to figure in how much money it takes to raise a child. And another. And another!

Furthermore, we had to consider the fact that I don’t work outside of the home and my husband does.

What if I died?

What if my husband died?

What if we both died?

Would I remarry and when?

When would he remarry?  hahahaha

There was a lot to consider.  We met with a lady at State Farm who convinced us that a whole life policy was a good investment. We paid a lot for that plan and felt really secure with our coverage.

Since then, we’ve downgraded that plan and added a term life insurance plan with a much higher payout in the event of my husband’s passing.  The new combination works better for us.  It’s cheaper, yet offers more coverage in the immediate future while our children are still young and would require years and years of financial assistance in the event of our death(s).

What works for us might not work for everyone.  But regardless of your life situation, if you have children in the mix, I encourage you to consider getting life insurance. It’s no fun paying the premiums now, but it sure is nice to know your family would be taken care of if you were no longer here.

As I’m writing this, I realize that even though we have life insurance, I’m not sure our family knows everything they need to know about the policy in case something were to happen to both my husband and myself at the same time.  I think I know what needs to be on this weekend’s to-do list!

Do you think life insurance is important for your family? Did it take having kids for you to get serious about life insurance?  

Life Insurance Resources:

How Much Life Insurance Do You Need? Get one personal finance blogger’s take on the amount of life insurance you need.

Types of Life Insurance – If you’ve ever wondered what the difference is between Whole, Variable, Term, and Universal life insurance, this article offers a good primer on the four types.

Life Insurance Needs Calculator – If you can answer a handful of questions about your current and future financial obligations, this calculator can spit out a life insurance needs recommendation.

#lifeAWARE Life Insurance Movement

Want to read over 100 other blog posts on the topic of life insurance?  Head on over to the Life Insurance Movement!

Here are a handful of my favorites, especially as they relate to my post above:

Life Insurance by Age – Wondering whether 15-year-olds or 60-year-olds need life insurance? The Financial Blogger examines insurance needs over the decades @ Fabulously Broke.

Reasons Why Families Need to Get Life Insurance: Take It From a Guy Not Trying to Sell You a Policy – John @ My Family Finances approaches this serious subject with a good dose of humor and reality.  He points out that your spouse would need to pay for daycare, college funds, and retirement even after you’re gone.

Should You Buy Life Insurance for Your Child? – I originally wanted to write about life insurance for kids, but it made me so sad to think of one of my children dying that I couldn’t do it. I’ll let Melissa over at Parenting Family Money broach the subject on my behalf.

Why Young Families Need Life Insurance – In case you’re still not convinced you need life insurance, Robert @ The College Investor offers even more reasons why it’s a good idea.

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This article has 6 comments
  • Danielle 24.08.2012 10:48 AM Reply

    Good point, we have life insurance but no one knows about it either. Never thought of that.

  • Jeff Rose 31.08.2012 3:25 PM Reply

    Thanks so much for taking part in the #LifeAWARE movement. This was such a good post!
    Jeff Rose recently posted..What Is a Family Trust and Should You Set One Up?My Profile

    • Lena 31.08.2012 6:18 PM

      Thanks, Jeff! Glad you liked it! Means a lot

  • Alisha @insuranceneed.in 24.12.2012 5:14 AM Reply

    Hello!!
    Really Great post about insurance. Ya I agreed ​ life insurance needs will change over time, a life insurance agent can help you think through the coverage you need, and explore the different ways insurance can help you achieve your financial goals. Thanks to share this wonderful post.

    Alisha

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