I’ve never looked in to life insurance before but I’m at the point in my life that an unexpected death could ruin the finances of those I love. After a few months of nagging from my husband, I finally made the call to our agent.
If you haven’t searched for life insurance before, here’s a quickie…
My insurance agent now knows more about me than my husband. Yup, it can be that personal.
They asked questions about medications, smoking habits, age, height, and weight. When I answered the weight question, my agent replied, ‘According to our system, you are 13 pounds underweight.’
‘I’ll buy it!’ I shouted.
Hmm. Perhaps computer generated flattery isn’t the best reason to purchase insurance…but I won’t judge you if you consider it part of the equation.
Once we sign the paperwork later this week, our agent will send a nurse to our home to ensure the accuracy of the information submitted and to run tests on cholesterol, blood sugar, and blood pressure. While my blood pressure has always run very low, I’ve never had my cholesterol or blood sugar measured. I guess this means I will be eating spinach and blueberries while running for the next 5 days.
Things you should consider before getting life insurance:
1. Have a goal – it will help you figure out how much you need. Know what you want to fund with your insurance proceeds. Do you want to pay off your mortgage? Fund your kid’s college? Provide income replacement for your spouse?
2. Buy it sooner rather than later. Life insurance makes significant jumps in five year blocks. If you are about to hit 30, 35, 40, 45, etc, get it before you do.
3. Research the type of insurance you need. My husband and I settled on Term life insurance with a fixed premium for 30 years. It’s cheap, especially for those in good health, and will provide the peace of mind we need while we are trying to reduce debt.
4. Quit smoking. You should quit smoking for lots of reasons, but smokers pay exceptionally high premiums.
Beks is a full-time government employee who enjoys blogging late into the night after her four kids have gone to sleep. She’s been married to Chris, her college sweetheart, for 15 years. In 2017, after 3 long years working the Dave Ramsey Baby Steps, they paid off more than $70K and became debt free. When she’s not working or blogging, she’s exploring the great outdoors.
Beks: in general, young adults with no children or other dependents should NOT purchase life insurance. Life insurance makes most sense when it is designed to replace the income and/or labor of someone who makes a contribution to the household. That is certainly you and your husband. However, the most legitimate concern is to protect those who cannot protect themselves after your death–e.g. children, disabled adults, etc. If you are buying life insurance so you can pay off debts posthumously, you are protecting the interests of your mortgage company and credit card company. Why do you want to ensure that they get paid in the event of your death? In most states survivors are NOT responsible for the debts of a deceased loved one. It sounds to me as though you are buying life insurance at this stage in your life to protect the companies you’ve borrowed money from–I’m not clear on why you care so much about them that you want to do this.
I don’t have any children, and I’m sure my husband could take care of himself, but I have been considering buying life insurance. I’m in my early 20s, with perfect health and the cost is about $15/mo for $500,000, 15 year term. When it’s that cheap, I can see the benefit in making sure my husband could do anything he wanted, should anything ever happen.
Maria is correct. At your age with no kids, there is very little point to life insurance. Your employer may provide a small amount anyway.
If you buy insurance to protect your spouse, get enough to cover the mortgage and any other major debt his name is on. Everything else disappears if you die. Don’t call your local agent, their prices will be too high. Instead, shop the aggregator sites first and pick a quality company with a fair price.
Whatever you do, make sure you buy term life, not whole life (also called cash value). Whole life policies are a complete waste of money. Life insurance is NOT an investment. The saying is “buy term life and invest the difference.”
The idea with “buy term and invest the difference” only works if you actually invest the difference. Most people don’t. Therefore, they don’t have any savings. Whole Life is only a waste if you don’t fund it properly. That is why it fails because it is non-insurance people explaining to other non-insurance people why it doesn’t work. There’s a reason why Whole Life has existed for so many years. Term or temporary insurance has its place in the world, but so does Whole Life. Know what you’re saying no to before you say no!
That’s funny that you mention the company saying you were underweight. When we started getting quotes for life insurance, the first company came back with a non-preferred rate for my husband because he was underweight! Granted, I believe it was more to do with that in combination with his asthma, but still kind of odd. In order to get his rate down, a broker recommended he gather up his medical history to show that his asthma has never caused any big problems for him. He ended up getting a decent rate.
i have always wondered why young adults get life insurance. could someone explain the difference between whole life and term life? if you survive for the next 40 years and die, does your husband still get the payout? i really am pretty clueless when it comes to life insurance, any help would be greatly appreciated=)
Maria and Another Reader – If I were to pass away today, my husband would lose our home and would be unable to pay some of his bills. If he were to pass away, I would lose our home. I’m willing to shell out a few bucks a month for the protection from that alone. That would be the very last thing I would want to deal with on top of a death. Plus, since we are both very healthy, the rates are a steal.
Stephanie – That was my thinking as well. Get it while it’s cheap!
Alison – They must run on a different set of numbers than anyone else! I’m far from underweight. That’s funny they thought your husband was as well!
Stephan – I get it so I can sleep better. It’s cheaper than sleeping pills. ; ) Check out http://finance.yahoo.com/how-to-guide/insurance/12823 They give a pretty good breakdown.
I also agree with Maria–with no kids I do not think it is worth it–I would just build up my emergency fund as your debt draws down.
I want someone to tell me I’m 13 lbs. underweight! I would purchase it too if they said that to me : )
I’ve just started reading your blog. I was glad you decided to buy term life. Like you said it’s dirt cheap and the best product out there. I partially agree with maria…what she doesn’t say is if you die and his name is also on the house he is responsible for it. The only thing he wouldn’t be responsible for is things that are in your name only. And say the house is just in your name….would he be able to pay the mortgage? It’s not looking out for the company when it benifits your loved ones. I suggest anybody who earns an income in the household to buy insurance. I wouldn’t insure any kids outside of burial expenses.
While insurance at a young age may not be neccessary, premiums are based on age, and to wait until you are older and need insurance could cost you more. If I had kept the policy I bought when I was 20, I would be paying much lower premiums than I am now. You have to ask yourself, will you get married and start a family some day? If the answer is yes, you need to start a policy now.