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Wildfires, Winds, and Emergency Funds

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Wildfires, Winds, and Emergency Funds

The Pacific Northwest is on fire right now. And so is my anxiety.

Extremely dry conditions and unusually strong winds have made for some unreal conditions. The closest fire to us is just 10 miles away (you can see the smoke in the right of this picture I took last night). We live in such a suburban and farming county, that I never dreamed it would be so close to home! The skies are smoky and orange all day, making you feel like someone forgot to turn off the sepia filter.

Putting the “Emergency” in Emergency Funds

Around here we all keep using 2020’s favorite word—unprecedented. And it’s making me look at our emergency funds with such gratitude. We still have that $8,000 in our emergency fund, plus our tax return that we’re reserving in case we have to shut down the business again.

There’s an evacuation center just up the street from us at a local school, and one of our employees had to evacuate in the middle of the night. This has all made me think about what you’d grab. What you’d lose. What pictures I’d have for the insurance company. Luckily, this nearby fire is now 50% contained (thank you, amazing fire fighters!). But entire towns are gone in our state, and I can’t imagine what it would be like to lose your home and your business at once.

Wind Damage

The wind has created a more immediate need for our emergency fund. When we first looked at this house, I cringed looking at some large trees on a slope behind the house. There’s an Alder that didn’t look unhealthy, but it just gave me the creeps. It could hit the house if it fell.

I researched arborists last week, figuring I could have someone come out and assess the trees and give us an estimate on removing that tree. It gives us privacy from the neighbors behind us, but I wanted to gather information. I felt like we had some time, though, because the tree seemed okay and most trees seem to fall around here in winter wind or ice storms.

Well, on Labor Day, we were up at my in-laws. We came home late that evening and the wind was craaaazy. I looked at that tree uneasily. I had the kids sleep in a room in the front of the house just in case.

The next morning, I got up and saw that some branches had fallen out of the tree. They were so close to the house behind us that we went up to check on them (that’s one way to get to know your neighbors…). Turns out those branches had fallen on their deck just a minute or two after one of them had walked inside. It scared them to death.

Luckily it didn’t do any damage to their property, but now things are urgent—that tree has got to go. I’ve reached out to an arborist. We don’t have an estimate yet but it’s going to be more expensive than I care to think about. But man, I’m grateful for emergency funds, especially during a year like 2020.

Life Insurance Decisions

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My quarterly life insurance payment came out of my account this past week. And it prompted me to take a look at my policy. As I was looking around on the site, I saw “Conversion Option expires: 12/24/2021.” No idea what that meant.

My policy is good for 4 more years. When my ex-husband and I originally purchased the two policies, one for me and one for him, we planned it so that the amount would be enough to take care of the kids through high school. And in just 3 short years, all my kids will have graduated high school.

(I continued to pay for my ex-husband’s policy for a number of years after we split, but eventually just let it lapse. As far as I know, he does not carry any life insurance. The few times we have spoken about “what ifs” he always insists that he should be the beneficiary. Ha, NOT!)

What are My Options

Ok, so I called my life insurance policy holder to find out what conversion means.

For those like me, in the simplest terms, conversion means I can convert my term life policy to a whole life policy with no need to reapply/re-qualify (ie medical exam) if I do it before the conversion date. After that, it will require a new application and medical exam.

These are the options in a nutshell…

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 CoverageMonthly RateTerm
Current Policy$250,000$22Expires in 2024
Options to Convert or Add
Whole Life$50,000$72Rest of my life
Whole Life$100,000$188Rest of my life
Term Life$100,000$3210 years
Term Life$250,000$5910 years
</center>

Any way I go, my cost would go up almost double to keep the same coverage. And significantly more to go with whole life. Ugh!

Calling for Advice

I jumped on a call with my dad to get his advice. And the point that stuck with me was that this insurance is not for my benefit. So what is my goal with life insurance?

When it started, it was very clear, to care for the kids through high school if something happened to me.

Now, I’m not sure.

If everything continues to go as planned, I will be debt free before my current policy expires and all my kids will be at least 1 year out of high school. But I don’t know that any or even most of them will be self sufficient by then.

My initial thought is to extend the existing coverage out 10 more years. The rate is not terrible. And hopefully by 10 years they will all be pretty self sufficient. If, God forbid, something did happen to me, it would help get them all through college and maybe provide a small inheritance.

But I’m not sure…and I have a year to make any moves; although, the costs do go up every year I age. So BAD community, share your wisdom with me when it comes to life insurance please.