Blogging Away Debt

We’re Cashing Out a Whole Life Insurance Policy

Back when my husband was 18, his parents took out a $25,000 whole life insurance policy on him. His parents paid the premiums for some time and not too long after my husband and I got married we took over the payments. A little while after that, the policy was transferred fully over to my husband’s name.

We paid premium after premium for that policy. Back then, I didn’t question it too much. But now that I’ve been reading about personal finance, I think there is a better policy for us.

I started reading some articles about term versus whole life policies like this one from SmartMoney.com. The difference between the two boils down to this:

A term policy is life coverage only. On the death of the insured it pays the face amount of the policy to the named beneficiary. You can buy term for periods of one year to 30 years. Whole life insurance, on the other hand, combines a term policy with an investment component.
[Via SmartMoney.com]

With all of our debt, $25,000 wasn’t going to go very far. At this point in our life, we need a policy where you get more bang for your buck if the unspeakable happens. After looking around and doing background checks on different life insurance offers at http://www.insurance-how-to.com, I found a 10-year term life policy that only costs a few dollars more per month yet will provide $100,000 in coverage. Now that will at least wipe the debt slate clean. While it would be great to have more insurance than that, for now that is what we can afford.

In some cases, whole life may be the way to go. But after careful consideration, I set in motion the application to get term life insurance for my husband. For simplicity sake, I went through the same company that I got my life insurance from (Gerber). I sent out the payment and got the official papers so then it came time for my husband to call his whole life insurance policy.

He made the call and a few days later we received the paperwork that needed to be signed and returned. In that letter, we found out approximately how much money we will be getting by cashing out the policy…a little over $1,200. They also refund some of the premium that you paid so the total amount will be closer to $1,300. Now we are just waiting for the check.

It’s exciting that we will be getting a minor windfall. Oh, how we would have blown that on frivolous junk back then! Not anymore, though. Only just now I realized I could satisfy my LCD TV obsession with that money but I don’t even want to do that. Nope. It goes straight towards our debt and maybe a little towards our savings.

So now both my husband and I have $100,000 term life insurance policies and we are still making progress towards getting some financial security. We’re on the right track 😉

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Updates

by Tricia

No enthusiastic post for today. That means that I wasn’t able to remain smoke-free today.

I woke up around 8 am with my husband and son and took a potty break. Instead of reaching for my coat and heading outside (which is a habit whenever I get up and go to the bathroom), I promptly headed back upstairs and went back to bed. That was a positive thing.

Then I got up around noon and went downstairs for something to eat. I was feeling on edge and my hands were shaking. I could feel that the craving for nicotine was taking over my body now that I was fully awake. I popped a piece of gum in my mouth and watched some TV. A little bit later, I cleaned up in the kitchen and then made myself a bowl of cereal.

I sat down and placed my gum on the side of my bowl while I ate my cereal. My son couldn’t figure out what the pink blob was on the side of my bowl and asked me what it was. I snapped at him. I don’t know why…he asked an innocent question for a kid. My ugly craving-for-nicotine self came out and I hate it when that happens. I finished my bowl of cereal and that was it. A little after 1 pm I went outside and had 1/2 a cigarette.

As I smoked that cigarette, I could feel the effect on my body. I felt my heart start to race and I could feel my vision going fuzzy. I was getting the buzz that was so common when I started smoking. Dang it. That was it. I didn’t make it.

When I came back into the house, my husband looked me right in the eyes and told me, “Look at how long you made it without a cigarette.” He’s always been pretty supportive of me trying to quit even though I have put him through H-E-double hockey sticks while trying to do it. He’s never smoked in his life, but he knows how much they have a hold on me. He’s been with me when I’ve tried the patch, the gum, as well as Zyban. He knew I was disappointed in myself for not making it through the day.

As of this moment, I’ve had six cigarettes today. I probably will end up having one more before bed so that will make it seven for today (but I’m still going to try to go to bed without having a cigarette first). My usual amount is 20/day and on real stressful days that can be more. I wasn’t able to go smoke-free today, but at least I had a minor victory with reducing how many I smoked. There’s still tomorrow as well…and the next day…and the next day. Even when I do have a smoke-free day, I am going to be battling this for the rest of my life.

And since I am a little bummed about not making it without a cigarette today, I needed a little confidence booster so I paid more towards our credit card debt and put more into our savings. Updated totals are to the right and I am pleased that our savings is now over $2,000.

Thank you everyone for your words of support. I didn’t make it today, but there is tomorrow.