When Is the Best Time to Think About Term Life Insurance?
Why Me? Why Now? How Much?
Many of us make the mistake in thinking that because of our current circumstances, we don’t need to think about life insurance…not yet anyway. We’re either too young, too old, too rich, or too poor. The excuses… I mean “reasons” vary from one situation to the next. The problem with any insurance is that we never need it until it’s too late. For example, I’ve been paying my own car insurance since I got my drivers license… I have great coverage and spend a thousand dollars a year and I’ve never made a claim! Does that mean I’ve wasted that money? No. It means I was being responsible and had peace of mind (not to mention I was obeying the law.).
But what if I was paying my car insurance and got in an accident and my car was totaled? What happens then? Because I have great coverage and I was prepared, it means the remainder of my car loan gets paid off and I get money to go shopping for a new car. What about the guy who had no insurance and just bought his new car. It’s totaled. He’s walking home and has to continue to pay for a car he can’t drive. That’s the way insurance works. It insures that you’re okay when life throws you a curve ball. The difference with life insurance is that your curve ball is your untimely death!
Who needs life insurance?
It’s not just for the old and dying- the seasoned players. On the contrary - it’s for everyone else, the rookies - anyone who has or wants a family, a business, or a mortgage. It can be for your spouse or yourself, but also consider taking out a term life policy on your young children. It sounds brutal, but it’s a fact of life that young children leave this earth all too early. Sometimes as young parents, we aren’t always prepared to deal with the emotional and financial consequences it can have. Also, if you think you can’t afford life insurance – you at least owe it to your loved ones to look into it. You might be surprised at what you can get for just a few extra dollars. And for those of you who think you have enough saved up elsewhere and you make secure investments… that’s a great start, but don’t stop there! You can never have enough of a good thing and you may be surprised at some of the expenses that come up after you’re gone.
How much will you need?
If you were to die without life insurance, or not enough life insurance, how will your family pay for the following expenses?
- Your final expenses – funeral expenses, medical bills not covered by health insurance, estate settlement costs, estate taxes, etc.
- Debt repayment – mortgages, car loans, credit card debt, college loans, home improvement loans etc.
- Monthly essentials – food, clothing, daycare, medical care, electricity, gasoline and taxes
- Non-essentials – cable TV, children’s activities, sports equipment, vacations and gifts
- Education – private/charter schools and college
- Emergencies & Life Opportunities – unexpected illnesses, layoffs, new roof, child’s braces, weddings, or even an unexpected business opportunity.
This is just a short and very vague list of expenses and keep in mind that costs go up every year. So, when you’re choosing a term life insurance plan, think about your current needs, but make sure you look ahead as well. We can never accurately predict the future, we can only be prepared for it. We can never know why, when or where our turn will end… we just know that it will. It’s our impending curve ball and we don’t want to be caught at the plate without a bat.
