There is nothing more invigorating than sitting around a dinner table with guests and talking about life insurance.

Okay, just kidding.

It might not be invigorating, but it is something that I wish people would talk about more.

Why is that?

Because far too many people still don’t have any life insurance at all, and if they do, they don’t nearly have enough.

buying 2 million life insurance policy

Often times, I see people that have $50,000 to $100,000 of term life insurance either through their employer or that they purchased themselves and they think that is enough.

Newsflash: It ain’t!

Fact: You Don’t Have Enough Life Insurance

If you have a family, with kids, if you have a mortgage, if you have consumer debt, student loan debt, I promise you that $100,000 is not nearly enough, and I will even be bold to say that $500,000 of term life insurance isn’t enough either.

I have shared my story about the progressions of me buying more life insurance as my family grew.

After I got married, $250,000 at the time I thought was more than enough, and it probably was. After our first child, I added an additional $500,000 and after our second child, I really ramped it and purchased another 1.5 million dollar 30-year term life insurance policy, for a grand total of 2.25 million dollars.

For the longest time, I thought that that was enough, even after the arrival of our third child I still felt that my family would be protected in the event that something were to happen to me. I’m not really sure what triggered it, but I started to get the life insurance itch again, thinking man, do I really need to buy more?

Why I Bought More Life Insurance

With my wife and I starting the adoption process for our fourth child, I thought it at least wouldn’t hurt to look into it. We have other assets, retirement accounts, savings, equity in my business that my wife could always liquidate, so I know there is other assets there, but I thought it wouldn’t hurt to at least shop around and see if I could get more life insurance; I didn’t expect that I would also be able to save a pretty penny.

By using the life insurance quote engine like you see here on the site, I was able to find out that I can actually get a 2.5 million 30-year policy and save over $400 a year for doing so.

How Much 2.5 Million 30 Year Term Life Policy

The previous policies had been purchased over an eight year period and apparently life insurance rates have gone down enough and by consolidating, I was able to save a decent amount.

Here is my challenge to you; do you really think you have enough life insurance?

If you are the breadwinner in your family and something happened to you, is the amount of coverage you have going to take care of your family? Will it help pay off the debt? Will it help ease the financial burden that your spouse may have when she is forced to take care of the bills, take care of the children and help pay for their college?

$1 Million of Life Insurance Might Not be Enough

Think $1 million of life insurance is enough? There is so many other things that people don’t realize that occur after your passing. If you have got the itch, use the life insurance quote engine to the left to see how inexpensive it is to get more life insurance coverage today.

Comments | 14 Responses

  1. SM says

    Question on Life insurance – what happens after 30 years (and I do not die in that 30 years) ? Do they pay me that million (or whatever amount I chose) and/or the amount I paid as premium annually?

    • Jeff Rose says

      @SM if you buy a standard term life insurance policy, then the premiums you pay over that 30 years is gone. Think of it like auto or home insurance. You really don’t want to cash in on it but if you do, your family is taken care of.

      There are other options though.

      1. Whole life insurance. Whole life insurance builds cash value over time. The only disadvantage is that to get sufficient amount of coverage will be very costly. Check out this post I did what looks at the difference between the cost of whole life insurance vs. term life. For me to get $250,000 of whole life coverage would be $3,440 per year vs. $252 for term.

      2. Return of Premium of insurance. ROP or Return of Premium insurance allows you to get what you paid back out at the end of the term (or a pro-rated amount before term’s end). You’ll pay more to have it, but it’s also a viable option.

      Hope that helps!

  2. Sean says

    Thanks for a great post. You helped me to make the decision to get serious about life insurance. My wife’s father died leaving 5 kids still in the house and I want to make sure we are now prepared if such a thing ever happens. Thanks!

    • Jeff Rose says

      @ Sean. You’re very welcome! $2.5 million might be too much for what you need right now, but making sure you have some life insurance coverage is a must. Let me know if you have any questions!

  3. says

    At my point in life my employer life insurance would cover me completely. However, if I ever take on my debt with a bigger house or have kids I know I need to buy much more insurance. I’m glad you got more and it should help you sleep better at night.

  4. says

    I have quite a bit of life insurance on me – I’ll be repricing it in the next year or so – got it 3 years ago. Not quite $2.5 mil but it’s up there. I may go up to $2.5 though – it’s definitely comforting knowing that my wife can buy a house with cash and still have plenty of cash to pay for college for our kids and live. :)

    Love how cheap term is.

  5. Joel says

    Call me devil’s advocate, but I’ve heard a quote (not sure of the source) that goes like…

    “How much life insurance do I need?”

    “Enough to get your wife by until she remarries.” (which WILL happen!)

    • says

      @ Sandra It depends on the severity of the illnesses. We’ve been able to get clients approved for high risk conditions but it will usually cost more. Contact our office for more information.

  6. Erika0123 says

    When I was a baby my parents had gotten a 1 million dollar life insurance plan you me and paid it off already, my mother just told me the other day that when I had turned 18 that I could cash it if I wanted to. What does that mean?

    • says

      @ Erika Did they buy you some sort of cash value life insurance policy? Like a whole life policy? If so, it could have accumulated some sort of cash value. Note: it won’t be $1 million dollars. :)

  7. Sandra parr says

    What is health class? I have had thyroid cancer and breast cancer but have been cancer free for five years. Non smoker. Active lifestyle. What is my health class?

    • says

      @ Sandra We wouldn’t know until we actually submitted a life insurance application. At that point, every insurance company may look at your profile differently. For example, I had one client that was a Preferred Class with one carrier, but another one rated him Standard Table 2.

      It truly is insurance company specific.

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