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.
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.
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.
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.
For my family we have four children (my wife would include me as number five) and they are all school age. This means if something were to happen to me, my wife not only would have to replace my income, but would have to handle the household, and be ready for the future.
This means having enough for retirement, paying for college, and whatever other expenses she has over the next several decades (mad props for using ambiguous language to not leak here age here). It seems to me that a million just isn’t going to cover it for my family.
If you have got the itch, use the life insurance quote engine on this page to see how inexpensive it is to get more life insurance coverage today.
Expanding Life Insurance Coverage
So what is the best strategy? That is going to depend on if you currently have a policy, how much you are paying and what your family’s needs are? Here are a couple of options.
Get a Single Brand New Policy
If you do not have life insurance or have a small policy, then getting a brand new policy may make the most sense. Even if you figure out you need $3 million in life insurance coverage, you can get a good price on a 30 year term life insurance policy.
The biggest advantage here is that you only pay the one premium and it makes life nice and simple.
Staggering Term Policies for Stages of Life
If you want to get the best bank for your buck, you can look at getting multiple policies. I do recommend doing this in a more deliberate way that I did whenever I got the life insurance itch.
We’ll use my family as an example. Instead of just adding life insurance when I felt like it, I could have looked at where my family would be when the term policy would run out.
Right now all my kids will be out of the house in 20 years or less (or at least they BETTER be). So I could get a 20 year term that is structured just for the family needs while they are still living with us. For my family that would be a $2 million dollar policy.
I would then have a longer term policy with the purpose of taking care of my wife before and after the kids are out of the hose. For me that would be an additional $500,000 to $1 million dollars of life insurance on a 30 year term policy.
When you do the math, that would mean while the kids are in the house Mandy would have $2.5 million to $3 million of life insurance for the next 20 years, and then $500k to $1 million once it’s just the two of us again.
Now you may be thinking, “But Jeff, why go to all this trouble?” The reason is that 20 year term policies can be significantly less expensive. So you spend much less in premiums over that 20 year period.
Whether you need a million, $2.5 million, or $3 million of life insurance coverage, get you insurance in place today.
It isn’t worth the risk to your loved ones to leave them without you being covered. So figure out how much you need, get some quotes and get that policy in place.