Life Insurance was the last thing I needed.
This is a more personal blog than I have done before, so please accompany me on a real life journey through some serious ups and downs. At the end, you will understand why I have changed my mind about a very important topic: Life Insurance.
Like many of my peers in my twenties and into my thirties, I never thought about life insurance. I had rent, student loans, auto insurance, a healthy going-out budget – I was leveraged about as far as I could go. Besides, what was life insurance to me anyway? It seemed like paying hundreds of dollars a month so that someone in the distant future could pay for my funeral when I was gone from this world. And at that point, I would hardly care about that, would I?
Of course, many of us thought the same thing about investing, that it was tomorrow’s problem that I couldn’t afford today. But that’s a blog for another time.
What I didn’t know about life insurance was that the younger you are, and the healthier you are, the better the value. It really isn’t that expensive to get a term life insurance policy if you are young and healthy, and you also save on Whole Life as well. Like investing, value is added the sooner you start. And the way life insurance works you could be looking at a substantial amount of money going to your loved ones if something terrible happens to you.
But I’m getting ahead of myself. Let’s talk about what happened to me to make me look at life insurance differently, and then explain a little about what the heck life insurance even is. After that, I’m betting you’ll see it in a different light – just like I did.
Sometimes you have to lose to understand.
Life Insurance is about death.
A couple of years ago my father passed away. He had been fighting cancer for about five years, and the disease that we thought would be slow and subtle was sudden and severe. I had planned my life a certain way, but by the third year of his illness I realized that life – or should I say, death – didn’t really care what those plans were. I moved back to the East Coast to be closer to him, and was there the night he left this world.
Losing a parent is a terrible experience, and one that forces us to grow in ways that we may not expect. My father was an insurance agent himself, but he never lectured me on why I should get this insurance or that, never told me how to live a life that avoided risk – except for driving slow in the left lane. He couldn’t stand that. People, for the sake of my father’s memory, GET OUT OF THE LEFT LANE. There, happy Dad?
My father taught me about life insurance by using it. In the aftermath of his death, when we were doing the paperwork and putting his affairs in order, one of those activities was to inform his life insurance company that he was gone. It was a simple, easy process, and I was grateful for that – after losing someone that meant that much to you, doing spreadsheets, going through bank statements and filing insurance claims are the last thing you want to be doing. After a brief conversation, we discovered just how much my mother would be getting from his life insurance policy. It was shocking.
I am not going too far to say it changed our lives. Of course my father had planned for retirement and my mother was taken care of in that sense, but the life insurance money made it so that she didn’t have to worry about, well, anything. She wasn’t going to go out and buy a yacht or the Carolina Panthers or anything (not that I would have advised her to), but she was able to invest the money and live comfortably. Just like that, she didn’t have to get a job, sell the house, or worry.
I learned that life insurance doesn’t have to cost that much a month, and yet it can give you $500,000, or $1,000,000, or $5,000,000, depending on how much you can afford monthly. I was blown away. I saw in action how it changed her life, and through her, our lives. It wasn’t something that a sleazy insurance agent would be droning on about at a barbecue while you are waiting for the hot dogs to finish grilling (Oh my God am I that guy now?). It was like a last gift from Dad, one that I never could have imagined.
Life Insurance is about life.
Fast forward to a month ago, when I became a father.
Yes, the picture above is me. And yes, I’m probably still figuring out how to hold him, and a great number of other things. I won’t write about what an immeasurable joy it is to be a father (it is), nor will I write about all of the things I have learned and am learning as I become a father myself (did you know the human body doesn’t really need sleep? HAHAHAHAHA). But what I will tell you is that, when he was a couple of weeks old, a thought hit me like a proverbial thunderbolt from the heavens:
I need life insurance.
After my dad’s passing, I knew what life insurance could do for a family after a loss. But until that moment, I didn’t know who it would help. If something happened to me in thirty years, twenty years, tomorrow, they would be in the same financial situation that we were already in, but without my help. It was mind-blowing. For those of us in the generation that didn’t plan for retirement (because we don’t think we ever will retire) and don’t have enough money saved (because most of it goes to student loans) the only way we can deliver a massive financial windfall to those we leave behind is through life insurance. It sounds crazy, but it’s true.
Now, that doesn’t mean we can’t turn it around and, through smart financial planning and hard work, we can leave our families something wonderful. Or that some of us have lived differently and already have robust financial portfolios (I’m both impressed and kind of hate you). But the great thing about life insurance is that it helps your loved ones immediately, not in some distant future where everything went perfectly to plan and the stock market didn’t crash. And not only that, if everything does go perfectly to plan, well, life insurance still works! It is the icing on the cake, the cherry on top, or whatever metaphor you want to use to say it is awesome on top of awesome.
As a new parent, I have something to care for, something to protect. That feeling doesn’t go away when I imagine my death. I don’t think to myself, “Well, once I’m gone, whatever happens to them is not my problem.” I want to do something about it. And I can if I get the right life insurance policy.
Time for a little hand holding.
Life Insurance isn’t complicated.
There are two main types: Term and Whole Life.
Term is life coverage for a specific term, like 10, 20, or 30 years, while whole life is for, well, your whole life. And that’s pretty much the basics right there. Sure, it can get more in depth than that, for example:
- Term life only covers you during the time period, and has to be renewed or converted to Whole Life after.
- Term life is easy to purchase, often without a physical exam.
- Term life generally becomes more expensive as you age.
- Whole life usually requires a physical exam.
- Whole life has to build value over time, often needing 10-15 years to build up a decent value.
- Whole life is more expensive up front, but shows value in the long-term.
Policies can range in price dramatically based on length of the policy, age and health of the buyer, and even market calculations for some Whole Life policies. But generally, you can get policies for anywhere from $100-1500 a month, for coverage amounts ranging from $250,000 to $5,000,000.
If you have finished this article, you already know more about life insurance than most of your peers. You know what can happen, how it can help, and why you need it. You also know the basics of how it works and what it does. The only thing you need to know now is this: when are you going to get it?
If you are curious about life insurance, and you want to get deeper than the bullet points above, fill out the form below and get in touch with one of our amazing life agents. Since the best value is found the younger you are, it is never too early to get your first life insurance policy.