It’s important to have life insurance in order to provide protection for your family, especially if you’re the sole provider. Jeff Rose over at Good Financial Cents started a life insurance movement which is taking place today. Bloggers and financial organizations around the web are helping by bringing more awareness to the topic and sharing why it’s important to them. So, I’m doing my part and sharing with you today why I believe life insurance is important for my family.
When you’re single you rarely thinking about bigger picture finances. Don’t get me wrong. When I was single I knew I needed a budget and it was smart to start investing for retirement at an early age. In fact, it was my dad who said I needed to make sure I was saving and investing money when I got that first job. However, I wasn’t thinking of expenses associated with kids, combining my finances with the future love of my life, putting food on the table for my family. I certainly wasn’t thinking about taking out a life insurance policy in the event something were to happen to me and my family need the money to pay for expenses, replace my income and on and on. It wasn’t necessary to think about those things, but after I got married, everything changed.
Getting married is a wonderful event in life. I’m thankful for my wife and love her deeper and in new ways than I did 10 years ago. Marriage made me grow and mature in many ways, but certainly with my finances. It was one of those events in life that forced me to do different things, starting with making sure we had a budget for all the wedding expenses my wife started telling me about the morning after I proposed to her. J Marriage made me think about the importance of an emergency fund. It made me get serious about paying off debt. After all, how were we going to buy a dream house if we still had student loans and car loans to pay off? Or, how would my wife eventually become a stay at home mom if we had these payments hanging over our heads each month?
Marriage made me think about life insurance too. I used to love reading personal finance books and still do; however, today much of my reading is on the web and from personal finance blogs. One of the books I learned a lot from years ago was written by David Bach, “Smart Couples Finish Rich.” It covered a wide variety of topics from building your “retirement basket”, “security basket” to “dream basket.” My single life was focused on a future beach house and the dream basket, but marriage me would now focus on retirement and security baskets.
Life insurance is part of a good security basket and it became really important to me because of the love for my wife. We had established a new married life together. She was finally able to stop working when we had our first child. The last thing we wanted to do was talk about something happening to me, but you have to be wise about these things. You have to ask yourself the question: what if the unthinkable were to happen and if so, is everything in order? Could my wife go on living with enough financial support to take care of herself and our first child, or would she have to handle all the finances, lack of funds to pay for my funeral costs and the pain that comes with losing a loved one?
David Bach says this about life insurance in his book
Most people hate to talk about life insurance, but if you’ve got anyone in your life who counts on you for financial support, then you need to have some sort of protection plan in place in case something happens to you. And that’s all life insurance is – a protection plan.
So we got a protection plan. I made sure that my wife and daughter were protected and today our coverage is enough to replace my salary for many years and support my wife and now two kids. There are different types of life insurance and I won’t bore you with all the details and the life insurance debate. The purpose of this post is to prompt you to take some action if you have loved ones that depend on your income. I’ll simply say there are two types of life insurance (Permanent and Term) and the majority of people need a term life insurance policy. Term insurance provides you with set protection for set amount of time for a set price. It’s simple and the easiest to understand.
Taking this financial responsibility feels good. I feel like I’ve done an important thing to protect my wife and kids. They won’t have to worry about paying for my funeral and they can have peace in knowing they are supported for years if I were to pass away. Life insurance for us is another financial tool in our tool belt. Term policies are so cheap that most people can find room in their budgets and this makes it getting life insurance a no brainer. I highly encourage you to take action today. Get in touch with someone you can trust, perhaps a financial advisor you already work with today that can help you find someone that can help you find the right policy for your situation. But, make sure you do your research and learn more on your own too. Here are a number of resources provided by the Life Insurance Movement that can help you.
- Life Insurance Needs Calculator: www.lifehappens.org/howmuch
- Life Insurance Product Decision Guide: www.lifehappens.org/whatkind
- Life Insurance 101 Guide: www.lifehappens.org/
- Insurance Agent Locator Tool: www.lifehappens.org/
- Life insurance basics: http://www.insure.com/
- Common questions about life insurance: http://www.insure.com/
- Who’s who on a life insurance policy: http://www.insure.com/