Hey everyone! As you all know, I recently switched to self-employment. It has been going very well so far, and I honestly wouldn’t have it any other way. I have been able to land a few contracts for now and the future, and that is definitely great.
All of my fears and worries related to unstable income and not being able to pay the bills (such as if everything went downhill very fast) have all disappeared. I was constantly discussing my worries here and on Diversified Finances, but I honestly haven’t even thought about these worries since before I made the switch to self-employment.
One thing that I cannot forget about is saving for the future. We are saving a very good amount, but something that we have not done is think about life insurance. Learnvest published an article about insurance policies that everyone needs.
Through my day job, I was given a small amount of life insurance (I think it was something like $40,000 or $70,000 – I honestly cannot even remember). And I believe W’s job gave him a little as well.
We’ve never gone further than that, and have never even honestly looked at anything else, so I’m not even sure what life insurance costs.
Yes, I know. Major personal finance fail.
Do we even need life insurance?
The reason why we never looked further into life insurance is because we thought that it didn’t really matter unless we have children. However, now that our income is primarily relied on what I am able to make, I have been thinking about looking for insurance, especially since right now we have a big fat $0 in life insurance.
I wouldn’t want something to happen that would mean a bunch of bills would be left behind because of me.
And, eventually we will be adding children into the mix, which will possibly be within the next few years.
Life insurance would give us peace of mind. When we do have children, we will definitely have life insurance as going without it just wouldn’t sit well with me. It shouldn’t be too hard to find what fits us best, such as starting by looking at guides.
Other reasons for why life insurance is important.
- Life insurance can help your loved ones pay for your medical bills and funeral expenses.
- It can help your children to continue living a similar lifestyle, and possibly pay for their education.
- Possibly cover the mortgage so that your loved ones have one less bill to think about.
Do you have life insurance? Why or why not?
Also, if you don’t mind, please share how much you pay!
Kevin H @ Growing Family Benefits says
You encountered a very common pitfall associated with group life insurance. It ends when you leave your employer.
You are fortunate that you are still healthy enough to get a private policy. Many rely on their employer’s plan, lose it, and then find they don’t qualify medically.
Michelle says
I plan on looking further into it soon. Had a nightmare last night about this!
Wendy says
Straight term life is what you should be looking at, and at your age the premiums should be very cheap. Take out as long a term period as you can – 20 or 30 year, or longer, IMO. When the term is up and you find you still need life insurance, you’ll be rewriting that policy at a very substantial markup in premium due to age progression. Contact multiple agents and get quotes and compare policies. Agents are going to push you to buy whole life or universal – you don’t need it and you will spend far too much money for it. If you think you need some sort of life insurance due to the “savings” factor – buy term and park the difference between term and whole permiums in a savings account. You will be much better off, financially, down the road.
Michelle says
Thank you so much for all of this information. I’m completely lost when it comes to life insurance.
Crystal says
Yeah, I made the mistake of buying a 10 year straight term policy for my husband and me. Needed 20-30 years most likely. Can’t wait to see our $30 a month go to whatever in 8 more years…
Liran says
I’ve seen many make that mistake..you’re better off replacing that policy sooner than later than deal with that dreaded letter that your $30 premium is now $200..
Michelle says
Good to know about. I didn’t even think about the term of the policy.
Liran says
Yes, my wife and I pay around $70 per month for 30 year term policies. If someone relies on you for income you should have life insurance, and term insurance is cheap enough if you are generally healthy.
Michelle says
Is that $70 altogether or each?
Liran says
Together
Khaleef @ KNS Financial says
As of now, our life insurance is supplied through my employer and it is 3 times my gross salary. We don’t have any children, but we do have a large amount of debt still. The amount is enough to cover the debt and provide for my wife for a period of time, but we will need more as things change in our lives.
Lance @ Money Life and More says
I have insurance through work, which is enough for us right now. Once our situation changes though, like having kids, we’ll have to pick up more insurance to cover our needs.