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- Many people with debt or children take out life insurance to protect their families. My wife and I don’t have either.
- But we’re happy to pay around $80 a month for our coverage.
- My policies total $800,000 and I have peace of mind that my wife is covered.
When I tell my friends and family that I Bought life insurance I get strange looks for my wife and I. This is not normal, at least in our situation.
2019 we have paid off our last debt: our house. That was a big deal. We don’t have any children either. And debt and children are two major reasons many people buy life insurance.
Now that we’re debt free, do we really need life insurance? I think so. And there are a few reasons for that.
Why life insurance made sense at this point in our lives
I know we don’t need life insurance. Most often, people use life insurance to cover funeral expenses after the unexpected loss of a loved one, make mortgage payments, provide an inheritance for children, and cover ongoing living expenses that come with the loss of an income recipient.
Our Savings and Emergency Fund would more than cover any unexpected death in our household. That’s not why I bought life insurance for myself.
Instead, I chose my $750,000 for 30 years term life insurance to take care of my wife in case of my death. In addition to this personal plan, I contribute an additional $50,000 through my employer. That’s $800,000 in life insurance coverage.
I want her to feel a sense of peace in the midst of a storm should I die before her. I want her to continue living the lifestyle we are currently enjoying. I don’t want her to have to worry about how she’ll have to pay the next gas or electricity bill, or whether or not she’ll have to go back to work.
My wife has far less life insurance than I do. She also earns less. Your plan goes through my employer. We decided that she should get life insurance for $25,000. Your life insurance would cover any additional costs for a funeral and incidentals and would allow me to take time off to grieve. We are considering adding additional life insurance for her, hoping to increase her coverage to $300,000.
What life insurance costs us
My $750,000 policy is $793.75 per year or $66.15 per month. For me, this is a small amount to ensure my wife is well taken care of when I die. She’ll be able to pay all funeral expenses and put the balance in a mutual fund so she can have a steady income when I’m gone.
My plan through my employer is much cheaper. I deducted $3.74 per pay period to cover my life insurance. This equates to $7.48 per month. It’s so little that we don’t even notice the difference in my income.
My wife’s plan through my employer is actually cheaper than mine. Their rate is $3.12 per pay period or $6.24 per month.
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My life insurance gives me peace of mind
There is a peace of mind that comes from carrying life insurance. We know that death is coming for us. At some point we all die. If that happens to me, I want to be financially prepared. I have had life insurance for three years now and they have been peaceful in the knowledge that I will be able to take care of my wife long after I die.
Some may be wondering why we chose term life insurance permanent insurance. We chose a term because it would cover us until our savings, investments and income are more than enough to cover the expenses and remaining income needed to support each of us in a stable living situation. Term life insurance is also a cheaper life insurance policy. We can invest what we save in investments that lead to higher returns.
While death is never easy, I will have made my death easier for my wife. She doesn’t have to worry about working overtime at her job, finding someone to take care of her, or having to change jobs to make up for my loss of income.
Even if we are debt-free, there are a few things to consider when it comes to life insurance. I feel like my wife and I have those basics covered and will be covered if anything ever happens to me.
That’s what life insurance is all about: protecting the loved ones we leave behind when we die.