Life insurance for my family will cost close to $20,000 over 20 years.

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  • For my wife and I, purchasing term life insurance when we had children was a no-brainer.
  • We want to ensure that they are financially protected if we both die before they reach the age of majority.
  • We spend about $82 a month on two policies worth $500,000 each.

Being a parent is very heavy.

An overwhelming sense of responsibility can be overcome when new parents realize that they are not solely responsible for their own lives. Suddenly you have a helpless baby who is completely dependent on you for everything.

That’s why it was easy for my wife and I to do so. take out life insurance Making sure our children are financially secure until they reach adulthood should something happen to us.

think of the impossible

One of the biggest obstacles to buying life insurance is having to think about things you don’t want to imagine. What if I die before my children grow up? What if my wife dies? What if we both die? what will happen? And how can we financially plan for all these possibilities?

However, after much thought, my wife and I ultimately came to the conclusion that if one died first, it would be difficult for the surviving spouse to grieve while raising children and earning a living. did. money from life insurance It certainly won’t solve all of these problems, but it can give survivors some leeway to take some time off from work to gradually return to the workforce when the time is right.

My wife and I both have careers and are equally capable of supporting our families, so we decided that we should both have life insurance of the same size in case one of us dies. In clinical insurance terminology, it is called the “predeath” of the spouse. And in the almost inconceivable case of both of us dying and at least one of our children surviving, our child will receive double her benefit that the surviving spouse would have. will receive.

That said, I wanted to have insurance until my children were adults, but I didn’t feel the need to be prepared if someone died after they were adults. Our goal is to raise our children to be independent, not to finance them for the rest of their lives. , the remaining assets must be inherited.

Choose a type of life insurance

Once you have decided to purchase life insurance, you will quickly discover that there are many different types of insurance available. However, they are all categorized into “duration” and “permanent” options.

term insurance They are sold for a specific period of time, such as 20 years, 30 years. If no claim is made, the policy will expire. A feature of term insurance is that the premium is a lump sum and the payment is fixed.

whole life insurance If you pay the premium, it will last until you die. This is usually higher than term life insurance.

Ultimately, my wife and I decided to purchase term life insurance. american property insuranceWe bought one for ourselves for 20 years with a profit of $500,000 each. This policy expires in 2033 as he purchased it in 2013.

If either of us dies by June 2033, the survivor will receive $500,000. If we die after June 2033, this policy becomes worthless.

But as I mentioned, we plan to have substantial assets at that point, including both retirement savings, home equity, liquid cash, and personal property. reduced the real value of our insurance, but also increased the value of assets such as homes.

My wife’s premium is $21.96 a month and mine is $60.66. This difference is due to my age (I am almost 10 years older than her) and health. I have a family history of heart disease and take cholesterol-lowering medication. I am also a commercially acclaimed aviation pilot and flight instructor. raise insurance premiumsI am not currently employed as a pilot and I am only flying for recreational purposes, but it was a risk factor that I had to disclose.

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What could have been done differently

It’s been nearly 10 years since I took out 20 year term life insurance and my wife and I have little regrets.

We probably would have purchased a longer policy a little earlier in life. The younger and healthier you are, the cheaper your term insurance will be.

And while we may have purchased more expensive insurance with greater returns, year after year our household wealth increased, our children’s future financial needs declined, and inflation against our insurance benefits increased. I know that it almost cancels out the effects of

Always keep in mind that we purchased these policies only to make sure our children were provided for adulthood in our absence, not for them to receive a windfall for life. We sleep better knowing that if anything happens, our children will be supported and the income from our life insurance will allow them to attend college. , they will not be a financial burden to our families who may be called upon to raise them in our absence.

I rarely gave life insurance a second thought until writing this article. That’s how you want it. We wanted to buy life insurance for the proverbial “peace of mind”. And I’m glad I didn’t think my children would suffer financially without me in those inevitable moments when I felt my life might be in danger.

As for the cost, our biggest wish is that 2033 will come and go, and my wife and I are grateful that we didn’t gain anything by making all these payments.

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