As we grow older, we start to begin to think more in the long-term. With the YOLO mentality of our twenties firmly in the rearview mirror, we must consider how our money decisions impact our spouse, partners, and all of our loved ones.
That includes financially preparing for our death.
It’s never too early to get organized with your paperwork, assign beneficiaries on your accounts, create a basic will, and consider purchasing a life insurance policy.
Think about it like this: on a scale of 1-10, how much of a financial burden would your unexpected death cause loved ones? Consider funeral and other end of life costs, covering day-to-day expenses for financial dependence, and even co-signed loans.
Losing a family member is never easy. Why make things more painful when so many issues can be easily and inexpensively avoided?
This article was sponsored by Haven Life, but all opinions are 100% my own.
Life Insurance: The Ultimate Emergency Fund For Your Family
If you have managed to scrape together a healthy emergency fund, you may have experienced firsthand just how important it can be. Whether it’s quitting a job, changing careers, or surviving a layoff, an emergency fund can help you stay debt-free in the face of financial hardship. However, an emergency fund isn’t meant to last forever.
Many financial planners recommend saving three to six months of living expenses to help navigate life’s unexpected financial curveballs. But the purpose isn’t it keep you financially afloat for years; it’s meant to assist you temporarily while you are getting back on your feet.
But if you were no longer around, would loved ones be left with a financial burden in your absence? If you have children, a partner who relies on you, or even cosigned student loans, a life insurance policy may be the additional blanket of financial security you need that a small emergency fund alone can’t cover.
Understanding the Different Types of Life Insurance
Is purchasing a life insurance policy right for you?
When weighing the pros and cons of life insurance, it’s helpful to understand the key differences between the two different types—term life insurance and permanent life insurance.
Term life insurance lasts for a specific amount of time, typically 10, 15, 20 or 30 years, based on which term length you choose. Monthly premiums are affordable, and your policyholder receives a guaranteed death benefit (the amount paid when you die). You are covered for the term length as long as you continue to pay your monthly premiums.
Permanent life insurance comes in either whole or universal form and lasts a lifetime. As you may expect, the monthly premiums for this type of life insurance are significantly more expensive. Additionally, it is more complicated because it has a cash value that can fluctuate over time. Because of its complexity, it’s worth reviewing the details with a financial planner who isn’t earning commission on the product.
It’s possible you have already been exposed to insurance salespeople trying to “help you” decide which option is best. When it comes to high-pressure sales environments, a little education can go a long way. For many people, term life insurance is a sufficient, simple, and affordable choice. And luckily, there are a lot of options for doing research online. Haven Life, the sponsor of this post, allows you to get a free online quote and compare pricing to other top insurers.
How Much Life Insurance Actually Costs
Most people who haven’t purchased life insurance have avoided it because they think it costs too much or have other financial priorities. Life Happens, a nonprofit consumer group formed by insurance providers, found consumers tend to overestimate the price.
This year’s Insurance Barometer Study, found the median consumer estimate for a healthy 30-year-old to purchase a $250,000 term life insurance policy was more than twice the actual cost.
So what’s the truth? I did some research through Haven Life. Haven Life is life insurance startup that’s backed by MassMutual and offering the ability to purchase a term life insurance policy 100% online.
Haven Life’s first-of-its-kind InstantTerm process allows you to apply through their website and find out right away if you are approved. The coverage begins immediately, and some qualified, healthy applicants won’t even need to take a medical exam.
Here’s an example Haven Life quote for a healthy 32-year-old, nonsmoking female living in Nashville who is looking for a $250,000 term life insurance policy lasting 30 years.
After you have filled in these fields, you will be redirected to a page to create an account and fill out an application. Once you submit the application, you’ll immediately know whether or not you’re approved for coverage – all with no obligation to purchase. If you decide to move forward, you can eSign your application and coverage will begin immediately.
Is Life Insurance Right For Your Family?
Growing older often means putting others’ wants and needs before our own. Most of us wouldn’t want our parents to be stuck with unpaid private student loans, our children to be unprovided for, or our partners to struggle with covering basic expenses like the mortgage, electric bill, or groceries.
If you are the type of person who prefers to be protected against the worst case scenario, you may want to consider purchasing a life insurance policy. It’s never fun to talk about or prepare for your own death, but fortunately, there are options to make the entire process faster—and much easier—than ever before.