Life insurance, similar to putting windshield wiper fluid in your car or an umbrella in your bag, is one of those things you never really think about needing until you need it.
Since I first started working at the age of 15, up until my late 30s, I would regard the filling out of new-hire paperwork with the same sort of “yeah yeah yeah” attitude.
Taxes made the most sense, since they come with the scary threat of fines and/or possible imprisonment if you don’t take them seriously. But the other things, such as a 401(k) and especially life insurance, that all seemed like something a much older person would need to worry about. Those were things that “future me” needed to pay close attention to.
If I was lucky enough to be offered a benefits package, which was a given with most office jobs in the early- to mid-2000s – not so much in this current climate of contract work – I would scan through the life insurance paperwork and, when it came to the part where you list a beneficiary, list the name of whatever person I was dating at the time.
It would almost be like a joke to me, imagining a worst-case scenario where I was taken out by a bus and then some person I had long since broken up with is tracked down and informed that they were now the beneficiary of my life insurance. Joke’s on me, though. I learned how seriously this should be taken, and I changed my tune, real quick.
Losing my parents changed my perspective
Over a six-year span of time, I lost both my mother and father. When my father died, I, his only child, was listed as the main beneficiary of his life insurance.
The payout was not enormous, but substantial enough for me to pay for his funeral arrangements and use the remainder as a down payment to buy a house.
If I hadn’t had that money, the financial state I was in at that time would have made it hard to even buy a plane ticket out to the small town where he lived and died, much less arrange for his funeral.
He knew enough to plan ahead, and now I do too. I bought a life insurance plan for myself shortly after returning home from his funeral, and I view it as one of the best decisions I’ve made in my life. Here are a few reasons why.
1. Grieving is hard enough as it is
I come from a small family, and have built a small family for myself. My little unit consists of me, my wife, and our dog and two cats. Both my wife and I currently work freelance/contract jobs, and while we’re lucky to make a pretty good living doing so, we’re not rich people by any means.
All the money I got from my dad’s life insurance went right back into the house we live in. If I died without life insurance, be it tomorrow or 50 years from now, it would be very hard for my wife to arrange for my funeral, while also keeping up to date with bills and our pretty hefty mortgage payment, all while being sad.
I won’t be around to cheer her up anymore, however as the sole beneficiary of my life insurance, the payout will alleviate some necessary burdens for her. It brings me a sense of calm to know that I’ve set up a plan to take some of the weight off her shoulders when I’m gone.
2. Getting life insurance is a lot easier than you might think
When I made the decision to get life insurance, I didn’t exactly know where to start in terms of researching plans and picking the best one, so I just picked one. I’ve always been a “better done than perfect” type of person, and don’t like to sit on things, so I figured that in the end, having something is better than having nothing.
This is going to sound ridiculous, but I chose a plan through MetLife because it uses Snoopy in its marketing campaigns, and seeing Snoopy on my paperwork made me smile. Who doesn’t trust Snoopy?
I filled out my paperwork online, selecting a renewable term life policy with a $70,000 payout that I plan to increase in a few years when a higher premium seems more manageable. I think from start to finish the signup process took me about half an hour. It takes more time to make dinner.
3. Life insurance is way more affordable than I imagined
As opposed to independently purchased health insurance, which costs hundreds of dollars a month, life insurance is surprisingly affordable. When I first signed up, the monthly premium for my $70,000 policy was $33.75. It is now just a tad bit more, at $41 a month.
My premium does rise every five years because it’s a “renewable” policy, but that means I get to keep the policy until I’m well into my 80s; with many term life insurance policies, the maximum term is 30 years, so you’re very likely to outlive your policy and your beneficiary will never see the payout.
4. Why not?
When I think of the wide variety of things I choose to spend money on in any given month, it puts a lot into perspective for me. I am currently signed up for a weekly meal plan that costs $38, and two (TWO!) different subscription boxes for my dog that are averaged out to $30 each per month. I also subscribe to just about every streaming TV service there is, because god forbid something comes out and I don’t have immediate access to it in the comfort of my own home.
Why in the world wouldn’t I put that same effort, and money, towards making sure that my wife can pay her bills once I die? Life insurance is a no brainer when you think of it like that. Zero harm can come from having it, but a whole lot of grief can come to your loved ones if you don’t. I would hope that I have as much invested interest in my wife as I do my dog.
5. You can change beneficiaries whenever you want
This will never, ever, in a million years happen, but for the sake of this article, let’s say my wife and I split up one day, and she’s removed as the beneficiary of my life insurance. Is there still a valid reason to keep the policy up to date? Absolutely.
Policies can be updated in any number of ways. I could choose to have my death benefit go to a charity, or have it split up amongst a number of charities. I could split it between a charity, and a cousin or an aunt. With some types of whole life insurance policies, you can even get a much smaller cash payout and, throwing your arms in the air in defiance, put it in your mattress for someone to find once you’ve died.
I wouldn’t recommend that last option, but it goes to show that when it comes to life insurance policies, they’re easy enough to get and fairly flexible. Just get one. It’s one less thing to worry about.