Last week, over 145 bloggers wrote about life insurance as part of Jeff Rose’s life insurance movement. I learned that many, if not most, of the writers currently have life insurance. And that makes sense. Jefferson is the breadwinner for his family of five, so he has a good policy. Crystal and her husband both work on the internet, and she thinks she’ll need a very good policy to account for the fact that it’ll be darn near impossible to keep writing about finance if something were to happen. Robert noted that it’s especially important to have life insurance when you’re a young family, which makes perfect sense. I kept reading story after story about why people have life insurance, or why they only have the minimums that their companies provide. As I thought more about it, I started to wonder if I, too, should get life insurance.
What is Life Insurance?
Life insurance, like homeowners insurance, is a tax on worry. You pay x dollars a month for the peace of mind that comes with knowing that, should anything awful happen, your family would be okay financially, if a complete wreck emotionally. You take out enough money to help cover the mortgage or your half of the bills for a set period of time so that your significant other can get back on his or her feet. You take out a bunch more if you have kids who would be lost without you. Then you update your will to make sure that said children go with your most responsible friends or family members. Then you sleep well at night.
Life Insurance for the Unmarried?
I’m not married, and I live alone. I have a boyfriend, but we don’t split bills since we’re mostly not in the same state. I certainly don’t contribute to his mortgage. So, while he would be very sad if I got hit by a bus, it wouldn’t affect him financially. Same with my parents. They’re set financially, and I don’t contribute to their bills. So, I don’t consider myself to be in the life insurance stage. But some of my personal finance goals could be life insurance, if you think of life insurance differently.
My Five Short-Term Finance Goals:
- No credit card debt
- No student loan debt
- No car loan
- Six months of expenses saved
- Fully funded IRA
All of the above steps are like life insurance. I don’t actually know if credit cards, student loans, or car loans can be forgiven after a person dies (and frankly, I don’t want to look it up, that’s too morbid!) but once I’m completely out of debt and save up in an emergency fund and an IRA, then I can die without leaving a burden to the people I love. And if they want, they can use my six months of expenses to fund a pine box in the ground somewhere.
Will I get life insurance one day? You bet your bottom dollar I will. But it’s not for every stage, and it’s not for me, yet.
Do you have life insurance? Do you think everyone needs life insurance?