Saturday, October 13, 2007

Life insurance

As requested by one lovely reader, here's a post about life insurance.

If you care at all for your family and for their financial well-being, you must have life insurance. We younger ones are the worst about taking care of this sort of thing; perhaps we think we'll live forever and life insurance is just another expense we don't need.
You need to have life insurance in place until you are financially wealthy enough to be self insured- meaning you've got so much stinkin' money, if you died tomorrow your family could continue financially fine. Hegazelle and I are in our mid-twenties and both have 30 year term policies. We figure by the time we're in our mid fifties we will have enough money that we can go without life insurance.
Now, on to the types of life insurance you can buy. I have had well-meaning, but uninformed people tell me that the way to go is cash value insurance aka. whole life. If you're not a wise consumer, on the surface this type of policy sounds good. But the truth is it's a rip off, and you should stick to term life. Term life is a bargain, and even stay-at-home moms should be insured. The person who best explains the difference between cash value and term life insurance is Dave Ramsey. Read this article before you continue.
So before you go on to read the next post on your next favorite blog, go to and get a quote on term life insurance. It certainly is a process (about 2-3 months) so get started now. Zander Insurance will give you a ton of quotes from tons of companies so you will get a good price. Also, a good rule of thumb: get 8 to 10 times your income in life insurance. Stay-at-home mom's should get at least a $200K policy too- good luck finding a Mary Poppins to keep your kids if something happens to her.
Now that I'm done being bossy about life insurance, I've got a few questions for you. Do you already have life insurance for you and your spouse? If so, was it a good buy or a rip off? Have you been putting off getting life insurance? If so, why? Do you have an opinion of your own about life insurance?

P.S. Get ready for a huge DUH: Do I even need to say that NO ONE CAN AFFORD TO BE WITHOUT HEALTH INSURANCE????
Toldja it was a big duh, but I know a few people who don't seem to get the concept. As Dave says though, "Stupid is not against the law..."