I never thought I needed life insurance at 31 until 2 unexpected deaths made me realize I couldn't be more wrong
- As someone who's young, single, and healthy, I never thought I needed life insurance until two of my younger family members died unexpectedly.
- Realizing that my own death could create a financial burden for my family members made it clear to me that life insurance is a no-brainer.
- To keep it affordable, I opted for term life insurance, which only costs me about $30 a month for $300,000 in coverage for the next 40 years.
- For less than it costs me to insure my car, my family is now taken care of in case I die unexpectedly.
- Life insurance will never be cheaper than right now. Policygenius can help you compare options to find the right coverage for you »
When you're young, single and healthy, life insurance is probably the furthest thing from your mind. After all, you're in the prime of your life and have other expenses to think about. You're saving for retirement, a home, or investing for your future. Putting funds towards an event that is statistically unlikely to happen in the immediate future sounds like a waste of money.
At least that's what I thought. The importance of having life insurance didn't hit home until I lost two younger family members within the same year.
Both passings were unexpected and a complete shock. These were two perfectly healthy young men in their early 20s. Friends and family pitched in to cover funeral expenses, which provided the families one less thing to worry about during difficult times. Nothing makes up for the loss of a loved one, but the removal of that financial stress allows grieving families some reprieve.
Their deaths made me realize life insurance is a no-brainer
These events got me thinking about how absurd my invincibility complex really was. Here I was at 31 years old - no longer a spring chicken, as my mother liked to say. If something happened to me, which felt more real than ever, I didn't want my family to have the added burden of dealing with financial matters.
Funeral expenses aside, what about outstanding debts? Luckily, I only have a car loan, but life is unpredictable. I write for a living and as the 2008 financial crisis reminded us, even good jobs can go down the drain faster than the stock market. I might be financially stable now, but that could change at any moment. And when that moment coincides with my untimely demise, it could create a huge financial burden for my loved ones. Viewing life insurance through this reality-based lens made buying it a no-brainer.
Life is unpredictable and to not plan ahead is irresponsible. That's why I ultimately got life insurance. I won't be young, single and childless forever. Things could change on a dime and remembering to get life insurance may not be top of mind when they do. We're all leaving someone behind, and saddling them with our financial problems is not the way most of us want to go.
I chose term life insurance, which is much cheaper
If you're concerned about the cost of life insurance, a term-life policy is a more affordable alternative. Especially if you're still young and healthy - oddly enough, the age at which most of us don't think about life insurance is also the age at which it's most affordable.
With a term policy, coverage is only valid for a set period of time, usually 10 to 40 years (although it's possible to get coverage for as few as two) and payments can be split into affordable monthly installments. If you pass away during that coverage period, the policy is paid out to your beneficiaries. If you make it through the policy period, you are no longer covered.
In my case, I opted for term life insurance because it was significantly cheaper. For example, I was quoted $234 per month for a $300,000 whole life policy. Meanwhile, a 40-year term policy was just $30 per month. The total policy cost during 40 years would be $14,400 as opposed to $112,320 for a whole life policy during the same period.
When that term life policy expires in 40 years, re-upping would be more expensive since life insurance cost goes up with age. That's something to think about when you're determining your own coverage needs.
I got enough coverage to cover my debts and make life easier for my beneficiaries
When it comes to choosing a life insurance policy, it's important to consider not only your personal and financial situation now, but how it might change in the future. I'm young, single and childless. Most of those factors aren't going to change in the foreseeable future. So when I bought my policy, I wanted to make sure that at the very least, my funeral expenses and outstanding debts would be covered.
I also wanted to leave something behind for my beneficiaries - enough to pay off a mortgage or maybe cover education expenses. That's why I settled for a $300,000 policy. It's more than enough to take care of my debts and make life easier for my beneficiaries. We all want to leave this world in a better state and I felt this number was sufficient in that regard, in addition to being affordable. For less than what it costs me to insure my car, my family is now taken care of in case the inevitable happens.
Some people go beyond a million dollars, but you know what? Most people can't handle large sums of money anyway. A huge windfall wasn't something I wanted to be on the hook for financially, in the hopes that my beneficiaries wouldn't squander it. Even taking inflation into consideration, I did the math and determined $300,000 to be a sufficient amount of money to leave behind.
I also recognized that at some point, I'll return to the workforce and likely receive life insurance benefits from an employer for significantly less. So if something happens before I hit retirement age, there's a good chance I'll have another policy in place.
Bottom line: Age, health, and marital status are ultimately irrelevant when it comes to buying life insurance. Almost everyone needs it, because none of us are invincible or psychic. Life insurance is about protecting what's important and taking care of those we leave behind. Without a clue as to when that might happen, it's important to be fully prepared.
Policygenius can help you compare options to find the right life insurance coverage for you, at the right price »
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