September is Life Insurance Awareness Month

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In September of every year the life insurance industry has an awareness campaign to make sure the average person is looking at their life insurance needs.  The majority of people do not have enough life insurance coverage so this is a great reminder to take a few minutes to review your own individual circumstances to see if you need to make any changes.

Of course if you are already financially independent then you likely do not need any life insurance.  Life insurance can be used for a variety of financial planning needs but it is primarily designed to cover the loss of income due to the death of an individual.  If you are already living off of your passive investments and do not rely on your job’s paycheck to cover you daily expenses then it is entirely possible that you do not have a need for insurance.  But for the rest of us, there is likely a need.

I have two life insurance policies on myself.  One is a $250,00 term policy that will continue to my early 60’s, at which point I will likely no longer need it (and actually it will probably be much sooner than that) because I will be retired and financially independent.  This policy is really cheap and gives me peace of mind knowing that if something happens Mr. SFF can pay off the balance of the mortgage and pay for any final expenses. With no mortgage he would have income coming in from the other half of our duplex to cover property taxes and many other monthly expenses.  In addition to this I also have a $100,000 permanent policy that I only have to pay premiums on for another 16 years and then it will be paid up and continue until age 120, not that I plan on living that long.  This ensures that if there is still some need even into our retirement years there will be some insurance in place to cover it.  I am very comfortable with the insurance I have on myself and know that my husband could get by without my income since these polices are in place.

Unfortunately I would be left very vulnerable if Mr. SFF passed away any time soon.  When he was laid off from his full time job in the spring of 2014 he lost any group life coverage he had.  I have tried to get him to apply for life insurance coverage and will pester him every now and again but he has not done anything about it yet.  Even though our mortgage is covered by the rental income I would have a very hard time making ends meet without his income as property taxes alone would eat up almost 30% of my current take home pay.  I would have to resort to drawing down some of our accounts in order to get by and would most likely have to change my lifestyle; meaning no vacations, entertainment or anything extraneous.  This is a scary proposition as you never do know what could happen in life.

Life Happens

There are many great resources out there to help the average individual figure out their life insurance needs and the best type of insurance for their personal circumstances.  My favorite resource is LifeHappens.org as they are not affiliated with any life insurance carrier.  They have calculators to help determine your need as well as an overview of the different types of insurance coverage out there.  If you have not assessed your own needs lately and want to make sure your family doesn’t have to struggle if something happens to you or your spouse, I would suggest taking the time to evaluate your needs to take the steps to get some insurance in place.  I know I would sleep better if Mr. SFF had some insurance in place.

 

 

Disclaimer: I am in no way affiliated with LifeHappens.org but do find them as a great resource.  You can also refer to your own local life insurance professional for guidance.

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