Do you have life insurance? Do you care? How does it play into your FI-RE?
I didn’t have any life insurance until we had our second child. Seeing his little face for the first time, made me realize I needed to make sure he was provided for along with his brother and his mother if ever anything happened to me. How much was the first question I asked myself.
And the response was fairly simple.
I knew exactly how much I needed to have in order to be completely, and utterly, financially independent, so I used that number and subtracted my current net wealth. The difference was my life insurance. Every year, as my wealth grows, I reduce my life insurance until – the day I become financially independent – I can stop the life insurance completely.
Today’s article comes from Gabe at Local Life Agents as I thought it would be good to share an expert’s point on view. Thanks Gabe.
Who likes to talk about life insurance? Most people think that you only speak with an agent when you feel something wrong is with your business, or your health is declining. The truth is, you need to take this seriously even while you are still healthy, alive, and kicking – especially when you are still young and have the means to pay for it.
Life insurance topics are not very enjoyable and definitely not a process that anyone likes to have. Nonetheless, getting one is crucial if they want to secure their future. Almost everybody knows that they need insurance, but not all people are willing or obliged to get one for their future. The great thing about life insurance is that it’s not only death that is covered by life insurance, but it also includes new guarantees for marriage, starting a family, and even children’s education.
Why Do You Need to Get a Life Insurance?
There are probably a lot of questions circulating in your mind right upon reading this. Why do I need to get one when I’m perfectly fine and healthy? Needless to say, illness isn’t the sole cause of death. You can die or encounter an accident even when sitting in a park bench or alone walking in the street. Emergencies are inevitable.
The next questions you should be asking yourself are:
- Will someone in my life would be negatively affected by my death?
- What would happen to my family with my debts unpaid?
- Who will manage your business and be your successor?
Especially if you are a blogger, a remote worker, a freelancer working on project-based tasks, a VA to a multi-national company, have kids with special needs, or have sick kids, or someone who has an existing medical condition.
What are the things to consider when getting life insurance? Here’s a good list:
- Your family or loved one’s assistance when you’re gone.
- Your kids’ future
- Debts and other expenses related to death
- Monetary protection for your kids
- Peace of mind for the people you’ve left
Your Family or Loved One’s Assistance When You’re Gone
You need to think of your family and loved ones and the pain that they will go through – both emotionally and financially especially if you are the one who is supporting them. If you are a father, and you are the breadwinner in the family, your death would be so painful if you don’t have insurance. If you have insurance, it can cover the next few months of your supposed income because let’s face the truth — your wife might not be able to find a new job right away. Especially if you have little kids unless she is working at home – but that is still not a guarantee that they will be secured.
Your Kids’ Future
If you have kids and want to secure their future, you can buy life insurance, and it will cover everything. If you don’t have these properties or businesses, you can leave a legacy by purchasing a life insurance plan while adding them as recipients. This is essential if you want to secure your children’s monetary needs in case of other circumstances in the near future, like them getting sick or the likes.
Your Debts and Other Expenses That Come in When You Die
Are you still paying for a mortgage? Do you have credit cards? Are you currently paying for your first car’s loan? You could even be paying a debt for a year, and it won’t be paid entirely right away. What if you die today or tomorrow? Do you have any assurance that your immediate family is not going to suffer paying off those debts?
Getting life insurance can save your family from the burden of your debts that haven’t been paid. These include the expenses for funeral and interment that is recently bulging as time goes by. We’re sure you don’t want to pass the burden, but if you aren’t getting any help, that will inevitably happen.
Monetary Protection for your Kids
It is extremely painful to lose a parent at an early age. Same is true with any age. If you are a parent, we’re sure you don’t want to see your kids having a hard time adjusting their life financially. Sure, you can get them a quality education plan, but with life insurance can also provide other benefits such as funds if they want to get married at a certain age or if they want to start a new business when they decided to start their own family. This is why it is quite essential to have additional insurances for the kids – because you’ll never know what comes around the corner today or tomorrow.
Peace of Mind for the People You’ve Left
If you’re a freelancer who has not signed an employment contract with any company, getting an insurance is something you need to think seriously about. We may not be sure of what will happen every day, and it is vital to take care of ourselves. Since unfortunate events are inevitable, having a peace of mind that your family won’t be having a difficult time while you’re gone is one of the perfect gifts you can ever give.
With the help of insurance, you can pay for the therapeutic and other out-of-state costs that you may get after an accident. The expenses include immediate treatment, hospital confinement, medical results from exams, and other simple fees like lodging needs especially for the family members that are watching you while you are in the hospital.
Dying or getting an injury is not a good thing to discuss, some might see this as a bad omen to talk about but being aware of the circumstances needs to be addressed at once as long as you are still able to talk about it. Speak with a licensed life insurance agent to know the different insurance policies that offer the best inclusions and monthly premiums for your desired coverage.
Thanks again Gabe,