When I was 23 years old, I had my son Nathan.
I was a high school business teacher at the time- in Waterloo, Wisconsin.
I was happy. I was healthy. I had an easy pregnancy and the worst health issue I ever faced was the occasional migraine.
A Spanish teacher at my school named Scott had a side job selling life insurance- so he sat me down after school one day and said, “Christine, you have a child now- you need some life insurance” (or something to that effect).
Of course, I was like “but the school district gives me life insurance”. Luckily, Scott was also heavily involved in the teachers union, so I knew he understood things like the teachers contract and what not. At that point in time, as a 23 year old, I certainly did not!
Scott explained to me that yes, the school district provided me with life insurance. BUT, the life insurance was only for the amount of one year’s worth of my salary- which at the time was about $36,000. $36,000 was not enough to pay for my burial, pay off my student loans, pay off my credit card bills, and send my son to college- let alone give my husband some breathing room while he grieved and got back on his feet.
SECONDLY, the life insurance policy that the school district was giving me was only valid for the period of time that I was working for them. Meaning, if I left, I didn’t have the policy anymore.
Scott explained to me that employers do this all the time. They offer life insurance as a benefit to their employees- which can make the employees then decide they don’t need to buy any additional life insurance. The issue is that most people do not stay with one employer their entire life and although you can always buy life insurance, it will cost you MORE to buy life insurance as you age. Life insurance premiums are the lowest when you are the youngest- when you can “lock in” the best price.
Obviously, with this explanation- I got life insurance. In fact, both my husband and I got life insurance. I think we got $250,000 each.
The process wasn’t terrible. We were interviewed and a nurse came to our apartment and took a sample of our blood- but it really wasn’t that bad. It took about 15 minutes each.
I think our life insurance cost us like $40/month total for the two of us.
My husband and I had those policies for about 18 months- but we were young and times got really tough for us when my husband finally got his degree and struggled to find a full time teaching job. In an effort to cut every corner we could; we cut the life insurance out of the budget. I guess we figured we probably weren’t going to die anytime soon.
Fast forward another year or two and we were in the market to buy a house. My husband had found a job and things were looking up. I was now 27.
A co-worker had told me that we should make sure we have life insurance if we buy a house because we were depending on both of our incomes to make our payments on all of the bills. If one of us were to pass away, the other would have a really hard time paying for everything without the other’s income. And not just the mortgage- I’m talking the cell phone bill, the cable bill, the groceries, the credit card bills, the car payment, etc. In our family- it was taking two to tango… so what my co-worker was saying was to make sure that we at least had life insurance in the amount of our mortgage so that if one of us died, it would pay off the house. That would allow the other person and the kids to have a place to live – no matter what.
So- we found a new life insurance agent and bought new policies.
Our new life insurance agent did a needs analysis with us. A needs analysis is basically going through and figuring out how much money you might owe (credit card debt, loans, etc) and adding up what you want to leave for your kids or other people. It was kind of like doing a little budget and truth be told- I actually thought the needs analysis part was kind of fun.
It may sound “morbid” or “cold” to come up with a dollar figure for someone’s “life”- but that isn’t what you are doing at all. That really isn’t what life insurance is all about. Life insurance isn’t about the person who is passing away- it isn’t about death at all. Life insurance is really about taking care of the people who are still living.
At the time, my husband and I were living in Oconomowoc, about to buy our first home, and we bought two new life insurance policies for each other- this time for $350,000 each.
That $350,000 life insurance policy still costs me only $28.27 a month.
Shortly afterwards, I found out I was pregnant with my second child.
So I was really grateful I raised the amount of the policy this time.
Fast forward ten years of my life…
About 18 months ago, I got a quote for a new life insurance policy. You see, in those 10 years, I had gotten a divorce and had gotten remarried. When I got my divorce, I had obviously removed my ex-husband as the beneficiary of my life insurance policy and at the time, I had listed my two children.
Now, being remarried, I wanted to make sure that my current husband would not have to be worried about things like- the credit card debt I still had from my prior marriage, my student loans, or even my funeral expenses.
I had a life insurance agent get me a new policy quote.
And let me tell you- the rates were a lot higher than $28 / month!!
(Okay, it wasn’t like over a hundred or anything… but it was significantly higher)
But, on the other hand, things have changed significantly since then.
For one- I’m ten years older.
I also have bee diagnosed with Crohns Disease- which is an autoimmune disease. It’s not as bad as being diagnosed with something like Cancer, but it is definitely not something that life insurance companies rate well.
I’m also on some prescriptions that I wasn’t on ten years ago.
I mean, come on.. a lot can happen in a decade.. if that is what happened in my twenties… what will my body look like by the time I hit 40?? Ugh!
The good news is that I am still locked in at my $28 rate for my first life insurance policy. I will always be locked in at that rate as long as I continue to pay it. Whoo hoo! Too bad I didn’t buy a bigger policy back then!!
The better news is that I could just add my husband as the beneficiary to that other policy.
But the bad news is that I will never get another new policy at the $28 rate again. It just doesn’t work like that.
Moral of the story- every single day you wait to get life insurance… the price goes up. You will never get younger. Maybe you will get healthier… maybe…. But most of us don’t.
There is a reason for every single person to buy life insurance. You should at least buy life insurance so that people have money to bury (or cremate) you. Burials cost money. Funerals are wicked expensive these days. If you have any kind of debt… you should buy life insurance to cover it- so that your next of kin doesn’t have to mess with it. Student loans? Credit card debt? Car loan? Mortgage? Then you need life insurance. Because someone is going to be on the hook for it. In fact- insurance companies see more families lose their homes because of someone dying than because of fires each year.
Now… I’m an insurance agent and I sell life insurance.
It’s my mission to make sure that I help people like you make the best decisions possible about your financial future.
Please call me about life insurance. It’s less expensive and easier than you think.