Don’t be a Jerk Get Life Insurance if You are Raising Children

Last week, I wrote about updating my life insurance and while it isn’t finalized yet revisiting the topic on a very personal level rather than for a faceless client has reinvigorated my feelings on the subject.  Granted, I work with the product, daily, but being in the in the middle of my own protection planning has really reminded me that the main purpose of life insurance shouldn’t be forgotten – PROTECT YOUR CHILDREN SHOULD YOU PREMATURELY DIE. 

For most relatively healthy young adults term life insurance is cheap.  So, if you are raising children, are relatively healthy, are relatively young and you don’t at least have some life insurance you are likely an asshole. Sounds harsh? It is meant to be.

Obviously, it is true that there are some people who can’t afford it, but at the prices I received I will only buy that if you don’t do any of the following:

  • Own a smart phone plan with one of the big 4 carriers – Is unlimited texting more important than protecting your children in case of death?
  • Stop at Starbucks/Dunks once a week (or more) – My $1,000,000 term policy costs $44/month.  So if you are stopping at Starbucks once a week you are drinking away a $250K – $500K policy.
  • Your Gym Membership is $80+/month.  Join a cheaper gym and protect your children damn it.
  • Don’t ever eat out. Ever.

These are just 4 quick ones that I can think of that directly change whether you can “afford” to protect your children should something happen to you.

10 Responses to Don’t be a Jerk Get Life Insurance if You are Raising Children

  1. This one should really be a no-brainer. My high school girlfriend’s father was an early computer engineer who had a high income and lived in a top 1 percent town. He died before I met her and was very well insured

    She inherited $1 million on her 18th birthday and the first thing she did was to buy a house three blocks from the ocean on the Jersey Shore, while socking away the $900,000 she had left.

    Last I looked (on Zillow), her house was worth $1.5 million and of course she also has whatever that $900,000 has grown to.

    Unfortunately, her house is right at ground zero where Sandy hit hard, but I bet she was well insured for that as well.

    • While I think it is fantastic that her father was smart enough to have proper coverage I wouldn’t agree with that distribution schedule! 18 Year Old Evan would NOT have been that responsible.

      As important, did her looks keep up lol?

  2. I have an 11-month old daughter and my wife stays at home. As much as I hate spending money, I pulled the trigger on an application in January. Had the blood test in February and am awaiting their review of my medical records now. As much as I hate to spend money, I feel that it makes too much sense to do this. I want to make sure my daughter doesn’t have to struggle financially at any point prior to college.

    I am going with a 20 year term that will put her right into her Sophomore year of college. I figure after that she will be somewhat on her own and my wife will have already been working once our daughter starts kindergarten. Also, I am requesting that with the 1Mil, my wife pay off the 175K balance on our mortgage and then live off the interest of 850K and try not to draw down if possible.

    I do have to give posts like this credit for pushing me over the edge and making a call to action for me.

  3. We don’t have life insurance other than what we get through our employers but that will change as soon as we decide to start trying to have kids. It would be irresponsible not to have insurance unless you’re financially independent already.

    • I would look into a small policy on each other…for grieving and even debt repayment (house, student loans, etc). When The Wife and I got married we bought small $250K term policies on each other. The cost was less than 20bucks a month

  4. Amen. My dad died when he was just 38. My parents had enough life insurance to pay off the house, but there was not much left after that, and my mom struggled financially. Now she is retired, and she is still struggling. More life insurance would have made a world of difference.

  5. Thank you and thank you for being so blunt. We purchased permanent life insurance on our daughters when they were born. (Northwestern Mutual) The dividends purchase paid up additions. I haven’t checked the policies, but both daughters at 17 and 19 have preexisting conditions that will either prevent them from getting insurance or will put them in a category with a high rating for life insurance in the future. Their policies weren’t huge and still aren’t, but when they are married with children (if they go that route) they will have something in place to protect their families.

    Also think about buying insurance on a stay at home or part time employed spouse. Add up the cost of paying for day care and all the other expenses you will incur if something happened to your stay at home spouse and see whether your income could cover it without causing some financial discomfort. A $150k policy could make all the difference in the world when it comes to the quality of care your children receive.

    Former insurance broker and 20 year stay at home mom

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