Your Life Insurance Isn't About You

By: Andy Hill

When my wife and I got married, we were comfortable in our financial situation. We were young 20-somethings living for today and enjoying life.

It wasn’t until we thought about having children that something clicked in our brains. We were bringing an actual human into this world, someone that would solely rely on us for their physical and emotional needs.

That dose of adulting hit us hard.
 

Jolted into action, we started to learn a little more about personal finance (outside of the typical “don’t spend more than you make” advice). With increased knowledge, we came to understand the importance of a term life insurance policy for our family.

Here are three reasons we decided to buy a term life insurance policy for our young and growing family—and why we’re happy we haven’t needed it ten years later.

The Benefit Protects Our Family

As a new Dad and husband, I wanted to make sure my family was protected if I were to die unexpectedly. If that were to happen, my income would be gone, leaving my family financially vulnerable.

That’s the last thing I wanted.
 

My wife felt the same way too. We’ve seen the financial struggles of single-parent households, and we didn’t want that for either of us.

We decided to buy two policies: one term life insurance policy for me and one for my wife.

Even though my wife was a stay-at-home mom at the time and had no income, it was necessary to have a policy to protect her and all the important work she did for our family. After all, stay-at-home Moms wear many hats. Working Dads would be in a world of hurt without them.

These two policies helped us rest easy at night, knowing our family was protected.
 

Term Life Insurance Was a Better Fit for Us Than Permanent Life

Term life insurance or permanent life? This was an important decision we made together as a couple. We decided to go with a term life insurance policy instead of a permanent policy for three reasons.

• Term life insurance premiums typically cost less than permanent life policies.
• The insurance coverage lasts for a period of time with term life insurance—once our kids are grown and gone, and no one is relying on our income anymore, we may not need insurance. Permanent is, well, permanent.
• With the lower premiums for term life insurance, we could invest more in the stock market and grow our retirement accounts.

Luckily, we haven’t needed our term life insurance policies, and hopefully, we never will. After investing for our retirement for ten years (with the lower premiums from term life), our plan to save for our children’s future is looking strong!
 

Buying Life Insurance When You’re Young and Healthy is Smart

Another major reason we jumped on a term life insurance policy as young parents was the price. If you buy when you’re younger, you can lock in a lower rate and hold that rate until your term ends.

For us, we locked our lower rates in our early 30s. With two 30-year policies, we’ll be covered until we’re in our early 60s. At that time, our retirement accounts will provide us with the income we need to live comfortably.

By then, if everything goes as planned, our kids will be moved out of the house and won’t need our financial support anymore. We’ll still be there for the emotional support, of course, but the bank of Mom and Dad has to end sometime.
 

Your Life Insurance Isn’t About You

Looking back, I’m glad we got our term life insurance policies when we did. They’ve been there to protect us as our kids have grown from little babies to pre-teens!

As a father, I feel happy knowing that no matter what happens, my wife and kids will be protected. I hope we’ll never need to file a claim on these policies, but it’s comforting to know that my family would be financially covered if we had that need.
 

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