Thinking Ahead with Life Insurance

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Life insurance. It is supposed to take care of your family after your death, right?

You hear a lot about life insurance, and the need for it on television, but what exactly does life insurance do for you? Is it really necessary? Is having a life insurance policy the right thing for your family?

I have a life insurance policy, as does my husband. Both of us acquired these in our younger days, before our marriage. Both of us have term life policies. {What is term life, you ask?}

Term life insurance provides coverage at a fixed rate of payments for a limited period of time. After that period expires coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments and/or conditions. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is the most inexpensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis.
Source: Wikipedia

Right now, this is what works for our family. I am a stay-at-home-mom with a small blogging income. My husband is a full-time youth pastor. We make what we need, and because we are in debt, we are not able to build up a large emergency fund at this time.

Once we are out of debt, we will continue with our term policies, but will begin to build our own “life insurance” policies to become self-insured.

But is it right for YOU? Ask yourself these key questions:

  • What is our family’s combined income?
  • If one or both of us suddenly became unemployed, would we have enough money to live on for six months?
  • Are we in debt? If so, is it “good” debt (aka, your home mortgage) or “bad” debt (aka, everything else)?
  • How long will it take us to pay off this “bad” debt?
  • If one spouse died, would our family be able to handle the financial burden?

I believe that if you are not in debt (or have only your home debt), that you should be building your savings and “life insurance” elsewhere. If you are financially sound, life insurance might not be for you! Put that money elsewhere , À la Dave Ramsey.

Another good resource, found on Bible Money Matters that explains When Should I Buy Life Insurance? It breaks down the different aspects of life insurance. It seems that everyone is in agreement that term life is much more financially smart than whole life insurance.

One final note: as with everything when thinking ahead, you must decide what is best for you and your family.

Do you have life insurance? Why or why not? When did you get your life insurance?

Disclaimer: I am not a financial expert. This post was not intended to be a professional financial piece, but rather an expression of my opinion and thoughts on life insurance.


  1. D says

    INHO, everyone needs life insurance. My husband died 9 years ago unexpectedly when i was pregnant with our third child. The only reason I was able to afford to purchase a house after his death was because we had enough life insurance (whole & term) to compensate for loss of income. I’ve used part of it for down payment on the house, paid off other debts, and left the rest for my retirement. Life insurance is for the people left behind not the one who died.

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