Now that we have a kid and Becca is out of school, my wife and I decided it’d be wise for me to get a life insurance policy. Our goal is to provide enough money for Becca and Anna to maintain their lifestyle if I die prematurely. For us, we decided that meant Becca would need enough money (combined with our current savings): to bury me, to buy a house (or to pay off an existing mortgage to reduce monthly expenses), and to have enough to live off of while she completes any additional education required to get a job (probably teaching).
My initial research made it pretty clear that a term life policy would best meet our needs. This type of policy gives you a guaranteed rate for a set number of years as long as the premiums are paid. For example, I could get a 20 year policy at $335/year. At any time I could just stop paying and lose my coverage. Or if I keep paying and get cancer in 10 years, there isn’t anything they can do to raise my annual premium, reduce my payout, or cancel my policy. If I pay $335/year for 20 years and never die, then my policy ends and the insurance company gets to keep the $6,700 that they’ve collected over the years.
We decided 20 years was plenty of time for us. By then our kids should be well on their way out of our house. We will hopefully have a completely paid for home. Becca will understand more about our business (and hopefully have some projects of her own) so she won’t be as pressed to get a job.
The next step was to look for quotes. Term4Sale is a great site that lets you punch in your birthday, age, general health, and other details to get a pretty accurate quote. They can also hook you up with an insurance agent once you are ready to apply. I had just had a physical, so I was able to punch in my actual data (such as blood pressure) to determine that I’d likely qualify for a “Preferred Plus” rate (i.e., the best rate offered). I filled in my contact info, clicked submit, and waited to hear back from an agent.
The next day I got a call from an agent. He went over my options, I told him what I wanted, and within a few hours I had an application in my inbox. It was pretty straightforward: contact info, beneficiary info, standard health questions, payment method, etc etc. The agent scheduled to have a guy come to my house to draw blood, take a urine sample, and weigh me. This only took a few minutes and they were kind enough to send me the results of the tests for my records.
The next step was the worst: wait. And wait. And wait. Just when I thought they forgot about me, over a month later, I got a call saying I was approved but had to wait a few more days because the insurance company messed up my last name on the policy. I went on vacation before the paperwork came for me to sign, so I had to wait even longer. But finally, a few months after I started the whole process, I signed the paperwork, they cashed my check, and my policy was in force. Yay! I’m insured!
What I learned from the whole process is that it isn’t an overnight sort of thing. It takes time to get a policy of this type put into place (over 2 months in this case). I also learned that it is surprisingly affordable. For less than a dollar a day I’m able to give my wife (and myself) the peace of mind that comes with knowing that my family will be financially secure even if I die prematurely. That means a lot to me, especially now that I’m a dad.
Photo courtesy of Alan Cleaver under the CC BY 2.0 license.