The One Nobody Wants to Talk About

A young, twenty-something wife and mother of three in my neighborhood lost her husband unexpectedly a few years ago. He died with no life insurance. It left the family financially devastated. She had to sell her house and move into her parent’s basement. A Go Fund Me account paid for her husband’s funeral.

I have another friend who lost her husband to a horrible illness when they were in their early forties. This couple had planned ahead and made sure they had the right amounts of the right kinds of insurance in place, including life insurance on the major breadwinner of the family–my friend’s husband. A year or so after he passed, I asked her how she was doing financially. She said her husband had taken care of her financially in death just as well as he had in life.

Life insurance is crucial for a specific portion of your life. Do not overlook this. There is more to losing a family member than the overwhelming grief of the loss itself. No one needs financial hardship heaped on top of that. And, it’s more than the cost of the funeral; the family loses the income that person contributed to the household. If that family has debts on top of the cost of maintaining a family, the problems are amplified, as they were for that young mom in my neighborhood.

Not everyone needs life insurance. Listen carefully here; if you have no debt, a lot of money in the bank, and no one depending on you for their financial support, you are probably alright to drop your coverage. Most of us DO NOT FIT THIS…YET. Every adult who does not fit that description needs life insurance. And if you don’t smoke and get it while you’re fairly young, it’s cheap. At least it should be.

DO NOT BUY any life insurance that has a savings attached to it. These come in many forms, but we will talk about those later. Look for TERM LIFE INSURANCE–you only need it for a specific term, for instance, 20 years, and it’s not expensive for relatively healthy non-smokers. And to those of you who smoke, yesterday was a good day to quit for good. After you’ve been a non-smoker for a while, you can get those awesome non-smoking rates.

If you have one of these life insurance policies with cash attached, don’t run and cancel it until you have something else in place. How much should you get? About 10 times your annual income is a safe place to start unless you have an astronomical amount of debt.

There are not many people who are comfortable talking about finances or death, but that is why I’m here. Someone needs to have the hard conversations.