If I die today on my way home… (A life insurance love letter to my family)

(Warning, it’s about to get dusty up in here… But not until the very end.)

I recently replaced our life insurance policies and got more coverage with a lower monthly cost. (Score!)

It got me thinking about how important life insurance is and what a deeply personal topic it can be.

Buying life insurance is usually a straight forward process. However, being in the position of receiving (or not receiving) the pay out from a policy can be extremely emotional.

I put out a call for stories about having (and not having) life insurance recently.

I heard back from over one hundred individuals about their experiences having (or not having) life insurance.

The stories, opinions, and experiences varied widely.

From It would have helped tremendously if my father would have had life insurance when he passed away at age 49.  to….

You don’t need life insurance, you can just get a job and/or re-marry if you lose your spouse. (A position I strongly disagree with) to…

I’ve had multiple family members die early and was grateful to receive the money from each policy.

In this post I’ll bring you three (very short) stories, show you how I recently purchased and replaced our life insurance policy (more coverage, lower monthly payment!) and give a few resources to help you make the right decision for you.

Then I’ll leave you with a letter to my wife and daughter letting them know how much I love them.

(Disclaimers: I am not a life insurance expert. Please do your own research and make decisions that are best for you. I am not responsible for any outcomes based on the information in this post. This post is sponsored by Select Quote, a website I used to find my new policy, more info below.)


Story time…

Short Story #1

I have a term policy and wouldn’t do it differently. I am also married with 2 young kids. Four weeks ago I fell asleep while driving on the interstate and flipped my car. I walked away injury free but easily could have died. If I had, my insurance would have made sure my wife could easily replace my income and provide for our kids. My responsibility is to them and to make sure if anything does happen to me, they can be debt free, have a home, my kids have their college paid for, etc. That’s why I have insurance (see pic of car below!). -Anonymous

life insurance - select a quote - how do i money

 

Short Story #2

We’ve been through the very unexpected loss of an uninsured parent. It is hard on the family to deal with the loss and all the finances when there is no insurance. The financial burdens often fall to the most responsible loved one and can create family rifts. -Anonymous

Short Story #3

I lost both parents and a sibling at a young age on different occasions. I was extremely grateful to receive the money from each life insurance policy. I don’t know what I would have done otherwise. -Anonymous

Of the hundreds of replies I got when asking for stories on life insurance these are the ones that stuck out the most. In cases when a loved one passes away too early life insurance (or lack of) always plays a part in the story.


You need a will too (Go Fund Me isn’t good enough)

One person who replied pointed out all the Go Fund Me campaigns that pop up after someone who was un-insured passes away. Just paying for the funeral/burial can be overwhelming for the family. (Average funeral/burial can be as much as $10,000!!)

Nothing wrong with a Go Fund Me campaign, but I did think it was interesting to bring up because it points to the financial needs and burden that can be passed on to loved ones. In other words, it proves that having life insurance and a will is a good idea.

A will can be just as important as a life insurance policy.

Without a will assets left behind will most likely go to probate court. It can take months for the assets to be distributed. The government can take a huge percentage. And families are often left to basically fight over what is left.

Having a will ensures the remaining assets are distributed quickly and with very little fighting within the family.


How my family got more coverage at a lower cost

The idea for this post came about as a result of being approached my a representative from Select Quote to sponsor a post about life insurance. Because I never write about or promote services I don’t use myself (or strongly recommend for other reasons) I decided to see what Select Quote could do for me before accepting the sponsorship.

I went to Selectquote.com and filled out the information on the website and was contacted via phone by a representative.

This very nice gentlemen asked me a series of (often entertaining) questions like, “How often do you go sky diving?” haha!

He then punched the answers into his super computer and emailed me a few quotes.

I then compared his best quote to what we current had and it turned out we could get more coverage for a lower monthly cost.

Hooray for us!!

It was that easy. Really.

It’s always a surprise when you find out you are overpaying for anything, but should it be? I mean when was the last time you or I or anyone shopped prices on things like life insurance, car insurance, or cell phone service? If the answer is never then why would it be shocking to find a better deal? hmmmmmmmmmmm.


How much life insurance do I need?

When I asked around about peoples experience with life insurance there was some discussion around the question “Do I have enough coverage?” The answer is you can never have too much coverage. If you die your loved ones will never say, “His/her life insurance policy left us too much money!”

So, how much coverage do you need?

Answers go something like this, from least amount of coverage to totally replacing yourself financially speaking:

  • Enough to cover my burial.
  • Enough to cover my burial plus all remaining debts.
  • All of the above plus a little extra (a years worth of salary) for my loved ones to help get them on their feet.
  • All of the above plus enough to replace my income for 20/30 years.
  • All of the above plus enough to pay for everything my spouse and kids would ever need including college and retirement for my spouse.

10 times your salary is another common way to calculate how much you need. If you earn $90,000/year you need $900,000 in coverage.

This sums it up pretty well… A person who sold life insurance for nine years said they never “paid out too much.”

What about stay-at-home parents?

YES! You need life insurance too!

You need at LEAST enough to replace your (priceless, thankless) contribution to the family.

How much would it cost to hire someone to completely cover all the endless work you do to keep the family and household running? Cooking, cleaning, laundry, shopping, transportation, paying the bills, saving the world, it’s endless!) It probably would cost more than you realize to replace a stay-at-home parent.

Have a policy on stay-at-home parents that covers a LEAST that amount. (More is better.)


Resources

Calculator

Life Insurance Need Calculator — A fantastic calculator from my buddy Todd over at Financial Mentor.com to help you find out how much coverage you need.

Compare rates and policies

Select Quote

More info about term life insurance and Select Quote can be found in these two brochures

  1. What is Personal Term Life Insurance?
  2. Why You Should Choose Personal Term Life.

(Tip: I doesn’t cost anything to get some quotes and compare to your current rates! hint, hint.)

There are other life insurance policy comparison websites out there, just Google em. Select quote is the only one I can recommend because it’s the only one I’ve used personally. I have heard good things about some of the other comparison sites too.


You can keep the money, all I want is you.

What a strange, strange thing to talk about.

“If I die, you get $750k!”

At first it seems so weird to create a situation where there is a financial payout if you die.

Of course it makes perfect sense the more you think about it.

Losing the person in your life you are relying on financially can be devastating.

There’s two options if you die early:

  1. Leave nothing.
  2. Leave something (possibly a lot!)

Option two seems better than option one.

Not that if I were ever in this situation I wouldn’t gladly give all the money back for just one more day with Carrie.

If I don’t make it home today…

(A note to my wife and my girls.)

Of this one life I lived, I’m so glad I got to spend it with you.

These memories are all I have now and they are all I need to know that my life was a good one.

You made my life worth living.

You filled my days with smiles, laughter, and happiness.

You’ll never know how much I loved you.

Carrie – Thank you for everything. Thank you for believing in me and my crazy ideas. Thank you for encouraging me. Thank you for loving me when I didn’t deserve it.

Baby Beebs – Thank you for your smile and your laugh. Thank you for being the daughter I didn’t deserve. Thank you for being you. Be good for your mom. Be a good big sister. I know you will be. I’m so proud of you.

Baby #2 – I never got to meet you, but I know you would have filled my life with even more joy than I already got to experience. Be a good girl for mommy and a good lil sister too. I love you!

-Papa

how do i money

P.S. UPDATE: I made it home!

10 Responses to "If I die today on my way home… (A life insurance love letter to my family)"

  1. Liz   November 2, 2016 at 6:39 am

    I am the most financially responsible adult in my family, including parents and all siblings. My retired parents do not have enough liquid assets to bury themselves if they died today. Only one tiny burial policy on one of them. My siblings do not have enough savings to pay their shares of the parents’ funeral expenses. Getting life insurance is an act of self sacrifice. Filling out the forms, doing the health exam, paying the hopefully low premiums (if you got it young/healthy enough) are a mild nuisance, but my spouse and I did all this while the rest of the family went on about its business. Totally inconsiderate. Monthly premiums can be as low as a meal out, but of course that meal is tastier.

    Reply
    • Derek   November 2, 2016 at 11:24 am

      I found it interesting that the burden often falls on the most financially responsible member of the family. I suppose it’s a double edged sword. It makes sense, but I’m sure it can also be frustrating.

      Thanks for the the comment!

      Reply
  2. Dave   November 2, 2016 at 8:33 am

    The note to your wife and girls is touching, I suppose.

    However, on a practical rather than an emotional level, I suggest it is much more important that you provide her with another note – one that gives her some idea as to how she might want to actually proceed in the world without you in the days, weeks, and months after your premature death.

    Surviving spouses have to deal with loss, grief, anger, loneliness, and uncertainty. These emotions are heightened with the death is a complete surprise (e.g. a car accident). And surviving spouse have to raise the kids “on their own” — which is extremely challenging.

    Receiving life insurance proceeds is vital to the ongoing financial success of the family you’ll leave behind should you die prematurely, I commend you for taking this action.

    This other note I’m recommending should include practical information (like getting a dozen or so original copies of the death certificate, knowing how to file for Social Security benefits, and of course how to actually file the death claim with the life insurance company). Plus, she’ll need to let the attorney who drafted your estate planning documents that you died (and update her estate plan). And it’s helpful for the survivor to know details right down to your organ donor status and your desire to be cremated or not.

    In the day-to-day tumult that follows the death of a parent who leaves behind financially dependent children, having a written “game plan” is much more critical to the survivors’ well being (economically and emotionally) than the emotionally ladened pablum: “Of this one life I lived, I’m so glad I got to spend it with you.”

    Reply
    • Derek   November 2, 2016 at 11:22 am

      I like the “life insurance game plan” letter idea.

      I’ll be collecting that info and going over the plan with my wife.

      Thanks.

      -Derek

      Reply
  3. Brendan Barrett   November 2, 2016 at 12:00 pm

    Great post Derek!

    This was a great conversation in the Facebook group and even better blog post!

    And to Liz’s point – those who feel a sense of responsibility carry a lot more burdens in this life than those who don’t. That’s the case in more aspects than just end-of-life expenses.

    The best you can do is to have open and loving conversations that educate loved ones on the bigger picture they some how missed. You’ll never convince someone to change in a single exchange, but over time (10s -100s of conversation and micro-conversation) they may come to see the light.

    Of course, there may also be cause to have some tough-love conversations about what you can/cannot or will/will-not pay for as a responsible and loving member of the family. I’m probably due for a few of these myself.

    – Brendan

    Reply
  4. Pingback: Nurturing Instincts | How important is life insurance once you are expecting a baby?

  5. CoupleofCents   November 3, 2016 at 8:42 am

    Thanks for this post. I’ve been procrastinating on getting term insurance and our first baby is due this month.

    Reply
    • Derek   November 3, 2016 at 10:15 am

      Let us know when you have it done!!

      Reply
  6. Mustard Seed Money   November 6, 2016 at 8:04 pm

    Someone said the other day the most selfish thing you can do is not have life insurance. It made me stop and think for a second and in someways I agree. I would hate to leave my family with a huge liability if something were to happen to me because I wasn’t able to sacrifice a couple of dollars in order to set my future up for a better life. Thanks for the great topical post.

    Reply
  7. Nathan   November 21, 2016 at 3:18 pm

    How does your “path to financial independence” factor into the amount of life insurance needed?

    As you get close to financial independence, shouldn’t your need for life insurance go down … and frankly disappear once you get there?

    Reply

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