Purpose of Life Insurance & Things to Consider

My cousin who has some life insurance through his employer, but not nearly enough, was recently considering buying some more insurance.  He hasn’t purchased any more yet, and he told me,  “I’m not gonna die anytime soon,” which I believe is the main reason he’s putting this off.

My cousin has a wife and two young daughters, and his wife works part time.  He’s in his early 40s, healthy, and he probably won’t die anytime soon. But what if he did?

The basic purpose of life insurance is to protect your loved ones by providing financial support for them in case the unthinkable happens to you.

Who will need that support more than your spouse and your children?

Life insurance can be very affordable.  However, as you compare different quotes and determine how much coverage you really need and can afford, there is no such thing as a one-size-fits-all life insurance policy.

For example, the financial needs of a single-parent household can be significantly different than those of a dual-income household. 

Determining your total life insurance coverage needs to involve itemizing all current and future financial obligations surrounding you, your children, and any other dependents.

You’ll need to consider the future costs to your spouse and children and the life that you hope to provide for them. Take into account every detail from childcare to college, and even the type of lifestyle and health care you would like them to have.

You need to consider how mortgage or rent payments, credit card bills, car payments, and any other living expenses will be paid in the event of your death.

If you are the sole breadwinner of a two-parent household, think about how much would change overnight if you were to pass away.

Your spouse, who may not have been working up until that point, may have to find a job immediately and continue taking care of the household and children all alone.  In many cases, his/her salary may not come close to replacing the income you once provided.

If you are part of a dual-income household, would one salary be enough to cover all the expenses?

Owning a home can easily leave the surviving parent stranded with an unaffordable mortgage, or an even tougher decision of finding another place to live.  Imagine losing your spouse, and then having to uproot your family shortly thereafter. 

Besides for the fact that I love her deeply and would be completely devastated if something happened to my wife, I think of all of the things she does for my family and what I would do if she passed away…

Driving my daughter to dance lessons, singing lessons, guitar lessons, picking her up from school every day because we live too close for her to take bus.  I’d have to do all the grocery shopping, all the cooking, and the list goes on and on. 

My wife also works six hours a day, and we get all medical, dental, and vision benefits through her employer.    

I would definitely not be able to continue working all of the hours I do now. I’d have to start paying for all medical benefits, and I’d be making less money.

I’d also, ideally, want to work less so that I could be around more for my daughter.    

To say my life would be turned upside down if something happened to my wife would be a HUGE understatement, and life insurance would help greatly to allow me to move forward with life. 

Unfortunately, this entire situation is even more serious for a single-parent household.  If you pass away, will your children’s other parent or guardian have enough money to provide for your children in a way that you’d feel good about? 

Children cost a lot of money. According to the U.S. Department of Agriculture, families spend an average of $269,520 to raise a child from birth through age 17.

We all want what is best for our children, and we want them to have every opportunity for the best life possible!

For those who are married but have no children yet, it is still important to think about whether your spouse would be able to cover all costs if you were to pass away, especially if you own property or have large debts to pay off.

If you do eventually decide to have children, remember to reevaluate your life insurance needs before your children are born, that way the father is insured in case anything were to happen to the mother in childbirth, and you will both be covered if anything were to happen to either of you as your children grow up. 

Figuring out an amount of life insurance to buy does not have to be complicated, and just remember that having ANY life insurance is better than having none at all.     

If you want help in determining the best amount for you to purchase, then go to this life insurance needs calculator and input your information.   

If you have a spouse and/or children, then the most important thing is that you have life insurance in case you were to die prematurely. 

Since the cost of a life insurance policy is a concern for most of us and if you cannot afford to pay much for life insurance, buy the highest amount you can afford for the duration that best fits your needs and your budget.

A 10 year term plan is usually the most inexpensive policy to purchase due to its short duration.  

While 10 year term may not be the perfect coverage, it’s better than having none. You could always buy longer coverage later, or you could convert any portion of your term policy later if you may not be able to qualify for a new policy later due to a health issue.

You do have a lot of choices on what type of life insurance to buy, but don’t hold off on purchasing it because you’re not sure what policy to buy. 

Feel free to call me at 1-800-380-3533 or email me at [email protected], and I’ll show you the best rates for ALL life insurance products available to you.   If the lowest rates are not the best value, then I’ll also make a recommendation, and you can choose the rate and product that you feel is best for you.   

Just ask for G3 (Gordon III) if you call, and if I’m not available, you can always ask for G2 (Gordon Jr.).