(SHAMELESS PLUG #43)
I have been working with insurance for over 10 years, and always talk to my clients about the peace of mind aspect that life insurance can afford. Let’s face it, already losing your spouse is tragic enough, but compound this with the fact that life just does not stop, adds extra pressure to the situation. From bills to the children’s schooling, mixed with the fact that there is not an extra hand to help, all can contribute to a cornucopia of issues.
Sometimes, those issues lead to depression, self-medication and a feeling of being alone. I know, I have faced these issues and more. My wife of 17 years (26 years together), passed away last year.
A real-life insurance policy is helping to address my family’s financial needs, while I recover mentally from this loss. 1 year prior to her sudden illness and death, I had just opened my own insurance firm. She was the steady income driver (A school teacher) while I worked to build my business. Things were moving well until her passing.
We always used to talk about how the cost of our insurance was so high. We were in our late 30’s when we obtained term life policies, mine was a lot higher because I am a smoker, but still really affordable. She had a good policy from her job but I had nothing, because I was self-employed and convinced myself that we could not afford one.
Soon after, I sat down and started looking at our spending and realized that we spent so much on the extra comfort features of life and truly did not plan well, but could cut-out and move some things around to afford it, heck we paid over 160/mo. just for cable. A September, 2016 article in “Fortune” said that cable prices averaged over $103.00/ per household. We would both hmm and haw about not being able to do so things financially because we had to pay our premiums. I am so glad that I did not listen to myself when I considered cancelling our policies to save an extra $160.00/mo.
While I re-build my life with my two daughters, the financial benefits are helping to pay my oldest child’s college bill, my mortgage, food bills, my youngest (15 years old) needs, and keeping us in a general life-style that the family has been accustomed to for many years. We have also learned to better manage our lifestyle, in order to save money.
No one wants to believe that a loss as devastating as a spouse can have so many ripple effects. It is coming up on 1 year in June and I am still a basket case (better than I was, but still a mess). Being able to use these funds to keep us going for the next few years is helpful because I can concentrate better on what needs to be done, look for ways to supplement my income (my life insurance income is not endless) and adjust to life without my best friend.
Experts say 7-10 times your annual salary is what you should be looking to obtain. I will take that a step further and consider that for the next year or two, you may be in such a flux that may affect the way you normally function (causing possible job and income disparages). I would say consider at least 9-12 times your annual salary to account for the transition period that you will face in the absence of your spouse. Larry Light, is a contributor to Forbes and wrote a 2016 article on the need to have the best options. Larry stated, “First question: Do you need life insurance at all? If you have dependents to protect and don’t have enough savings, you definitely need insurance.”
You can obtain affordable, reasonable and extremely valuable life insurance. There are always some things that a person should take in consideration:
-Lifestyle (you must be truthful with yourself. It may surprise you).
-Time horizon with amount (how long do you want to supplement income for)?
-Present bills (utilities, mortgage/rent, daily needs, etc.)
-Children’s needs (sports fees, school fees, and daily life needs)
-funeral expenses (Average burial over $10,000.00).
-Future bills (college costs, travel costs, vehicle maintenance)
-Your age is a determining factor in your premium
-Health condition may rate (help determine cost/risk) or exclude you from being insured
-Activities you participate in (EX. Sky-driving may exclude or highly rate you)
Please excuse the length, but this is a serious topic that demands a more in-depth discussion. There are a variety of companies that offer options. I work with AFLAC for small group policies and Farmers for individuals. Contact me at (973) 518-0676 or email me JLC3Consulting@gmail.com, for additional information.