Why The Heck Do You Need Life Insurance Anyway?

Protect your family!!

This is a guest post from Aaron at Clarifinancial.

I was emailing with Brad last week when he suggested I write a guest post. “It would be nice to share with my readers the importance of getting life insurance to begin with,” he said.

With that goal in mind, I’m going to try to tap into some of that Brad-passion to explain to you why the heck you need life insurance anyway. I normally ramble in some emotional deep-water metaphor type of stuff, so this will be different.

Look, you make money, you own things, and (if you’re reading this site) you owe things too. When you die, some of that will stop; some of it will keep on going. If people depend on you financially (hint: your spouse, partner, or kids), you owe it to them to take some responsibility and look at life insurance.

Man-up! – or woman-up! as the case may be – and get your life insurance quote today!

But I won’t die

When people start to think about life insurance, they often put up barriers. It’s natural to do that because we are talking about your death. But ignoring the future will only get you so far. Plan consciously.

If you’re one of those people who thinks you will not die – you’re wrong.

I can tell you stories about friends, family members, and neighbors who died in a car wreck, died of cancer, died of a heart attack, died of respiratory complications, were kidnapped (as an adult) and never seen again – all under the age of 40. All of these people left their families behind. Sometimes, that included young kids, a pregnant fiancé, or mourning spouses.

If you think you won’t die in the next few years, that’s fantastic! Not a lot of people have that confidence. Go ahead and get out your calendar to mark down the date you will die. That will make planning a lot easier.

Not so confident when you have to put down a date, are you?

You will die. We all will. That’s part of life. It’s just a matter of when.

Now, most of my friends, family members, and neighbors are still alive. And if you’re thinking you don’t want to protect the people you love because it’s unlikely you’ll die, I have some good news for you – that’s why life insurance is so cheap.

Life insurance is too expensive

Sometimes I hear people say life insurance is too expensive. I say that’s bull horse puckey.

Do you know how much life insurance you can afford for $30 or $120 per month? Probably not, because you’re too busy complaining about how expensive it is. Stop that and do something about it today.

If you have looked and still thought it was too expensive, one of two things are likely:

  1. You didn’t get competitive quotes from agents who are actually competing to get your business, ensuring you benefit from multiple points-of-view or
  2. Your priorities are out of order, in my humble opinion. How much do you spend on iGadgets, cell phones, and cable? Spending a lot on life now looks selfish if your loved ones won’t be able to continue when the unexpected happens to you.

I have seen people find affordable life insurance quotes who had diabetes, heart attacks, epilepsy, depression, and more. Your foreign travel, acid reflux, and high cholesterol is probably not that big of a deal. Let the experts research it for you.

Life insurance is too confusing

If you haven’t looked at life insurance because it’s too confusing, I can understand that.

Sometimes it seems there is so much information out there that is directly contradictory. Or you hear about all the bells and whistles of this policy that are slightly different than that policy. Over 500 life insurance companies, no single agent can know them all, each with a few different plans, and each plan with its own choices!

Life insurance confusion turns into apathy.

Don’t let the “I don’t care” monster creep in, to the detriment of your family’s future. It’s important to take a meaningful step today.

Now, there are a few other ways of getting life insurance quotes. And if that’s the only way you are going to get started today, do that instead because it’s that important.

But let me tell you why you might want to check out Clarifinancial:

  1. We don’t ask confusing questions.
  2. We ask enough questions so different types of agents will be able to compete against each other and show you their best quote.
  3. We use a standardized submission process that gets rid of confusing add-ons and doo-dads. You just see what is important to you.
  4. Once agents are done submitting what they think is best for you, you get to actually choose the one that really works best.
  5. Only the one agent you choose can use our system to get in contact with you, eliminating the need for a heavy sales talk or a barrage of emails and phone calls you get through other quote processes.
  6. Clarifinancial doesn’t sell life insurance, so we don’t limit what options agents show you or which one you choose.

There are lots of places to get life insurance quotes, so if you find something you like better than Clarifinancial, go for it. But don’t wait a second longer, get started today. Then tell me why it’s better so we can keep improving.

Is life insurance a part of your financial plan?

About Brad Chaffee

21 Responses to “Why The Heck Do You Need Life Insurance Anyway?”

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  1. harm says:

    But if you don’t have dependents, you don’t need life insurance.
    Like those infuriating Gerber ads for baby life insurance….ripoff city.

    • The Planner says:

      You might not have dependents, but someone is going to have to pay for your funeral! Hope you have money set aside for that, so your family doesn’t have to have a fund-raiser or past the hat. I have seen that too many times, families go into debt because their son or daughter, brother or sister didn’t properly plan. In reference to insurance on children, yes “Gerber” is a rip-off, but insurance on children is just good planning. I pray you never have to experience having a child die, but there are final expenses at any age. The last thing a family should have to worry about when a child dies is how to do pay for the funeral.

  2. I recently got engaged and I’m looking for term life insurance right now. It really does get confusing though…

  3. Aaron @ Clarifinancial says:

    Thanks for the opportunity, Brad, and thanks for the comment, harm. To clarify what I think you’re saying: if you have a baby, it is a dependent and you have a responsibility to take care of his or her future. But the baby doesn’t have any dependents, so life insurance doesn’t make so much sense.

  4. kt- lifedividend says:

    it is not and it will never be. I dont think i will ever have to include it in my financial plan because of so many reasons and the fact that i dont really see the investment value of it

    • Brad Chaffee says:

      Once you have a nice size emergency fund, you’re right you don’t need it, but the truth of the matter is that none of us can predict what will happen to us and I know some people who have been saved by having life insurance in place. I’m glad you have things so figured out though. Good for you!

      The best policy is a twenty year term policy. If you do things right financially during that twenty years you will be self insured and will no longer need a safety net to catch life’s disasters.

  5. Jeff Ryan says:

    Finally!! I’ve been preaching this to everyone myself. Mostly family. I’m glad to see somebody took the initative to write about it. Life insurance is a duty to your love ones….unless you don’t really love them.

  6. If you’re a 30-year old, chances are you’ve got half a century or so before you kick, less if you’re dumb enough to smoke. Of course your income will vary throughout any insurance term, but it’s reasonable for the insurer to assume that your income will rise throughout your work years then decrease once you retire. The insurer calculates the likely existence trajectory of someone in your position, then determines that a typical term policy for someone like you should cost around, say $100 a month. If you die via a cause approved by your insurer (who probably won’t let you, say, jump in front of a train and then have your spouse and kids expect a windfall), your beneficiary will get something like $125,000.

    But you’re almost certainly not going to die during the term. In any event, your spouse can work. (If you don’t have dependents, you must really hate money in order to own life insurance.) Besides, well before your 30-year term elapses, your kids should have stopped relying on you to provide for them anyway. That $1200 a year can go into far better investments, ones that don’t require you to die.

    You can’t win with life insurance. Your death, while a foregone conclusion, is hard to predict the date of. In fact the more accurately you can predict the date, the less likely you’ll be to find a company willing to insure you. And the higher the premia you’ll pay. If you want to invest for your descendents, try index funds, blue-chip stocks…even something as conservative as a certificate of deposit offers you a comparable return with way less risk of losing your investment (if you buy a term policy.)

    • Brad Chaffee says:

      With no dependents I agree, however, I would never spend $100 a month on life insurance because term life insurance is very very low cost. Life insurance isn’t intended to be an old age death benefit as much as it is supposed to help your family in case of an unexpected death. The fact that you just don’t know if something could happen to you or when, is a good enough reason to make sure you are covered should something happen premature of old age. Plus you mentioned the word investment and insurance is not meant to be an investment, it is meant to protect. Buying insurance as an investment is really really stupid and usually involves a whole life policy.

      Maybe it’s not for you, but that doesn’t mean getting life insurance is worthless.

    • Aaron says:

      @Greg the thing you’re missing is that insurance companies have the law of large numbers on their side. They have enough insurerds to spread the risk out across, so the averages come into play. Any individual only has one mortality to risk. The averages don’t matter nearly as much as what will happen to that particular person. The only way for someone to put the law of large numbers when it comes to their mortality is to transfer the risk somehow along with others. The potential risk is so great, foregoing the coverage to invest it is incredibly aggressive. I’m surprised to hear you mention such conservative investment options. And BTW my neighbor died at 38 with no life insurance two years ago. Young people do die, it’s just unlikely, which is why life insurance is so affordable.

      • Fair enough. I just think people are indoctrinated to believe they need SOME life insurance, then they thus try to determine WHICH type of life insurance, instead of asking the more fundamental question about whether they even need any.

        /perfect health
        /wife makes great money

  7. Sam says:

    A big YES! I surely don’t want to die anytime soon, but we never know. I have kids, and I don’t want to have them begging relatives for shelter, or simply just for food. And what’s nice about insurance policies is that some offer you a cash back if you outlive the term or maturity.

  8. Jenn says:

    When my husband started working after college, his employer provided life insurance and an assortment of other medical benefits (eye, dental, prescription etc). When we married he added me to his company plan for about $5/pay. When I started working after university I had the same arrangement with my company and added him to my plan.

    All was well for 20+ years. Then my husband had a stroke at 41. I got him to the hospital immediately and he got the medication you can have only in the first 3hrs, so no after effects.

    Two years later, he was laid off after 25yrs at his first and only employer. Now with his medical history, and being in his mid forties he is considered a higher than normal risk and therefore only qualifies for his new employers basic life insurance, equal to 1yr of salary). To top up to the $500 he previously had we now pay $255/mth for a 20yr term policy for both of us.

    Lesson to be learned: even if your employer offers great free or low cost insurance, get your own indepentent coverage while you are young and healthy. With every passing year it becomes that much more expensive to get life insurance – if you’re like most people you aren’t getting any healthier as you age. You’ll never be able to replace your cheap employer insurance at the same rate and if you’re laid off or retire early you don’t want to arrange a new policy at that point.

    • Jenn, I completely agree with you. Get Life Insurance while you are healthy. I know so many cases…It is just people do not like to talk about death and avoid planning. But all people age and, eventually, die. Death has always been an experience that a lot of individuals do not wish to talk about, especially when it involves the burdens the departed can leave on his or her loved ones.

  9. carloan guy says:

    Life insurance guaranty financial stability as time comes. It’s the most rewarding financial preparations that ensures the future of our family. As we may now ignore this fact maybe because of our present situation and still enjoys life, it is accordingly essential to be prepared for the uncertainties that life brings.

  10. Dante says:

    I prefer my own emergency fund way, the bank account way. I’ve heard horrid stories about some companies and the way they screw people. I remember this one when an old friend of mine paid close to 20 years worth of premiums until that specific company hired some new people and mess up the plans all together. Some policy owners lost allot of money including him and have to pay even more for premiums. I’ve heard allot of stories from this, sleezy agents stories, misleading presentations, etc.

    It’s hard to find a really good company but by saving yourself allot of stress, either invest another plan or bank account and call it your own emergency fund.

    Just calculate the costs and once you filled that mark, tada, you got yourself a nice permanent emergency fund.

    As for life insurance, I have no interest about any of their benefits which really isn’t that effective although I’ve heard better benefits elsewhere.

    That’s pretty much my opinion.

    • Aaron @ Clarifinancial says:

      For most working folks, the amount of life insurance you need is reduced by your assets. So once you have enough assets set aside, you may find you don’t need life insurance. However, saving enough to support your family could take quite some time.

      At least you need a plan to fill in the gap. Life insurance is the cheapest way I know of to make sure your family has the money they need until you have enough money saved up.

  11. Sam says:

    A big YES! I surely don’t want to die anytime soon, but we never know. I have kids, and I don’t want to have them begging relatives for shelter, or simply just for food. And what’s nice about insurance policies is that some offer you a cash back if you outlive the term or maturity.

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