I called a local financial advisor last year and in our conversation he mentioned a few things he always wants to make sure his clients have.\u00a0 The things he suggested always having were life insurance and a will\/trust, especially if you have children and\/or assets.\u00a0\u00a0<\/p>\n
Here is my journey in the arena of life insurance.\u00a0 \u00a0 Since my profession is a popular one and I belong to a national professional group, the national professional group offered cheap term insurance, and I decided to pay the premium monthly amount for $100,000 coverage.\u00a0\u00a0The same year I married, we also purchased our home.\u00a0\u00a0After getting married, we went to the same insurance agency that we purchased our home insurance through, but weren’t sure how much coverage we needed.\u00a0 At this point we had no kids and our largest expense was our mortgage.\u00a0 I have heard suggestions of getting 10x your annual income, or variations of what amount of $ you would need to cover if your spouse passed.\u00a0 We ultimately decided to have enough coverage to pay our home mortgage off, so we wouldn’t have that worry on our plate.\u00a0 Our insurance person asked if we wanted term or whole life insurance.\u00a0 Not knowing, we ended up choosing a mixture of term and whole life.\u00a0 It took me 10 years to come to my senses and cancel the whole life, which was 6x more expensive than a similar amount term life insurance we eventually signed up for.\u00a0 When each of our children were born we reevaluated if we had enough life insurance.\u00a0 We ended up sticking with the amount $250,000 and my employers also had $50,000 coverage.\u00a0 Our mortgage amount owed was decreasing, and my husband’s social security would give some benefits to the children if he passed.<\/p>\n
I have heard other experiences with those with whole life.\u00a0 A close family friend’s wife had a failing organ sickness and wasn’t able to be covered under most insurances as she had a preexisting condition.\u00a0 Mony Insurance company was willing to have a dual whole life policy on the husband and wife that would pay out after the death of both.\u00a0 As the death of his wife was thought to be soon, they took this policy out for a million dollars with the beneficiaries being their five children.\u00a0 The yearly premium for this policy has been between $8,000 and $9,000 every year.\u00a0 The couple’s understanding originally was that the dividends on the invested money in this policy would potentially cover the yearly premium, so far the yearly dividends have been a couple hundred dollars.\u00a0 This couple, thank fully are both still alive after 28 years.\u00a0 They are still paying upwards of $8,000 a year on this policy and all their children are older than 30.\u00a0 Those who sell whole life insurance would emphasize the cash value of this policy, as it is now over $300,000 that the couple could tap as a low interest loan.\u00a0 Whole life policies are a blend of insurance and investments, but I don’t think those two should be mixed.\u00a0 Whole life policies tend to have high commissions to the seller of the policy.\u00a0 Be careful.\u00a0<\/p>\n
Another friend I have lost her husband when their children were very young.\u00a0 He did not have life insurance as he had high risk factors in his life which made life insurance very expensive.\u00a0 He had social security and those benefits are paid to his children a little bit each month.\u00a0 As the sole provider of her family of four, this friend wants to be assured the guardians of her children will not be monetarily burdened by inheriting her children if she passes, will be able to upgrade their home if needed, and that some money for college will be available if her children go that route.\u00a0 This friend has a $1,000,000 policy.\u00a0\u00a0<\/p>\n