The Insurance Nerd – Life insurance for Life Events

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I’m a fan of that feature on Facebook where you can create a Life Event. From graduating college, to getting engaged or married, to having a baby, to buying a cat, to buying a house, to getting divorced, you get to set aside those really big milestones from the rest of the chatter and awesome Infinity War memes you post the rest of the time.

Anything that might trigger you to create a Life Event on Facebook should trigger something else, too. Well, except maybe the cat. If you are posting about your new baby on Facebook or Instagramming your wedding or Snapchatting your graduation day, it’s a good time to review your life insurance as well.

When we have major changes in our life, it often triggers new financial obligations as well. When my fiancé and I bought our house recently, I realized that if one of us passed away unexpectedly and the other one had to carry the mortgage payment alone, the surviving partner would be in a world of financial hurt. I therefore set out to quote and apply for a term life insurance policy for each of us, with each other as our beneficiaries, that would last the duration of the mortgage and cover at least the amount of the loan. That way, neither of us needs to worry about being old and homeless alone. (If we end up old and homeless together, well, that’s another story.)

The question to ask yourself when you review your life insurance isn’t if you can afford it, it’s if you can afford to be without it. What would happen to your loved ones, financially speaking, if you died? What would happen to you if something happened to your spouse? Who would take care of your cat and do they need extra funds to do so? (Yes, you can actually set up a trust for your pets with a trustee and have the proceeds of your life insurance go into the trust.) If you recently graduated college, you may have student loans, and if you have a cosigner, you may want them as a beneficiary in case you pass away suddenly and they are stuck with the bill.

I know, I know, you are thinking, “I just bought a house/had a baby/adopted a cat! I can’t possibly afford another insurance premium!” The fact is, 80% of consumers think life insurance is more expensive than it really is. You won’t know until you at least get some quotes and take a look. Quoting life insurance requires only a little information to get preliminary numbers. Also, while 61% of Americans have some life insurance, around half of those are underinsured. If you are counting on just the life insurance your employer is paying on your behalf, remember that it A) is probably not very much, B) will go away if you leave that employer, and therefore C) you will be older, and possibly sicker, if you do lose it and decide to apply for your own policy.

Many people leave considering their life insurance needs until it’s too late in the game to buy it for a good price, if at all. If you wait until you have a major health scare or realize you are “getting up there” or that someone you know just passed away, you may pay more or not qualify at all. If, however, you take Insurance Nerd’s sage advice and think about it while you are posting all about your great new Life Event, you will be well prepared to provide for the future.