Well it has been an interesting night at work tonight. But before I can explain it I need to do a quick back story.
The town we live in has a real bad stretch of highway running into and out of town. It is so bad that there have been6 fatalities in the last week of March on this road. 46 if you want to count the 40 sheep. 5 of the accidents were from passing in a double yellow zone, in a hilly section. Head-ons. I'm sure my Sacramento readers have seen it on the news. All the accidents on Highway 12.
Well the most recent accident was on Sat. morning around 6:00AM. A guy was passing at the base of a railroad bridge. He was .17 BAC. The limit in Ca. is .08. The BAC was taken 3 hours AFTER the accident. It took that long to cut the driver out of the car. He survived. He also had cocaine in his system and 1.5 pounds of crank (meth) in his back seat. Cops found 2 more pounds of crank at his residence. Along with several thousand dollars. He was doing approximately 95 when he went head on with another guy. Killed him.
Well tonight I found out that the guy that died was the next door neighbor to a guy that I work with. The guy was the same age as me. Had a wife and 5 kids ages 3-12. He was on his way to work to work some overtime to pay for a trip with his family. The sad thing is that the guy from work was telling me is this. Having 5 kids a wife and a mortgage life insurance was the last thing o his priorities list due to finances. So his wife is now dealing with the loss of her husband but also the threat of losing her house as he was the sole provider of the family.
I commented to the coworker that I'm in the same situation. Life insurance is not at the top of my list of things to spend money on. So he proceeded to lecture me for a good 15 minutes about all the reasons that I need life insurance.
So after I'm done talking with him I'm driving down the levee roads to my next destination and I start to have an anxiety attack. First one since I have been taking my meds. (Which I have been very poor about taking lately since my schedule change.) I was thinking about the fact that this guy was the same age as me. 33 years old and now he's dead. Just like that. No warnings or anything. then I started thinking about what would happen to Summer if I were to die tomorrow. Happy thoughts right? Then it hit me. My chest got tight and I had a hard time breathing. My vision blurred a little bit. I was listening to this song on the radio by Green Day. The faster the song got the tighter my chest got. It was really weird. It lasted for a few minutes. Then went away.
So here's my question to no one in particular- How do you choose a life insurance company? How do you determine what type to get? Life or term? What does that mean? How do you determine how much is necessary? Am I over reacting? Tell me! I need to know! It's 1 AM. I should be in bed right now!
6 comments:
Life Insurance is for emergency protection, not for savings so first off at your age you should always buy term insurance as you get more protection for a cheaper premium than you do with savings life insurance.
As to how much is enough, determine how much is needed to pay off all your debts (including the mortgage), as well as support the kids until they are on their own, as well as SR. Of course how much insurance that you can afford to pay a monthly premium on will also dictate how much you can get.
As to where to get it, get in on a group insurance plan through your employer. Employee group insurance is the cheapest, best, and safest that you can get.
The younger you are then the cheaper the insurance premium is. I started buying life insurance when I was 21 and then gradually increased it over the years. As the family grows up and the house gets paid off, etc then you can decrease the amount of insurance that you need. Don't delay or you may regret it.
Not to mention, you need a last will and testament (in case you die) and a durable power of attorney (in case you live).
Ive never seen an employer plan that offered enough coverage.
You should be looking for term life insurance as noted above, with convertible features allowing you to convert to whole if you need to. You might conclude it isn't worth it but look for it. and don't forget to insure SR too. WHo's gonna take care of those kids if she's gone?
I second what lbp said in that group life usually caps out at $50K, though sometimes you can get more.
I believe your kids are older (for the most part), but I'd get at least enough coverage to:
a) Pay off the mortgage
b) Pay funeral expenses (sorry to be morbid)
c) Pay off other debt
d) If possible, cover your salary for a year or two or three so Summer can focus on the kids and not worry about working
e) If you can afford a little more, get enough to cover as much as you can in college expenses for the kids.
And at this point, whoever does your car and home insurance, should be able to set you up with life insurance or recommend someone else who can. The good thing about term insurance is you can pretty much shop based purely on price. Choosing the right whole life plan gets a lot more complex.
Just my $.02.
Good advice above. The most important thing however is not to stress about life insurance, it is the easiest and cheapest insurance you will ever buy and the only one that you will 100% need. You will die someday (hopefully a reeeeeally long time from now) but you can drive your whole life and never need car insurance.
Talk so someone, dh said your car/home provider and that is always a great place to start, you already have a relationship with them. Typically they recommend starting at five years of salary, that always gives you a good idea of the number at least.
The Will is also a part of this that shouldn't be ignored and you should also think about that, I'm not familiar with CA law, but there are some tricky things in many states that you have to protect your family from. Any decent family law attorney can help you, and they usually have a reasonable rate for that.
You aren't unusual, most people wait until their mid-thirties before they really start thinking about this stuff.
And, as always, if you need any specific advice, I am always just an email away. Just relax, take a deep breath and get it taken care of, for you and your family.
All of these are very good. The other person you wnt to talk to is your lawyer who has done your will - I don't know the laws in your state but the death tax takes a huge chunk out of what your heirs get, so you might want to make the beneficiary of your life insurance a Trust Fund that Summer Rose controls, rather than going to her directly to be considered income.
I have no life insurance advice. Just this, breathe, breathe, BREATHE! I've had panic attacks they are no fun at all! Hope you get this figured out... good luck.
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