Should We Buy Life Insurance? And, How do We Not Kill Each Other for the Money?
Welcome our bi-weekly column, “Ask a Grown Up” in which you can ask and have your most burning questions answered by a supposed grown up.
Howdy-doody (heh, heh doody) Broke-Ass-a-roonies! It is I, Kate, the smartest of alecks, the most supposed of grown ups here with another installment of Ask A Grown-up, your questionable bi-weekly agony aunt column.
Did you know that “Agony Aunt” is what they call advice columns in England? (And, Ireland, too, I think.) Neat fact, right? I digress… let me get right to it.
Much like this column about Social Security, this week’s question is a “little” more serious in nature, with real grownup information needed. There is a twist, though… stay through for it.
MM in LA asks…
Supposed Grownup! Should my partner and I buy life insurance; then, how do we keep from murdering each other to get the money?
Oh MM, think you’re hitting me with a hard one? Haha, I say! As it happens, my #BritishHusband and I have actually been talking about life insurance recently! We are middled aged parents of a (nearly) one year old child, we are concerned that something could happen to one or both of us before she is able to fend for herself in the big, bad, ugly world. We have been researching getting life insurance and debating what type of life insurance to get. So I know a little something something about this topic at the present moment.
The main questions you need to ask before buying life insurance are: How much can I afford to pay in a monthly premium? And: What is my goal for this life insurance policy?
There are two basic types of life insurance – Term Life and Whole Life – and, both have different costs and benefits. Let’s break it down:
Term Life Insurance
- Often has much lower premiums ($25-$35/month) with the a similar death benefit as Whole Life policy
- Has a fixed term of 25-30 years
- Does not accumulate interest or provide a cash benefit during the term of the policy
- When the policy ends, if you are still alive, you do not get any of the money you’ve invested back
- Typically taken out for protection of a specific goal such as covering a house payment, funeral costs, tuition, or other bills in the case of an early or unexpected death
Whole Life Insurance
- Has higher premiums ($250-$500/month, depending on policy benefit) and has a guaranteed death benefit
- Covers you for your whole life up to age 120 (typically)
- Does accumulate interest and provides a cash benefit during the term of the policy (you can access the money at any time and use it as equity to guarantee loans for other purposes)
- Policy does not expire, your beneficiaries will receive a death benefit whenever you die
- Typically taken out to build wealth and provides coverage for estate taxes or death taxes
As far as the general question of should you get life insurance is concerned, yes – in my opinion – you should get life insurance of some type to protect you and your loved ones against the unforeseen. It is never a bad idea to plan for the future and life insurance is one of the many tools in your financial toolbox that will allow you to do that. Using my family as an example, we –of course– want life insurance to cover us both, as we want to protect each other and our daughter from having to deal with unexpected expenses should one of us die before she reaches the age of maturity (and, let’s face it, the age of maturity these days is like 30 years old… JOKING, but not really.)
Given that I’ll be 63 when this child graduates from high school, it’s not unreasonable to think that something could happen to me before she’s ready to handle the financial world on her own. In other situations, if one partner earns substantially more than the other, life insurance is good protection for if something unexpected happens and will allow you to cover your household expenses and funeral costs.
Just because you’re young and healthy and beautiful doesn’t mean you shouldn’t purchase protection.
Then you need to answer the question, “How much can I afford for life insurance?”
I’m suspecting that if you’re reading this website then you are much like me – broke AF. Given this, you probably will be restricted to the type of life insurance you can purchase. Whereas, a whole life insurance policy will cost you upwards of $3,000 per year, a term life insurance policy costs much, much less.
But, then what if your goal for your life insurance is to build wealth and savings? Well then, you might actually want to consider a whole life policy… except: Most term life insurance policies allow you to convert them to whole life or universal life at some point within the policy. (Usually before the age of 70.) Meaning, that if you’re broke now, get a basic term life policy and then when you are more financially stable, convert that sucker to build up your bucks.
Additionally, there are a few other things to consider when buying life insurance. First of all, you need to know that (unlike most other places in life) women are preferred customers and get better rates for life insurance than men do. Life insurance rates are based on mortality tables, and unfortunately, women just live longer than men – so they are considered a better investment by insurance companies.
Further, it’s important to consider your family medical history when applying for life insurance. If your family has a history of diabetes, heart disease, cancer, or other chronic illnesses, such as depression, you need to consider getting coverage when you are young and healthy to protect yourself from the potential health issues you might face further down the road. You can get coverage if you get sick later in life, but it is difficult and expensive.
Lastly, if you are a smoker, heavy drinker, or hard drug user you are going to face a very difficult time finding life insurance at all. Smokers pay up to 300% more in monthly premiums, and heavy drinkers/hard drug users are often denied coverage.
So clean up your lives, you animals!
As far as the murder question is concerned… well that’s pretty simple.
Just. Don’t. Kill. Each. Other.
Or, if you do, make sure to cover your tracks. Definitely do not skin your partner and display their pelt, decapitate them, boil their head, and butcher their ass cheeks as steaks and feed them to your partner’s children like Katherine Knight did… Do not torture and dismember your partner, then store their remains in a blue barrel in a garage like the Snowtown killers did… Or, call the cops and cry about having murdered your partner like The Weepy Voiced Killer did. Also best to avoid poisons (unlike The Black Widow and Jim Jones) and FOR SURE don’t buy into anyone on social media saying they’re a MI6 agent and you need to kill your partner as a loyalty test.
Really, just don’t murder each other would probably be best and easiest. Everyone dies eventually, am I right? Just be patient and wait.
Got a burning question (you should see a doctor about that) you need Supposed Grown Up to answer? Email firstname.lastname@example.org and we’ll see how we can help you with your condition.