» Why I Bought a $500k 20-Year Term Life Insurance Policy and You ...

by PT

A good term life insurance policy is something most people should have.

I’m sitting here writing a check for my life insurance premium. I’m so glad to have this process over with. As most of my regular readers know I’ve been talking about getting life insurance since the birth of our first child, seven months ago. The process has been a long one. But I’m finally done. The receipt of this payment will seal the deal on a $500,000 20-year term life insurance policy .

When I first started this blog I was clueless about life insurance. It’s just one of those products no one wants to talk about. I started caring about it about the time I found out we were having a baby. Over the past year or so I’ve picked up a lot of good information and formed an opinion about what type and how much life insurance product works best for me. I actually have a small policy through work, but it’s only for a small amount. I knew I needed more.

I decided term life insurance was the way to go (vs whole life insurance or some other product) for the following reasons:

1. I plan to self-insure in the future. Twenty years from now I won’t need life insurance. I’m planning on having at least $500,000 of my own at that point. I’m taking serious steps with my retirement and short-term savings so that as soon as I’m able I can drop life insurance and rely on my own stash.

2. I’m of the opinion that investing and life insurance are two separate things . Why the heck did investing and life insurance ever get involved? Insurance products that promise investing returns are just an expensive waste. Keep investing simple, inexpensive, and separate from your insurance goals.

3. It’s inexpensive now. I was able to get my term life, 20 year, $500k policy for around $45 a month. For what it’s worth, I’m in my mid 30s, a non-smoker, and in good health. My weight was the only thing that took me down from the elite to the standard rates.

Read more...