Later this year, the first of my husband’s and my term life insurance policies expire.
Twenty years ago, I found out I was pregnant. In between waves of nausea I remember thinking “We should get life insurance”.
We chose 20-year term life insurance policies. Term life insurance pays a benefit in the event of the death of the insured during a specified term. It is especially important for people with young children.
In the event of an untimely death, life insurance helps the surviving spouse and children maintain their lifestyle. It’s important for anyone with earnings, but also for stay-at-home caregiving spouses. If the caregiver spouse dies how much would it cost to hire out all the tasks the caregiver did? (Answer: a lot)
So for nearly 20 years two auto-debits to Banner Life Insurance have gone out of our checking account on the 26th of every month.*
The baby is now in college.
We are older and grayer. Fortunately we are still healthy.
When the policies expire, instead of lamenting loss of those premiums, we will celebrate our good health.
We might have unhealthy cupcakes like these:
Term insurance doesn’t cost a lot – especially if you’re in good health.
Today a 34 year old non-smoking female with the highest health rating can buy a thirty year million dollar policy for ≈$30/month. Why is it so cheap?
Because very few term policies pay out.
A healthy non-smoking 34 year old female is not very likely to die by the time she is 64. But an unlucky few do. The 97 or so women with policies who outlive their term are the source of funds for payout to the beneficiaries of the 3 who don’t make it.
There are lots of ways to waste your money: Lottery tickets, cheap plastic crap, expensive coats requiring all new accessories. But term life insurance isn’t one of them.
*Paying the life insurance premiums annually works out to be a little less expensive than paying it monthly. But an annual payment can’t be on auto-debit. I love the convenience of auto-debit. I never have to think about it. I never have to worry that the policy will lapse because I missed a payment.