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Let’s Talk Life Insurance

Life insurance is a pretty boring topic, right? At least that’s what I’ve always thought. But then I became self-employed and lost the company-paid policy that I always took for granted. It occurred to me that I needed to find some way to make sure my son is taken care of in case I die in a freak accident. Not that I enjoy thinking that way, but how many people know when they’re going to die and have time to prepare? Very few.

My situation is interesting because, while I’m raising my son on my own, my ex-husband does still exist and should take over responsibility for Jayden’s well-being if someone happens to me. Notice the word “should.” To be honest, I can’t depend on him for anything, even when it comes to our child. So I have to plan ahead.

There are tons of articles online that provide a basic overview of the types of life insurance policies you can purchase. I’m not going to get into the “term life versus whole life” debate here because this post would be 100 miles long, but it’s important to know what you’re getting when you sign up for a policy. The last thing I want to do is die thinking everything is peachy when I’m really leaving a big mess for my family to clean up. If I’m going to pay for something, it better provide for my son’s needs if I’m gone before he’s able to take care of himself!

Budgeting for Life Insurance

When I left my job last winter, I had to work the cost of a private life insurance policy into my monthly budget. I added a small policy to my health insurance plan, but it would basically only be enough to pay for a burial. I knew that I could get a decent rate since I’m young and relatively healthy, so I decided to run some numbers through a life insurance budget calculator to see how much I could get.

I was shocked to see that, based on the calculator, I could get a $1 million policy for as little as $25 a month. Of course the actual pricing depends on a number of factors – that was just a generic estimate based on age and gender – and my actual policy isn’t quite that amazing. Still, I figured life insurance would cost a lot of money and I was surprised to find out that it doesn’t. Especially when you’re young.

Who Needs Life Insurance?

If someone else depends on your income, you need life insurance. It’s that simple. Since I have a teenage son, there was no question for me – I have to be able to meet his needs even if I’m dead (at least from a financial standpoint). Knowing that he’ll be taken care of allows me to worry less about what would happen if I die young and more about what’s happening right now.

Do you have adequate life insurance coverage? Does it squick you out to talk/think about dying?

About Andrea Whitmer

Andrea is a freelance web developer and mom trying to maintain a sense of humor in an otherwise chaotic world. She blogs in hopes of helping others avoid the same mistakes she made in the past. Join in the discussion here on So Over This, or connect on Twitter, Pinterest, Instagram, or Google Plus. You can also subscribe to new posts via RSS so you never miss out!


  1. Thankfully, no one depends on my 17 year old part time job income, so I'm safe.
    I know both my parents have life insurance, and I have had several conversations about what would happen if there was a freak accident and they both died. I *think* my family is prepared for the worst.

  2. I am underinsured but not really too worried about it. We are in the process of shopping around for it though. The main reason I am not really worried is that we have a very nice nest egg and a paid off house, so if I dropped dead tomorrow my wife would be ok, not great, but ok. She would also get the joke of a policy my work provides for me.

  3. I am actually underinsured and I am looking at getting a additional policy for the future. I like having two policies to protect me if one goes under or if they somehow reneg on their promise.

  4. momoneymohouses says

    I know I have some insurance through my work, but once I get hitched I definitely want to look into getting some more. I think. Ok, I clearly need to do some more research on what I've got and what I'm missing, but I definitely don't want to go without having it (you just never know what could happen!).

  5. I have enough for my wife to pay off mortgages and to cover my lost income, but I also didn't want to leave so much to make any future boyfriend rich. It doesn't freak me because it's going to happen one day.

  6. Canadianbudgetbinder says

    We both have life insurance policies and through work as well. We're hoping that come January it will go down in price since we quit in January as we currently pay $135.05 for both our policies as smokers.

  7. Life insurance is a quick way to build an estate for your son should the need arise. Probably equally important for you to address the guardianship issue, especially if you have doubts about your ex-husband's willingness/ability to take over and raise your son.

    • Fortunately that part is already taken care of – my parents would have physical custody and share legal custody with my ex. I just don't want my parents to be financially responsible as well.

  8. Absolutely, if someone depends on your income and that income would go away if you died (in other words, it isn't from investments) you need insurance. Also, as you said, it is really cheap if you use term insurance. Note that you will do far better buying term and investing the difference than you will do by buying whole life and getting their joke of a savings plan. Everyone should have at least 10 times their income until they have that much in the bank.

  9. Your timing couldn't be better Andrea! As I'm going through a divorce at the moment I will be needing to increase my life insurance dramatically. One of the many things on my growing to do list!

  10. Did you actually buy the life insurance yet? Just curious how much it cost. We have good policies, but we plan to buy more soon because the ones we currently have will expire when our youngest is only 15. Not good.

  11. kimateyesonthedollar says

    I hope what we have is adequate. I guess I'll never really know because I'd be dead. It does weird me out to think about it, but not planning makes me feel even worse. Can you set it up so your ex couldn't somehow spend the money if he ended up taking care of your son? That would be a worry that whoever I left in charge might blow the money.

    • Luckily my parents are listed as the beneficiaries. They would also get physical custody of Jayden (sharing legal custody with my ex) if something happened to me. So I don't have to worry about him being taken care of; I just don't want to saddle my parents with the financial burden if the worst happens.

  12. I am severely under insured. I have a tiny policy my husband took out on me thru his employer. I am still a student and my husband doesn't depend on my income. I only have student loan debt and all would be written off should I die. I have some retirement accounts that would help my husband out a little but for the most part, he wouldn't be left with massive debts or struggling to pay bills. When I am finished with school I will be taking out a better policy for me.

    My husband, on the other hand, is highly insured. He has a decent policy thru his work and his mom took out a large policy for him when he was younger and now I am the beneficiary on that policy. Husband has no debts.

  13. I actually got critical illness insurance a few years ago. Because nobody depends on my income at this point, I was more concerned about being a financial burden on my family if I got sick. I have to say, that being self-employed this also gives me a HUGE sense of peace knowing that if I get some critical illness, my mortgage and expense will be paid for and I could focus on my health instead of bills. It's costly though… it costs me about $150/month.

    I didn't think I could afford life insurance at this point, which isn't smart since the old I get the more expensive it will be. I tried the calculator and am pleasantly surprised that it's not that it wouldn't be as bad as I thought (keeping in mind that my insurance company's cost will likely be higher).

    As a business owner though, I strongly recommend disability and critical illness insurance.

  14. When we both went self-employed, finding life insurance followed finding health insurance by one week. We ended up with $250,000 policies for a total of $30 a month. Sounds good to me…

  15. Both my husband and I have $500,000 of life insurance on each other and wills that would establish a trust for our little girl if we should both die simultaneously. I would much rather plan and then not think about it again than be too squeamish to plan in the first place.

  16. My boyfriend and I both need to buy life insurance, since we depend on each other for business. I'm shopping for a plan for him right now.

  17. Life insurance is really important topic to discuss. That is so fine to have it hand and use it any time I need it.

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