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Have You Had The Life Insurance Talk?

Playing at SunsetIf you’re like me, you think about living to a ripe old age, where your days will be spent telling the grandkids about the olden days when you had to type on actual keyboards, uphill, through the rain to get any work done. No one wants to think about the alternative. Realistically, you never know when your time is up. Because life is uncertain, you need to have the life insurance talk with your significant other today.

When Do You Need Life Insurance?

Its a judgement call, but I think there are several instances when you absolutely can’t do without life insurance.

If you have dependents who rely on your income to live, you need life insurance. If your income helps pay the monthly bills, how would your family fare if that income was suddenly taken away? You don’t want your spouse to worry about how to feed the kids, especially when dealing with grief.

If you have a mortgage, I think it would be wise to have enough coverage to pay it off. That way, your family won’t have to worry about losing their home.

If you own a business that needs working capital generated by you, I think you need life insurance. In my case, my optometry practice would probably be okay with current staff for a while, but I would want my husband to have enough money to be able to hire someone to take over the day to day operations until he could sell it or learn how to manage it himself.

How Much Life Insurance Do You Need?

That is literally the million dollar question. The more life insurance you have, the more you will pay in premiums. You don’t want to pay for more than you need, but if you get hit by a bus tomorrow, your survivors might wish you’d had double the coverage.

I think a fair way to look at it is to see how much your partner needs to pay the bills without your income.  As I mentioned before, I would also leave enough to pay off the house. After that, you should decided if you want your spouse to be able to stay home for a while to cope with upheaval.

Other things to consider are whether or not you want to leave enough to pay for your children’s college education or your daughter’s wedding. I can’t imagine how sad it would be for my loved ones to go through major life events without me, but what a gift if I could at least leave them comfortable enough so they don’t have to worry financially.

How Do You Have the Life Insurance Talk?

Talking about life insurance with your spouse is hard. I am pretty open when talking about my wishes, but my husband is very averse to even mentioning anything related to the grim reaper. Once we had a child, though, we realized that life insurance is too important to put off.

I used to go to a yoga class taught by one of the healthiest people I’ve even known. She was in her early 30’s and had a two year old. One Saturday, although there was no past history of breathing problems, she died after a severe asthma attack.

Another lady from my home town was only 34 with two small children when she fell down the stairs and died from a broken neck.

I’m sure you can think of tons more examples where people’s lives were tragically cut short. I’m not going to worry about things like that, but I am going to be prepared. Of course you want to update things as your situation changes, but after you have the life insurance talk and get everything in place, you don’t have to worry about it anymore.  You can check it off your list and go about enjoying today.

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About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.

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