I guess I should be a grown up now.

I don’t know if you all are aware, but I’m kind of a rebel. I’ve lived the last 28 years of my life with reckless abandon. Doing something so controversial I rarely mention it on the blog. But today, it’s time I come clean…

I’m uninsured. 

I know, I know. You are judging me. Second guessing your very decision to continue reading. Doubting every piece of financial advice I’ve ever shared. I get it. I’d probably judge me too.

I’ve been married for a little over three years now, but never found a legitimate need to explore getting life insurance. I could have died six months ago and Girl Ninja would have been just fine. In fact, she arguably would have been better off. Here’s what life looked like for us a few months ago….

  • We were on a month-to-month lease.
  • We had nearly $100,000 in savings.
  • We had $100,000 in retirement.
  • We had no debt.
  • We were both employed full-time.

You see. I could have died, and it would have had little impact on Girl Ninja. Well, except for the whole being emotionally distraught thing. She would have moved out of our apartment, and in with her parents that live 20 minutes away. She could have sold one of our two vehicles (adding another $10,000 to savings). There was no income crisis as she works full-time.

Basically, she would have been just fine. 

Unfortunately, that is no longer the case. Now that we own a home, we have a couple hundred thousand dollars of debt to our name and a much larger house payment. If I die tomorrow, that payment isn’t going anywhere. A payment Girl Ninja couldn’t comfortably float with her income. She’d be forced to either sell the house, or begin renting it out.

So it’s time I man up and get myself some 20 year, level, term life insurance. After a quick search on the interwebz, it appears I can get $1million in coverage for around $30/month. In other words, for about $360 a year (what we spend dining out each month), I can take care of Girl Ninja even after I die.

SO WORTH IT!!!! 

I’ll be honest, I’m not pumped about spending $30/month on something I will most likely NOT use (fingers crossed), but I’d be way less pumped about  dying and leaving Girl Ninja up a creek without a paddle.

There really is no excuse for not being covered in my opinion. Especially when you think about all the dads paying $90/month for their iPhone, but wont cough up $20/mo for $500,000 in life insurance.

Have you been totally reckless like me? Do you have life insurance? If not, what is keeping you from getting your crap together!?

note: If you are single, have no dependents, or are self-insured via investments/savings, then I obviously wouldn’t expect you have life insurance 😉

32 thoughts on “I guess I should be a grown up now.

  1. I think that you have approached insurance sensibly to date – if you don’t need it, don’t pay for it.

    However, I think you’ve also made the right decision now. Man, it sucks growing up!!! 🙂

  2. Good thing you got the million. I bought a 100k whole life many years ago thinking that was a significant sum. Well, 100k is not that much anymore because of inflation. I recently bought a 20 year term for 500k just to beef up my whole life. Still not enough like your million but much better than “only” 100k. You might want to increase that term to 30 years. Better to buy more now than needing more in the future. Life insurance gets pricey when you get older and the needs seem to become ever greater…

  3. What about Girl Ninja? My husband and I have always both had life insurance ( which would pay out early if either of us had a terminal illness). Either of us would be able to afford our mortgage on our single salaries, but we would be far less comfortable.

    We also have a child to think of now. I know that if either of us died we would probably want to scle back work commitments if possible.

  4. Have you checked if you have a life insurance policy through your federal employment? I work for the Canadian public service and get enrolled automatically in our group insurance policy. It will provide my beneficiary with 3 years’ annual salary if I die. We are also DINKs and considering our current liabilities and our ability to cover them, this is enough coverage for me.

    We recently discussed this with our lawyer as we made our wills, and she suggested that I check first if I can add on term insurance through this policy as it would likely be the cheapest option.

    • This is exactly what I was going to say. Federal employees should have access to the Federal Employee Group Life Insurance program (FEGLI), and it is less per month…for now. Rates go up as you get older. With term life, it will be a flat rate for the next 20 years (I think?), so even though he could get it cheaper now, over the next 20 years I’m assuming term life would be cheaper in the end.

  5. We tried to get life insurance for my husband but he is denied each time because of type 2 diabetes. Not sure what will happen if something happens to him, as he is the breadwinner.

    • I hadn’t thought about that, but my husband has Type 1 diabetes, and I don’t think he has life insurance yet (he’s still in grad school). Just curious, was your husband trying to get private insurance, or through his employer?

      • Allie – my husband was a type 1 diabetic (he received a pancreas transplant – hence the past tense – for now). He is completely uninsurable under individual insurance: We can’t even get bank insurance on our mortgage. I don’t know of any companies that will insure an insulin dependent diabetic individually.

        Group / work insurance (in Canada), isn’t dependent on health up to a certain amount of insurance. We have the group life insurance we can get for him without additional medical evidence. When he leaves his job, most insurance companies will let you buy the existing insurance without any medical evidence. We will likely do this when he leaves his existing job.

      • Allie,

        I would definitely recommend that your husband apply now. Type 1 diabetics are an automatic decline with many insurance carriers but not all. And I can tell you right off the bat that you’re going to want to lock down a very long term or whole life now because as your husband ages the chances of him getting approved will go down significantly.

        You’re also probably going to be told by many agencies that as a Type 1 diabetic that he won’t be approved for traditional coverage and that he should apply for an “accidental death policy”. This may or may not be true, but if he’s healthy now and his A1C is reasonable, you should be able to get coverage, visit my link to learn more.

        • that’s a good point about no complications Brian: We didn’t have a reason to insure (no debts etc) until about the same time as the side effects from diabetes kicked into high gear.

          It leads to my belief that people should have life insurance even if they don’t think they need it: When you know you need it, it’s too late to apply.

          Accidental Death Policies don’t tend to pay out; there’s a reason it’s cheap.

      • I have type 1 diabetes, and I have a (very small) life insurance policy through my work. There are often smaller policies that don’t require any health questionnaires so they’re available to anyone. They won’t help with a mortgage, but they’ll at least help with funeral costs. Depending on where he works after graduation, that might be an option.

    • Jaime,
      Do you know why your husband was denied because of type 2 diabetes? With nearly 30% of American’s having “pre-diabetic” sugar levels, many insurance companies are beginning to realize that they are either going to have to loosen up on their underwriting guidelines or they simply aren’t going to be able to insure anyone.

      Diabetes alone shouldn’t disqualify your husband from all carriers. Maybe it was his diabetes and…
      weight, tobacco use, A1C, or maybe complications from his diabetes that caused the denial. Either way I would still get a second opinion, going without is just too much of a risk if it can be avoid.

      Lastly one other thing to consider, some agencies require that diabetic applicants have a minimum household income level before they would consider writing an policy for them. This is done at the agency level, and not by the insurance carrier themselves. Some agencies will do this to cut costs for the agency and has nothing to do with actually getting approved, so this may have been another contributing factor in your previous applications.

  6. Our mortgage insurance would pay off our home should one of us pass first, so the one left behind won’t have to worry about carrying the mortgage alone, or having to sell/rent it out. We both have insurance through our employers; both of our carriers have changed in the past couple of months, so I do need to read up on what our death coverage is. We’re DINKs (and that’s the way it’s staying), so it’s good to know that the surviving spouse will not have to worry financially. We do need to get wills done up; that the last part of being an adult we need to look at.

    I hate being an adult 😉

  7. It must be different in the USA b/c in Canada we had to prove that we had life insurance when we bought our house. At your age – get it NOW! Do not wait. It will become more expensive as you get older and get Girl Ninga some too (maybe not as much but enough that in the event that something happens to her and you have children that it will compensate for child care and raising costs).

  8. I have group life insurance through my employer that currently covers 2x my salary. We’re both young, and don’t have kids, so it’s probably going to be another decade before we think about getting life insurance policy separately. If I died, my husband could easily survive financially, and visa versa.

  9. I don’t have life insurance beyond the very basic coverage that is included in my health insurance I have through my employer (basically, it would pay out enough to throw me in the ground and that’s about it). I don’t plan to buy a plan, either, for the simple reason that I don’t have dependents. No one is financially dependent on me – my spouse and I both work and make about the same in income. I’d rather take the money I would be paying towards a life insurance policy and invest it. For us, I think that’s a better use of our money – but again, only because we don’t have anyone that is financially dependent on us.

  10. I got Life Insurance after my brother in-law died in a freak accident and left my sister with nothing until is Will was settled 15 months after his death. I was 40 when I got mine, granted that I do have a policy from work that pays out my base salary for 2 years, but that wasn’t enough I thought, so I got enough to pay everything off in case I’m gone. It bad enough to lose the person you love, but then be broke because of poor planning. I’m taking steps to make sure my family is taken care of when I’m not around anymore. I tell my kids this all the time ” it only takes 1 second for your life to change and it might not be your fault.”

  11. In your case you weren’t being reckless but were being smart. I’ve never had life insurance beyond what my company provides (2x my salary), which if I croak will I guess give my mom a good chunk of change. I have no debt (incl. no mortgage) so all I really need is money to pay for my bodily disposal LOL.

  12. No life insurance, not sure about my health insurance (no cancellation letter yet). I’m single and have a 120k left on the mortgage on a house I bought for 170k 2 years ago and over 200k in cash & investment. No reason for life insurance at this time.

  13. I’m a SAHM of 2 kids, so yeah, we have life insurance! Hubby has 3x his income provided by his work and we bought 1 million that will allow me to pay off the mortgage and continue homeschooling the kids. If he died tomorrow, I would probably not need to work until the kids went to college. I have 500k insurance which will allow hubby to pay off the house and pay for both kids to go to private school/daycare since I won’t be home with them anymore. His income will pay for their college educations as we already planned.

  14. I don’t think anyone should get life insurance unless they have dependents. If something was to happen to you, your spouse would just be single like many other adults in the world. Just my opinion! Above Canadian poster (Joanne), we’ve bought 3 houses and never had to prove life insurance!

  15. I’m a married guy with a kid and we self insure. I mean I do have a crappy policy through work and a crappy policy that my grandpa pre-paid for when I was a kid (and it generates more than enough to continue to pay for itself and gain in value). That policy is probably the entire reason why I don’t have any more insurance. My grandfather was lied to about what the policy was and who it would really benefit. As a result he soured on insurance and I am sour on it too. I get that it is great for most people, but I would prefer to self-insure at this point.

  16. My mom has actually had life insurance for me since the time I started college. I have now been out of school and independent for nearly 3 years but have yet to take over the insurance and the payments. I guess this is the one thing I am leaving to my parents then but part of me feel like what it the point since I am single and definitely have enough money in the bank to pay for any debt and funeral related expenses. Although, I know that now that it is there I should keep up with it and take over payments since it is the one piece of my finances my parents are still involved in. Oh and I also have like 10,000 life insurance from my job.

  17. I’m single with no dependents and I have had life insurance since I graduated from college (I’m 28). If I die before my parents I don’t want them to have the added stress of paying for my funeral or any debt I might have that wouldn’t be canceled upon death. I understand why some people think it’s not necessary to have life insurance in my situation, but I wholeheartedly disagree with them.

  18. Right after I got married to the love of my life I got a life insurance policy. I just want to know that if something were to happen to me, she wouldn’t have to worry finacially. There would already be enough stress for her to deal with.

    IF I was single, then no, I probably wouldn’t have life insurance. I might have a fund for my cats, but that’s a different story…..

  19. Life insurance is nice, BUT more important that life insurance is MAKE A WILL.

    Nothing like probate to drain your finances and your emotional well being, so ALSO MAKE A TRUST, and a living will, etc.

    REMEMBER the important lesson about term life insurance: “Buy Term life insurance, invest the difference.” The purpose of term is to pay less (than whole life) so you can grow your assets and investments with the difference you save. You have a new opportunity now… don’t blow it.

  20. I have some amount tied to my job (which i’m leaving this month!). We still don’t need it, but I’m wondering if we should get policies now that we are still young.

    We both earn roughly equal salaries and either of us could theoretically support ourselves, but we do expect to buy property and have children within the next 5 years. And obviously life is much easier with another person making similar salary, even though we save a lot.

    Also, there is the fact that if one of us were to pass on early, the other would get access to all the retirement savings that the person who passed didn’t use. That would be enough for short term needs and paying down a potential mortgage to a more manageable level. I don’t know, I’m debating if we may be able to get by with never having life insurance (aside from cheap policies through employers where offered)

  21. I have some life insurance through my benefits at work ($90,000) as of now, and it is of no cost to me. With a baby on the way I will need to increase that amount in order to take care of my wife and child if I were to pass away. Thanks for the helpful reminder to get with it.

  22. How did you shop for it and what company did you end up with? There are so many options I have no idea where to start!

  23. Both my spouse and I have life insurance, and to be honest it really does give me peace of mind! (My spouse is a bit of a daredevil) One thing I regret about setting up our policies, however, is that we didn’t set them up as ILITs (Irrevocable Life Insurance Trust) initially. We live in a state with estate taxes once your estate hits $1 million, so putting the proceeds in a trust is a good idea but if we start the ILIT now it counts against our gift tax limit. (not that I anticipate having $5.25 million to give away, but you never know!)

  24. Ok so im single with no dependents but i got life insurance through my group benefits at work so that my siblings and parents would get a post-humous present from me if i die. I figure it would help with the grief and cost of burying me. At about $10 per month, I don’t notice the difference off my paycheque.

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