February 11,2022

When it comes to building a strong financial ‘house’, one of the most important support structures is definitely life insurance. Indeed, life insurance will provide vital income for your spouse and your children if, heaven forbid, something happens that ends your life prematurely. It is also an excellent idea to continue your life insurance even after the children have long since left home because of the fact that, as you get older, the likelihood of bigger medical expenses increases greatly.

Let’s look at this realistically for a moment. If you are a young father in your 30s, 40s or even 50s  and you have the requisite 2 or 2.5 children ( let’s just assume one of them is really small) the cost of rearing your children will vary depending on their age and needs. If we could put a number on that however, let’s just say that each child costs approximately $3,000 a year. That’s nearly $7500 a year just to take care of the kids.

Let’s say that you have only 1 child and, when you suddenly pass away, that child is 10 years old. In order to take care of this child your spouse would need at least $24,000 over the 8 years until he or she became an adult. That’s only 1 child! Depending on your age you may still have dependent children when you’re in your 50’s or even 60’s, increasing the likelihood that you might not be around to help raise them. Actually, nearly 10% of all households today still have dependent children when 1 or both spouses is over 55.

But what about your home and the mortgage? That beautiful house you built I your Home country? Depending on how long you’ve had your house, where you are on the mortgage payments and whether or not your mortgage is ‘under-water’ (meaning you owe more than the home is worth) you may still owe thousands, if not hundreds of thousands, Liability that your spouse would inherit if you suddenly passed away or are invalid.

There’s also the fact that, with medical advancements, your spouse could literally live for decades after you. If you don’t have enough death benefits they may well run out long before your spouse does.

It used to be thought that $500,000 or $1 Million, would be sufficient, life insurance wise, but these days it is much better to sit down with an insurance expert and try and figure out what the cost of putting your kids through college, paying off your mortgage and supporting your spouse into their 90’s would be. Frankly, most people are completely surprised how large this number can be.

The two main types of insurance are permanent and term life. Permanent includes whole life, universal life variable life policies. It is basically a mix of one part life insurance and one part investment account that pays a specific benefit when you pass away or can be liquidated for a specific cash value before that happens. A term life policy is what you might call ‘pure’ insurance protection. It provides a specific amount of money if you die within a certain number of years but, if you live beyond that time, it typically pays nothing.

These things of course are best discussed with a qualified insurance agent who can explain to you the differences and guide you to what is best for you and your family. One thing is certain, making sure that you have enough insurance to take care of your family if something should happen to you is vitally important and should be taken care of now rather than later.