Because I’ve already pissed off debt bloggers, The Simple Dollar, index investors, my girlfriend 18 times today, 52% of the population of Winnipeg, Manitoba, and everyone’s ears when I belt out You Belong With Me by Taylor Swift, why not include life insurance agents on the list?
You know the expression “everything looks like a nail when all you have is a hammer?” That’s exactly how folks who sell life insurance are. I’ve met some of these people and they’re all generally pretty nice, but the fact remains that they’re all obviously pretty biased. If somebody is interested in insurance, I’m pretty sure their local life insurance agent isn’t going to talk them out of it.
I, on the other hand, tend only to be biased in other ways. So allow me to figure out what groups of people need insurance and which ones don’t.
Ah, children. When they’re not crapping their pants, butchering perfectly good sports and plays, and generally annoying the crap out of each other in the backseat, I suppose they’re okay. I don’t have any (that can be proven anyway), so I’m pretty meh about the kids. Maybe that’ll change when I have one that resembles me.
Should you buy life insurance for your kids? I’m leaning towards no, for a couple of reasons. First off, kids are liabilities. We all get upset when kids die (and rightfully so, even I’m not that big of a monster), but from a financial standpoint, most parents who don’t have junior in the fields plowing like an Amish are in a better financial position without that mouth to feed.
Plus, most standard benefit plans include some sort of death benefit in the unlikely scenario junior kicks it. That’s usually enough to cover a funeral, and most employers will give grieving parents time off with pay.
Saying all that, I can see the point in having it. The last thing a parent wants to worry about in that situation is money. A small life insurance premium on their kids will ensure a grieving parent won’t have to go back to work early or anything like that. I’d be more inclined to self-insure against something like that happening, but I can see the logic in a small policy. It’s not like it costs much to insure a 4-year old.
Single guys/gals/guys who used to be gals/seriously just pick a gender, God
If you’re single with no dependents, there’s very little need for life insurance. From a financial perspective, nobody really cares if you kick it. Also, nobody is coming to your funeral.
Life insurance agents will try and scare you into getting it just in case you develop some sort of ailment in the future. Sure, that happens sometimes, but not often enough for you to get too concerned. If you’re a healthy 20-year old, chances are you’ll be a healthy 30-year old. Besides, if you develop some sort of issue, chances are you can still get insurance in the future. It’ll just be more expensive. After all, they insure people who willingly suck on cancer sticks.
I particularly enjoy the “you might get sick and be unable to get insurance in the future” argument. Not content enough to insure someone’s life, insurance folks also want to insure against the possibility of getting a debilitating disease. I’m honestly surprised insurance agents don’t walk around wrapped in bubble wrap while breathing through a surgical mask.
This is when it gets a little more complicated. If you’re just recently married but don’t have kids, you might need life insurance.
If your wife/husband can support themselves without your help, then life insurance is a unnecessary expense. If you keel over, she can just go on without you, picking a new man that satisfies her every need better than your sorry ass ever could.
But what if you have a mortgage that requires two incomes to carry? Although we could debate the intelligence of that decision in the first place, it’s probably best not to leave your lady with a debt she has no hope of paying off on her own. In that situation, I’d look into getting a policy worth at least some of the mortgage. There’s no need to look into replacing income with the proceeds of the life insurance yet, because the point is to pay down the mortgage. Chances are your significant squeeze will be fine financially once the big loan is taken care of.
Married folks with kids
Unless you’re richer than Veronica Lodge, you will need life insurance if you have a family.
Even if you live on one income, it still makes sense for both spouses to have it. If your wife kicks it, suddenly you’ve lost your free babysitter. (I’m assuming the lady stays home with the kids because sexist) Replacing years worth of income is important in this scenario. It’s up to you to decide how much, but I’d say most folks should have half a million or so.
We’ve all seen the ads for life insurance for retirees. “Don’t burden your children by forcing them to pay for your funeral. Burden them by being an annoying old child who constantly needs help accessing the g.d. internet GOD GRANDPA ARE YOU RETARDED SERIOUSLY?
If you don’t have enough in savings to cover your own funeral, you’ve got bigger problems. I suggest plenty of delicious cans of cat food.