Studio Chat: Life Insurance
STEPHEN SMALENBERGER, EA & MICHELLE SMALENBERGER, CFP®
We want to talk through some thoughts regarding life insurance that we personally discussed when choosing what was best for us.
Please watch these other videos that explain the what, why, how much, and types of life insurance that makes sense.
Comfort Level & Timing
One of the first things we needed to consider was how much insurance we felt comfortable with. We needed to hear how each other felt about the amount we should purchase. We both felt that paying our mortgage off was important, so there wasn’t that burden for the surviving spouse. We wanted each other to have the ability to consider what was the best way to move forward regarding work and family, even if that meant making some drastic changes to care for everyone.
Life Insurance Myths
A reason why people don’t get life insurance is they think it’s expensive, or they are healthy enough, or they just don’t need it. But when you are younger it is cheaper to get in place.
We chose to get a level term policy so that we know the cost for a specified number of years. We also chose to get private life insurance policies that were in addition to our employer provided insurance. So we weren’t just dependent on the employer provided insurance but we had policies on our lives regardless of where we worked for the term of the policy.
We chose to add policies that lasted for 25 years so that by the time these policies end we would have saved up to self fund the costs of anything that would have happened if either of us dies.
We also chose term life policies because we really just needed pure life insurance without any additional savings component that also built up cash savings with a portion of our premiums.