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Life Insurance

As Benjamin Franklin famously said, “In this world nothing can be said to be certain, except death and taxes”. So today we are going to talk about death, well really...Life Insurance. I know that thinking about life insurance isn’t fun, but it is necessary. Having life insurance is one of the most loving and helpful things you can do for your family.


The purpose of Life Insurance is to transfer risk. If the breadwinner in your family was to die, would the remaining family members be able to stay in their home? Would their lifestyle need to change greatly to continue to pay for everyday items? Life Insurance is taking care of your loved ones should something happen to you.


There are different types of life insurance out there...so how do you know which one is best for you and your family? When Nathan and I first looked at getting life insurance we sat down with a financial advisor to discuss options. They explained to us how we could have life insurance and a savings plan for retirement all in one. We didn’t know much, so we signed up for it. However, when the economy took a hit in 2008, we couldn’t afford the larger payments, but didn’t want to cancel our life insurance. We felt stuck. Once again, this is where Dave Ramsey came to help us figure it all out!


So the two main types of life insurance are Whole Life and Term. Whole Life is what we had been sold by our financial advisor. This is where part of the payment goes to life insurance and the rest goes into investments. However, these are not good investments, they will not make you money, but they will make the people selling whole life insurance money! You are paying a higher premium for less life insurance. Whole Life can also be called Universal Life or Variable.


Term Life Insurance is what you want to invest in, and is what my family now has as well. You will want to purchase a term of 20-30 years, depending upon your family’s needs. You should have a policy that covers 10-12 times your annual salary. And don’t forget to get coverage for the stay at home mom as well. Should something happen to her, replacing her is going to cost money!


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