Sunday, October 11, 2015

Three Reasons Why You Need Life Insurance Outside of Your Job

A staggering number of Americans do not have life insurance – over 95 million to be exact! The three most common reasons why so many people remain uninsured are first, they don’t think it’s affordable. Second, they don’t think it’s important and third, they never got around to it.

If this describes you, you may want to think about it, have you ever known someone close to you pass away without life insurance? If so, how did that affect the family? I’m sure it was rough. Think about if you died would you want to leave a financial burden on your family as well as an emotional loss? I hope not. Lately, I’ve been seeing a lot of GoFundMe requests on Facebook when loved-ones unexpectedly pass away. So, while the family mourns they have to become fundraisers on the side as well. GoFundMe is not a life insurance policy!

Another serious issue is that of the people who do have life insurance, many only have life insurance through their job. I’m definitely not knocking benefits you may have at work, however there are three reasons you should have at least some life insurance outside of your job:

1. The first reason is a lot of times at a job, when you leave the job your benefits don't leave with you. Most times you lose the benefits, when you leave the job.

Also, at a job, benefits could be taken away at any time – they are not guaranteed. And who knows, you may not even be insurable if you were to try to get your own insurance later on.

2. The second reason you should have life insurance outside of the job is at the job they may give you one to two times your income. But, even if you don’t have children, you probably are going to need more coverage than that.

One easy way to judge approximately how much insurance you may need is to multiply your income by 10. So, if you make $50,000 a year, you may need $500,000 worth of life insurance. The reason for this is if you were to die, your beneficiaries could invest that $500,000 and if they just got a 10% rate of return, that would pump out $50,000 a year forever! Obviously, this would not replace you, but it would replace the income that they were relying on and they wouldn’t have to suffer financially as well as emotionally.

3. And the third reason? Well, this story sums it up. A friend of mine had an Aunt and she only had life insurance through her job. Then she found out she had Cancer. The thing is when you have Cancer most times you don't just die right away. Well, she put up a good fight but she finally succumbed to her dreaded disease. And when she was off the job for six months to receive treatment, she was no longer considered a full time employee. So, when she died, she lost all of her benefits.

Life insurance is not very sexy, but it is very important. If you have savings that are equal to or greater than the amount that you need to be fully insured than you are self-insured and you do not need life insurance – otherwise, you need life insurance!

If you do have life insurance, but only have it through work, then you need to at least have some form of portable life insurance that is outside of your work. In order to not leave your family’s financial future in the hands of your Boss you will need to take control of it yourself and it all starts with life insurance.

"Employer-provided life insurance is only good for as long as you stay with that employer. Get laid off or switch jobs and you are suddenly without life insurance. Even if your next employer offers the benefit, the coverage is unlikely to be all that you need to protect yourself. And what if at the point that you leave a job you aren’t in the greatest health? If you look to buy your own life insurance at that point, your premiums are going to be higher than if you had bought the insurance years ago when you were healthy.The bottom line is that if you need life insurance, you are far better off shopping for it on your own. You want a policy that lasts as long as you need it, not only as long as you keep your current job." ~ Suze Orman

I'm so excited to share this information with you. If you have enjoyed the information or feel that it would benefit someone else, please share it. If you have any comments, please post them below, otherwise, feel free to contact me.
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