“Mo’ Money, Less Problems” Insurance

You may call it life insurance, but from this point forward, I’m gonna call it, MMLP: “Mo’ Money, Less Problems” Insurance! You die, and your entire family gets hooked up—what what!

The fact of the matter is that MMLP is super important—especially if you have any loving husbands or wives or a plethora of running kids all around your house. The last thing you want to do is put them into more hurt *financially* after they lost their favorite person in the world!  Make sure to give them financial peace of mind so they can live a long and stress-free life when you’re gone—it’s the best thing you can leave them! (Outside of love and fond memories, of course.)

Here are 4 reasons why MMLP is important:

  1. When you die, it’s going to cost money. Who, will depend on you.
  2. It’s good to give your family complete peace of mind.
  3. It’s good to give YOU complete peace of mind while you’re still alive! 😉
  4. And more importantly, you can forever ward off any more questions from your mom or dad (or personal finance blogger?) on why you’re not acting like an adult and getting insurance 😉 Nice, huh?

The fact is, when you die your entire family is going to be crushed and the last thing on their mind will be money. But when it all sinks in and they’re thinking clearer, you leaving them with hundreds of thousands of dollars is going to make it a teensie bit better for them later—believe me. Imagine your entire household being 100% debt-free? No mortgages or loans or anything? Or that your kids had their college tuition all set up? Shoooooot … Money can’t bring you back or kiss your family on the forehead every night, but it sure can improve their lives forever and ever, no doubt about it.

So the question you should REALLY be thinking about right now, is *how much* you need to be feeling that good. And unfortunately that’ll be up to you and your comfort levels, as no pro can tell you a magic number (although they’ll always try). Personally, we came up with our own numbers by asking ourselves what our goals were. And now that I look back at this post, I realize it’s already been four years and we need to update it! Yikes … I guess the Life Insurance Movement is for both me AND you, ha,ha…

Our goals with MMLP were as follows:

  1. We wanted to be completely debt free in the event any of us went bye bye.
  2. We wanted to “set it and forget it” so we didn’t have to think about death every day …
  3. And now we want to make sure Baby $ is all set for future and other crazy expenses that can come up over his lifetime in the event we’re gone.

After talking with a lot of people back then, we also decided that term life insurance was the best bet for us youngins’ too. Here’s a quick summary on Term from Wikipedia:

Term life insurance … is life insurance which provides coverage at a fixed rate of payments for a limited period of time, the relevant term… If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.

So basically you pay a set amount of money for coverage over a certain amount of time, and when/if you die it pays out X amount to the person you linked it to. Nice and simple. This is how it currently breaks down for us (again, we need to call and adjust this):

  1. My MMLP plan: $30.99 a month, which pays out $350,000 if I die within 30 years.
  2. The Mrs’ plan: $24.57 a month, which pays out $350,000 if she dies within 30 years.

We came up with that $350k figure because it would have pretty much wiped out our entire mortgages at the time. And that was the main thing we wanted to have covered since it was (and still is) our #1 sore spot financially. Looking forward we now want to make sure we have enough to cover future funeral costs and college tuition for our kid(s) too—probably upping our new number to around $450k, or maybe even topping it off at a cool half million? We’ll have to see how much more that costs a month though, and what are options are with updating our original agreements (maybe we need to pick up additional MMLP on top of the ones we have? I’m not too sure … it’s part of my homework)

Another question is figuring out who *DOESN’T* need life insurance at all? Or is there no one that falls under that category? I always think that everyone DOES need it, but time after time I also get convinced that maybe there are those who don’t. Like maybe people who are single and/or without any debt whatsoever? I don’t think there’s any 100% answers here, but I do think it’s totally up to your own comfort levels. Some of us like being covered for everything out there, and others could care less. The only thing I’ll say is that *someone* will have to pay for your funeral at some point, and maybe other things? So it may make sense to at least get a little. It really doesn’t cost that much.

If it helps, here are a couple of resources that goes a lot more into detail. I’ll be reviewing ‘em too:

The point of all this though, is to GIVE LIFE INSURANCE SOME THOUGHT today. That’s all I ask of you. If you already have it, review your situation again and see if it’s still enough. If you don’t have it, ask yourself if it’s time to change? Maybe you got married? Maybe you had kids? Maybe you want a fancy funeral with all kinds of parades and concerts in your honor? Or maybe you just want to leave some money to a special person in your life just for the hell of it?

Whatever the case may be—think about it for a hot second and then move on to your coffee and Facebook. :)  It’ll probably be another four years until I blog about it again, so you don’t have to worry about me checking up on you, haha… just promise me you’ll think about it!

Note: This post originally appeared on J. Money’s blog Budget are $exy during the Life Insurance Movement, a one-day blogathon that was co-sponsored by LIFE and was coordinated by Jeff Rose of Good Financial Cents.

  1. Cost of life insurance ultimately depends on many factors including your age, gender, weight, if you’re a smoker, the amount you wish to take out, the period you plan on taking it out for, whether you’re a healthy weight, have an illness (terminal or not) and whether or not you work in a hazardous environment.

  2. Why? According to a recent survey, it is because people think life insurance is way more expensive than it actually is. Weird, because In the last several years rates have fallen dramatically and life insurance is now more affordable than ever.

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