Wednesday, March 14, 2012

My Coverages

Continuing to simplify my life by combining all my blogs into's another post from my old insurance blog :)!

My husband and my boys' role model.

Early on, one of my bosses told me to put my own house in order as far as family protection. He asked, "How can you really sell something you don't own and believe in yourself?" The day I wrote the check to pay for my first month's premium made me choke up a bit. Not because of the premium or it was money I really would never see the benefit of....but because I knew if I left the office that night and didn't make it home, Gunner and Gauge (my four and two year old boys) and my husband Jesse, would financially be okay. It made me realize what legacy I would leave for my family.

My boys could continue sleeping in the comfort of their own beds, they would have enough to at least pay off the mortgage, take care of my funeral expenses....well let me just stop there.  Why don't I just share with you the family protection I have and the reasoning behind it.

First let me say, each family has a different need, a different budget and a different scenario. So my protection plan may not fit your family's needs, but if you're a bit like me, I still like to know people's reasoning so I can better formulate my own.

Tonight, I'll start with my husband Jesse's coverage. He has a $500,000 10 year term policy. He uses tobacco, so his premium is a bit higher than mine. His premium is $79.17/month.

So why did we go with this policy?

He's young with two little boys and a super fun wife (I added that in there, but he would hopefully agree :)!). If he didn't come home tonight and Farm Bureau delivered me a check for $500,000 - we decided I would pay his funeral expenses $12,000 for a decent funeral, pay off the mortgage $132,000, pay off my car loan $15,000, pay off my college debt $20,000, set some aside for the boys' college educations $40,000 and that would leave me with about $280,000 to cover his contributing income for four and a half years.

Term is great because it provides maximum coverage at a fraction of the cost of whole life. Now term is like renting. We only have this policy for ten years. Once the ten years finish, he has no more coverage. It also does not generate cash. So we have small premiums, receive maximum coverage and walk away with nothing after the term.

The catch is within those ten years, we'll slowly convert portions of the policy into whole life insurance. Whole life is with you until you're 100 and generates cash you can use while you're alive - say for retirement. Next year, we could convert $50,000 into whole life and continue to have $450,000 in term. The plan would be by the time the ten years are done we converted a good portion, if not all into whole life.

Basically, Jesse and I made the choice to have a lot of coverage while our children are young in order for him to feel that his family would be taken care of, would have time to grieve and would be able to continue living the life he works so hard to provide for us. Why? Because he loves us.

Has this scenario put your brain into over drive? Curious to learn more - I would LOVE to sit down and discuss the perfect plan for your family. Tomorrow and Wednesday we'll cover my coverages and Thursday we'll discuss Gunner and Gauge's life insurance policies.

Thanks for reading! And make sure you're not just insured, you're covered!


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