one of the most important benefits not to overlook next year

by Alison Green on December 6, 2016

And now a break to talk about a sponsor…

If you’re like a lot of people, you get a life insurance benefit through your employer. If you’re like a lot of people, you haven’t thought about it much beyond that.

But often, the amount of life insurance that your employer provides wouldn’t be enough to cover all the expenses and people you’d want it to cover, should it ever be needed. It also usually ends when you switch to a new job.

It’s pretty typical for an employer-sponsored plan to offer coverage that equates to only one to two times your base salary. In other words, if you make $60,000, and the coverage you have is two times your salary, your beneficiary would receive, at most, a $120,000 payout upon your death. That can sound like a lot of money when it’s in a big lump like that, but if you’re married with kids, it can go quickly. In two years, your partner would be supporting your kids on a single salary. That’s why experts suggest coverage of at least six to 10 times your salary.

It’s also smart to think about life insurance if you have other relatives who rely on you financially, or if you have significant cosigned debt, like student loans, a mortgage, or a car loan, since that debt could fall to your co-signer to pay off if you die.

Haven Life, the sponsor of this post, is one place to go to get your own affordable, high-quality life insurance – either to supplement what your employer provides or to get as your sole policy. They’re a life insurance startup – backed by a MassMutual, a top life insurer – that lets you apply online, get a decision right away, and if approved, start coverage immediately. The whole process takes only takes at most 20 minutes, compared to most other companies, which take four to six weeks to get a final decision and won’t let you do it online.

A 20-year, $500,000 Haven Term policy could cost a healthy 30-year-old less than $18 per month. You can get a free, fast, no-obligation quote here.

Here’s a video with a bit more information on employer-sponsored coverage – or you can go straight to your free quote here.

This post is sponsored by Haven Life. All thoughts and opinions are my own. Haven Term is a term life insurance policy (DTC, ICC14DTC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111 and offered exclusively through Haven Life Insurance Agency, LLC.

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{ 84 comments }

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  1. WellRed*

    After my (retired) dad died earlier this year, and I saw how helpful it was for my mom to have that extra cushion to cover funeral expenses (in the manner we knew he’d want) plus have a little left over, I checked in with HR on my policy. I am single, no dependents, but I have enough to pay off student loans, funeral expenses and leave a bit left over, should I meet an untimely demise. I also plan to re-evaluate yearly.

    1. Scorpio*

      I believe student loans are forgiven in the case of death. Just something to consider if you are factoring them into your costs.

      1. WellRed*

        If you have a co-signer, which I did, the co-signer can be required to pay them back. I’ve heard horror stories.

        1. E*

          I work for a student loan collection company and can verify that this is true, at least for Dept of ED loans (not sure about private loans). If you are the sole person on the student loan, your family can send a copy of your death certificate and the loan will be written off. But a co-signer could still be held accountable for paying off the debt.

          1. The Cosmic Avenger*

            Another reason to avoid co-signing loans: if the co-signer dies, the entire loan can often be called due immediately.

            1. Jerry Vandesic*

              If you ever co-sign for a loan (something you probably shouldn’t do), you should require that the other person on the loan takes out a life insurance policy equal to the amount of the loan, with you as beneficiary. That way you aren’t on the hook if something tragic happens.

                2. the gold digger*

                  Yep. It was to cover the alimony due if he died before he finished paying out all the alimony.

                  He had five years of alimony but bought a ten-year policy. Trust me that on the day he sent the last alimony check, I was all over him to call USAA RIGHT NOW AND CHANGE THE BENEFICIARY TO ME!

                3. Lia*

                  I have a good friend whose ex forgot to change the beneficiary (her) after their divorce.

                  He had a policy with my friend as the beneficiary, because she was a stay at home mom and they had young-ish kids. They split up, she got a job, kids grew up some, and he had a new girlfriend. Except — he forgot to change his life insurance. He died about five years after the divorce, and about a month later, my friend got a call from the insurance company that there was a $200K check with her name on it. He had never updated the policy and although the girlfriend tried to fight it, they owned no joint property nor bank account, so the insurance company found for the ex.

                  Nice windfall for her, as she used it to pay for her kids’ college (and grad school) because he’d refused to pay anything towards that.

      2. Lemon Zinger*

        I work in financial aid.

        Federal student loans are generally discharged in case of death. Parent PLUS loans are also discharged if the parent dies. It’s the private loans you have to worry about; they usually become tied to the deceased’s estate and become debt that must be repaid by the estate. Failing that, heirs take on the debt.

        I wish my SO would consider life insurance. His parents co-signed several of his private student loans, and God forbid if something happened to him, they’d be stuck with massive loan payments they could never pay. (They’re underemployed and living paycheck-to-paycheck)

        1. Marillenbaum*

          Is there a particular reason why they haven’t done it? Or is it simply one of those “I don’t want to think about my inevitable death” things?

        2. Lia*

          No no no, heirs do not take on debts unless they have co-signed. Now, they may not get any of the estate, but they are not liable for any debts incurred by the deceased.

        3. Jessen*

          At least if you’re in the U.S., the heirs of an estate cannot be required to take on debt. The only time a heir can be required to take on any debt is if the estate was not properly probated and the heirs got money that should have gone to pay down the debts. And even then they’re only liable up to the value they received from the estate.

  2. I GOTS TO KNOW!*

    My husband and I really need to get on this… we keep talking about how we need it but drag our feet on getting it done

    1. Mona Lisa*

      If you have an insurance agent or there are local, independent ones near you, they can be immeasurably helpful. Ours walked through our individual medical histories with us and made some calls to make sure that we could get the rates she quoted us. When she discovered one rate might go up from a minor medical complication that had since resolved, she found a different company for that policy. It was wonderful to have an expert’s help!

      1. Norman*

        I don’t disagree with this, but just a reminder: an insurance agent is an agent for the insurance company, not for you.

        1. Mona Lisa*

          Fair enough. Our agent represents 30 different life insurance companies so she wasn’t tied to giving us one in particular. She put one of our policies with a company where we already had our renter’s/auto policies, which got us a discount, and then put the medical issue policy with a company that got us a better rate for the coverage amount. She’s obviously invested in selling us something, but she was incredibly helpful in explaining the ins and outs of the policies and didn’t try to upsell us.

  3. Mona Lisa*

    About a year after my husband and I got married, we applied for life insurance in case something happened to either of us. In our case, my husband had students loans, and since he’s pursuing a doctorate, I’m the primary bread winner. While each of us would probably be ok financially if one or the other died, it made sense to get at least basic coverage to take care of ourselves.

    By getting life insurance so early (mid-20s), we were able to lock in a relatively low rate (~$200/each/annually for $250k/each) for 30 years. Also since we were fortunate to both be in good health, our life insurance policies include a clause that, if we decide to re-up after the 30 years, we get to maintain the same health status no matter what happens in the interim.

    I’ve been encouraging my friends to seriously consider getting life insurance. Eventually they’ll want it if they have children or a spouse or if they just don’t want the co-signers on their student loans to be stuck paying forever if they pass. It can also cover any outstanding medical bills or funeral expenses. The plans that employers offer are really just a starting point for coverage, especially since you can’t take it with you if you leave. It’s important to have some other kind of coverage in place.

    1. Ella*

      +1. I recommend getting it sooner rather than later. I waited until my early 30s, and just by chance happened to have an abnormal test result the month I was applying for life insurance, so the insurance company has postponed me getting it until my test result is normal. Don’t wait– apply while you’re healthy!

      1. Mona Lisa*

        Yes to applying while healthy! A blogger I follow experienced major pregnancy-related depressive episodes, which caused her to be rejected when she and her husband applied for life insurance following their son’s birth. It took more than a year for her to be accepted. Her story was actually the kick in the pants I needed to follow through with our own life insurance applications.

        1. the gold digger*

          One of my biggest career failures was failing to convince one of my accounts to upgrade their employee life insurance. The company offered a flat $5,000 per employee. I tried to convince them to go to at least one times salary, if not two. (Not so much because I would make any great commissions but because I was really concerned about such a small amount of insurance.)

          The owner refused. A few months later, my contact (and my friend), the company finance manager, who was only 32, was diagnosed with cancer. He was dead in a few months, leaving behind a wife and a baby. He had not bothered to get a personal life insurance policy and of course it was impossible as soon as he was diagnosed. His wife and baby were left with $5,000. That’s all.

          It still makes me sick to my stomach to think of it.

          Get life insurance while you can. If you can afford cable, if you can afford Netflix, if you can afford a cellphone, you can afford life insurance.

          1. Mona Lisa*

            Oh, that makes me sick. I’m so sorry for your friend. People don’t want to think about the awful situations, but life insurance is one of the few things that can make a really difficult time more bearable.

          2. Princess Consuela Banana Hammock*

            Oh goodness, that sounds awful and is heartbreaking. I think people don’t realize that insurance is for exactly these kinds of situations—rare but devastating events, or common events with devastating consequences.

  4. AFineSpringDay*

    My company has kind of an odd benefit – fully covered by the company you get one year of your salary, but if you die on a business trip, you get 5x that. As a single person with no dependents who plans to stay that way, that’s obviously all the coverage I need anyway.

    Suze Orman used to talk about this, in terms of years instead of X times your salary. Like, you should consider covering up to your kids graduating college, and how much would your spouse need to cover all bills including tuition until that time.

      1. Jamie*

        Until this very moment I thought I was the only one to have given this advice. I feel slightly less mercenary now.

        2. The Cosmic Avenger*

          My wife and I joke that we have to walk that fine line between having enough to make things easy on the surviving spouse and having so much that it becomes tempting to cause an “accident”. ;D

          I actually picked the amount she’s insured for, because I’m cheap and I only wanted to pay for enough to get me through either a year of not working or quite a few years of being able to get by on one salary and paying for extra help around the house. She wanted me insured for more, so she would not have to worry about working for a longer time, or could work part-time or pay for more services around the house the rest of her life.

    2. 3NoNike*

      I’ve never heard of Suze’s approach but I suppose that’s generally how I looked at my family’s situation. I’m a mother of 4 and my husband has been a stay at home parent for over a decade. I maxed the crap out of my voluntary work policy and bought an additional personal policy because I don’t want my husband to worry about how he’d financially support our family upon my death, and how he could get a decent salary after being out of the workforce for so long.

      1. nonymous*

        Don’t forget that he is eligible for your ss benefits if you die first – there’s a widow(er) annuity for cases like this. Basically anyone can pick from using survivor’s benefits or their own (assuming the spouse passed and that survivor has not remarried before 60) when claiming SS benefits. You just pick the one that pays more.

        1. Editor*

          Don’t forget that those Social Security benefits for widows and widowers are prorated and have age restrictions. If the spouse dies before retirement age, there may be a reduction. If the surviving spouse is much younger, there may be an age threshold. If the surviving spouse claims before retirement age, the monthly payments are prorated.

          I claimed a pension my late husband was entitled to, and the monthly payment that he would have received at retirement was about four times larger than I receive. When I was laid off a few years after his death and ran out of unemployment, my widow’s benefits were reduced because I was below the SS retirement age for my cohort.

          Now I recommend setting up an appointment with Social Security to find out what benefits a surviving spouse will receive at various ages, then use that information as part of life insurance and retirement savings planning.

    3. A Day at the Zoo*

      This is part of your business travel accident policy. It covers a lot of things that can happen when you are away from home. Generally, it kicks in when you are at least 100 miles from your normal place of business. Most companies offer this, but the it only pays in very specific circumstances.

    4. Cass*

      My mother’s policy has something like she gets 5x the amount if she dies at work. She’s always joked, doesn’t matter where she kicks it – take her body over to her office!

  5. Jamie*

    Just a reminder when putting end of life stuff in order not to forget your four legged babies. Make sure they have guardians and, if possible, provide money for their care. They’ll be hurting enough grieving for their human(s) they don’t need to do it in a shelter because your plans weren’t documented.

    1. the gold digger*

      Yes! My husband asked his parents five years before they died what should happen to their two cats. Primo’s dad told him that Primo and I could take them, to which Primo answered no, that was not an option.

      When we got our cats, we included information about them in the letter of instructions to our executor (my sister). We told her to return them to the Siamese Cat rescue place along with a $3,000 donation.

      When Primo’s mom and dad died last year, the absolutely most stressful thing he dealt with (including his half brother who wanted the estate to reimburse him for attending his own father’s funeral) was finding homes for the cats. He did not want to send them to a shelter and pretty much didn’t sleep until he found homes for them.

      1. Jamie*

        It really is hard. Many years ago we adopted a dog from a shelter who was there due to the death of his owner. He was clearly beloved by his human. His healthy weight was 80 lbs but when we got him he was 42 and so frail you could feel every bone in his body. His collie fur wasn’t matted as he received good care, but it was dull with bald patches. He didn’t stop trembling and we actually thought he was unable to bark because he was silent. Our other dog had picked him and we truly thought we’d be giving him comfort in his last days since he was so shut down due to grief and stress, even with no underlying physical illness, it didn’t seem like he’d make it.

        Soon he was at his optimal weight, healthy coat (so healthy we could have started an entire industry had there been a use for the fur I was constantly cleaning) and the boy could bark! And charm the pants and the bacon off anyone. And do this little butt shaking, tail wagging, look how cute I am dance in a little circle …so distract you so he could steal your sandwich or guilt you into another walk.

        We did lose him 2 years ago after 12 wonderful years with us…he was 15 when he died. I don’t know who his former owner was, but if there is some spiritual plane after this I like to think he was happy that Lucky didn’t follow him as soon as he would have had he stayed in the shelter.

      2. Marillenbaum*

        Thank you for this reminder. My parents don’t have pets, but if I follow through on my plan to get a dog in the next few years, I’ll make sure to include that information in my will.

    3. Punkin*

      Exactly. I wish a had a dollar for every time our rescue group got this call: “My grandmother died and left 4 black 10 year old cats. Can you take them?” not many people looking to adopt a 10 year old black cat, sad to say.

      One friend left directions to have her 3 cats euthanized. They were all over 13 and she did not want them to go thru the experience of a shelter/sanctuary.

    4. nonymous*

      My local humane society has a “pet guardianship”. You pay $1000 up front and they will cover up to 5 pets from your household when you die. Of course they will try to adopt out the pet to a new home, but the service includes a regionally recognized identification tag (so that if your family /neighbor just dumps the pet at a different shelter, those folks can contact the guardianship team), pickup/immediate care services, the option to keep pets together, and (most importantly imo) the option of skipping shelter housing in favor of direct-to-foster (although there is some language about behavior/medical issues possibly vacating that preference). You can even designate them as the backup guardian, but they won’t provide interim care until the fee is paid (which can take a while for the estate to address), meanwhile it can take some time to release a pet for legal adoption.

  6. Catabodua*

    Something I have also just recently been told but have not confirmed yet – if you leave your employer the life insurance plan does not come with you.

    So essentially you are paying for life insurance that is only in effect while you are employed there. If this is true, it makes WAY more sense to buy a plan on the open market and is not dependent on your employer.

      1. MechE31*

        This is not always the case. When I left a previous employer, I had the option to continue the same coverage and rate. This may have been an exception to the norm.

        1. Brittney Burgett*

          It varies from company to company. It’s helpful to find out, though, if an individual policy outside of your employer could be less expensive for the same amount of coverage.

    2. Mona Lisa*

      This is how my current employer works. They provide a 1x annual salary plan free of charge, and employees can opt in to pay for an additional 1-5x our salary. This policy is only in effect while we’re employed here, and once we leave, we’d have to find new coverage. This is why I went with an independent insurance agent as I mentioned in my comment above. It’s much more secure than the employer’s plan, especially since most people aren’t living out their professional careers with one company anymore.

  7. Anomanom*

    So, I have a question on this that I’ve never really known who to ask. I am 34, single, no children, no spouse. I have 3 4legged friends, but have my 401k set up to pay out to the rescue organization my family manages who will take them should anything happen to me. (PS, if you don’t know this, if you make a 501c(3) the beneficiary, they do not have to pay taxes on this money). I have some debt but no cosigners, and some sizeable student loans, but they are all fed loans with no cosigner.

    Am I missing any reason I should be carrying more insurance? I currently have 2 times income employer paid, which amounts to right around 200,000.

    1. J*

      Life insurance is mostly to help anyone who relies on your income. So, if you have already taken care of your dependents, you don’t need it.

      Other forms of insurance, such as long-term disability, might be worth a look. If you are incapacitated, the piece of mind is worth it.

      1. LawPancake*

        A lot of life insurance policies also have a benefit where if you’re diagnosed with a chronic/terminal illness you can get access to some of the money while you’re still living. If I had to guess, I’d say most policies out in the marketplace include some form of this benefit and, while it’s certainly not the sole reason you’d want to buy a life policy in the first place, it is something to keep in mind.

    2. the gold digger*

      The only reason to get insurance now is if you think you might need it in the future. You can’t get it once you are sick, so locking in while you are healthy is a good idea. Term insurance for someone healthy can be pretty reasonable.

    3. nonymous*

      When I was unmarried, the goal I was trying to achieve was to make sure that my death did not introduce a housing insecurity for those who depend on my contributions. So my insurance was enough to cover the balance of my mortgage, and my will left our home to my partner. That way he wouldn’t be unceremoniously kicked out of our home that we had made together, simply because my half of the monthly contribution vaporized. It’s actually really common for the survive partner (spouse or otherwise) to have to sell a home if this happens, and then there is a double bind because the survivor may not be able to buy into the same neighborhood (because now there’s only one income on the loan qualification). Prior to living with my now-husband, I was living with my mom so she was the beneficiary of this planning, but I could see this approach working for many households, regardless of the legal/relationship status underlying.

  8. TootsNYC*

    I don’t know if this company has one, but back when we were earning less but owed more (and were expecting to have children), we purchased a joint first-to-die life-insurance policy.

    The idea was that we wanted to be able to pay off the mortgage completely and provide a little cushion, but that we couldn’t afford premiums for a huger amount.

    With the first-to-die, both our names are on the policy, but it only pays out once.

    Something to think about for people for whom money is tight in terms of premiums.

  9. De Minimis*

    Not available in my area, apparently. Hopefully my clicking on it at least helps out the site!

    Getting this type of coverage is on my to-do list though. I may be back with the Feds soon and they have a good life insurance benefit, but it may not be quite enough for my needs.

  10. Hotstreak*

    Any premium my company pays for life insurance valued at over $50k counts as taxable income for me, I really wish I could cancel it (or reduce it to $50k!). It’s a little depressing to think that they never considered that some people might not want the policy, but unfortunately there’s no way to opt out.

    1. HR Bee*

      Whoa, really? As an HR person who is in charge of purchasing company plans, that this could even be a thing is news to me. Is it just the company your employer uses?

      Our health insurance is also mandatory, and I would hate to think it was an accidental burden on anyone!

      1. Anomanom*

        No, this is an IRS regulation. Insurance coverage of over $50,000 paid by the employer has a taxable impact to the employee. The GTLI rates are published with age banded amount that is taxable per 1,000 or coverage per month.

  12. Catherine*

    Ask a LOT of questions if you apply for a policy that requires medical screening. My husband had his insurance check-up two days after getting over a violent stomach flu, and his liver counts were so out of whack that he was rejected by the insurance company. We’re not scientists and had no idea this could be an issue. Now he has that black mark on his history and we’ve been scared to try again, since we’re told that two rejections will end you.

  13. One Handed Typist*

    Husband and I each have 20 year term policies at 8-10 times our income. Should either one of us pass, that money will pay off the house with enough left over to support the surviving spouse for several years. Should both of us pass, a trust would be created for my son.

    Which brings the next point – HAVE A WILL. All adults should have a will, even if it is the most basic of documents for when you are in debt or have no assets. And if you have kids, you need to talk now about what would happen if both parents are gone, and set up provisions for that!

  14. Anxa*

    So I have toyed with the idea of getting a policy while I’m young, but two things are stopping me:

    1. I might never need it. Currently, my income is pretty negligible and it doesn’t show any signs of improving. I could probably support myself on my own with lots of roommates, etc., but I would have to hope that other people would be in my shoes and wouldn’t mind roommates in their 30s, 40s and 50s. I’m not married and my current boyfriend doesn’t really need my income replaced if I do. And I don’t think I can afford kids. I feel like I should wait until I know if I’ll need it before I buy it, but by that time I’m sure it will be pretty expensive.

    2. It seems so wasteful if you have coverage with an employer. Seriously, what is the point of employer based coverage? It’s not like health insurance where you can switch your insurance when you move jobs. If you want any kind of real coverage, you’d have to go on the open market, right? Who’s getting jobs that they can count on for life insurance? And yet, I feel like if I could get that benefit for free, I’d feel kind of annoyed of having double coverage. Like I’m wasting a benefit. I wonder if the best thing to do would be to get a more barebones coverage (assuming that even a low premium would have a big impact on your monthly budget) that you keep with you and treat your employer coverage as a bonus? I guess I just don’t understand how it makes any sense for life insurance to be based on employers when employers change every few years.

    1. Lemon Zinger*

      I’m in the same boat as you. I make a low salary but am debt-free and live with my SO. I definitely won’t stay at my current employer forever, so I declined the life insurance option.

      Frankly, I’m not sure I’ll ever get life insurance because I am not going to have children.

    2. Brittney Burgett*

      Hi Anxa,

      Brittney here from Haven Life (sponsor of this post.) Life insurance coverage typically isn’t necessary if you’re unmarried and don’t have financial dependents. You’re right to wait until you need it. Who needs an added monthly expense, right? We have a free life insurance calculator if you’d like to double check your needs: http://bit.ly/2g6kojM

      In regards to your second point, you’re correct. The hangup with employer-provided life insurance is that it usually doesn’t go with you, which is a big deal if you have people you need to help financially protect with a policy. That’s why a policy outside of your employer is usually recommended to mitigate this issue. In many cases, these individual policies can be less expensive for the same amount of coverage, too.

      Hope this helps.

      Thanks,
      Brittney

  15. Amber Rose*

    My advice: Don’t bother.

    My mom had invested in a pretty generous policy and they refused to pay it after her death because we couldn’t prove she didn’t have pre-existing conditions. The lawyer we hired advised us not to bother trying.

    They put us through hell during one of the worst times in our lives. As far as I’m concerned, life insurance is a scam designed to screw over vulnerable people.

    1. nonymous*

      >they refused to pay it after her death because we couldn’t prove she didn’t have pre-existing conditions

      My Dad died from complications of a service-connected disability (which he sustained prior to buying the insurance policy through his employer and then converting it into a private policy at his retirement) and we had no challenges to payout. This sounds really awful! You have my deepest sympathies and condolences.

      Can I ask what company the policy was with? It is always helpful to find out which companies are unethical and should be avoided.

    2. Former Retail Manager*

      I’d be interested to know how long the policy was in place prior to her death, her health condition at the time the policy was purchased, and her cause of death. I realize that is personal information you may not want to disclose (I’m not really asking), but I assume the insurer believed that she had a pre-existing condition of some sort to base their denial of claim on? I am so sorry this happened to you.

      The only thing I can say for modern technology is that it will hopefully cut down on these sorts of occurrences. Every single detail of your health history, assuming you’re under about 45-50, is available electronically. I have large amounts of life insurance and they can tell you every prescription I’ve filled in the last 20 years along with certain other medical information. It stands to reason that most pre-existing conditions would require medication or treatment of some sort that they would be documented.

      Once again, can’t say enough how sorry I am to have been put thought that at such a terrible time.

  16. Dzhymm, BfD*

    My experience attempting to buy individual life insurance ten years ago was rather unpleasant. Fill out the online form, “We’ll be in touch”. Next day I get a phone call and an agent *obviously* trying to close fast:
    “Can we send the nurse over to do your physical tomorrow?”
    “uh, no, that’s not good for me”.
    “The day after?”
    “Look, can you just send me some information about your policy and I’ll call you if I’m interested?”
    “The physical can also be scheduled on a weekend!”
    “Listen, we’re going to do this on MY schedule or not at all!”
    “*click*”

    1. Mona Lisa*

      I think this might be pretty standard. Our insurance agent told us that the company would be sending a nurse to our home pretty quickly after we put in the application. I think the idea is that you’ll get a clearer picture of your health instead of giving you time to possibly cheat the system. (Similar to how my now-employer didn’t tell me that I’d have to complete a drug screen prior to my position being finalized, and I only had 48 hours from the time of the phone call to complete it.)

  17. Viktoria*

    I’m single, childless and young (26) so it’s not really a concern for me, but I was diagnosed at 24 with Type 1 Diabetes which, I imagine, would make it considerably more difficult and expensive to get life insurance at this point. If I’m ever in a position where I’d need it, I’d look into how much it costs, but I just thought I’d point out that one advantage to getting it even when young, single, and childless- and healthy.

    I assume that once you have the policy in place, being diagnosed with medical issues doesn’t affect it? I”m not totally sure that’s how it works but it stands to reason.

    1. the gold digger*

      As far as I know, as long as you are paying your premiums, the insurer cannot drop you for a change in medical status.

      But they can deny payment after death if they discover you lied on your application (for instance, whether you smoke).

    2. BTW*

      Anything can happen at any time. Childless or not, single or not, young or not. There’s funeral costs, debts (do you have a car payment? A balance on a credit card?) etc. I think it’s important for everyone to have life insurance even if it’s only a small amount.

  18. Former Retail Manager*

    I looked into this when Alison first posted it about a year ago I think. The website was friendly and easy to navigate and the whole process was easy and quick. I requested $500k, which requires a physical exam, including blood test, and there were some questions I needed to answer about some recent prescribed medications, but this is par for the course for any life insurance company. The premiums were definitely reasonable considering the coverage amount. Thanks for this recommendation!

    2. hellcat*

      Same for me – my husband and I had just bought our first home and I’m the primary earner, so it’s nice to know that if I get hit by a bus or something, he’ll be able to pay off the mortgage and take care of expenses. I had to get the exam and bloodwork and answer some questions about a previous injury, but I’m definitely happy with the service.

  19. YesYesYes*

    Just a heads up to apply for life insurance BEFORE you are pregnant. They hounded me to get a blood test (couldn’t understand why I didn’t want to meet a nurse that day in the lobby of my brand new employer for a blood draw), then I was rejected because my blood test came back with “abnormal” results. I had my obgyn write a letter to my file explaining that those particular measures were inaccurate during pregnancy and certifying I was 20 weeks pregnant. The insurance nurses verified the letter was in my file, agreed that the measures shouldn’t disqualify me, but then they had delayed reviewing my file for so long that I was in the 3rd trimester and not eligible for coverage. Incredibly frustrating experience.

  20. Jeanne*

    Please also see a lawyer and get your paperwork done. You need a will, a living will, a power of attorney, and a health care power of attorney. Yes, even if you are married you need them. If you are not married you need them. If your estate is not rich and complicated, your lawyer can do this for a few hundred dollars. You have no idea what difference it makes if you are suddenly very ill.

  21. BTW*

    I’m 28. We just finished building our first home and are expecting our first baby. It’s interesting that this post came up because my husband and I just went for our document signing appointment for life insurance the other day. A lot of people don’t think about it, think it’s not important, don’t think anything will happen to them etc. And yet we’ve all heard one or two horror stories about people who had nothing in place. My husband is the breadwinner so I would be screwed without him. With kids, we would want me to be able to keep the house. He gets a little over 2x his salary from his work benefits but he might not work there forever ya know? So we can’t always rely on that. His life insurance policy covers the difference in our salaries (as opposed to his entire salary for X years because…) and enough to pay off the house at what we currently owe. Which is obviously going to go nowhere but down as the years go on. My policy covers the mortgage, paying off my vehicle and my salary for X years. Yes, it’s an extra payment every month but it’s a necessary one.
    Next is the wills and power of attorney’s to specify how all that crap gets divided out (husband has a son)

  22. Regina 2*

    Dumb question: If the sample policy Alison quoted is $18/mo when you’re 30, does that start going up as you get older, or is it fixed for the term?

    Sort of but unrelated question: How does one find a good financial planner to advise on all these matters? I know nothing about life insurance, college planning, retirement, health care, wills, etc. It really scares me, but it feels like everyone is out to scam you, so I end up freezing and not doing anything. I save a decent amount for retirement and have mutual funds, but I don’t know what else to do because I don’t know who to trust.

  23. Melissa C*

    So, I have a question: my husband and I have life insurance that we carried over to individual policies when we left our previous employer (we worked together at the time). Out of curiosity, I typed in our basic info on Haven Life, and see that we are paying about the same amount monthly for our current policies, for about one-fifth (!) the coverage that Haven Life would give us for a 20-year term. I’m guessing that this is because of the term limit offered by Haven Life (our current premiums are supposed to go up every few years, based on our ages). It’s always bothered me that our current policies offer such a low payout, and I’m considering switching. I suppose the downside is that the coverage would end after 20 years (the 30-year term is almost twice the price, so I’m not sure it’s in our budget right now), but in 20 years, I’ll be at retirement age, and my husband will be close to it. Is there a recommendation for choosing one option over the other? It seems like our current policies are ridiculously overpriced, but I get that “lifetime” changes things considerably.

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