Why I have life insurance.

insurance © by Alan Cleaver

(This post is part of the “Life Insurance Movement,” created by Jeff Rose of Good Financial Cents. Just as with his “Roth IRA Movement,” more than 100 PF bloggers committed to write about a single issue on the same day to raise awareness.)

About six years ago I was a midlife college student and in debt after a divorce that had dragged on for two years. During that time I’d been helping my daughter as much as I could as she waited for her disability claim to be approved. (That took two years as well.)

After the divorce I figured to finish my degree on $12,084 per year – a mix of short-term alimony and leftovers from scholarships and grants. I was also determined to keep helping my daughter, since her disability payment covered rent and utilities but not much else.

One evening I had the radio on while I studied. An insurance commercial came on, one that I’d heard before. This time, it clicked: What would happen to Abby if I got hit by a bus tomorrow? I have no savings to leave her.

I called an insurance broker. Within a week I’d chosen a plan and made my first payment.

And I was finally able to let my breath out. Until then, I hadn’t been aware I was holding it.

Keeping it current

Things have improved considerably for us both since then. Chief among those improvements: Abby is no longer on disability because she found a job she can do from home. Tied for first place is the fact that she met Tim, the man she would marry.

I finished my degree and have continued to make a living writing for MSN Money and Get Rich Slowly, among others. The divorce debt is gone, and I have a decent amount of savings.

It’s my daughter’s long-term outlook that concerns me. Until recently neither she nor her husband were able to contribute much to retirement. They need to play major catch-up just as other issues surface:

  • Tim’s health problems put him on disability.
  • They are trying to have a baby. (Abby just turned 34, so they can’t put it off much longer.)
  • His bankrupt parents have moved in.

My savings plus the 401(k) and small pension from my newspapering days won’t make much of a dent against that situation, especially if I live as long as the people in my family generally do. By the time I shuffle off this mortal coil I might have spent every dime I’d set aside.

On the other hand, that bus could take me off the game board tomorrow. To prepare for both situations, I’m keeping my life insurance current.

I urge you to talk with a financial planner about the people in your life who need protection. Life insurance is likely a part of the equation. Think about those who rely on you and make the loving gesture of insuring against future loss.

Here’s hoping you get to share cake with me at my 100th birthday party, and that you’re blowing out candles at your own century mark. But please, please prepare as though your own bus were just around the corner.

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  1. jestjack

    Insurance is something you purchase and hope you never have to use. Not a fan of life insurance unless it is to be used for one’s “final expenses” so as to not leave a burden for family.

  2. lostAnnfound

    We got small policies (just enough for funeral expenses) after we were married & then increased them substantially after the kids were born, making sure that if one of us died that the other would be able to raise two kids without worrying too much about money.

  3. We just added DC2 to our life insurance policy last week. Yesterday we signed the update to our wills so DC2 will share with DC1 and has some place to go if, God forbid, her parents should die before she reaches her majority.

  4. afterkidsRus

    Life insurance is a must have, however don’t get caught up in the hype of term insurance. It is the most expensive insurance to have. Why, because people generally purchase it for a duration of let’s say 20 years and they forget about it. You know, out of site, out of mine. Well if you purchase a term policy when you are let’s say 25, the price of course will be less expensive but it will cost twice as much to purchase a policy at the age 45 after the policy has reached its term. I made that horrible mistake. Your financial picture in this world of economy today and perhaps to come as mentioned in Donna report, could be potential worst than when you were 25 years old. So take my advice and select a whole life policy at the age of 25, you will be better off.

  5. Hate to pay for insurance, but God bless it when it is needed!

  6. Wow, good luck to your daughter. That’s admirable that you still want to help take care of her if something happened to you. As long as we have loved ones we need to help, life insurance is a necessary expense.

  7. ImJuniperNow

    Unfortunately (or fortunately, if you look at the glass half empty or half full) I have no one for whom I am financially responsible and don’t need life insurance. I am advised that it can also be a useful investment tool, as can an annuity, but I’ve yet to be talked into it.

    Long-term care insurance is something that I am looking into. And maybe other singles (like you, Donna) might want to get into a discussion about that. I want to be taken care of in my old age (100 years from now, after I’ve blown the candles off MY cake) and don’t want to rely on or burden family and friends.

  8. Life insurance has come through for me when my 1st husband passed away at 41 y/o. I gave it to my two sons with some restrictions (they were 17 and 20 at the time)and they both chose to buy a home. After husband died I bought a 20 year term policy and now I have cancer. I have 9 years left on this policy and chances are they will be recipients again It is a necessary evil. Don’t use it for investments…..there are better avenues for that. Buy term. After your children get a certain age they should be fairly financially stable anyway.

    • Donna Freedman

      @Joyce: I’m so sorry you lost your husband at such a young age. What intelligent choices your sons made.
      I wish you strength and healing.

  9. Marcia.B

    Donna please could you advise me or anyone whom may contribute would be greatly appreciated,who would be a good insurance company to take a policy with? I am also Disabled,I have Rheumatorid Arthritis will this make a differance.Joyce you mentioned term why?I’m sorry to hear that your having such hardship in life.I also wish you strength in healing and god bless

    • Donna Freedman

      @Marcia B.: You need to talk with someone who knows more about insurance than I do. May I suggest you go to the following URL and type in your question to Amy Danise of Insure.com?


      I hope you can find the right policy.

  10. I still say your great-grandkids will be the ones to inherit that life insurance. If I have anything to say about it. Which I totally do.

  11. I had to get insurance…after I bought my house it hit me!..how about if I get hit by the bus! what would be of my family,buying the insurance gave me peace of mind knowing that if that bus hit me the house is going to be paid off,my funeral is going to be covered and the best of all,my family still will have some money to get on their feet after I’m gone.

  12. Louise

    Thanks for a great article. Alot of people disregard life insurance, which is a big mistake I think. I was able to get sorted with a quote from lifes best insurances and they never made me go through an exam so I’m happy. Good stuff!


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