2909: It's Time For You To Get A Life - Insurance by J. Money of Budgets Are Sexy on Financial Security

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[00:01:06] [SPEAKER_00]: This is Optimal Finance Daily. It's time for you to get a life. Insurance. By Jay Money of BudgetsAreSexy.com.

[00:01:15] [SPEAKER_00]: And I'm your host and personal finance enthusiast, Diana Merriam.

[00:01:19] [SPEAKER_00]: This is actually one of multiple shows in our network, covering different topics like personal development, health, relationships, and your work life.

[00:01:29] [SPEAKER_00]: So if you like narration-style podcasts, be sure to search for Optimal Living Daily wherever you're hearing this, and check out our other shows.

[00:01:38] [SPEAKER_00]: But for now, let's get right to it and continue optimizing your life.

[00:01:46] [SPEAKER_00]: It's time for you to get a life. Insurance. By Jay Money of BudgetsAreSexy.com.

[00:01:54] [SPEAKER_00]: Seriously, though, you better have some life insurance. Or what I'm going to call from this point forward, MMLP.

[00:02:02] [SPEAKER_00]: Mo' money, less problems insurance. You die and your entire family gets hooked up.

[00:02:08] [SPEAKER_00]: If you didn't already know, today is official life insurance day for my good friend Jeff Rose, where a whole mess of bloggers are putting out the good word.

[00:02:18] [SPEAKER_00]: With some being way more detailed in their posts than others, I'll be in those others, FYI, because I don't know a ton on the subject, and the whole thing honestly bores me to death.

[00:02:28] [SPEAKER_00]: No pun intended.

[00:02:29] [SPEAKER_00]: The fact of the matter, though, is that MMLP is super important, especially if you have any loving husbands or wives, or a plethora of kids running all around your house.

[00:02:42] [SPEAKER_00]: The last thing you want to do is put them into more hurt financially after they lost their favorite person in the world.

[00:02:50] [SPEAKER_00]: Make sure to give them financial peace of mind so they can live a long and stress-free life when you're gone.

[00:02:56] [SPEAKER_00]: One, it's the best thing you can leave them. Outside of love and fond memories, of course.

[00:03:02] [SPEAKER_00]: Here are four reasons why life insurance, also known as MMLP, is important.

[00:03:09] [SPEAKER_00]: Number one, when you die, it's going to cost money. Who will depend on you?

[00:03:14] [SPEAKER_00]: Number two, it's good to give your family complete peace of mind.

[00:03:19] [SPEAKER_00]: Number three, it's good to give you complete peace of mind while you're still alive.

[00:03:24] [SPEAKER_00]: And number four, more importantly, you can forever word off any more questions from your mom and dad or personal finance blogger on why you're not acting like an adult and getting insurance.

[00:03:37] [SPEAKER_00]: The fact is, when you die, your entire family is going to be crushed and the last thing on their mind will be money.

[00:03:44] [SPEAKER_00]: 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 teensy bit better for them later.

[00:03:54] [SPEAKER_00]: Believe me.

[00:03:56] [SPEAKER_00]: Imagine your entire household being 100% debt-free.

[00:03:59] [SPEAKER_00]: No mortgages or loans or anything.

[00:04:02] [SPEAKER_00]: Or that your kids have their college tuition all set up.

[00:04:06] [SPEAKER_00]: 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.

[00:04:15] [SPEAKER_00]: So the question you should really be thinking about right now is how much you need to be feeling that good.

[00:04:22] [SPEAKER_00]: And unfortunately, that'll be up to you and your comfort levels as no pro can tell you a magic number.

[00:04:28] [SPEAKER_00]: Although they'll always try.

[00:04:30] [SPEAKER_00]: Personally, we came up with our numbers by asking ourselves what our goals were.

[00:04:34] [SPEAKER_00]: And now that I look back at this post, I realize it's already been four years and we need to update it.

[00:04:40] [SPEAKER_00]: Yikes.

[00:04:41] [SPEAKER_00]: I guess today is both for me and you.

[00:04:44] [SPEAKER_00]: Our goals with MMLP were as follows.

[00:04:48] [SPEAKER_00]: We wanted to be completely debt-free in the event any of us went bye-bye.

[00:04:53] [SPEAKER_00]: We wanted to set it and forget it so we didn't have to think about death every day.

[00:04:57] [SPEAKER_00]: And now we want to make sure baby money is all set up for future and other crazy expenses that can come up over his lifetime in the event that we're gone.

[00:05:07] [SPEAKER_00]: After talking with a lot of people back then, we also decided that term life insurance was the best bet for us youngings too.

[00:05:15] [SPEAKER_00]: Here's a quick summary on term from Wikipedia.

[00:05:19] [SPEAKER_00]: Quote,

[00:05:21] [SPEAKER_00]: Term life insurance is life insurance which provides coverage at a fixed rate of payments for a limited period of time, the relevant term.

[00:05:29] [SPEAKER_00]: If the insured dies during the term, the death benefit will be paid to the beneficiary.

[00:05:35] [SPEAKER_00]: 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.

[00:05:45] [SPEAKER_00]: End quote.

[00:05:47] [SPEAKER_00]: So basically, you pay a set amount of money for coverage over a certain amount of time and when or if you die, it pays out X amount to the person you linked it to.

[00:05:57] [SPEAKER_00]: Nice and simple.

[00:05:58] [SPEAKER_00]: This is how it currently breaks down for us.

[00:06:01] [SPEAKER_00]: Again, we need to call and adjust this.

[00:06:03] [SPEAKER_00]: My MMLP plan, $30.99 a month, which pays out $350,000 if I die within 30 years.

[00:06:12] [SPEAKER_00]: The Mrs. plan is $24.57 a month, which pays out $350,000 if she dies within 30 years.

[00:06:22] [SPEAKER_00]: We came up with that $350,000 figure because it would have pretty much wiped out our entire mortgages at the time.

[00:06:29] [SPEAKER_00]: And that was the main thing we wanted to have covered since it was and still is our number one sore spot financially.

[00:06:37] [SPEAKER_00]: Looking forward, we now want to make sure we have enough to cover future funeral costs and college tuition for our kids too.

[00:06:45] [SPEAKER_00]: Probably upping our new number to around $450,000 or maybe even topping it off at a cool half million.

[00:06:53] [SPEAKER_00]: We'll have to see how much more that costs a month though and what our options are with updating our original agreements.

[00:07:00] [SPEAKER_00]: Maybe we need to pick up additional MMLP on top of the ones we have.

[00:07:04] [SPEAKER_00]: I'm not too sure.

[00:07:05] [SPEAKER_00]: It's part of my homework.

[00:07:07] [SPEAKER_00]: Another question is figuring out who doesn't need life insurance at all.

[00:07:11] [SPEAKER_00]: Or is there no one that falls under that category?

[00:07:15] [SPEAKER_00]: I always think that everyone does need it.

[00:07:17] [SPEAKER_00]: But time after time, I also get convinced that maybe there are those who don't.

[00:07:21] [SPEAKER_00]: Like maybe people who are single and who are without any debt whatsoever.

[00:07:26] [SPEAKER_00]: I don't think there's any 100% answers here.

[00:07:29] [SPEAKER_00]: But I do think it's totally up to your own comfort levels.

[00:07:33] [SPEAKER_00]: Some of us like being covered for everything out there and others could care less.

[00:07:38] [SPEAKER_00]: The only thing I'll say is that someone will have to pay for your funeral at some point.

[00:07:42] [SPEAKER_00]: And maybe other things.

[00:07:44] [SPEAKER_00]: So it may make sense to at least get a little.

[00:07:47] [SPEAKER_00]: It really doesn't cost that much.

[00:07:49] [SPEAKER_00]: The point of all of this though is to give life insurance some thought today.

[00:07:54] [SPEAKER_00]: That's all I ask you.

[00:07:55] [SPEAKER_00]: If you already have it, review your situation again and see if it's still enough.

[00:08:00] [SPEAKER_00]: If you don't have it, ask yourself if it's time to change.

[00:08:04] [SPEAKER_00]: Maybe you got married.

[00:08:05] [SPEAKER_00]: Maybe you had kids.

[00:08:07] [SPEAKER_00]: Maybe you want a fancy funeral with all kinds of parades and concerts in your honor.

[00:08:11] [SPEAKER_00]: Or maybe you just want to leave some money to a special person in your life just for the hell of it.

[00:08:17] [SPEAKER_00]: Whatever the case may be, think about it for a hot second and then move on to your coffee and Facebook.

[00:08:22] [SPEAKER_00]: It will probably be another four years until I blog about it again.

[00:08:26] [SPEAKER_00]: So you don't have to worry about me checking up on you.

[00:08:29] [SPEAKER_00]: Just promise me you'll think about it.

[00:08:35] [SPEAKER_00]: You just listened to the post titled,

[00:08:37] [SPEAKER_00]: It's Time for You to Get a Life Insurance by Jay Money of BudgetsAreSexy.com.

[00:08:43] [SPEAKER_00]: And I'll be right back with my commentary.

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[00:09:45] [SPEAKER_00]: This is a paid advertisement.

[00:09:48] [SPEAKER_00]: As someone who doesn't have life insurance, I still think term life insurance is a good idea

[00:09:54] [SPEAKER_00]: for most people.

[00:09:55] [SPEAKER_00]: The reason why I don't have life insurance is simply because I don't have any dependents.

[00:10:00] [SPEAKER_00]: I don't plan to have any dependents, and my assets will cover any necessary expenses

[00:10:05] [SPEAKER_00]: upon my untimely death.

[00:10:07] [SPEAKER_00]: However, I do know people who want to have children eventually, and they'll buy a 30-year term

[00:10:13] [SPEAKER_00]: life insurance policy at 30 years old, even when they aren't in a relationship.

[00:10:18] [SPEAKER_00]: So in theory, it could be years before they're married and or have children.

[00:10:23] [SPEAKER_00]: The reason why they do this is so that they can secure the lowest premium possible

[00:10:28] [SPEAKER_00]: as life insurance does get more expensive as you age.

[00:10:32] [SPEAKER_00]: Term life insurance is relatively cheap, so for someone with dependents, it seems like

[00:10:37] [SPEAKER_00]: a no-brainer.

[00:10:38] [SPEAKER_00]: The average cost of life insurance is $26 a month.

[00:10:42] [SPEAKER_00]: This is based on data for a 40-year-old buying a 20-year, half-million-dollar term life policy,

[00:10:48] [SPEAKER_00]: which is the most common term length and amount sold.

[00:10:52] [SPEAKER_00]: If you'd like to learn more about what goes into determining the cost of life insurance,

[00:10:57] [SPEAKER_00]: check out episode 1803, titled,

[00:11:01] [SPEAKER_00]: Top 5 Non-Medical Factors That Affect Your Life Insurance Rates, by Jeff Root with GoodFinancialSense.com.

[00:11:09] [SPEAKER_00]: But that should do it for today.

[00:11:11] [SPEAKER_00]: Have a great rest of your day, and I'll see you tomorrow where your optimal life awaits.