I have very strong feelings about life insurance, but I understand that it can be overwhelming to plan for your own death. I tried to keep the topic lighthearted with my friend Mr Kinetik this week on The Pete the Planner ® Radio Show. Listen to the clip below to hear my thoughts on life insurance and whether or not it is something you need to consider. Clip courtesy of 93 WIBC.
Here is my strong opinion: Not having life insurance is like telling your family you don’t care what happens to them after you die. I know there are a few things that can complicate getting life insurance, but the bottom line is that if you have dependents you should have life insurance.
Are you single? I answered the common question, should single people have life insurance, in a previous post but the short answer is that it is probably a good idea to lock in a good rate while you are young and healthy.
In my Ideal Budget, I show that life insurance premiums should be in the ‘Miscellaneous’ category. For budgeting purposes the premium needs to be an amount you can afford, but the most important thing about life insurance is it’s face value. My rule of thumb is that your life insurance should be 10 times your current income. Remember, life insurance should not be viewed as a way to get out of debt in the case of death, but instead as a replacement stream of income. You don’t want leave your spouse and kids with no income to live off of.
In my book 60 Days to Change, I list out the four stages of financial wellness: Surviving, Driving, Arriving, and Thriving. I think life insurance is so important that I put it in the ‘Surviving’ category which means you can’t move on until that is accomplished. Death can cause a lot of financial stress and I believe that having life insurance can ease the burden.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.