More than a decade ago, my husband and I purchased a term life-insurance policy for $300,000. Our goal was to cover the mortgage and death expenses in the event of my husband’s passing. It seemed like a responsible and secure plan. Now, with my husband as my caregiver due to a chronic illness, I realize that the payout wouldn’t sustain me for more than a few years.
A Well-Intentioned Plan
When we first discussed life insurance with the agent, we clearly stated our needs: covering the mortgage and associated death costs. That $300,000 policy appeared sufficient. However, life has taken an unforeseen turn. My husband now provides our only regular income, and his care is a priority. Our circumstances make the financial implications of his potential loss far more significant than we initially considered.
The Harsh Reality
If my husband were to pass away, a large portion of that $300,000 would immediately go to paying off our condo mortgage. Funeral and cremation expenses would consume another substantial chunk. Even without considering unforeseen hospital bills, ongoing costs like homeowner’s insurance, HOA fees, and health insurance would quickly dwindle the remaining funds. When we factor in routine expenses like groceries, transportation, and medications, the money would be depleted much faster than we had planned for.
COVID-19 and a Hard Truth
The COVID-19 pandemic heightened our awareness of mortality. Given my husband’s autoimmune condition, the risks were even more pronounced. The financial anxieties during that period were palpable, and our life insurance coverage came into sharp focus.
The obvious solution—purchasing a new, larger policy—is complicated by budget constraints and our age. As people over 50, the cost is significantly higher than it would have been a decade earlier.
The Cost of Waiting
In our 40s, we believed that securing the mortgage and covering death expenses would be enough to ensure my financial security. Now, we understand that a larger policy would have made a significant difference. Even a $500,000 payout would provide considerably more financial stability, while a $1 million policy would offer true peace of mind.
Advice for the Younger Generation
While it might seem difficult to think about tragic events when you’re young, locking in a low rate for a substantial life insurance policy is a wise investment. It’s far preferable to the difficult choices that arise when unexpected events leave loved ones struggling to cover basic necessities.
