Image caption: Rebecca Chamaa
A decade ago, securing our future meant purchasing a term life-insurance policy. My husband and I felt responsible, mature even, when we bought a policy totaling $300,000, enough, we thought, to cover the mortgage and final expenses were something to happen to my husband.
“We want enough to cover the mortgage and death expenses,” we told the insurance agent back then. It was a plan that, at the time, seemed rock solid, prepared for the future. We signed the paperwork, feeling secure in our decision.
However, life has a funny way of changing the best laid plans. Almost ten years later, it’s painfully clear that the life insurance we have is insufficient. My husband is now my caregiver due to a chronic illness. He’s the sole provider. $300,000 won’t last me very long.
If my husband were to pass away, over half of that money would be immediately allocated to paying off the mortgage on our condo. A considerable portion would then be dedicated to cremation, burial, and the funeral. (Let’s not even consider the possibility of lingering hospital bills.) After settling those expenses, I would still be responsible for homeowner’s insurance, HOA fees, and my own health insurance. With just those three bills, the money would be gone in under ten years. Include groceries, the internet, transportation, and medications, and the money would be depleted in less than five.
The Reality of the Situation
Since the onset of the COVID-19 pandemic, mortality has been at the forefront of our minds. My husband has an autoimmune disorder, making him more susceptible to complications from the virus. The pandemic has been a frightening experience, understandably bringing finances and the future to the forefront of everybody’s mind.
While the solution seems simple—acquire more life insurance—it’s financially challenging. We are on a strict budget, and both of us are over 50, making new policies prohibitively expensive.
We made the mistake of waiting until our mid-40s to purchase life insurance. Had we acted sooner, the cost would have been significantly lower. We assumed that covering the mortgage and death expenses would be sufficient. I wish we had bought more insurance when we were younger.
The Value of Foresight
Now, with the benefit of hindsight, we wished we’d obtained a more substantial policy payout. Even a $500,000 policy would have improved my circumstances significantly. A $1 million policy, though it may sound excessive, would offer genuine financial comfort.
It may sound counterintuitive to suggest that young people should buy larger life insurance policies, but if they can secure a low rate for the policy’s duration, it’s a sound investment. Of course, it’s harder to think about tragic events when you’re young, but you don’t want your loved ones facing tough decisions between basic necessities.
