Executive Homemaker: Life Insurance Explained by Suze Orman

Life Insurance Quotes are not as scary anymore

In light of the recent family death I have been immersed in preparing for my own and my husband's deaths. Not our actual deaths, but what will happen after.  I've always had an "In case of death" file with all my requests but that was well before being married and having a family. Now this topic is more serious than just making sure a huge kick butt party is thrown in my honor.

Going from a dual income to a single income, finances have been tight. Maybe more than tight, more like draining-blood–from-turnips-with-fingers-crossed-and-psalms-being-sung tight. Recently we cancelled our life insurance policies so we can start over after a good reassessment of what we have and what is needed.

I was extremely over insured and my husband under insured. 

Ten years ago when my dad died he did not have enough life insurance for the family needs. In my fear, I went balls out with my life insurance policy guaranteeing not to repeat my dad's mistake, BUT, I don't own two businesses with mega overheads. I have a meek mortgage, a daughter, a husband, and the usual American-dream debt that less than a quarter of my old policy would have covered. My husband’s policy would not have covered squat had he faced his demise before me thus putting me and B in a mega world of hurt. Can someone say government cheese hurt?

Time to learn about life insurance-que the anxiety.

Suze Orman for SelectQuote puts life insurance in terms I understand! (Hello, girl crush just got a bit stronger!)  Whole life expects you to die and a death benefit to be paid out. The issuing company needs to figure a profit into the equation which helps make these such policies so expensive.

According to the LIMRA, 2011 saw a 2% increase in individual whole life insurance policies over 2010, and “this is only the 4th time policy sales have increased in the past thirty years.” Whole life is flourishing in our current economic climate which I find interesting considering whole life is extremely expensive. Aside from the astronomical upfront monetary outlay there are great benefits to whole, but if your finances are hurting as is, these benefits do not out way the costs.

Term policies on the other hand are extremely affordable. According to Suze everyone can afford something, yet they are not faring as well in new policy increases even though they “represent 65% of all coverage and nearly 40% of all new individual policies issued” in the US.

On SelectQuotes website Suze has a number of short, to the point videos that explain things in layman’s terms.  She stresses if you have anyone dependent on you financially or physically (hello SAHMs) you must have a policy in case of your death so they can continue to live the way you want them to.  Term is for a specified amount of time where the issuing company does not expect you to die, so companies are profiting from day one with your policy, while not adding it into the premium.

Insurance has always been the most intimating concept for me. Hah! Not anymore! Life insurance you no longer scare me.  By month’s end my husband and I will have new policies in place providing comfort knowing if something happens our survivors are not worse off.  

I'm looking forward to our new term policies and the time we can transfer them to whole when we get back on our financial feet.

How did you choose your families policies and the companies you went with?