Term Life Insurance – Act II

As you put your financial plan together, this could be the cornerstone. Read and see how this can drive you to making and following through your most important financial goals.

Before we had ever heard of Dave Ramsey, my husband and I put a financial plan together. It followed pretty much the same steps that most recommend – get out of debt, live on less than you make, invest regularly. Term life insurance is recommended across the board for various reasons. We both made decent money and we were pretty disciplined even at that point. Looking at our plan, it looked like we would be self-insured in 10 years so we bought a ten year policy.

Fast forward – and please don’t miss this if you are younger. Our ten year term ran out last month! We are in pretty good shape but we still didn’t feel like we had enough assets to consider ourselves self-insured. Our 401K didn’t grow as quickly as we projected as the market has been down. Also my job was eliminated at my company nearly two years ago and that threw a twist into our plans. Now we were faced with purchasing more life insurance in our (very) late 40′s with less income and no idea how much that would cost!

Our story has a happy ending but we learned some important lessons that you can benefit from:

1. Buy the longest term you can afford. You don’t know what the future will bring when the term comes to an end. Will you still have low cholesterol? What will the economy be like? Will you still be insurable? If you get fabulously wealthy before the term is up, you can always cancel the policy! A longer term costs more but not that much more. Use Zander’s and you’ll be surprised how affordable a longer term can be. (We had initially purchased a renewable, convertible policy but we were shocked to find out the rates would double if we renewed.)

2. Don’t just know the balance of your debt (if you still have some) or the amount in your fully funded emergency fund. Know what you are paying for life insurance, know where the policy is, and know the length of the term and know when it ends!

3. Shop around from time to time. Had we shopped earlier, we would have found out that we were paying way too much for our policy. We renewed for a twenty year term and still pay the same premium for an A+ rated comapny that we paid ten years ago for the same amount of coverage. Thank you, Dave Ramsey, for recommending Zander’s! Through Zander’s, we found a great agent, Don Chambers at Garner and Glover in Rome, Georgia who found us such low rates at A+ rated companies. He slashed our premiums while giving us great attention and service. We’re thrilled.

4. This is the most important point. You’ve got to buy term – whole life is insanely expensive and doesn’t deliver what it promises. But you’ve got to understand – please hear me on this one – your term WILL run out!! Don’t play games with your financial plans. If you find yourself saying every month “we spent too much on toys but we’ll buckle down next month and get serious” you are going to be caught short!!

The final point shows why term life insurance can drive you to make financial goals and to actually execute them. The clock is ticking and you don’t have time to play games. Your family and your future depend on it!

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