Have you ever received a selfless act of kindness? Perhaps the car ahead paid your bridge toll. Maybe a stranger helped pick up your groceries when the bag ripped open. Or perhaps you received a life insurance payout when a loved one passed away.
I hate bad luck. And dying prematurely is the worst bad luck there is! Do you have dependents, best friends and extended family that you love dearly? Getting a life insurance policy is a selfless act of kindness you can bestow upon them.
Life Insurance Is A Bad Luck Insurance Policy
I don’t know about you, but I go through strings of bad luck every several years. This makes me question whether I’m sometimes cursed.
For example, my car Rhino wouldn’t start one morning. I had to call roadside assistance to have them jump him so I could then drop him off at the service department. He was in the shop for a couple days and the day after I picked him up, he wouldn’t start again!
I had to cancel my road trip to Lake Tahoe that morning to take him back to the shop and waste another couple hours of time. While I was driving around in a rental car, I was pulled over and given a $160 ticket because I was looking (not touching) at my phone on the center console for directions while stopped in traffic.
If Rhino had never died, I never would have gotten a ticket because my phone would be in the phone mount as usual. Curses!
The reason why I hate bad luck is because it’s outside of our control. We can do everything right, but still not succeed due to unfortunate circumstances. As they say, it’s better to be lucky than good! I see life insurance as a bad luck insurance policy.
A Selfless Act Of Kindness
When you pay for something that benefits another, that’s by definition a selfless act of kindness. Perhaps the joy of helping people is exactly why I have spent so much time writing over the past ten+ years.
I want to help as many people as possible achieve financial independence sooner rather than later. This is why I continually write about personal finance topics.
Knowledge is vital to achieving wealth. With awareness comes determination, courage, risk taking, and the ability to set and achieve goals. For example, get to know your finances forwards and backwards by taking advantage of free wealth management tools.
In addition, get educated on important investment concepts like the proper asset allocation of stocks and bonds and different ways to earn passive income.
Life Insurance Gives Peace Of Mind
Now back to our discussion on why life insurance is a selfless act of kindness. Life insurance makes me feel better about life in general because I’ve imagined these various scenarios before:
1) I’m in a horrific car accident where my legs are crushed and my heart is punctured by an improperly installed Takata airbag. During the moments before blackout, I’ll think about all the things I did and didn’t do.
Most of all, I’ll think about my loved ones and how I’ll never see them again. The only thing that will keep me from dying from sadness is knowing that a term life insurance policy will pay out to my beneficiaries in order to minimize any further disruption.
2) I’m flying overseas and my plane loses both engines. I’m not afraid of flying, but I always text and e-mail as many loved ones as possible before I take off because I never know whether it’ll be the last time I communicate with them. A life insurance policy will let me die in peace before impact.
3) Right after I turn 50, I feel a pain in my lower abdomen. I go to the doctor to check out what’s wrong and it turns out I have pancreatic cancer with only one year left to live. Thank goodness I took out life insurance while I was still healthy.
During the time I have left, I’ll do everything I can to live life to the fullest. The life insurance benefits will go to my wife and kids to help them continue living a comfortable lifestyle. My death would give purpose to someone else instead of just dying for nothing due to bad luck.
Worry Less With Life Insurance
I can’t be the only one who has thought about these accidents happening to them. Before I got life insurance, I wondered more often when my ultimate bad luck would come.
Now, I don’t think about unfortunate events as much because the people around me are taken care of thanks to life insurance and my estate planning.
I want life insurance to minimize disruption in my survivor’s lives. I don’t want them to be forced to sell our house because they can’t afford the mortgage payment. Grieving takes time. The more stable the environment for grieving, the better.
There Is A Price For Everything
People have asked me why get life insurance if I have a large enough net worth that makes me “self insured” already. Given I view life insurance as a selfless act of kindness, I like to get more insurance than simply replacing 100% of the financial benefits I provide. This way other people can actually BENEFIT from my death. The benefits are viewed as making up for the sudden pain.
Since $3 million is the new $1 million, I took out a $3 million, 20-year term life insurance policy for my family at a cost of about $200 a month several years ago.
Because my beneficiaries will inherit all my investments and properties that generate six figures in passive income a year + my online business, the $3 million will be icing on the cake for them to live the most financially free life possible long after I’m gone.
This makes me happy, because again, I’ve always felt it my DUTY to provide for the people around me. What would tear me up is not being able to provide for anyone because I’m dead.
Related: The Right Amount Of Life Insurance To Protect Your Family
Calculate How Much Life Insurance You Need
A good way to understand how much life insurance you need is by estimating how much debt you have or calculating how many months of your income is needed for how long a period of time.
Six to ten times your income is the common recommendation. If you have children, consider your debt plus the costs to complete their tuition.
Another way to calculate how much term life insurance you need is by asking your beneficiaries. Asking will force your beneficiaries to talk through their finances with you so that everybody is on the same page. It’s much better to have the talk while alive, than dead.
If you’re a healthy 35-year-old, you can get a $500,000 term policy from PolicyGenius for just ~$24 a month. That’s the cost of a couple rubber chicken sandwiches. Not a bad deal for insuring against bad luck!
Try PolicyGenius today and compare life insurance policies for free from top insurers in minutes.
If there’s nobody in your life you want to help after you are gone, there’s no need to get life insurance. Just make sure your will or revocable trust is clear.
I believe in leaving a positive legacy. Life insurance is just one way to help others as a selfless act of kindness. Even if you are financially independent, getting life insurance is a good idea if you have debt and dependents.
Get A Life Insurance Policy The Easy Way
My wife recently got a new life insurance policy with better terms for less money. If you’re a first time buyer of life insurance or want to see if you too can get more life insurance for less money, try PolicyGenius.
PolicyGenius is the most efficient way to get competitive life insurance quotes online. They are the #1 life insurance marketplace where qualified lenders compete for your business.
It’s much easier to apply on PolicyGenius than go to each carrier one-by-one to get a quote. I’ve known the founders for years and they have truly built a fantastic resource for individuals and small business owners.
Life insurance is a selfless act of kindness and love. Please get life insurance to protect your family.
Related: How Much Does Life Insurance Cost By Age And Sex
Warren Franklin says
The life insurance company is taking your $ and investing it at a conservative rate – using an asset-liability matching strategy. The liability in this case is your death.
I personally buy enough to ensure my family’s security in the event of my demise, however I am always a fan of putting your own money to work not in the hands of someone else- so my “excess policy” is the growth in invested assets and passive income. For example, $2m in term life and a strategy to have $500k-$1m in invested assets producing passive income.
But that strategy needs to be evaluated on a case by case basis. For example, can you outperform the life insurance companies returns? will you die before passive income strategy is established – are you expecting to outlive the actuarial tables?
Good thought provoking article.
Financial Slacker says
I follow a similar philosophy in that I want more than enough life insurance so my family is well taken care of if something happens to me.
Ms. Financial Slacker and I each have a small whole life policy that we took out years ago, but the bulk of our coverage is inexpensive term life.
We also purchased small whole policies for our children. One of the benefits is that they have additional purchase options which means even if they have a health condition later in life, they’ll still be able to buy insurance. And actually the cash value has been generating a 4.5% after-tax return which isn’t too bad.
Brian C says
The wife and I went with the term route for 30 years with an amount slightly higher than the mortgage. We also have small policies through work. Instead of getting two policies we got one with a rider basically stating that whoever croaks first the other will get paid. The numbers don’t lie and you would be much better off, all things being equal to invest the premium difference from a term vs a whole life policy in a low cost index fund over the same duration. You come out on top due to the BS fees that insurers charge on whole life policy. The one vehicle though that may make some sense is borrowing against the policy. It’s a lot of due diligence though but you will find if your dividends cover the interest (and maybe the principle) you can borrow (interest free, sort of) from the policy creating cash flow and tax breaks versus cashing the policy out. It gets complex but this hits the general ideas of it.
I asked this in a previous post on insurance but didn’t get much response, so I’ll bring it up again. What about joint term life insurance? I was doing some research on it but there doesn’t seem to be much info out there. It would seem to make sense for dual income family where both parents have similar income…
Not entirely sure I agree with the methodology of how much coverage you have. Most women remarry within 5-7 years of a their spouse dying prematurely. Very noble to ensure your family is taken care of and financially free but do you want so much coverage that the new husband also become financially free? Buy enough coverage to pay down all loans and debt plus five to seven years of spending. Anything more is overkill.
I love my wife a little more than that. What if she doesn’t remarry? I want her to be taken care of for life. If she remarries – great. I trust my wife to save those funds for our children then. And I trust my wife to not marry someone like that. Regardless, I’ll be dead, so who cares. I just want to know that should something happen to me, my wife will be very comfortable and can raise the kids without having to worry about work.
I wasn’t actually sure how to reach you so I figured posting a comment made the most sense so it gets caught by you in the modding phase. You’ve mentioned in past posts meeting up with other FIRE-ers. I’m 28 and FIRE’d a few weeks ago. I’ve been a reader of your blog for over a year and of all the early retirement bloggers out there, your approach has been the most aligned with my values and life (also worked in finance, live in a HCOL city with my husband so I think it takes a few million to throw off the appropriate amount of passive income to support a family, etc).
I’m in SF for a week and was wondering if you still meet up with readers for coffee. I’d be really interested to hear your perspective on the transition from go-go-go to retirement and how to think about reasonable goals/where meaning comes from. Right now my biggest challenge is how to get the monkey off my back that says ‘only activities that make money are worthwhile’ to make room for all the other things I had quit to pursue in the first place. I got the sense that you had wrestled with some of this yourself and would value your input. Let me know if you have time to meet up! Thanks. And if you’re busy, totally understand and wish you the best with all the writing for the blog.
Cash Flow Celt says
The only debt I currently have is student loan debt and it’s non-transferable after a death. I do have a son; however, his uncle is a wealthy attorney and left him a sizable deposit into a 529 Tuition Plan. Sizable enough that should he choose to go to an in-state public school, it’s already paid for. It’s for that reason, I have minimal life insurance and both are provided through my work. My employer automatically provides one year of salary (which I tripled coverage on for a minimal monthly fee), and then my membership with a Sheriff’s Association adds an additional year of insurance.
I know I’m lucky at this point in my life to not really need to buy my own. I’ve thought about buying a separate policy because my work insurance isn’t transferable, but it’s just not imperative at this point.