Getting Life Insurance Within My Budget Gave Me Peace of Mind – Business Insider
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- I set myself a deadline to purchase life insurance by my 30th birthday.
- I purchased a policy that I could afford and that would offer some security.
- Even though experts would recommend more, having some coverage has helped me worry less.
I was on a plane to Florida to celebrate my 30th birthday with my sister and cousin. Yet instead of searching for the best beaches to catch a tan, I was looking at life insurance policies.
I had promised to give myself one of those gifts that as an adult you don’t necessarily want, but know you need: life insurance. Not only was I entering my third decade, but I had also recently had a second child. I was the breadwinner in my family. If anything happened to me — a risk that seems particularly acute in an airplane — I wanted to know that my two daughters and husband would be looked after.
Searching online for advice, I saw numbers that were intimidating. I knew I couldn’t afford a policy that was 10 to 20 times my annual income. Plus, it didn’t seem necessary. So, I vowed to make the best choice I could at that moment. It wasn’t perfect, but it’s brought me a lot of peace of mind in the years since.
I took a policy that was about 3 times my annual income
To decide how much coverage I needed, I spoke with my husband. If the worst happened, I knew I wanted him to be able to pay off our mortgage and stay home with our girls for at least one year before he had to work outside the house. He agreed that was a good goal.
So, I calculated what we would need to pay off the house and replace a year of my income. The answer was about three times my current salary, not the 10 to 20 times I had seen recommended. But, this felt like a number that would work for our family.
Next, I decided on the term. In 25 years my children would both be done with college. My husband …….