August 23, 2007
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Life Insurance
I think a lot of people who have yet to have their own families do not have life insurance. A lot of times, people feel that they simply do not need it because they don’t have any dependents. What people fail to see/understand is that life is a fragile thing and shit happens. Anything can happen and you might die at any time. It is expensive to die.
When my grandfather passed away in December, his funeral cost $16,000. You didn’t read the number wrong. Sixteen-thousand-dollars. He didn’t even have a big funeral. We had about 40-50 people show up sporadically. Why so much? Well you see, just the casket itself ranges from a couple of hundred dollars to thousands of dollars. My grandfather’s casket cost over $5,000. They also need to build something under/below it so that water doesn’t get into it and that costs a couple of thousand. Personally, I think it’s BS and funeral homes just try to convince you to spend more. No body lasts forever, so it doesn’t matter what kind of casket you have. And then you have to pay for the renting of the funeral home for wakes as well as all other arrangements such as flowers, a hearse, car service for the family members to go to and from the cemetary and then a restaurant to provide all the guests with a meal. This is just the cost of the funeral. What about the plot of land? This 4′x7′ piece of land ranges from a thousand to a couple of thousand of dollars, depending on where it is located at.
With that said, I think it is IRRESPONSIBLE to die without leaving anything to help shoulder the costs of your own funeral. I think unless you literally cannot afford life insurance, everyone should have it. Life insurance is so affordable these days. For example, I pay $19 a month for one of my policies (I have two). I think it is good for $350,000. I’m paying about $230 a year for the next 20 years (Term Life), which isn’t much. If you can’t afford to spend $19 a month, then you can get a smaller policy like $50,000 and pay less than $10 a month.
Why is my policy so cheap? Well, there are a couple of reasons. First you need to understand that there are many kinds/forms of life insurance. The two most popular kinds are Whole Life and Term Life. Whole Life is a policy where you pay for life, but you are also covered for life. However, Whole Life can be considered a form of savings or even an investment because the money sits there in your account. It accumulates interest and in most cases, the money that is made from it will cover your monthly payments, which means you don’t have to make any payments to it anymore. However, that is not always the case because of interest rates go down, you will in turn have to start making payments again. You can always borrow against your policy and take a loan out for whatever reason or you can cancel your policy altogether and cash out.
Term Life is totally different. It is simply just life insurance. Depending on the amount of money your policy is worth, your age, your health (these are factors for Whole life as well) and the length of your policy, your money payments are different. Because I am young, healthy/in shape, and do not smoke, I only have to pay $230 a year for 20 years. After 20 years, my policy is terminated and I cannot extend it. If I wish to purchase a new policy, the cost will definitely be a lot more since I will be older. The payments for term life is low because the money goes directly to the insurance company. You will never see a penny of it back. I find this benefitial because I have more money to spend and I am covered in case I die.
I will always recommend term life over whole life because not only is it a lot cheaper, you have more money at hand. A whole life policy for me worth $350,000 would run me over $1,000 a year in payments. That is more than 4x the amount of money I am currently paying. The amount of gains you get from your whole life policy can easily be gained by simply putting your money into bonds, mutual funds, high interest saving accounts or CDs. Not only that, the money can easily be liquid and you can use/spend it anyway you want as opposed to whole life where you will have to take a loan against your policy which lowers the value of your policy. At the end of the day, it really depends on the person and his/her needs. There are pros and cons for both types and it is up to the person to see which one works best for them.
I really urge all you people to go out and get yourself some life insurance. My parents don’t need my money and what is a couple of hundred of thousands of dollars will do for them if I died? It’s not going to make them happy. But at least I am taking responsibility for the expenses they will incur because of my death. I feel more at ease knowing that I have provided them with some more money so they can spend the rest of their days with a little less worry. On top of that, they spent a lot of money raising me. If I die before them, at least I tried to compensate for all the money they have spent on me.
I know that a lot of people get their life insurance from their company because they either provide you with it for free or at a very low price. Take advantage of that because you just never know. Like I said before–life is a fragile thing and you never know when/if shit happens.
I’m going to tell my parents to get me a really cheap casket and forget about paying for things that will prevent leakage. I wish to be cremated because I have already signed away my organs for donation. What the hell is the point of preserving my body if my organs are gone anyway? They might as well take whatever they can and then just burn/cremate whatever that’s left. However, I would really want to have a big funeral so I know that is going to be costly. If I ever do die, anyone and everyone is invited. Information would be posted on this Xanga by one of my friends. I sound morbid but I guess I’m just giving everyone a heads up.
Last night, I went to a dinner that consisted mostly of my fraternity brothers and some of John’s closest friends to raise money for his funeral. We were able to raise a substantial amount that should cover most, if not all his funeral expenses. We all did whatever we could to help his family. My family wouldn’t need help for my funeral so be responsible and make sure that you are covered as well.
EDIT: I got my Term Life policy through www.accuquote.com. It is a website that takes in your information like age and health and stuff and then check every single insurance company to find you the best available prices. Think Hotwire for Term Life. It really works and if you are considering Term Life, check out that site.
Comments (32)
Sometimes I really think ur in the wrong line of work. U have such a passion for helping people in all sorts of ways. As for life ins, yes, I’m covered by my company but even beyond that, I have savings all over the place left to my parents should anything happen to me. No one likes to think that way but avoiding the topic doesn’t rectify it.
You guys are a great bunch of guys.
OMg I totally agree. The funeral business is in the business of making money off of people’s grief and misery.. They jack up the prices so much and you pay it because you’re grieving..Life insurance is necessary if you live in America.. my mom was a insurance agent and when she passed away she made sure we were taken care of.
I am still quite an amateur about Life Insurance but I have learned from other people and from a few friends who are in that line of work. The Life Insurance my friends provide covers the person if something happens AND as a means to save for retirement with a midly-high protected interest rate. Of course, different life insurance provides different benefits. I would definitely do research before purchasing one. I also agree that people can use other means to invest but either the risk is too high or the interest rates is too low that it will only be negated by inflation. I have to note, I am glad you are finding ways to help people after your death. All you need is a hybrid car and your are as green as The Green Giant.
man his family is so lucky to have people raisemoney. my mom’s grandmother died and she had to pay for some of the funeral costs. not that it’s important but she wasn’t even mentioned in the will.
I was thinking about getting life insurance…ILL look into to later when my life is a little bit more stable. I also want to be cremated.lol…I want a huge funeral as well and I, too, gave out my password (to a good friend) for THAT SOLE REASON—To get the word out about my funeral. Hahah.
first off: great info and entry. i think i have life ins. with my company at work, but i haven’t checked into it because i dont like to keep these things on my mind… though i know i should because it’s really something that can happen at any moment. i dont know how i’d want my funeral to be though.. or who would get my stuff/pets if any. when i was younger, i said i’d be taking everything with me to the grave.. lol.. oh well. when my grandfather died, i don’t know the exact $ specifics, but i knew it cost a pretty penny.. especially in the cemetary lot – the row he was in isn’t designated to have a standing tombstone, just a regular flat inset marker, but we changed our minds last minute and paid a very pretty penny to get one made for him anyway.. so now his grave is the only one in the entire row spanning nearly 400 people across – with a standing marker.
i think the worst death is that involving students.just think about it, parents or whoever are already paying 20+K/year for the student’s tuition. if a student dies, s/he most likely doesn’t have life insurance. sigh the cruelty
First, sorry about your loss. Second, thanks for this bloq. I never thought I needed life insurance at this time. I do have it through work (by default). But this really did give me something to think about. My mom always recommends going to the casket dealer than the funeral home. When it comes to death, I know my time will come eventually, but you’re right, I haven’t really been preparing for it.
it’s really important to have yourself set up with life and disability insurance as well as a retirement plan. it took me a while to get on that. seeing my mom have to try to find $9,000 a month to cover my grandmother’s health care (she had alhlzheimer’s so she had to go to a nursing home where they monitored her 24 hours a day for her own safety), really made me realize how important it is to be as financially responsible as possible so my kids aren’t stressing like my mom did with my grandmother. also important is setting your will up correctly. my mom is being sued by my uncle (her bro-in-law) over left over money, and heirlooms, etc., sucks and is stupid.
ppl who attend the funeral usually give money to the family, which helps with funeral costs, but it could just be a korean thing? but i totally agree, life insurance is sooooo important. i mentioned before that one of my worst fears is having my husband die before me. i’m going to make sure my future husband and i are both insured for as much money as possible. right how i think i have that whole life term thing, where you can use the accumulated money as a loan when needed. I pay about 120 a month and i like the idea of having backup for money if something came up and i needed it for something, than to know that the money is going away forever and i never see it again.
exactly. not only that – investing in your own plot is also very practical. i know a lot of people thinks it’s so weird for somebody who is in her 20′s paying for her own plot now but if i view it as smart – you see, it’s only a few dollars (literally not even as much as a month of MTA card) but it will save you a lot of headache in the future – per se – a family passed away and needs a plot or something in that nature (since it’s transferrable and sellable). Although it might sound a little weird – i view it as real estate. no matter what it is – it is stupid not to think about this and obviously very selfish. take care! -di
thanks for the site. someone (an older coworker) told me i should get a policy beyond what my company offers (it’s 2-3x our annual base pay, which isn’t that little, to be honest). (i think it should more than cover my costs) thanks for the info too, i never understood the difference and couldn’t be bothered.
now in a related topic, on a legal note, i urge everyone who has specific wishes- as you do- to go out and execute living wills, proxies, power of attorneys, everything, and in writing state what you want clearly. think terri schiavo… but also what about teh things that you want like a big funeral, to be cremated, etc.? you could say it to your parents or family but they might forget when the time comes (from being upset, or it was just never emphasized to them), whatever it is. i really urge everyone. and if you think you can’t afford an attorney, just download the forms off the internet somewhere and sign them in front of a witness + a notary and have it notarized. i’m serious. you never know what it could save your family in pain and questioning (shuold we pull the plug, shouldn’t we).
(and if you need/want an attorney to take care of this stuff for you, ask me, i can refer you.)
i have it but never thought bout to make use of it now =X…..but really when im old and for my kids..i guess shiet happens *knock on wood*
thanks for the informative entry.
yup, life insurance is important and my dad bought whole life for all of us when my brother was born. it was very expensive but now we have accrued enough interest that we stopped making payments. it is still expensive nonetheless. i also have that free insurance from work too. i’m thinking of getting another policy when i get married one day.
a thing about caskets, you don’t have to purchase it from the funeral home. you can buy it directly from the company that makes it. someone who knows the casket business once told me that companies raise prices of caskets in chinese funeral homes moreso than other funeral homes.
whoa, 16k for funeral expenses?@? i had no idea. i have life insurance through my workplace. it’s almost 200k so i’m hopeful that will provide a little bit for my family should anything happen to me. the house should be paid off in another 5 yrs and we don’t have any credit card bills or outstanding balance. it’s a morbid and uncomfortable topic, but one that needs to be addressed.
this is so interesting. thanks of the post. sorry about your loss
Here’s what I think. Yes, it is highly important to have life insurance. But the common notion that you need a huge funeral is ridiculous. When I die, and hopefully I’m old when that happens, I don’t want a big funeral, or a funeral at all. I’d want to be cremated and have my ashes sprinkled over the ocean or something. And my friend told me this and I think it’s the greatest idea ever. She told me that after her grandfather passed away everyone just like went bowling and talked about their memories of him. I think that’s much better. But then, I’ve always been against the common society idea that you have to spend money on things, that you have to buy people things. I’ve always thought that actions speak louder than words. Stuff is nice too, don’t get me wrong, but it’s not everything.
It is truly unusual for anyone under that age of 40 to have such a solid understanding of the real need for life insurance. I’ve been in the life insurance business for over 20 years and I share your feelings about the importance of life insurance as a foundation for every person’s financial plan. The reasons to own it are many, and the reasons not to are hard to find. And today, with the price being over 60% LESS than just 12 years ago, it’s difficult to imagine any excuse for not having it, assuming you’re healthy and can qualify for it! Thanks for sharing this information with your readers and for recommending AccuQuote.
Byron Udell, JD, CLU, CFP, ChFC
President and Founder
http://www.AccuQuote.com
I have plenty of money tucked away for just such an event, and I don’t have any dependents. So…
i second the comment about having an advanced directive - at minimum appoint a healthcare proxy if you’re not ready to decide on the rest. lol at the comments that say it’s sooo important to have life insurance……i think i have it…
I like your style of writing, its so interesting to read what comes after the next line… Also, I agree with you on it being a need to get life insurance. My dad has us on a family plan I think and my college has this plan for all the students. When I have my own money and all, I sooooo want to learn how to play with bonds and the stock market. Interesting stuff…
I find your views on funerals interesting— pay for insurance to help cover costs that your loved ones may have to pay. Yet how many people do this? But on the other hand, you could save those premiums and enjoy life- let tomorrow take care of itself. I just lost a family member last week so the feelings are very much on the surface. I sympathize on the loss of your friend. You are young and unfortunately his life was taken way too soon.
You had favorite actors- Kevin Spacey- he’s one of mine also! I hope you have seen “The Usual Suspects” – we recently watched it! he is so good in it!
Your post hits home on the main idea about life insurance, which is taking responsibility.
Many folks don’t want to thin about their own mortality, but what happens to those left behind, that rely on them for financial support to make it?
Term life insurance is one option for people who are on a tight budget, or want to get the most coverage for their money. If you’re young, or have a family, it’s a good way to go.
I’m sorry for your loss. Yes, I think you are right that many people do not get life insurance until they have a family – and some don’t even when they do have dependents. This is especially important if you have children and there is a sole or primary source of income. People should not wait until they have a family. They should consider getting a policy when they are young and healthy to lock in the best rates but make sure it is a flexible plan that they can change over time as their life style changes. Check out http://www.termlifeinsurance.com to learn more about options and to get free quotes. Thanks for the post!
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