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- I am a former life insurance agent and purchased a policy to protect my family in the event of an unexpected death.
- I pay $25 per month for a $500,000 policy through Bestow.
- I could get the right amount for my needs at an affordable price and define my beneficiary as I see fit.
As a former life insurance agent, I have heard many reasons why people buy life insurance. Some do it to build wealth, create an additional retirement fund or leave a legacy for their family. Most people (myself included) just want to leave a nest egg for our loved ones to support their basic needs and future expenses.
That’s why, a few years ago, I purchased a term life insurance policy worth $500,000. I set it up through Bestow, an insurtech company that sells life insurance online, and I pay about $25 a month. I’m super happy with this standard policy for three main reasons.
1. I could get the amount of coverage that suited my needs
Determining how much life insurance you need is always tricky. I never received life insurance through work, but my husband was offered coverage equal to one year’s salary through his employer. It’s just not enough, and it only stays active as long as you stay at your job.
I knew I had to buy an independent life insurance policy that I could keep for the long term. A general rule is to multiply your annual income by 10 to determine the amount of life insurance coverage you need. Although I didn’t do exactly that, I set up a policy amount of $500,000 thinking about what my husband would have to pay if I was gone.
The priorities would be:
- Pay off our mortgage and other small debts
- Paying for our son’s education/college
- Salaries for about a year to take time off and adjust
We don’t have a ton of debt and my goal is not for my family to get rich from life insurance payouts, but for them to be comfortable and have their needs met.
Another thing I like about term life insurance is that when my 20 year term is up I can always get a new policy for a higher amount if needed. Or, even if our circumstances change sooner and I feel like I need to increase coverage, I can cancel this policy and start a new one.
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2. The monthly premium is affordable
Since I’m still considered a bit young in the life insurance world, my premium is extremely low at only $25 per month. I almost never notice the funds leaving my bank account automatically each month. Locking in such a good rate means I will only pay $6,000 over the 20 year term.
Another reason I was able to get such a low premium is because I opted for no-exam life insurance, also known as accelerated underwriting.
When I worked as a life insurance agent, I really enjoyed researching and building relationships with insurers and helping clients find the best policy terms for their needs.
It also helped me learn about accelerated underwriting, which is when an insurer doesn’t require a thorough medical exam for you to get a policy. This means no one has to come to your house to check your height and weight, draw blood, etc. Usually, you just answer a few basic health questions when applying online and instead of waiting weeks for an insurance policy, you can have one the same day.
Even though I don’t have any major health issues, the fact that my BMI is a bit higher and my blood work results haven’t always been perfectly normal tells me that I probably saved some money. money off my premium by waiving the medical exam and getting life insurance online through Bestow.
3. I can easily change beneficiaries if I ever need to
Naming a beneficiary is one of the most important aspects of a life insurance policy, as it determines who the money will go to. Some people make the mistake of naming their child as the beneficiary, or even splitting the life insurance death benefit 50/50 between the child and a partner.
A few years ago I learned that naming a child a beneficiary does not mean they will receive the money. Under the Uniform Minors Transfer Act, minors can accept monetary gifts and even inherit a life insurance payout. However, they cannot actually use or manage the money themselves until they reach a specified age set by the state (usually 18).
In the meantime, the state should appoint a custodian or guardian to manage the money for them until they grow old. The court makes this decision alone but tries to find a parent or other suitable guardian.
I don’t want my loved ones going through this whole process when I know my husband would make the best financial decisions for our son and raise him with care. So I named my husband as the sole beneficiary of my life insurance and added another person I trust as a secondary option if my husband was unavailable to do so.
Fortunately, I can change my beneficiaries at any time if something changes, but I’m very happy with the way it’s set up now.
For me, life insurance is about having peace of mind and taking responsibility for my family’s future, even if I’m not around. I intend to live a long and full life and not need this policy, but have it Is help me sleep more peacefully at night.
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