Life Insurance 101
Life insurance seems like a scary thing, but — especially if you have kids — it’s something to think about. I never really thought about it until I had children. But it makes sense. If something were to happen to me or my husband, I want my children to still have the financial support that we give them now.
That’s why I was interested in Fabric, the company that sponsored this post. In addition to a free will service, Fabric offers life insurance for less than $14 per month, and application takes just ten minutes online. It was started by parents and designed with us in mind. Want to learn more? Read on!
What is life insurance?
It’s like any insurance — car, home, health — but in this case, the stakes are higher. To put it crassly: You pay a company each month and if you die, they pay your beneficiaries an agreed-upon lump sum.
If you have someone who depends on you financially — especially a child who is unable to work — I think it makes sense to have life insurance. Some people may have coverage through their employers. If you’re depending on this, make sure that you won’t lose it when you change jobs.
Is it expensive?
It depends on your specific situation, but I don’t think so. A recent industry poll showed that 50% of millennials believed that a $250,000 term life insurance policy for a 30-year-old would cost them $1,000 per year — it’s actually about $160.
That amount depends on how much and how long you pay into the policy: At least five times your annual income is the industry standard. You should also take into account large expenses like college tuition.
Typically, life insurance covers death by unexpected events like a car crash or fire, by illness like cancer or a heart attack, or by natural causes. Life insurance companies differ when it comes to suicide.
Term life insurance is slightly different. This covers a specific period of time — typically between five and 30 years — and might make sense if you’re a parent. For example, you could get a 20-year policy, which would benefit your child if something happened to you during the time between their birth and when they move out of your home. (These policies are typically more affordable.)
Full disclosure: My family had purchased life insurance prior to me meeting up with Fabric and I am not insured by them. But I did my research for this post, and they have a good reputation. I also like that Fabric’s application process takes just ten minutes and can be conducted on their app or online — and that it is seriously secure.
Be safe, everyone!