Today I received the most useful financial tip I think that I have ever heard in my entire life. Seriously! It kind of sounds weird, but it is really great.
Over the last couple of years certain things have happened to friends and family that made my husband and I realize that overall we didn't have enough insurance coverage. When we were first starting out, all we could afford was the most basic of insurance coverages. And to top it out, we really didn't know what we needed. Our agent was very kind, but not necessarily helpful.
Then a friend lost everything in a fire and didn't have enough coverage. A family member had huge medical bills not covered by insurance. And other similar situations, and we got to thinking... Do we have enough coverage?
Long story short since we just recently moved we decided to go meet our new agent and up our coverage. So glad we did!! Our agent was awesome. He answered all of our questions and helped us figure out what was best for us. Now don't just assume we got duped or sold a pitch. We had done research before and pretty much knew what we wanted. There were just some loose ends and unanswered questions.
One of our areas of discussion was life insurance for my husband. I have a tiny life insurance policy through my employer, but my husband had nothing. While the reality is that we would both really struggle financially without the other, I would be worse off than my husband.
We would really love to get a permanent life policy (meaning you pay a certain amount for a set period of time then have insurance for the duration of your life; it never expires and you never get disqualified) versus a term-life policy (meaning you pay for set period of time but the policy expires, you can be disqualified, and if you don't use it, you lose everything you paid into it). The problem is permanent life is more expensive and we cannot afford it right now. The other problem is it gets more expensive as you get older.
Note this - the younger you are, the cheaper permanent life insurance is!
So here is the most useful financial tip I think I have ever heard in my life....
Get a permanent life insurance policy for your infant or toddler.
Seriously!
Yes, it is more expensive than term life, but it is cheaper for a child than for an adult. It will cost a nice chunk of money for my husband to have this type of insurance, but would be far less if he were a baby. So get it for your kid. When he gets older, he can adjust the policy to fit his needs and those of his family, but the life insurance is there. And the painful "start-up costs" of your 20s are taken care of at a much cheaper price as an infant.
Random I know, but something to consider.
Grandparents, if you are planning on leaving your grandchildren an inheritance, consider paying for this expense when your grandchild is born. That could be more valuable and give you more "bang" for your buck.
Life insurance is one of things that is really weird to think about. I didn't like sitting next to my husband and saying, "Well, if you passed away, I would like to receive enough insurance money to pay off any outstanding debts and put a chunk of money down on a house so I don't have to move in with my parents or bear the expense of renting." How awkward is that? But if you can fit it in your budget, it is definitely something to consider.
And think about it - how awesome would it be if you taught your kids to pay it forward? You set them up with a permanent life insurance policy, so they didn't have to worry about that as an adult. Then they in turn set up their children with permanent life insurance, then your grandkids set up their children.
Train 'em right! The financial things my parents taught me, I am implementing in my life right now.
Again I know that this is totally random, but I thought it was such a good tip I had to share it!
