what’s the deal with life insurance?

by Alison Green on October 2, 2019

And now a word from a sponsor…

If you have people who depend on you for financial support, you probably want to ensure that they’re protected if something were to happen to you.

But how exactly does life insurance work? How much should you get, and where should you get it from? I asked Paya Schlass from Haven Life Insurance Agency to answer the most common questions I hear about life insurance.

(Haven Life is a life insurance agency backed and wholly owned by MassMutual that was founded by a new dad who thought the process for purchasing life insurance should easier. They’ve modernized the process of buying term life insurance to make it simple and affordable.)

What’s a good way to figure out how much life insurance you need?

Paya: The industry-wide rule of thumb for how much coverage someone should aim for is five to ten times their income, but that doesn’t work for everyone. When calculating  specific needs individuals should factor in debt, childcare, expenses, and savings. For an easier and more customized approach, you can try using an online needs calculator, which allows you to plug in your specific details and what you’d like to cover.

Keep in mind that your financial needs may change in the future. For example, purchasing a more expensive home may require you to have more coverage. You can try and estimate some growth into your first life insurance policy or simply purchase a second policy down the road.

If you already have life insurance through your employer, does it make sense to get more on top of that or does that usually cover it?

Paya: The great thing about employer-provided life insurance is that it’s often a free benefit and if you do have to pay an amount towards the policy, it’s often a minimal amount (think a few dollars a month).

However, there are downsides to solely relying on group life insurance plans. For one, over time, getting additional life insurance through your employer could end up being more expensive than a policy purchased directly from a life insurance company. Next, the coverage limits offered may not be high enough to meet your needs. For example, your employer’s policy may be capped at the amount of your annual income, but most people with financial dependents would need more coverage than that.

Finally, employer-provided life insurance is tied to your employment status. If you change jobs, your coverage would likely end or you may have to pay a fee to take it with you, making employer-provided life insurance less flexible.

This is not to say that you should not take advantage of group life insurance benefits. Just be sure to factor the limitations when you need to purchase additional coverage. Generally, it’s a good idea to consider having an individual life insurance policy outside of work.

If you’re single and don’t have kids, is there any reason to get life insurance?

Paya: Life insurance is a safety net that becomes necessary when there are people in your life who financially rely on you in some way. That could be young children or even a spouse who you share the mortgage with. So if you’re young and single with no debts or children, then you may not need a policy at this time.

That said, if you hope to have kids in the future, you may want to consider getting life insurance in place early on. The younger and healthier you are, the more affordable it can be.

An online life insurance calculator can also tell you whether coverage is needed or not.

How exactly does term life insurance work?

Paya: Term life insurance provides you with coverage for a set period of time — typically, 10, 15, 20 or 30 years. You pay a set premium each month, and if you die within that term length, your beneficiary will get the payout. However, if you don’t die within that term length, no payout will be issued. Term coverage often appeals to people who want an affordable way to put coverage in place.

For example, a healthy 35-year-old-woman can buy a 30-year, $500,000 Haven Term policy, issued by MassMutual, for $36/month. You can get more information by visiting this article on our blog or estimate your term life insurance rate.

With term life insurance, what happens once the term ends?

Paya: Term life insurance is meant to be an affordable way to help financially protect your loved ones during the years they need it most, until the mortgage is paid off or the kids are in college. Once you’ve come to the end of your term length, there are three options:

1. Don’t do anything: Ideally, you’ll no longer have a need for coverage. If that’s the case, you can let the coverage end and enjoy that extra money in your pocket each month.

2. Renewability: Some term life insurance policies have “guaranteed renewability.” Terms vary by life insurance company but generally it means you will be able to extend your coverage without going through underwriting again. This buys you some time to figure out the next steps and still remain covered. Keep in mind: when renewing your policy, premiums will increase substantially, which usually doesn’t make it a great long-term option.

3. Purchase a new policy: You can always apply for another policy if your term is ending, and you still have a need for coverage. You are likely at a different place in your life both personally and financially, so be sure to revisit your coverage needs to ensure you’re purchasing the right amount for your situation.

What’s the process to apply really like? I’ve heard some people say it’s pretty fast and others say it can be more involved.

Paya: Haven Life has worked hard to make applying for and purchasing term life insurance as simple as possible. You answer some questions online about your age, lifestyle and health history. Then, once an application is submitted, we analyze that information in real-time and verify it with some industry-standard third party data sources. If approved, you can start coverage that day. At times, we may not have enough information from your application alone so we’ll required a medical exam so an underwriter can review it further and if approved, finalize your rate based on your information. When that’s the case, we try to make it as simple as possible by letting you take it at a time and place of your choosing.

How do pre-existing conditions affect your rates and eligibility? And what kinds of conditions are looked at as part of the underwriting process?

Paya: Medically underwritten term life insurance (which is what we sell at Haven Life!) takes into consideration a variety of factors to determine eligibility and pricing. The underwriting algorithms will look at BMI, cholesterol, prescription history and many other data points to get a holistic understanding of an applicant’s health, with pricing being personalized on an individual basis. Without knowing the specific medical condition, it’s difficult to say how it would affect pricing and eligibility.

If you do have a medical condition, it is likely that you’ll pay more than the best rate — but there are also conditions that wouldn’t impact rates at all. Medically underwritten life insurance is usually more affordable. So, if you’re considering buying coverage, you can find out about pricing and eligibility is to submit an application online or feel free to reach out prior to submitting an application and provide us with some information regarding your condition so we can help determine if this is a good path for you!

You can get a free quote from Haven Life here.

This post is sponsored by Haven Life Insurance Agency. All opinions are my own.

Haven Term is a Term Life Insurance Policy (DTC 042017 [OK1] and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. Policy and rider form numbers and features may vary by state and may not be available in all states. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Our Agency license number in California is OK71922 and in Arkansas, 100139527.

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{ 58 comments }

{ 58 comments… read them below }

  2. WellRed*

    I’m single and no kids. I have life insurance so that if something happens to me, my mom or whoever can pay for funeral and the balance of my student loans, which have a co-signer, will be paid off.

    1. Person from the Resume*

      Me too. I just have my employer provided life insurance. I’m single, my college loans are paid off, my car is paid off, and I’m renting. All my parents will have to worry about is funeral costs and honestly my survivors would inherit my savings (intended for my retirement) so they will come off monetarily ahead.

      About a decade ago when I owned a house I was paying off and the housing market sucked, I was a bit more worried but I still didn’t think I needed more than what was offered through work.

    2. The Man, Becky Lynch*

      Yep! I’m single in the way that we’re not married at this time. But my partner doesn’t depend on me for financial things. Yet I have it because I want to take care of my parents/brother/partner in at least some way if I go first. It’s such a minimal cost to me that I’d rather leave them a chunk of change that will take care of my final expenses and not put that burden on them.

      Nobody has cosigned on anything, so the debtors can suck it, they can all afford the loss [the big ones have life insurance policies on me of their own, hey car loan provider] but I certainly don’t want to put anyone out for the cost of getting rid of my remains!

    3. Fortitude Jones*

      Yeah, I’m in a similar boat – single, no kids, with significant student loan debt. I opted into my company’s life insurance plan and took out the max amount, which was four times my base salary (so $280,000) at $11 per pay period. That will be more than enough to pay off my debts and have me cremated should I croak anytime soon. And my company’s policy is portable – as mentioned in the Q&A above, I’d just need to pay a small fee and take over the full cost of the premium (which really isn’t that expensive).

      I also have critical illness and accident insurance.

    4. Goldfinch*

      I understand wanting to fund the funeral, but why the student loans, assuming you don’t have a cosigner? I’d think they would get their share of your estate, and then just be SOL if there wasn’t enough.

      1. Flyleaf*

        You might want to have life insurance even though you don’t have a co-signer if there are other assets in your estate that you would like to go to your heirs. Otherwise private student loans (not government student loans) can come after your estate assets to cover the loan.

        But if you do have a co-signer, it can go very bad if the borrower dies. Some private student loans become due upon the death of the borrower, meaning that the co-signer can’t keep making payments. They will need to pay it off all at once. That’s where life insurance, with the co-signer as beneficiary, will be helpful.

        1. Fortitude Jones*

          Yup, this is me. Most of my student loans have no co-signer, but I have book royalties I do not want a lender going after should I die and my book sales explode (it could happen…lol) as a result. I also have one that’s in my mother’s name, and I don’t want her saddled with my loan payments should I die prematurely, so she’s getting more than enough to pay it off immediately in full (she’s my beneficiary).

    5. Emily K*

      I’m also single and child-free, but I do have pets. I have a small policy worth $25,000 that I pay $2/month for through my credit union. The beneficiary is the person I have named in my will to care for my pets if I die before they do.

      There are more complicated legal arrangements you can set up with “pet trusts” to actually ensure that the money gets spent on the pets and nothing else, but I trust my designated person to love my pets as his own and not pull an Aristocats on them, so I just want to make sure that caring for them after I’m gone, especially as they get older and have more health issues, isn’t a financial burden for him and that he’ll be able to give them the care they need for the rest of their natural lives.

    6. Z*

      Me too. I’m single, no kids, and I have the free life insurance provided by my employer (to pay for the funeral) and nothing more. My parents worry about my mortgage or my student loans — but I have no co-signors. I told my parents that should I predecease them, they should feel free to let all my accounts default and let the bank foreclose on my home. I’ll be dead, what do I care about my credit rating! And all those debt collectors can go sit on a tack.

  3. Amber Rose*

    Here’s my problem with personal life insurance: there’s no reason for them to pay out. They can just claim you developed a condition later and didn’t tell them, tie your loved ones up in red tape to try to disprove it until they give in out of exhaustion and frustration, give back a couple hundred bucks of premiums and that’s it.

    It’s what happened with my mom. If it weren’t for her employer’s insurance we would have got nothing at all.

    The process of signing up for life insurance is not the issue. It’s the claim. And I have yet to meet an insurance agent who can ease my concerns on that front. So to anyone signing up for this stuff: read closely, or get a lawyer to walk you through any contracts you sign. Make sure you really understand how the process works.

    1. ipalindromei*

      I used to work for a life insurance-related industry and dealt with a number of claim filings. What you and your mom experienced isn’t the norm unless the claim was filed within the two-year contestability period. When you have a problem like this, you should reach out to your state department of insurance and file a complaint – state DOIs take these kind of consumer complaints seriously.

      I’m sorry you and your family had to go through this – no one should have to deal with this, especially when they’re grieving the loss of a loved one.

    2. Fortitude Jones*

      My mom works for a well-known life insurer, and she says the exact same thing because she sees those claim denials firsthand. Still, she opted into her employer’s life insurance, lol.

    3. Artemesia*

      My parents had a mortgage life policy on my Dad (this is a terrible product and they had enough equity they didn’t need it and it cost as much as the mortgage every month but when I suggested to my Mom she drop it, she said, ‘but he could die next month and all that money would be wasted’ — I wisely shut up. My Dad had AD and did die a few days short of his 80th birthday unexpectedly. It turned out that the policy became invalid at age 80 which I didn’t realize. The company owed 15K to finish the mortgage but they told my mother ‘oh we changed the policy and it is now prorated and since he was so close to 80 we will only pay 3K.’ A friend of my elderly mother who had some corporate experience stepped in an backed them down — but having collected well over 15K on this policy over the years, they still tried to cheat an old lady out of the money to pay off the mortgage. We have known a few people who died young leaving families and the term insurance always paid off. Large policies have medical exams involved usually and I am sure they occasionally try to weasel out of paying but the few I am aware of paid off with no hesitation.

    4. HappyRetiree*

      It appears that your mother had a policy that was medically underwritten, meaning that she had to satisfactorily answer questions about herself and her health before the policy was issued. The insurance company would not be concerned about a condition she developed after the policy was issued. They would be concerned that the cause of her death and contributing causes as indicated on the death certificate existed before the policy was issued (pre-existing condition), that she knew or reasonably should have known the condition existed, and that she did not disclose it when asked before the policy was issued. The terms of the policy will say that the policy will not pay if the death is the result of a pre-existing condition.

      In this sort of situation, the assistance of an attorney would have been useful, either to argue on the family’s behalf that a pre-existing condition did not exist or to explain to you why the claim was validly denied.

      It is never a good idea to fudge information about a health condition when applying for insurance because the insurance company will find out about it and deny a claim just when your family is depending on it. It is often possible to get life insurance coverage even if there is a concerning health condition. It may cost more (“rated premiums”) and there could be some hoops to go through to get coverage issued but those things are small compared to leaving you family in the lurch when the insurance claim is denied.

      (I worked for a couple of insurance companies , had a career in employee benefits admin, and have education in life insurance.

    5. Paya at Haven Life*

      Hi Amber, I’m sorry to hear about the experience you went through during the claims process for your mom’s policy and can completely understand your skepticism. While I’m not sure about the specifics of her policy, generally speaking, with term life insurance policies, there is a two-year contestability period typically starting from the policy’s effective date. It’s in place to protect the insurer from misrepresentations in the application. So, for example, if an insured passed away due to cancer and they knew of the diagnosis and failed to disclose this information on the application that would be considered a misrepresentation.
      During this time period, if a claim is filed it will likely be subject to additional review. As long as the application was answered as accurately as possible, it’s uncommon for a claim to be denied with a top-rated company. For example, Haven Life is backed and wholly owned by MassMutual, a leading life insurer that paid more than 5.8 billion in life and annuity claims in 2018. We are here to help financially protect people and their families, and we take that responsibility very seriously.

  4. Artemesia*

    Great example of a single person who needs life insurance — a co-signed student loan which will land on the parents. There are some recent example in the news of this happening to mothers with very low incomes who suddenly find themselves owing 100K on their deceased child’s loan. No one without great means should be co-signing loans and you never co-sign without the expectation you will have to pay them off, but lots of parents do and this is one of the disaster scenarios. (the other being a callous offspring who simply fails to pay and sticks the parent with the loan.)

    The important rule with family is a big term policy on both parents when the kids are 25 and under — the cost of managing child care if one parent dies is enormous and of course must be done with the loss of the income of the second parent — or their services as caregiver if they are not in the workforce. And if you hope to educate the kids, being covered through the college years will be helpful. Big term policy and then relentlessly save each month for retirement so when it becomes too expensive to renew term policies (and the kids are grown) you now have a big nest egg and are ‘self insured.’ Whole life is almost always a terrible idea; do your savings outside your insurance policy which lets you buy the much cheaper term insurance and get the huge policies half a million and up per parent you really need.

  5. No real name here*

    There was one thing I didn’t see mentioned but was a piece of advice that I got that seemed useful. If you have kids and one of the parents stays home with them, it’s still worth insuring the SAHP even if the SAHP isn’t providing income to the household. If the SAHP were to pass, the working parent would need to take on more expenses like childcare.

    I got calls about term life insurance from my insurance company the second I got married. My spouse is quite capable of being self sufficient, thankyouverymuch. The kids? Not so much. We waited until our first child was born before embarking on that expense. It’s an expense where I certainly hope we are just throwing money down the toilet, but it’s nice to know it’s there if we need it.

    2. Mr. Tyzik*

      I have my husband, a SAHD, covered by my policy amounting to my income. Our son is old enough not to need childcare, but I will have to up some expenses in the even he dies.

      I even have a small policy for my child to cover funeral expenses, just in case.

  6. Hey Karma, Over here.*

    Clicked the link.
    “OUR RECOMMENDED POLICY
    Based on your answers, you probably don’t need life insurance at this time. However, if you have a unique situation that requires coverage, we’re happy to help you get your real rate.”
    I thought so.
    But not enough to call and talk to an agent. So thanks.

    2. Paya at Haven Life*

      Thanks for checking us out! Our needs calculator uses several factors to help calculate how much term life insurance coverage is right for your personal situation. And, as you’ve seen, in some cases it may determine coverage may not be needed. Generally speaking, the calculator factors any debt you may have along with the financial impact on your dependents (such as: replacing your income, health care for a non-working partner/ debts, the cost of child care, college education and funeral / final expenses) so if you have specific needs that aren’t captured here, you are still welcome to select the coverage you need and apply.

  7. Anonforthis*

    I recently found out my mom has life insurance. When I thought about it, it didn’t make sense — she has basically no assets, no mortgage; she owes on a car and a small loan, but the balance isn’t more than $5000. No one relies on her, and if anything, she’s asked us (her kids) for money. And I don’t know how much the life insurance is or what kind it is, but I do know she was a smoker for decades and has COPD (she still vapes, I’m not sure how that’s seen by insurance these days) so it can’t be the cheapest. Is there a reason I’m not thinking of that she should have life insurance? I suppose for funeral expenses, but I’m sure my brothers and I could cover that at this point.

    1. Person from the Resume*

      Interesting. My parents mentioned that my Uncle continues to purchase new life insurance in order to leave something for his wife and kids when he dies. Like it’s important to him that they receive money when he dies. He and my aunt are in their 60s. Their kids on in their early 40s, middle/upper class, employed, married with kids of their own. He’s in decent health for a 60 year old, but my parents mentioned it as a waste of money because his kids certainly don’t need an inheritance and the money spend on buying term life in later life could probably be better spent or just saved by my Aunt and Uncle.

      * My aunt may need some of it as we don’t know the full details of all their finances.

      1. Anonforthis*

        Hmm, I can sort of see that, but it makes even less sense for my mom. She literally asks us for money (or at least food, gas, etc.).. surely she knows if she is regularly asking us for funds, we aren’t expecting to get any when she passes!

      2. The Cosmic Avenger*

        Right, he should just put those premiums in a savings account…although if he’s not at all good with money, that might explain why saving would not be a viable option for him.

        1. Coverage Associate*

          Yes, it can be a savings or investment or estate planning vehicle, not just risk management.

    2. Paige*

      Funerals are ridiculously expensive these days, and she may just feel better not worrying about putting whatever burden it is on you.

  8. The pest, Ramona*

    Getting life insurance when kids were little and we were young and healthy meant the cost was low and stayed the same throughout the life of the policy. We based the payout dollar amount on ‘replacement’ cost of each parent (childcare, cooking, housecleaning, projected income, transportation, etc) until the kids were 18. Best decision ever, given that I became a widow way too young. Our lives would have been so much more difficult without this safety net!

    1. TootsNYC*

      It can be such a difference in money. Sure, you’re paying for a longer period of time, but your life may change.

      Later in life, my husband didn’t have as much employability, and if I died, it would be harder.
      We’ve contemplated buying a new home, so having that mortgage suddenly dropped on someone would be hard.

    2. pleaset*

      Sorry to hear about your partner dying, but you did it right and this an important lesson to share.

      Thank you.

    3. Paya at Haven Life*

      I’m so sorry for your loss, Ramona. Thank you for sharing your perspective, and you’re correct, it’s smart for anyone with financial dependents to lock in affordable pricing while they are young and healthy.

  9. Insurance Agent by Day*

    I would like to see them address getting declined. All of this assumes applicants are relatively healthy which is where group policies are very beneficial. It also sounds like a pretty comprehensive look into the medical history of the applicant. My understanding of these policies is that they look at your entire history, not just the last 5 years or so. Supplemental Life policies offered through an employer provide guarantee issue amounts for employees and their dependents. Often the participation requirements are very low (as few as five employees electing). If your employer or spouse’s employer does not offer voluntary life coverage ask about it! They can also elect to cover domestic partners where allowed by state law. Finally, portability of coverage is available in most policies should you leave the company.

    1. Artemesia*

      If work coverage is all you can get then go for that. The obvious problem just like with health insurance is that if you get too sick to work you don’t have health insurance or life insurance. But if you are uninsurable otherwise it can be a valuable benefit. I could get one and a half times my salary very cheaply; not enough when we had young family so we had other policies, but if I had been uninsurable, it would have been a comfort to know we at least had that much.

    2. Paya at Haven Life*

      Hi, our medically underwritten coverage isn’t solely for the healthiest applicants. One of the things we are most proud of is that the underwriting platform we have developed does an excellent job at looking a the holistic health of an applicant to determine eligibility and the appropriate rate class. You are correct, it’s a comprehensive review of health and potential risk but is no different from what the rest of the life insurance industry is looking at for medically underwritten coverage. In cases where individual, medically underwritten coverage isn’t possible for an applicant, we agree, supplemental life insurance through work is a solid option. But for many people, it’s possible to get better pricing with an individual policy. Then, you don’t have to worry about what happens when you leave your job or need to pay extra for portability.

  10. Schnoodle HR*

    Though I think it’s important to understand life insurance policies, I’m not for them. Take what is free from your employer and focus on budgeting and paying off debt. The reason life insurance policies are so popular is because high debt has been normalized. I had kids a little later (early 30’s) and that had some advantages financially, but I still believe that by the time you’re 40 you should have your house paid off. A 30 year mortgage shouldn’t exist, living in debt is not a right of passage or a positive mark of “adulating.” If you educate yourself on finances and debt, you could save that $36/month for 30 years, which is over $12,000.

    Plus, I don’t want to be worth more dead than alive.

    And I’d want my parents for instance, to use their money and enjoy their lives, not worry that I “need” their insurance money. I’ve heard countless conversations in this similar fashion, that “well I’ll leave such and such rich when I die!” WHY?!? Why is that a thing? I have employees who have multiple policies, over $500 a month in premiums for one guy, so he can brag about how rich his wife will be when he dies. I just do not understand.

    1. Artemesia*

      When you just start out and have a young family, the costs the remaining partner will have in raising those kids alone without your salary are ginormous — everyone should be saving and living within their means as you suggest, but they should also have large term policies when they have dependents counting on them and before those savings are large.

      1. The pest, Ramona*

        This! No way could I have raised kids on only my income. No way could we have saved enough to cover that cost. And no way would we have qualified for a 20 year mortgage, so yes, I was still making house payments throughout my 40’s. Life insurance is the better financial move for many of us as I noted earlier in the comments.

    2. July*

      Respectfully, I think you have some pretty unrealistic ideas about what people can do financially as well as the vicissitudes of many people’s lives. People are seldom buying homes in their early twenties, and the great majority of people aren’t able to pay even a modest mortgage in a decade. For instance, my husband bought our house when he was thirty-years-old and single. His field is one that involves a long education and, often, several jobs before settling into one’s “permanent” job. He bought a home that was within his means as a person early in his career. Fifteen years or so later we could afford a far more expensive home, but we’re living below our means, socking away money for retirement, and will have our home paid off early next year. We’re thrifty, but we’re not going to live like paupers so we can meet some arbitrary benchmark.

      I also really understand the idea of wanting to leave your spouse rich. It’s probably not financially wise for the reasons you cite. But people do have a pretty powerful impulse to care for their loved ones and, when contemplating one’s death, it’s pretty natural to want to use money as a stand-in for presence.

    3. reformed lurker*

      Or you could save $36/month for 2 years, die at 35 with young children, and leave your spouse to care for a young family. Eliminating debt does not mean your family will have no expenses. The $1000 you saved during that time won’t go far.
      Life insurance does not make financial sense if you don’t die during the term, but the whole point is that you don’t know if you will die. You are paying the life insurance company to take on the financial risk of your death.

      1. pleaset*

        This. If you did, you don’t want it to be a total financial catastrophe for your kids/partner. It’s unlikely most of us will die young enough for this to matter, but the risk is there.

    4. The Man, Becky Lynch*

      My dad actually cashed in his life insurance policy to buy our home decades ago because he has always taught us to never incur debt as well.

      Part of this is that some partners neglect retirement funds and go the hard route of piecing together life insurance polices like you’ve mentioned! If I die, there’s also money in my retirement fund that goes directly to my estate. So

      I don’t need a six figure life insurance policy. I just have enough to get rid of whatever stinky aftermath is left when I am evicted from my body. I agree that nobody should “get rich” or “be set for life”, that’s how you end up on 20/20 because someone got greedy and didn’t like you anymore.

      1. Coverage Associate*

        My husband is uninsurable and unemployable, and it’s a hard situation on the life insurance level, as well as all the others. He stands to inherit a tidy sum, so I try not to worry about our relative lack of retirement savings, but ideally he would at least have life insurance in case he passes before his parents.

        1. The Man, Becky Lynch*

          I feel for you immensely. Before the ACA came in, I was uninsurable health-care wise and it was absolutely awful and scary. It reminds me how much insurance is great…when it’s frigging available.

    5. Asenath*

      I think it’s seen as giving your children a really expensive gift by leaving them insurance money. For some people, it’s a way of expressing their love – they might not be able to afford much of a gift when they’re alive, but wait until they die! And for others, it’s a need to ensure that they don’t leave a burden for their children – that however expensive their last days are, there will be something there to pay any debts and do a “decent” burial (or, these days, I expect, cremation). Personally, I’ve pre-paid my funeral (money in trust with a reputable company; there was one local business that collapsed and the pre-paid money was nowhere to be found). Some of my relatives made the same choice.

      Personally, I have no dependents to care for and minimal debt, so I just have insurance on my home and the minimum policy from work on my life. And supplementary health insurance for drugs and so on.

    6. Kate*

      I’m the breadwinning spouse of a stay at home parent. My spouse would have to do significant higher education/job retraining to get the kind of job that comes with health insurance. You bet your butt I have a great life insurance policy and so does he, because I don’t make enough to replace everything he does for our kid with paid labor.

      And our policies are through Haven–I came here to say thanks, Alison, for featuring this! When I was looking for life insurance I thought AAM might have some good suggestions and that’s how I found Haven. I’m not dead yet, but our experience has been good so far : )

  11. TootsNYC*

    I like to chime in on life-insurance conversations to mention

    first-to-die life insurance

    My husband and I felt we couldn’t afford to have high-value life insurance for both of us.
    So we decided on an amount that we thought would cover the things we felt needed to be covered, and we bought one policy that would pay out when the first of us died (and then would cover the expenses of getting that person set up to go forward without debt).

    It was only a little more than the cost of one policy, but very definitely not as much money as two.

    There is also last-to-die and 2nd-to-die insurance.

  13. Hope*

    As the child of a parent who died in an unexpected car accident (which also resulted in insane hospital bills for my sibling who was also in the car accident and nearly died, and this was at a time before hospital bills had skyrocketed), at the very least if you have children, get some damn life insurance. We were totally fucked because my parents didn’t think they needed it (and/or didn’t want to talk about it because it’s morbid). We’d have been even more fucked if my parent’s boss (who was devastated b/c he was really good friends with my parents) hadn’t paid most of the hospital bills for us, including my sibling’s extensive rehab, or if we hadn’t been renting with only two months left on the lease.

    As it was, we were lucky we were able to move in with my grandparents, or things would have become a lot more dire much faster. Social security doesn’t cover the cost of a funeral–nothing near it. Even though my other parent had a solid work history, they had been a stay-at-home parent for a couple years, and when you lose your spouse suddenly and have to constantly be in the hospital/rehab with a brain-damaged child, you’re not exactly free to find a job that’s going to cover the bills. In many, many ways we were lucky, but life insurance would’ve been a lot more helpful than luck.

    If you have anyone who might remotely depend on you–and that includes pets, if you’re going to need someone to take over the care for them, that someone might need help paying for pet needs–get some life insurance. Get a will. Make your wishes known. And consider filling out this for whoever’s going to end up dealing with your stuff: https://drive.google.com/file/d/12LuGzCeU2PKPTjXjrXG63CGHK-bUB6XV/view

  14. Goldfinch*

    PSA regarding medical exams: if you buy a policy that requires you to receive a medical exam, RESCHEDULE if you become ill. We waited forever for a nurse to come to our house to do bloodwork for my husband’s union life insurance, and the day before the appointment, he came down with a minor stomach bug. The scheduling had been such a pain that he elected to power through instead of reschedule. It turned out that his bile/liver counts were so messed up from the day of vomiting that he was denied the policy. We ended up having to spend a lot more to get an outside policy, just because he tried to do the right thing and keep his appointment.

    1. Paya at Haven Life*

      That’s an understandably frustrating situation. If a medical exam is needed to finalize coverage, it’s definitely worth letting your medical examiner know about any illness so they can advise if the exam should be rescheduled (in many cases, it should). It may also be useful to provide the context of the sickness to the underwriting team. They may either allow for a second exam or review medical records to see if your doctor has noted any previous history of those abnormal exam results.

  15. Calyx Teren*

    If you have a history of treated depression in total remission, and no other health conditions, both Aetna and Cigna will deny you life insurance year after year, citing that as the single reason. So, if you have depression but want to take care of your kids and family, better to go without treatment.

  16. Tachy IT Lady*

    This is to anyone who does not have kids or a spouse (but want to have them later in life): If you automatically receive life insurance through your employer, I heavily advise against declining it just to save a few bucks a pay period. Once you decline coverage, applying for life insurance again will be very difficult due to the extensive screening process (medical examinations, lifestyle assessments, etc.)

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