I'm a huge planner. It's a fact. I feel like time is wasted when you live life flying by the seat of your pants. This is a lesson I learning the hard way from acquiring serious debt and baggage in my early 20's. When I met my husband we decided to be as prepared as possible for any situation that comes up so we don't have to rely on our parents. MOST OF THE TIME - it works.
So when we got married in 2014 and purchased our home 5 months later - aside from joy, the first thing I felt was fear. We just spent our savings on a house we could grow into when we decided to start a family. This now required both of our incomes to meet our monthly bills. I don't regret this decision at all. We have a beautiful home that is a perfect fit for our family for years to come. We won't have to sell in 5 years to get a bigger place.
However, if something happened to me or my husband we could no longer afford this home. We would be forced to sell and either move into a small rental or in with our parents. For me - this was not an option. I am all about leaning on family in times of crisis but I have my limits. So what were our options.
Being young, we hadn't had time to rebuild our savings quickly and we didn't have a retirement plan in place. Yes my job offered a 401k but it wasn't very big yet - certainly nothing I could live off of if I cashed it out. (This is not a good idea to do before you turn 59.5 anyway!)
Next option was term life insurance. (I had done my research on the difference between WHOLE LIFE and TERM LIFE - and in another post i'll explain why TERM LIFE was the best option for me.) To some people, life insurance is a commercial they see on TV for old people who haven't planned ahead. For others, it's a waste of money (who needs security for your family - right?! NOT) or they assume it's too expensive. I decided to get a quote from our homeowners insurance agent who also provided term life insurance. WOW - for only $45 a month my 26 year old husband and I could have a $500,000 policy EACH. That's less than the cost of a date night! And it would allow me to pay off our house and debts while investing the rest to live off of each month if anything happened to my sweet hubby or visa versa.
So we signed up for the policy. Unfortunately, our agent wasn't fully in our corner. Yes he got us something we could afford but 3 years later I found the catch. I was going over our budget as I do every 6 months or more as needed and finally decided to READ the policy. Turns out we were only covered on a 10 year policy. So when we turned 36 and still have our mortgage to pay and a kid or two, our affordable life insurance was going to jump from $45 a month to $300 a month!!! WHAT!!!! We couldn't afford that nor would we want to. AND if we tried to extend our policy for additional years, we would have to provide "proof of insurability" which means they would re-asses us at our new age of 36 (the older you are the more expensive life insurance gets) and take all new medical history into account and give us an increased monthly premium based on that. They could even deny us if we had a nasty medical condition pop up in those 10 years.
I started freaking out. Luckily I had a friend who had just become an agent and I immediately called him over to give us a new quote. When he got here I found out we could get the same $500k coverage for the extended term of 30 years (not 10) and it was only going to cost us about $40 extra a month. It was a no brainer. After filling out the application, I got out my Just In Case book and wrote in our new policy info. That's when the next chapter in my life started...