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Life Insurance: What To Get & How Much

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Disclaimer: This post may contain affiliate links, which means I may earn some money if you click on one at no cost to you.

Life insurance is not something most people want to even think about in their 20’s.

And I get it…Insurance in general can be confusing as hell.

Plus when you’re 20-something that feeling of invincibility can lead you to believe that you can get around to buying life insurance later.

However, life insurance is a crucial part of any long-term financial plan, and, in most cases, the sooner you get it the more affordable it will be.

Get a free life insurance quote with PolicyGenius

Why We Need Life Insurance

The main purpose of life insurance is to replace your income in the event of your death.

If any of the below statements describes your living situation, you should definitely get a free quote:

  • You are married or live in a cohabiting relationship.
  • You have children or plan to very soon.
  • You’ve taken out a loan for a house.
  • Your student loans don’t have a death benefit.
  • You have any consumer debt with a co-signer.
  • Anyone (aging parents, kids, spouse, etc) relies on your income.

And those are just a few.

Should something happen to you, the people who depend on your income should be able to grieve without worrying about how they’re going to survive financially.

It’s known that I’m looking to dive into real estate investing.

Let’s say I go out and borrow $200,000 for an investment property next week.

To celebrate I eat some really bad sushi, get sick, and die.

(I know, I know. Super dramatic but roll with me here.)

My wife would now be on the hook for that entire $200k loan without my income. That would really stink!

With adequate life insurance, she could not only cover the cost of the new investment property, but also any burial expenses and normal, everyday expenses that we already had prior to the purchase.

This is why life insurance is so important.

Do you need life insurance? Get a quote with PolicyGenius today!

What Type of Life Insurance Should I Buy?

I personally have a term life insurance policy for myself.

And for most people a term life insurance policy makes the most sense. Why?

Well, for starters, it’s wayyy more affordable than a whole life policy.

In a lot of cases we’re talking 5-6 times less expensive.

For example, I currently pay less than $30 per month for over $750,000 in coverage for a 25 year term.

A whole life agent may try to invoke fear by telling me that term is only good for those 25 years and I could die after the term ends leaving my family with nothing. 

But that’s not exactly true. Not for me at least.

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I wouldn’t leave them with a life insurance policy, but in 25 years I’ll have enough wealth built up to self-insure.

And if you’re on this site it’s because you’re looking to build real wealth for your own family.

By following our financial guidelines, you should be debt-free with enough wealth to self-insure at the end of your own term.

Should you die within the term you choose your family would be financially covered. And should you die after the term expires, your family should still be financially secure due to the wise financial decisions you’ll make.

Remember, term life insurance is much cheaper the younger and healthier you are when you get it, so don’t put this off.

How Much Do I Need?

This is where you’ll need your budget and a calculator.

Don’t worry- calculating your life insurance needs is actually a fairly simple process!

The first thing you need to do is determine the total cost of your necessary annual expenses.

By necessary, we mean all of the items included in your rent/mortgage, food, clothing, and transportation costs.

Not your Netflix and Apple Music subscriptions.

Let’s say your needs total $3,500 per month.

Once you have that monthly total, you’ll multiply it by 12 to receive your annual number.

In our example of $3,500/month, the total annual expenses would be $42,000.

Then it’s time to calculate what your household needs for a financial independence nest egg.

We do this by multiplying your total annual expenses ($42k) by 25.

This gives us a total of $1,050,000.

Once you have your financial independence number, you’re going to subtract your current net worth which is just the value of what you own minus the amount you owe.

For example, if your assets are worth $200,000, but you owe $50,000, then your net worth would be $150,000.

We would then subtract your current net worth ($150,000) from your financial independence nest egg ($1,050,000) to determine how much life insurance you need.

In this example, you would need a policy worth $900,000.

If you’re married, both parties need life insurance even if someone stays at home with the kids.

I mean just imagine losing a stay-at-home spouse and needing to now pay for daycare or a nanny on top of all your new responsibilities as the only parent. 

Having adequate life insurance for both spouses gives your family the ultimate peace of mind.

Where Should I Buy Life Insurance?

Many companies offer life insurance to their employees at no cost.

While you should totally take advantage of this, you should also have a separate life insurance policy outside of your job.

Here’s why:

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Something totally unexpected could happen to cause you to lose your job, and, as a result, your life insurance.

And you never want to have a lapse in coverage for your family’s sake.

I always recommend folks go through an independent broker for their outside of work insurance needs.

The primary responsibility of an independent broker is to shop around on your behalf and find you the absolute best price possible.

You don’t always get that when going directly through companies like MetLife or any of the other agencies.

With that said, the Winning To Wealth team has partnered with PolicyGenius to help you get a few quotes for absolutely free.

As I went through the process myself, I was amazed by how simple the whole thing was. This assured me that they would take care of anybody I referred over to them.

I also liked that once I applied for my quote, I didn’t start getting a million phone calls hounding me about life insurance every day.

Also, their quotes are extremely accurate with no hidden fees and you can ask their agents as many questions as you need to.

Seeing as how the longer you wait the more expensive your quote can be, I highly recommend you tap below and get started on a quote today.

Again, it doesn’t cost you a thing.

Do you need life insurance? Get a quote with PolicyGenius today!

Applying Through PolicyGenius

To get started, you’ll enter a little info about yourself. 

Notice the “expert helpers” in the top right corner. If you need assistance at any time, just click there and someone will assist you.

I will say, though, that I went through the entire process unassisted as it’s fairly simple.

Next, you’ll start to enter in some basic info about your health.

Once you enter in the basic info, you’ll be asked to go into a little more detail regarding your current or former health status.

After you enter in your health info, you’ll be prompted to save your progress by entering in your email address with a box like the one below.

Once you save your progress, you’ll then be given a few quotes from several companies. Below are screenshots from my quotes.

You’ll notice that you can opt for a monthly or annual payment option with the annual option potentially saving you some money.

You’ll also notice the “expert help” tab is even more noticeable now on the right side.

As I mentioned, this is my actual quote. So you can see the lowest offer I received was from Pacific Life at $25.56 per month.

This comes out to $306.72 per year.

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Now let’s take a look at the annual quotes.

You’ll notice that the best price now comes from AIG and would save me $6.19 for the year.

Again, these are my quotes based on my health info. Yours could and probably will look totally different.

I chose the annual plan then added a line item in my budget for $25.04 to start saving every month for next year’s renewal.

That’s pretty much the entire process to get a quote. The whole thing took less than 10 minutes.

Securing Your Life Insurance Policy

Once you’ve made your decision, it’s time to actually secure your policy.

There are a few steps involved in this but PolicyGenius does a solid job of simplifying the process.

Step 1: Schedule A Review Call

You’ll need to speak with an agent just to verify the info you submitted. This is a great time to ask any questions regarding the policy you’ve chosen.

They’ll also send you some additional paperwork to sign for the insurance company you chose as well.

Step 2: Complete A Medical Exam

More often than not, you’ll need to complete a quick medical exam for your insurer. This sounds like it would be a nightmare, but it’s actually fairly simple. 

Someone will reach out to you and schedule a time to meet. They can come to your job on lunch break or even by your house before or after work in some cases. The only thing you really have to do is give them a time and location and show up.

The examiner will show up and ask you a bunch of questions about your medical history. Do yourself a favor and answer as honestly as possible.

You’ll also give a blood sample which means it could be a few weeks before you actually hear anything back so stay patient. 

Before the examiner leaves, ask when the policy is effective. Some policies become effective at the time of the application while others start once you get the results of the medical exam back and make the payment.

That’s really all there is to signing up for an affordable life insurance policy.

Summary

Term life insurance is the way to go for a lot of Americans today.

Not only will lower monthly premiums save you money today, you can also build wealth for the future by investing the difference in low-cost index funds.

I recommend starting with a free quote from PolicyGenius because they really do care about making the customer experience a pleasant one.

If you haven’t already, get started with your quote by clicking the image below.

 

How much life insurance do you actually need? Should you get whole or term? We answer these life insurance questions and more inside.
Learn how PolicyGenius can save you money on term life insurance today

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