One day you’re sitting on the couch sharing some laughter over that silly reality show only the two of you watch. The next thing you know, a heart attack takes them away from you unexpectedly.
When I met with my client, a recent widow, sympathy and helplessness is all I could feel. Her husband of twentysomething years is gone. She's 57 and could only hope to retire at 66 when she is eligible for Social Security. But the harsh reality of the situation is that she won't be able to retire. Her husband had very little saved in his 401(k) and and his total life insurance was provided through his employer, at a mediocre $25,000.
This woman is now left with a house that still needs to be paid off and very little money in her own retirement account. So while she's still mourning the loss of her husband, she now faces a new set of challenges. Although we can’t bring her husband back, I think about how much more comfortable she would have been if he had purchased more life insurance.
I compare her situation to that of another client who is just a few years younger. This client's youngest child will soon be graduating from high school. She also experienced the unexpected loss of her husband, and while the grieving and pain are still there, there’s one undeniable difference: Her husband had the foresight to purchase cheap term life insurance.
Not only did he purchase life insurance, but he purchased enough life insurance that in conjunction with his above-average retirement savings, his wife would have enough to take care of his kids and their ambitions of going to a private university. If my client manages her money properly, she will never have to go to work again if she doesn't want to.
I’ve had several meetings with her over the years and the one undeniable truth is that she’s so thankful that her husband was responsible enough to purchase the life insurance. It pains me to see situations like the first client, where each day is a struggle. I write this to all the spouses or parents out there who have a family that depend on you: Do not believe that it will never happen to you.
Do not believe that you are somehow blessed and fortunate to where bad things never happen. I’ve seen it happen far too many times to know the truth.
Life insurance is cheap. Life insurance is easy. Life insurance is a must.
When's the last time you reviewed your life insurance coverage?
Jeff Rose is a certified financial planner and U.S. combat veteran. He blogs at Good Financial Cents and Soldier of Finance. Learn more about his Life Insurance Movement that has inspired over 75 personal finance professionals to educate families on the importance of having enough insurance coverage.