I know it seems dark, but do you ever think about dying earlier than expected? It pops into my head once in a while, and then I start thinking about the people I’d leave behind. Then I get all teary-eyed. And then I attempt to leave the emotion part out of it and think about the financial repercussions for my husband. That is how I try to make insurance and other financial decisions that would affect him if I die first.
When we hit about 28 years old, my husband and I started taking life insurance a little bit more seriously. Our coverage before that was just one year’s income, which would cover our funeral cost and pay off our first home.
But at 28, we noticed our accumulated assets, we paid off our first home and bought a more expensive one, and he joined me and took the leap into self-employment. We decided to get more coverage and bought a 10 year term life plan that will cover each of us for $250,000 for an accidental death (or $37,500 for a natural one…). That is enough to cover our funeral costs and about 3 years of not working at all, which should be long enough for whichever one of us is still alive to get back on their feet.
If you have a super low budget or just rather not look at the big life insurance plans, you may want to check into simple funeral insurance. Plans like HBF’s funeral coverage can be extremely affordable and at least take care of your final resting costs. There’s a low monthly premium in exchange for a $5000-$15,000 payout if the worst comes to pass.
Other than insurance, I also look at our largest assets and see how we would be affected if the other one of us passes away. Our home and our rental property are in both of our names. So are our major investment accounts (or at least our spouse is the beneficiary in all accounts). The only main assets that we have that aren’t co-owned or have beneficiaries is our cars. My husband is the name on his car and my name is on my car. It was easier than filling out financing paperwork for both of us. So, worst case, one of us dies and their car is in probate for a while? Not too worried overall…
Honestly, our next step is to get a real, legal will written up. We have an informal one signed and have told the executor where it is. But by age 35, we should have a legal one wrapped up just in case.
How about you? Do you have stuff squared away if the worst happens?