5 Steps to Setting Up a Term Life Insurance Policy
Does anyone else hate paying for life insurance? Oh, just me? OK.
For the longest time I could not get myself motivated to take the plunge and purchase term life insurance as Dave Ramsey suggests.
The concept makes sense in my brain. I know it's relatively cheap per month, but I always felt the need to gamble on the premise of not ever needing to use it, so why buy it?
When we had a baby, my mindset shifted pretty quickly. Actually, before she was born I finally took the plunge to get some life insurance. I simply couldn't stomach the thought of suddenly leaving Kelsey and Rooney on their own with my income gone and no way to pay the mortgage and keep up with the bills.
I think one of the reasons I didn't want to take out a life insurance policy was that it just seemed like it would be a lot of work. I don't particularly like filling out paperwork, and what about the pesky screening they sometimes make you go through? Annoying. Again, having a baby was my motivation to actually move on this action item that had been sitting on my list for more than a year.
If this is something you're thinking of doing for yourself (actually, for your family) here are the steps broken down that I had to go through. My hope is to break down the scary monster so that you, too, will go get the all-important term life insurance to protect your family, heaven-forbid something tragic happens.
5 Steps to Setting Up a Life Insurance Policy
- Get a recommendation. For me, I went with Zander Insurance. Highly recommended by Dave Ramsey. They were fantastic. Customer service was phenomenal! This was before reconnecting with the Conroys. Kelsey is currently working with them to get her policy set up.
- Fill out the paperwork. There will be paperwork. No way around it. But! It's not that bad. Just the standard questions about your overall health and any family history issues.
- Send in the paperwork. Fill it out and send it back. Then you just get to wait. Let them do the work for you. This was a big misconception that I had about the whole process. I felt that I would have to talk with a half dozen people trying to get the best price and coverage. Zander did all that for me and gave me the best price for what I was looking for.
- Schedule the screening. I think it's pretty common for life insurance companies to request a screening prior to starting your policy. Yes, it was annoying that I had to spend one lunch hour getting a screening done, but in the end, it just wasn't that big of a deal. I think I psyche myself out sometimes with these types of things.
- Wait for the results. After the results were in, it was simply a matter of signing some brief paperwork to get the policy started. It's set up on auto draft on a monthly basis and I don't even have to think about it.
The peace of mind is worth every penny I pay for term life insurance. Again, I hope Kelsey never has to cash in on the policy, but having it in place makes me feel like I am doing the right thing for my family. After I had the term policy in place, I was able to cash out a whole life policy that my mom had set up when I was a wee little guy. It was enough to pay for my new (refurbished) MacBook. Thanks, Mom!
FYI: Dave Ramsey suggests a policy that is 8-10 times your annual income until you can become self-insured through building wealth over an extended period of time. Term life policy only. No whole life! Read this article for more information.
For a baseline read this article on the Simple Dollar of Life Insurance Loopholes to Avoid.
Do you have term life insurance? If not, what's holding you back?