Did you ever play the game of Life as a kid? Did you smile as you drove your little car around the board, taking in the ups and downs, racing your friends to the finish line?
As you got older, maybe you realized Life wasn’t that different from real life. When big life events happened, you remembered the same events happening in the game. The only difference is that the people were plastic, the money wasn’t worth anything, and you could always start over.
One realistic feature of the game was insurance policies, except one type was missing.
While something few people like to think about, buying life insurance is one of the most important things you can do for your family. Whether you purchase a term life, whole life, or universal life policy is not nearly as important as the fact that you provide life insurance protection for your beneficiary during the times they need this protection most. (Read about the different types life insurance.)
Reasons to Have Life Insurance
Pays Off Your Debts
Your debts don’t evaporate once you leave this world. Someone else inherits them on your behalf (your parents, spouse, or children). Life insurance helps to pay things like mortgages, auto loans, and credit cards off so that your loved ones are unburdened by those debts.
Gives Your Family Time to Make Thoughtful Decisions
In the hours and days after your death your family will experience a great deal of grief. Your spouse will need to take time off work to comfort the children and make thoughtful plans for their future. If you don’t have a life insurance plan, your spouse may be forced to make decisions out of necessity rather than thoughtful deliberations and what is right for the family. Life insurance buys your spouse time to grieve and options to consider.
Peace of Mind
While it is difficult to think of your family dealing with the usual struggles of life if you aren’t there to help them through, a decent life insurance policy can help them with the financial means to make it through many of the struggles they will face. This should offer you the peace of mind well worth any discomfort you feel dealing with a difficult subject.
Cover Final Expenses
Your life insurance policy can do all the things above and cover the costs of your burial and other final expenses. It can even help pay your medical bills if you suffer from a prolonged illness.
Your Final Act of Love for Your Family
Life insurance provides you with one final act of love to leave with those you’ve left behind. It’s your way to letting them know that you care enough to provide for them beyond your life.
Life is unpredictable. You can be perfectly healthy and ready to tackle the world one day only to discover on the next that you have a terminal illness, get hit by a bus, or have some other major accident that ends your life.
What will this mean for your family? Will it lead to a life of struggle or will you leave behind a legacy to provide for them when you are no longer around to do that yourself? That’s what life insurance does. That is why it’s so important to buy now.
In the game of Life, you can just start over when things don’t go as planned. But in real Life, you have to do things right the first time. Let’s dive into the game board and see what spaces we come across. As you come across these spaces in real life, it’s time to think about life insurance.
The Game of Life
The game starts off with a tough decision. Do you start a career right away or head off to college?
Start a Career
If you’re starting a career, chances are you’re out of high school and of legal age. While you might still be under your parent’s health insurance for a few more years, most child life insurance riders expire at age 18.
Now is the time to purchase your first life insurance policy. You hopefully don’t have any debt to worry about and the only expenses upon your early demise would be funeral costs. Make sure your policy is enough to cover these at the minimum.
Go to College
You’ve decided a degree is calling your name. You fill out your applications, get accepted, and head off to your new dorm. Just as if you decided to start your career without college, now is the time to get life insurance.
While you’ll want to make sure it covers any unfortunate funeral expenses, you’ll also want to make sure it covers any debt you leave behind. If you’re using a credit card to pay for food and necessities when you’re in between part time jobs or are starting to rack up student debt faster than you thought, make sure you have enough coverage. While federal loans are forgiven upon death, private loans are not and your cosigner will be held responsible.
Now it’s time for a big step in the game. You get to pick your own plastic person to sit in the car with you. Forever. It’s your wedding day!
Because you already have an insurance policy, now’s the time to make a few adjustments. While your parents were most likely the beneficiaries before you walked down the aisle, you’ll want to change the beneficiary to your spouse. Just call your insurance company and fill out any required forms. You also will want to talk to your insurance broker about increasing your policy’s coverage to support your spouse if something should happen to you.
Buy a Home
This is a favorite part of the game. Will you end up with a trailer or a mansion? Chances are, your home will be the biggest purchase of your life. You’ll want to speak to your insurance broker right away. Not only will you need homeowners insurance, but you’ll want to modify your life insurance policy as well. Should something happen to you, your mortgage will be passed on. Make sure your policy will cover it.
This is a scary but exciting range in the board. Will you and your spouse carry on alone or will you fill up your car with plastic babies? The average cost to raise a child in the U.S. is about $233,000. Whether you have one bundle of joy or five, the associated costs can be astounding.
If you aren’t able to raise them, you’ll want to make sure your life insurance policy leaves behind enough for your spouse or other appointed guardian to comfortably take on the task. You should also add your children as secondary beneficiaries to your life insurance policy in case an accident takes the lives of both you and your spouse at the same time.
There are plenty of miscellaneous spaces you can land on along the way. These are similar to the curve balls you land on in real life. Here’s how to handle them.
- Swap salary: If you land on this in the game, your salary automatically goes up or down, and sometimes drastically. If your salary suddenly jumps up in real life, you want to make that adjustment in your life insurance policy as well.
- Buy vacation home: Congrats! This is a favorite space to land on. But with the additional mortgage, you’ll want to up your life insurance coverage.
- Winning the lottery: This happens in the game of Life a whole lot more than in real life. But if you do strike it big, the first thing you should do is have a meeting with your financial advisor. Go over all your paperwork, including your life insurance policy. There’s a good chance it will need to be updated.
How did we get to the end of the game so quickly? In the game of Life and real life, retirement is a dream that comes too soon once it’s here.
Now is the perfect time to make sure all your ducks are in a row, so you can enjoy your remaining years. Make sure your beneficiaries are all correct on your policy. Is your spouse still living? Are you still married? If you have more than one child, decide how you want the money to be split up. Do you want any of it to go to your grandchildren, if applicable? How about charity? This isn’t necessarily all listed in an insurance policy. You’ll want to update your will with this information. But make sure your policy matches with how you’ve planned out distributions.
While not part of the board game, it is a part of the real game of life and you need to prepare for it. This is where it all comes together. Everything you’ve done in your life all catches up here. Your legacy has been decided. Now that you’ve watched your final sunset, it’s time for your life insurance policy to finally do what you planned for it to do.
When your policy matches your needs, it will take care of any outstanding debt, pay for your final resting costs, and leave your loved ones with the financial means to continue enjoying life, even if you’re no longer with them. When you know the reasons to buy life insurance, there’s no other way to play the game.