I’m officially ready to die. Not that I want to or anything. I’ve still got a few things I’d like to check of the ol’ to-do list, but should something happen to me, I’m ready, financially speaking.
Thanks to Life Insurance I’m Ready to Die
For the better part of 15 years I’ve put off getting life insurance for many reasons:
- Lack of money.
- Too busy.
- Too busy and lack of money.
Whatever – all pathetic excuses. Thank God nothing has happened to me because what a colossal dick move that would have been to go out and marry my high school sweetheart, have four kids, then pass away leaving no means or assets to help them out once I’m gone.
Had I died before today, my wife would have needed to go back to work, no easy task for someone that’s been out of the workforce for the past 10+ years raising babies. She would have been a single mom, thrust back into the workplace to earn a salary that would probably be far less than we make today.
She would have been forced to raise 4 kids alone. Work a full time job. Cook meals. Tend to the house. Help do homework. And do everything else by herself, with no help from me because I didn’t have the foresight to get some life insurance. A tough job to say the least, yet one that is done on a daily basis by so many of you out there (hat tip to all you single parents – keep fighting the good fight!). In a sense, my death could have equated to the loss of BOTH parents.
Sorry kids – daddy didn’t want to shell out $42 bucks a month for insurance, so now you get to pay for it in other ways.” #WorldsGreatestDad
Worth More Dead Than Alive
All that changes today. I just finished getting my life insurance physical. The money for my policy has already been deducted from my bank account. I’m officially covered, which means I’m now worth more dead than alive. Which also means I’ll sleep very well tonight. And tomorrow night. And from now on knowing that there is a plan in place to support my family if and when I kick the bucket. If that happens this year, my family will get: $1,368,000 in tax free money plus $50,000 a year in Social Security benefits. Here’s how it all shakes down:
Life Insurance – Personal
- A $750,000 policy with Mass Mutual through Haven Life. That’s three quarters of a million, all tax free. Our cost: $52.00 $42.00 per month. (Update: I recently received an email from the good folks at Haven Life informing me that my policy rate was being LOWERED by $10 a month.)
Life Insurance – Employer
- My employer offers a basic policy worth 1.5 x my base pay; again, tax free. This benefit is free for me.
- My employer also offers a voluntary policy of 4 times my base pay which costs me $40.83 per month. This isn’t a great deal actually, but I’m enrolled. I’ll need to look into this when my next enrollment period rolls around. This money will probably be better spent on a private insurance policy.
Social Security Benefits
- If I die this year, my wife and kids will get $4,165 per month in Social Security benefits. The way the government breaks this down is $1,784 a month for my wife, and $1,784 a month for each kid, but there is a hard cap of $4,165. Because I have four kids, that cap kicks in. Based on the age of our kids today, my family will be guaranteed to get the $4,165 amount each month until 2026. In 2027 they’ll get $3,568 per month. Starting in 2028, after our youngest turns 18, my wife will continue to get $1,784 per month for the rest of her life.
Life Gets Better
With all of this money I hope my wife will leave the Seattle area and move back closer to our family so that she’ll have a solid support system to lean on. I also hope she’ll pay off our modest debts, pay cash for a nice house with a big yard for the kids, then invest what’s left over in our Vanguard account. Put it all in VTSAX, withdraw 4% of that nest egg annually to live off of. That money plus the Social Security benefits will be more than enough to live the life of her dreams.
Now I feel ready to die. Should I pass away, life get’s better financially for my family. And as a provider, that’s the best gift I can give them.
Do you have life insurance? If you’re already financially independent, is life insurance even necessary? What if you don’t have any dependents? Leave a comment and let me know your thoughts.