A nurse I'd never met sat at our kitchen table on the first Thursday in April and wrapped a blood pressure cuff around Tyler's arm while Moose watched from the hallway. She took blood from both of us, weighed us, asked a few questions, handed us each a cup for the bathroom and was out the door in 35 minutes. That was the exam part of buying our first life insurance.
We applied at the end of March, a couple of weeks before my birthday, so I went in as a 31-year-old. Tyler is 33. Both policies were approved this week.
We don't have kids. We don't own a house yet. For a long time that seemed like a reason to skip life insurance, and for a while it probably was. Two things changed our minds.
The first is the house. We met with a loan officer last month, and buying a place around Macon is starting to feel real. Typical starter homes here run $120,000 to $170,000. Once we have a mortgage, it'll take both paychecks to carry everything comfortably. If one of us died, the other would be left with a 30-year loan and one income.
The second is Tyler's job. He's a maintenance technician at a plant, and he spends his days around heavy machinery. He's careful, and his plant takes safety seriously. But I'm a pharmacy tech who reads warning labels for a living, and I can't unknow what I know.
Tyler's plant does give him a group life policy worth about a year's pay, and my work offers a small one too. That's nice, but those stay with the job, and they wouldn't come close to a mortgage. We wanted coverage that belongs to us no matter where we work.
How we picked $250,000
I sat down with the sheet and asked one question: if one of us died, what would the other one need to stay in the house and not be pushed into a bad decision for a few years?
- Pay off a mortgage on a house under $150,000: about $140,000
- A funeral and burial in a small town: about $10,000
- About two years of Tyler's take-home pay, $2,950 times 24: about $70,800
- A cushion for the things nobody plans for: about $30,000
That adds up to about $250,800, so $250,000 for Tyler. For me the income piece is smaller, since I take home less. But when we priced $200,000 against $250,000 on my policy, the difference was less than $2 a month. We made both policies $250,000 and kept it simple.
Why term, and why 20 years
Term life covers you for a set number of years at a set price. If you die during the term, it pays. If you don't, it ends, and you've paid for protection you didn't use, the same way we pay for car insurance and hope never to need it. Whole life lasts your whole life and builds a cash value, but the whole life prices we saw for the same $250,000 were many times higher. People who do this for a living argue about whole life. We just knew we couldn't afford it and didn't need it.
For the length, we compared 20 and 30 years. The 30-year policies would have cost us about $20 a month more combined. Twenty years takes us into our early fifties. By then, a mortgage we take out in the next year or so will be paid down a lot, we'll have more saved, and the hole one of us would leave should be smaller. If life changes, we can try to buy more later, as long as we're healthy enough to qualify, which is a real if.
What we pay
We got prices through the independent agent in Moberly who handles our car insurance, who checked several companies for us, and from one big national company online. The application took longer than I expected. There was a phone interview with a lot of health questions, the exam at our kitchen table, and a check of our prescription history, which as a pharmacy tech I knew was coming. About three weeks later, both of us were approved at the price we'd been quoted, which our agent said isn't a given.
Here's what we pay for 20-year term, $250,000 each:
Me: $14.80 a month. Tyler: $19.60 a month. Together that's $34.40 a month, or $412.80 a year, and the price is locked for all 20 years. It's less than half our phone bill.
We're each other's beneficiary. If we're both gone, it's split between Debbie and my parents. Tyler said that's the most morbid sentence I've ever made him agree to, and he's not wrong.
I'm not an insurance agent, and I can't tell anybody how much to buy or which kind. What helped us was writing down what the other person would actually need, pricing a couple of amounts and lengths, and remembering that the cheapest time to buy is usually now, while you're younger and healthy. Your own agent can run the numbers for your life.
