A few years ago the business that I had helped to establish was forced to close down. I remember that night well. I had sunk all of my savings into that business and it had thrived. However in 2003 when the bombs began to fall in Baghdad, our largest client ended up canceling their contract and two of our other larger customers went out of business. My creditors, of course, didn’t really care what the reasons were of why I wasn’t getting paid. All they were interested in was getting paid themselves.
I sat down with my wife and we made a list of all of the changes we needed to make such as downsizing to a home that was smaller, cutting out cable television, and perhaps canceling my policy for life insurance. We did cut lots of items from our budget, but I did manage to scrape a few dollars together each week in order to keep paying for my term life insurance policy. I used to joke about being worth a lot more dead than I was alive.
Those times were very scary. Now I am in good financial shape. However, the recent downturn in our economy has landed many friends of mine in the exact same place that I had been. For a majority of Americans the cost for maintaining their policy for life insurance is about the same cost as two meals dining in a casual restaurant. When you have just been laid off from your job or facing some other sort of financial crisis, it’s quite natural to think about dropping your life insurance coverage. You may think at that point that things can’t get much worse.
Unfortunately they can get worse.
Death statistics have been examined by economists from the U.S. Federal Reserve and Columbia University. Their findings showed that workers who had been laid off had a higher rate of mortality than workers who remained steadily employed. Discharged workers, from mass layoffs over the last twenty years, in many cases were more likely (up to 20 percent) to suffer mental or medical problems leading to death.
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If you have life insurance through your job, if you leave or are laid off usually you will need to get a new insurance policy. In fact there are many financial advisors that encourage their clients to maintain a policy for term life insurance on their own in addition to any coverage that their employer might offer them. That way, even if you change employers you will be able to keep your coverage and keep the cost of your monthly premiums low. You also won’t be required to take new medical exams every time you change your job.
Over the last several years I have supplemented my employer-provide insurance with my own term life insurance. This has given me the peace of mind that no matter what my employment status is my primary policy is there to protect my loved ones.
I wish I could say that over the last decade I stayed with the same insurance company. However, after learning more in terms of how insurance providers for term life insurance rate risk, I made a switch. If you are overweight, smoke or have a lifestyle that is sedentary, your monthly premiums may cost more. I have never been a smoker, but when I started going to a gym several times a week I looked online and was able to find a life insurance company who could save me about ten dollars per month on my premium payments. It was a little reward for me doing some things to take better care of myself. Of course they are things I should have really been doing this whole time.
If you are considering canceling the policy for your life insurance think about other budget items that you may be able to cut. Maybe you will be able to kill two birds with one stone. Try spending less money on items that are unhealthy and keep your life insurance policy still intact.
