Yep…you read that right. October of last year, my husband left his 10 year banking career to work for an insurance company, and because he was insured through the bank’s group insurance plan, he had no life insurance when he left. What that meant for our family of five is that if something were to happen to him before he obtained coverage, we would be SCREWED. I stay at home with my kids, and we have a life insurance policy on me, but we knew we needed to act fast to protect our family from the dangers of being unprepared. Here’s what Dave has to say about why you shouldn’t have ALL of your life insurance tied up at work.
As previous bankers (both of us) and licensed insurance representatives (my husband), we knew what we needed to do. We had heard Dave Ramsey recommend a term policy through Zander Insurance (one of his Endorsed Local Providers, or ELP’s), and in fact, this is the company I’d purchased my insurance policy through a few years ago. They are a brokerage with the ability to obtain the best rates from multiple companies, allowing you to choose the right fit for your family. So we went online to obtain a quote. If you obtain an online quote, be open to the fact that if you have risk factors (such as family history, cancer, and/or smoking/nicotine use), your rates will likely be affected.
The day he was hired at his new company, we set out to get coverage. After you apply, a representative from Zander Insurance reaches out to you to schedule an appointment for blood work and an exam at your local Quest or Lab Corps. He scheduled the appointment and within a week, we were playing the waiting game. It can take (usually) up to six weeks to obtain approval of your life insurance coverage, and for us, it took closer to 9 weeks. The reason it took so long is because my husband has a history of a rare heart condition (diagnosed at age 15), and they had to track down the physician that diagnosed him for a report. What a headache!!
The Waiting Game is No Fun When you have No Life Insurance
While we were waiting, it must have been really weighing heavy on my husband’s mine. He told me he had a dream that he had died and Sadie (our 2 year old) couldn’t remember him. 🙁 He said that because he travels for work, he wanted to do something special with her. He wanted to get a folder with business card holders, and he was going to bring home every single key card from every hotel he stays at. He’s always done this, and Sadie calls them her “debit cards”. So every week, when Daddy comes home from his business trip, he tells Sadie to get out her book and they organize her key cards. Here she is in action. She pulls it out sometimes when he’s away just to look at them.
Moral of the story? Make sure you have life insurance in place, and you should truly consider the fact that your employer offers life insurance as a benefit. Take the FREE life insurance and consider purchasing additional through a private policy, because the company provided life insurance usually isn’t enough.
How Much Life Insurance do I Need?
Dave Ramsey recommends having 8 to 10 times your income, and if you’re a stay at home mom or dad with no income, he recommends $400,000-$500,000. You DO work, and if something happened to you, as the main provider and caregiver to your children, a price would have to be paid for those services.