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The True Cost of Life Insurance

Many overestimate what it actually costs

Three out of four people feel they have a good understanding of life insurance and although they may understand the basic benefits and purpose, many overestimate what it actually costs.

The right reliable life insurance policy can provide you with cash-on-demand for future use, supplement your retirement income, and provide a plan for your financial future. It can also provide for your family when you’re no longer available to do so (i.e., when you pass away) and protect them from unnecessary financial strife by covering final expenses, paying off debts, providing an income, and ensuring your family maintains a comfortable standard of living and your children can continue their education. What’s more, a life insurance policy can protect your business by providing the money to fund a buy-sell agreement, protect it from the loss of a key employee, and leave a legacy for those you care for most.

Having the right life insurance policy in place makes good financial sense, but many mistakenly feel that it’s probably not an affordable commodity for them. For example, when asked how much the yearly cost would be for a twenty-year, $250,000 term life insurance policy for a healthy 30-year-old, 80% of those surveyed overestimated the cost by five times the actual investment required.

To set the record straight, the actual cost of the $250,000 life insurance policy mentioned above is about $220 per year. That’s a manageable $20 per month, or $0.66 per day! To put this into perspective a bit more, many of us pay far more to our local service providers, coffee shops, and restaurants on a monthly basis. On average, these monthly expenses are costing us approximately: $110 for cellular service; $120 for cable TV or streaming entertainment; $130 for coffee on the way to work; and $200 for that quick and easy take-out lunch.

Having access to these local services and treating ourselves to these amenities helps to provide us with comfort, convenience, and enjoyment; there’s no doubt these things are important for the average person’s overall happiness and well-being. However, as important as it is to invest in yourself now, it’s equally important to invest in your future—that way, if the unexpected happens, you can feel secure in the knowledge that you, your family, your business partners or employees are covered. Having a reliable life insurance policy in place can help you do just that.

If you find that things are a little tight—and, let’s face it, with the high cost of living here in Bermuda, spending even just a little more each month may leave you feeling underwhelmed at the concept—the right life insurance policy can still be affordable by making minor tweaks and adjustments in other areas where you’re currently spending your money each month. Trimming here and there would make getting—and affording—life insurance a breeze and save yourself and those you care about far greater financial pressures in the long-run.

There’s no doubt that finding a healthy and manageable balance between living extravagantly versus living frugally, enjoying life in the present moment and also managing to set yourself up to continue to enjoy life, or to protect your family in the future can be challenging. Now that you have a good understanding not only of the benefits of a reliable life insurance policy, but also the fact that it’s far more affordable than most people believe, you have one more tool in your toolbox to give yourself a better chance of success in finding your financial comfort zone.

If you would like any further details, please contact Mahkai W. Outerbridge at Freisenbruch on 441 294 4618 or 441 534 0006  mwouterbridge@fmgroup.bm for more information.

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