Why my mother and I bought life insurance to protect each other - Business Insider

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Because their husbands were the primary breadwinners of their families, my friends were left with mortgages and all the household expenses

"I don't want you spending your money on me," my mother said, shaking her head as she poured us both coffee. We were sitting at her kitchen table talking about money, the same place where many financial discussions had taken place over the years.

Recently, though, I've found myself thinking about it — certainly not because I missed paying the premiums. Perhaps it was because I witnessed two of my friends left nearly homeless after their husbands died suddenly. Neither of their husbands had life insurance, and one of them had a teenage daughter.

After the death of her husband, I helped one friend sort through papers in his office. She had found a life insurance policy issued by his employer that needed only his signature. We were both stunned. She just stared at it in shock. "He always thought there would be another tomorrow. He never wanted to talk about dying."

Despite having some savings, one friend had to launch a crowdfunding campaign to help with her husband's funeral and the utility bills. My other friend was forced to sell her home to avoid foreclosure. They both eventually got back on their feet with the help of their communities, but they endured so much undue stress that a life insurance policy could have alleviated. This got me thinking about my 83-year-old mother. As a German immigrant who survived WW2, she has always lived frugally.

After some comparison shopping, I purchased a five-year term policy with a value of $50,000. My payments are $40 monthly, or approximately eight lattes in coffee currency. Definitely affordable and well worth it. Financial experts offer mixed advice about life insurance. Sure, if you're a young, married couple with a newborn baby, a policy is crucial. The primary function of life insurance is to replace the income for those who are financially dependent upon it.

 

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