It is something that we don’t want to think about, but it happens. What would happen to your finances if you or your partner were to get sick or die? Yes, when you have small children you really, really don’t want to think about the potential for death, especially dying when they are small. However, planning for these potential events is important.
We just got life insurance. When my daughter was about to be born, we were going to get it, but it dropped off the plate. This is because I thought I was no longer eligible, since at that point I got a chronic illness that increases my chances of disability and death. My husband has some coverage through work, so we thought that was enough.
However, I learned that I might be eligible for insurance. As the primary caregiver for our daughter and a full-time worker, I had to admit that I am financially important to our family. My part time day job provides minimal life insurance, and our mortgage is very large, as are all of the mortgages and rents in our area. We took a look at my husband’s life insurance and discovered that while it was all right, it wouldn’t really cover what my daughter and I would need to live.
Our new insurance also provides money ahead of time in case of a terminal illness, and for a very, very small amount of money, my daughter is on the insurance and can opt in before she is 25, no medical required. This is useful, since several chronic illnesses run in the family, and they could potentially disqualify her.
While expenses will change after the death of a spouse, it’s good to plan to minimize the disruption to other parts of your family life. If we didn’t have life insurance and something happened, we would have to move, and that moving would likely take us far out of the city, away from our friends and family.
Of course, this is not at the front of mind when people think about day to day expenses, and of course you can save money yourself. Do you have an excellent emergency fund? Do you have sources of savings that you could tap into in an emergency? Do you have the financial support of family and friends? For just a little while this summer, think about what could happen if the worst were to happen, and think about how you’d manage.