At Least Insurance Companies Think I’m Worth It

Lately I’ve been wondering if I’m in a strange position of being “insurance-poor.” I pay around $180 per month for life insurance, and that’s a big chunk of my monthly expenses. So I decided to look into the unbelievable amount of information about life insurance available.

My insurance agent originally helped me come up with what seemed like an affordable life insurance quote at the time, but a lot’s changed since then. I’ve been divorced twice, lost two houses and then remarried. I don’t currently have a house and don’t need mortgage life insurance. I pay a LOT of child support, and can’t contribute much other than that to the family income.

Most of the calculators ask a lot of similar questions, and if you have some information at your disposal while you’re working, it’ll make the process go faster. For example, you should have a good idea of how much term life insurance and whole life insurance you have. You should also have a listing of your monthly expenses and assets.

So, to find out how much insurance I needed, I went to a few websites that had life insurance calculators to see what I could find. Just about every insurance offers free instant life insurance quotes, but I wanted to make the calculations myself. I picked the first three sites on Google that had calculators, and fed the same information to each of them.

The first site was BYG Publishing. They publish a lot of interesting non-fiction books about ordinary life, with some about financial matters. Their calculator demanded the most information of all, and did a great job of helping to figure out a lot of other aspects of finances.

The life insurance calculator required that I do calculations in a lot of different areas including a cash flow calculator and a net worth calculator. These were both very helpful. I recently calculated my own cash flow, and this calculator showed me a few things I missed when I put mine together, most notably, monthly hidden expenses. I’d missed a lot of these. Even if you’re not looking for insurance, this site is worth going to just based on the cash flow calculator alone.

The calculator was very thorough, and looked for all possible financial resources my current wife and children might need. Essentially, the number the calculator finally reached would allow my family to continue living in their current fiscal conditions until my children turned 21 and my wife reached 55. The amount suggested for my poor bankrupt self? $1,200,000.

Sure, I’d like to have $1.2 million for my loved ones, but I’d also like to eat. I wondered why this estimate was so much higher than any I’d seen before. My initial thought was that this site was published by the insurance industry itself, but that doesn’t seem to be the case. The website has the typical Google Adsense advertisers on it. It’s just a little too conservative for my needs.

The next site I looked at was sponsored by the Knights of Columbus, a mostly charitable fraternal organization. Their site required a lot of similar information, but didn’t have the handy calculators that BYG’s did. It also didn’t get as picky about information, and offered a more realistic amount, around $500,000. All things considered, I couldn’t afford this either. And, as it happens, as soon as I finished my calculations, the site offered to connect me with my nearest Knights of Columbus insurance agent. It seems they’re a mostly charitable fraternal organization who happens to own an insurance company.

Finally, the most objective site, in terms of advertising, was MSN Money. Again, their calculator wasn’t as comprehensive as the first, but more comprehensive than the second. One feature I liked about this site was that if you didn’t have a lot of information readily available, it suggested averages for you. I found those averages to be pretty realistic. My favorite feature of the site though was the bottom line. It actually suggested that my current amount of insurance was more than adequate, and that I’m slightly over-insured.

So for now, even though it’s tough for me to make my monthly insurance payments, I’m going to stay right where I am. I know my financial situation is going to start changing for the better; after all, there’s no place to go but up from bankruptcy. If I dropped some of my current coverage, I wouldn’t easily be able to replace it, due to my being over 40, and having some serious health issues in the past. There’s insurance available with no medical exam, but it’s often more costly than other forms.

It’s nice to know that there’s someone out there in the financial community who values my presence. Even if I’ll never have a million bucks, now I know I’m worth a million bucks.

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Filed under: General Observations on May 21st, 2007

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