On Wednesday I wrote and published a blog post called Do You Have Life Insurance? When I got home after work last night, Thursday, not even 24 hours after publishing the post, what to my wondering eyes had appeared in my mailbox but a letter from the company managing my life insurance policy.
It appears that my term life insurance was in effect for 10 years, and I am approaching the end of the initial term. My policy anniversary is November 10, 2012.
Next month, my premium will increase from $18.79 to $102.38. Going forward, my premium will change annually.
As I read the letter, my heart sank. Shoot. All my grand plans to leave my loved ones an inheritance dissolved since I can’t afford the new premium, and I will be cancelling my policy.
Okay, maybe I could afford that new premium if I stopped paying extra toward our debt. But to be honest, even though I am not your typical personal finance blogger (since I don’t invest in stocks, bonds, do not have a Roth IRA or 401K and no retirement savings and don’t know a lot about these things) I think I could do better, if I had $102.38 each month (and the amount will increase yearly) to invest that money in some way. Just socking $100 a month into my mattress for twenty years would be $24,000!
Early this morning I read the great comment by Kosmo on my original post which brought up a lot of good points, and actually made me feel a lot better about my decision to cancel. I especially liked the part where he mentioned that a person nearing retirement themselves should not be relying on their parents for money. Yes, an inheritance would be a nice bonus… bonus being the key word.
Here is my next consideration… about a week ago I received a letter from my credit union informing me that I have $2000 credit union paid coverage for Accidental Death and Dismemberment Insurance through Minnesota Life Insurance. For an additional $5, they will increase that to $50,000. I tucked the letter beside my computer monitor to have a closer look at it later. It says my additional coverage is already pre-authorized and will go into effect as soon as I submit the form enclosed. I have received these notices over the years, but have never really paid much attention to them. I will definitely read the fine print and see what exactly is covered. I do see that all coverage is reduced by 50% when I turn 70 (in 2033).
Accidental Death and Dismemberment insurance has always seemed kind of weird because who wants to think about these things? Who wants to think about losing a hand, or an eye? It almost seems if you have this kind of insurance you’re opening some kind of gateway to something happening, tempting fate in some way. Of course that isn’t logical, but my superstitious upbringing gets the best of me at times.
So what do you think? Should I pay $5 for this Accidental Death and Dismemberment insurance?