In the hectic hustle and bustle of day to day life, we sometimes don’t have time to sit down and really consider whether we are spending our money in the wisest possible ways. Of course, we worry about the immediate necessities like food, clothing, and housing, but many people forget to think about those unforeseen necessities, the things that our families might need in the future. This includes savings, of course, and deciding to purchase life insurance.
Life insurance provides a vital safety net for those left behind in the event of an untimely death. And for families without it, the loss of a breadwinner can spell absolute devastation. So, given the fact that the need for life insurance is obvious, why do so many people neglect to purchase life insurance policies? It turns out it all has to do with one common misconception: According to a recent study by Life Happens and LIMRA, 65 percent of households do not purchase life insurance simply because they think it’s too expensive.
When respondents were asked to estimate the cost of a $250,000 term life insurance policy, 80 percent of them guessed that it would cost about $400 a year, overshooting the mark by more than double. The actual price is around $160 a year, or roughly $13 a month (prices vary according to age, sex and health).
So, to illustrate just how affordable life insurance actually is, we’ve put together a little list of 7 common things that you probably already spend money on, which cost more than a life insurance policy:
Dining Out
According to a recent Consumer Expenditure Survey by the U.S. Department of Labor Statistics, the average American household spends roughly $225 per month on meals away from home.
Clothes
The average American family spends around $1,700 on clothes annually, which works out to over $140 per month—more than ten times the cost of some term life insurance policies.
Coffee
Even your daily cup of joe costs more than your life insurance policy. A few years ago, a study found that Americans spend more than $14 per week ($56 per month) on their morning buzz, and that’s not counting coffee consumed at home. And given the rise of indie coffee roasters and artisanal pour-over coffee shops since that study was done, we can only imagine how much that price has gone up.
Home Electronics
With the price of a new LED TV hovering between 800 and a few thousand dollars, just one single purchase at your favorite electronics store could cost the equivalent of five to ten years of your term life premiums.
Entertainment
Even a relatively inexpensive night out—dinner and a movie for instance—Is going to run you $40-$50 at the very least, which is possibly more than double your monthly premium.
Streaming
How many streaming services do you subscribe to? Add them all up and chances are you’re paying more than $13 per month to get your binge-watching fix.
Alcohol
That bottle of scotch in your cupboard or a single night at the bar each cost more than the $13 you could be spending on life insurance.
Are we saying you should stop buying clothes, cancel your Netflix subscription, or stop going on movie dates? Absolutely not. But if you cut out one or two things here and there (opt for a beer instead of a pricey cocktail, resist the urge to go on that shopping spree, brew your coffee at home, etc.), you could quickly find yourself with the leftover money you need for a much more important purchase – the peace of mind that comes with knowing your family is protected in the event of tragedy.