In this most recent episode of The Casual Corner, Mahkai Outerbridge sits down with Keishon Wilson to answer some of the most frequently asked questions about succession planning and the real cost of life insurance.
Is Life Insurance Really Expensive?
Many people believe life insurance comes with sky-high premiums, which is one of the biggest myths. When you focus on the coverage you actually need, rather than inflated policies, the cost is far more affordable than most expect.
Example:
- A healthy 35-year-old couple, recently married with young children, may purchase a $500,000 policy.
- The premium could cost around $50 a month.
- Over 25–30 years, that’s less than $15,000 in total to secure $500,000 in coverage.
Would you sacrifice $15,000 to protect half a million dollars? That’s really what it comes down to.
Mortgage protection works the same way. If your mortgage is $1 million, adding a small premium (say, $20,000 over time) ensures your family won’t be left with the debt if something happens to you.
How Long Should You Hold Coverage?
Life insurance isn’t one-size-fits-all. The term depends on your family’s needs.
- Children’s education – A temporary need lasting 20–25 years.
- Mortgage protection – Typically 20–30 years until the home is paid off.
- Income replacement – Essential for as long as your family relies on your salary.
The key is to protect your income potential. Without your salary, none of your family’s goals, like paying for school or the mortgage, can be achieved.
How Much Coverage Do You Really Need?
So how much is enough? According to the Life Insurance Market Research Association (LIMRA), a good rule of thumb is:
7–10 years of your annual salary. For example:
- If you earn $70,000 annually, you should aim for $500,000–$700,000 in coverage.
- This ensures your family can cover school, mortgage payments, and day-to-day living expenses if your income suddenly disappears.
Income is the primary factor because it underpins everything else.
Balancing Coverage Between Spouses
Here’s another common misconception: both spouses should always have equal coverage.
In reality, it depends on financial roles.
- If one spouse is the primary breadwinner, their policy should reflect the larger income responsibility.
- For stay-at-home parents, coverage should be designed to replace the value of their contributions, such as childcare and household management—expenses the family would otherwise need to outsource.
The goal isn’t to make someone worth more dead than alive. It’s about protecting what each person contributes to the family.
Life insurance doesn’t have to be overwhelming or unaffordable. By tailoring coverage to your family’s unique needs, you can ensure lasting security without overpaying for unnecessary benefits.
If this conversation sparked your interest, we invite you to contact Keishon Wilson at kwilson@fmgroup.bm or call 535-6352.
