Everyone loves or hates the holidays for the same reason: you get/have to be around family. Assuming you love and trust your family, the holidays are a great time to ask them for their opinions on a major financial product: life insurance.
Discussing life insurance with your family, both immediate and extended, is the first step towards getting on the same page about an important piece of your financial plan. 1 in 3 families would have "immediate trouble paying living expenses if the primary wage earner died," according to LIMRA, and life insurance is the best way to protect your family against this risk.
While discussing life insurance during the holidays may sound weird or awkward, it doesn’t have to be. We put together this list of four simple questions that you can use to start a conversation around life insurance.
1. "Do you have life insurance?"
First, you have to start by asking your family members whether they have life insurance at all. They might not – if you’re the oldest child, your younger siblings may not be thinking about life insurance as part of their financial plan yet. Additionally, your parents may have let their term policies lapse already, especially if they’re retired.
Even if your older relatives don’t currently have life insurance, however, they can provide some insight into the product they owned and whether or not they were happy with it. Additionally, while your siblings may not currently own life insurance, they may have started researching or shopping for life insurance, or even gave up trying to shop for it because they became frustrated.
2. "How did you start thinking about life insurance?"
This starts as a pretty vague question, but for a good reason: while many people start thinking about life insurance because they want to protect their families, the ways in which they approach it can be wildly different.
You may also find that their trigger for buying life insurance is completely different than yours. For example, you might be buying it because you and your spouse are planning on having kids, but a sibling or cousin may have purchased it to cover co-signed student loan debt or a small business.
What your family member valued most out of a life insurance may be different than what you expected as well: your penny-pinching sister may have looked for the lowest premium possible, while you’re more concerned with a brand that you trust, and then your cousin pops in with comments about his insurer having a good online portal.
Getting a different perspective on how your family members started shopping for life insurance can inform your own shopping process, especially if you’re not sure where to start.
3. "How much coverage do you have?"
Choosing your life insurance coverage amount is a personal process, specific to your family’s financial situation. But that’s exactly why talking to a close family member about it can be so useful – you already know so much about each other, and you may already talk about your family’s financial situation with them. Talking through how they approached this calculation – assuming they did more than just pick a random number – can help you get a grasp on the things that you value and want to cover with your life insurance plan.
4. "Who do you trust when it comes to life insurance advice?"
Whether it’s their financial advisor, a website, a podcast, or their spouse, your family members probably trust someone or something when it comes to life insurance advice. Gather these resources from your family members – you may find out there’s an excellent financial advisor in your neighborhood that you never knew about, or a website that has answers to all of your questions.
Just watch out for anyone trying to sell you on whole life insurance – we break down the difference between term life insurance and whole life in more detail in this article, but basically, whole life insurance a really expensive product that doesn’t fit most people’s needs.
What you can do with the answers
Asking these questions is worthless if you don’t know what to do with the answers. These questions are meant to spark discussion, so don’t feel limited by the four questions we’ve outlined above. You also shouldn’t feel like this has to be the end-all be-all discussion – these questions should inspire your own research and shopping process, which can take as long as you need.
There may have been questions that you have about life insurance that your family members couldn’t answer. Our life insurance learn center should have those answers for you, but also look into the resources that your family provided. When you want to start looking at real life insurance quotes to see how much it will actually cost you, check out our life insurance quoting engine. We can compare quotes from over a dozen top-rated life insurance companies and help guide you towards the right decision for you.